U.S. Treasury Secretary Steven Mnuchin will travel Friday morning to Ottawa, Canada to meet with Canadian Finance Minister Bill Morneau. It’s the first trip to the Canadian capital for a U.S. Treasury secretary in a decade and comes at a time of tension between the two countries regarding the North American Free Trade Agreement (NAFTA) and disputes over lumber and dairy exports.
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A senior Treasury official says issues to be discussed include economic policy and security, tax reform, financial regulatory reform, trade and terror financing. “We are not looking to start negotiations yet on any topics. We still have domestic work to do but we want to get a sense from the Canadians on the timing for them,” the official said.
Canadian Finance Minister Morneau says he looks forward to Secretary Mnuchin’s visit, “…as we discuss the importance of our economic and business relationships.”
The U.S. Trade Representative’s Office says total trade between the United States and Canada totaled almost $628 billion in 2016. The U.S. has a $12.5 billion trade surplus with Canada, having exported about $320 billion in goods and services last year. The U.S. is Canada’s largest export market, totaling almost $308 billion.
Recent trade disputes, however, have erupted over the import of Canadian soft lumber and the export of U.S. dairy products. The United States is also in the midst of a 90-day consultation process, a prelude to renegotiating NAFTA with Canada. When asked about the timeline, the senior Treasury official told FOX Business: “I think we would defer to the U.S. Commerce Department and USTR for timing of negotiations but we are aiming to move quickly and hope to be concluded as soon as we can.”
Defense issues will be a big part of the discussions Friday, as Canada just announced its intent to increase defense spending 73% over the next 10 years from 18.9 billion Canadian dollars a year to 32.7 billion Canadian dollars in 2027 – or roughly 24.2 billion U.S. dollars. The announced increase in defense spending comes just two weeks after President Trump demanded NATO members increase their defense spending. Not to mention, Secretary Mnuchin has made cybersecurity and anti-terror financing a cornerstone of his tenure.
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Joining Secretary Mnuchin on the trip to Ottawa is U.S. Deputy National Security Adviser Dina Powell, who was scheduled to make the trip before the Canadian government announced its increase in defense spending. Both countries acknowledge their strong relationship, which the Canadians call, “…a model for the world: it is balanced and fair…supporting well-paying jobs for the middle class in both countries.”