Canadian Prime Minister Mark Carney on Sunday called a snap general election for April 28. An economist, Carney was elected leader of Canada’s governing Liberal Party just two weeks ago and became Canada’s first new prime minister in nearly a decade. Carney now leads Canada amid unprecedented trade tensions with the United States. To what extent will Canada’s change in leadership result in a shift in the country’s trade policy? How might Canada’s relationship with the United States and Mexico change under Carney? What could Carney’s ascension—as well as the Liberal Party’s sharp improvement in recent polling—mean for review of the United States-Mexico-Canada free trade agreement (USMCA), which is expected next year?
Carlo Dade, director of international policy at the University of Calgary School of Public Policy: “Now that the writ has been dropped, there will be little time for any foreign policy changes. That situation should not change much if Carney wins a general election. The United States will occupy most available bandwidth, and this summer’s G7 leaders’ summit in Alberta still lacks an agenda three months out. It’s hard to see a Carney government simply carrying forward with an agenda from his—now universally despised—predecessor as the first international statement for a new government. Other foreign policy changes will take time. The current government has made a ‘generational commitment’ to strengthening ties with the Indo-Pacific, on which there is wide consensus. This is unlikely to change. And the foreign ministry has announced significant budget cuts over the coming years. All this limits capacity for new initiatives. Lacking evidence to the contrary, relations with Mexico would be expected to remain the same. Carney has, for obvious reasons, questioned the benefits and use of an agreement whose principal purpose is to bring certainty. The biggest change and improvement for Canada will come from simply not having Justin Trudeau as a target for Trump’s personal ire, vendettas and taunting. Regardless of the party or wherein lies the fault, at this stage, simply not being Trudeau is a win for Canada.”
Barry Eidlin, associate professor of sociology at McGill University in Montreal: “To the extent that Canada’s trade policy shifts under new Prime Minister Carney, it will be due to responding to the actions of the country’s southern neighbor as opposed to a shift in the Canadian government’s underlying principles and policy goals. The Carney government is largely a continuation of the previous Justin Trudeau government, with a few new faces, a shrunken cabinet and somewhat less ambitious climate and economic policy. And as an Oxford-trained economist, former central bank governor for two countries, with a long career in investment banking, it would be hard to find a more faithful representative of global economic orthodoxy surrounding trade policy than Carney himself. It would be hard to see Carney wanting to take a different tack on trade policy compared to Trudeau based solely on his own policy preferences. But Carney is not operating according to his own policy preferences. He has to react to the Trump administration’s unprecedented assault on Canadian sovereignty, as well as the U.S. administration’s wild, unpredictable trade war, with different tariffs coming and going on what seems to be a daily basis. In response, Carney has sought to strengthen ties with European nations like France and the United Kingdom, while reducing economic involvement with the United States. He will also likely look to Mexico’s Claudia Sheinbaum as a key ally to respond to Trump’s threats. Her popularity has skyrocketed as she has proven herself to be an effective opponent of the Trump onslaught. While Carney does not share Sheinbaum’s progressive political outlook, I suspect he will be taking cues from her on how to respond to Trump, as his political future in the upcoming federal election hinges on his convincing Canadian voters that he is the leader best equipped to stand up to Trump.”
Tequila Brooks, attorney and former labor law advisor to the North American Commission on Labor Cooperation Secretariat: “Canada’s new prime minister and Liberal Party leader, Mark Carney, is a globalist who served as a governor of the Bank of England from 2013 to 2020 and of the Bank of Canada from 2008 to 2013. He has also served as the U.N. Special Envoy for Climate Action since 2020. With early trips to meet with the leaders of France and England, Prime Minister Carney signaled that Canada will be buttressing its relationships with allies and trading partners in Europe and elsewhere. Mexican magazine Proceso reports that it is likely that under Carney, Canada will work to diversify its trade portfolio to reduce its reliance on trade with the United States. Unlike the United States, which never finalized a preferential trade agreement with the European Union, both Canada and Mexico have trade agreements with the European Union: the Canada-E.U. Comprehensive Economic and Trade Agreement, which took effect in 2017, and the modernized version of the 2000 Mexico-E.U. Partnership, which was finalized on Jan. 17 of this year. Both agreements have strong labor and environmental provisions. Unlike the United States, both Canada and Mexico are members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). While the United States withdrew from CPTPP in 2017, the United Kingdom became its 12th member on Dec. 15. Thus, both Canada and Mexico are well-positioned to deepen trade with one another and with existing trading partners in Europe, Asia and the Americas in an era when the current U.S. administration has declared multiple trade wars and put the USMCA at risk. It will be interesting to see whether Carney and the Liberal Party prevail in upcoming parliamentary elections in Canada–his climate change and financial portfolios could elevate Canada’s environmental leadership on the global stage.”
Halina B. Ostrovski, president of HBO International Consulting in Toronto: “Canada’s new prime minister, Mark Carney, chose an experienced and compact cabinet to ‘fight tariffs and strengthen the domestic economy.’ A new general election will be intended to reaffirm the mandate of his government. No matter who leads Canada’s government, bilateral and trade relations with the United States will be a challenge. The current U.S. administration implemented radical changes to trade, disregarding the practices that they had previously negotiated and agreed upon. Needless to say, the level of trust in dealing with the United States has changed. There is no confidence, nor is there trust, in statements coming from the United States anymore. And it seems that this pattern of deconstruction extends to all kinds of alliances and cooperations that once were symbols of U.S. leadership. Mexico and Canada are substantial contributors to the U.S. economy as consumers, as suppliers, as partners, as friends and as family connections. To renegotiate the current trade agreement will be difficult and complicated. Both Mexico and Canada should be prepared; negotiations toward an agreement implying ‘respect’ no longer appear to be valid. The concept of abiding to agreements may not be adhered nor respected, for it seems that the current U.S. administration only respects an agreement if it favors and benefits the United States. Meanwhile, Canada has already started to strengthen its own economy while looking for ‘more reliable markets,’ as Carney indicated in his first speech as prime minister on March 14.”
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