Trudeau dismisses concerns free trade with China will hurt Canada-U.S. relationship

Prime Minister Justin Trudeau said strengthening trade ties with China does not put the Canada-U.S. relationship at risk, shrugging off concerns raised Thursday by a member of his NAFTA advisory council.

Speaking in Quebec Friday, Trudeau said diversifying Canada's trading partnerships could actually help trade negotiators who are in the middle of difficult NAFTA talks.

"I think there's an argument to be made that demonstrating that we have a diversification and a broader range of interests than simple dependence on NAFTA might actually strengthen our NAFTA negotiating position," Trudeau told reporters during a news conference.

Trudeau's assessment comes a day after James Moore, a former Conservative cabinet minister who is a member of Canada's NAFTA advisory council, issued a warning about getting closer to China. 

Moore said entering into formal trade discussions with the Chinese would give U.S. President Donald Trump ammunition to launch verbal attacks against Canada and NAFTA.

"President Trump has made it very clear he has an antagonistic view of China," Moore told reporters following a panel discussion on NAFTA in Ottawa.

"Canada runs the risk of providing Donald Trump with an argument to say that Canada can't be trusted, because we will have cheap Chinese goods that violate labour standards," Moore said.

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"The weaponry, rhetorically, that you would hand to Donald Trump, to say that Canada can't be trusted, because you would have Chinese goods dumped into Canada and finding their way into the United States, further depredating the American manufacturing sector, I think would be incredibly toxic to the Canada-U.S. relationship."

Moore is urging Ottawa to put any plans with Beijing on hold, until NAFTA is "put to bed."

"One in five Canadian jobs is dependent on trade with the United States … don't jeopardize that by saying to the Americans that a free trade agreement with China is about to happen, and ruin our reputational equity with the administration. That is a huge risk that Canada should not take."

Canada and China have completed four rounds of exploratory free trade talks. The Liberal government has not said if those talks were successful, and if it wants to graduate to formal free trade talks. 

Government officials have acknowledged that formal discussions with China would move slowly and the process could last for years.

Diversification 'extremely important'

Canada's foreign affairs minister also downplayed Moore's suggestions.

"Trade diversification is extremely important to us," Chrystia Freeland told reporters during a news conference in Toronto.

"We've also always understood the value of trade diversification, and perhaps now we understand it more urgently than ever," Freeland said, acknowledging the tensions at the NAFTA negotiating table.

The fourth round of NAFTA talks ended on a sour note earlier this month, after U.S. negotiators made a series of protectionist proposals that Canada and Mexico said are "non-starters." 

The mood deteriorated further at the closing news conference, when U.S. Trade Representative Robert Lighthizer said he was "surprised and disappointed by the resistance to change" from his trading partners.

Freeland shot back, saying the deal won't be updated successfully if one partner comes to the table with a "winner-takes-all mindset."

She echoed those sentiments again on Thursday.

"I'd like to caution those parties, that a negotiation where one party takes a winner-take-all approach, is a negotiation that ... may find some difficulties in reaching a successful conclusion."