U.S. ambassador to Canada hopeful two sides can ‘put together a great’ deal
Updated:
U.S. Ambassador to Canada Pete Hoekstra says he is “very positive” about the potential of the economic and trade relationship between Canada and the United States, and he hopes the two countries can resolve “some of the irritants.”
On Wednesday, U.S. officials announced they’re opting against renewing the Canada-U.S.-Mexico Agreement “in its current form,” and the trilateral trade deal will enter an annual review process.
“The United States will continue to engage with Mexico and Canada to address the agreement’s shortcomings and our trade deficits with these countries,” U.S. Trade Representative Jamieson Greer told CTV News. “However, the agreement remains in force pending resolution of these issues or until the agreement’s termination.”
In an interview with CTV Your Morning Ottawa on Friday ahead of Independence Day celebrations in the capital, Ambassador Hoekstra said he thought Canada and the U.S. would have reached a deal by now.
“I never thought that it would take this long,” Hoekstra said.
“Hopefully, we can resolve some of the irritants and some of the other issues that are out there, and we can put together a great, great trade agreement. It would be good for the Canadian people, it would be good for the American people, and we can move forward.”
Hoekstra was asked if he thinks the trade issues between the two countries can be addressed.
“I’ve always been very, very optimistic that we can fix it,” Hoekstra said.
“There are two strong economies here. The U.S. has a very strong economy. We have lots of resources. The same is true about Canada. Everyone says we’re stronger together. I truly believe that we’ve demonstrated that with our defence and military co-operation, economic co-operation, and energy.”
July 1 was the deadline for officials in Canada, the U.S. and Mexico to say whether they wanted to renew the CUSMA agreement for a 16-year period. Canada-U.S. Trade Minister Dominic LeBlanc said Canada’s preference was to renew the three-country trade deal.
‘We’ve got to get this fixed’
Hoekstra told CTV News chief political correspondent Vassy Kapelos last week that the U.S. and Canada were nowhere near a deal on CUSMA.
In a separate interview with Newstalk 580 CFRA Friday morning, Hoekstra said there is still “some work to do” to get an agreement.
“I thought we would have been done at this point. I’ve been here roughly 14 months, I never thought, after 14 months, we’d still be as far apart as we are on some of the trade stuff,” Hoekstra said.
“We’ve got to get this fixed, and, hopefully, that will happen sooner rather than later. I know that they’re going to continue working, you know, through July and August, even though Parliament is gone for what, three months.”
Hoekstra said the U.S. is trying to get a deal “on (U.S. President Donald) Trump time.”
“Which is really, really fast in the United States,” the ambassador said. “Hopefully, if you put (Prime Minister Mark) Carney time together with Trump time, you know, we can get something done.”
With files from CTV News’ Spencer Van Dyk
Josh Pringle
Opens in new windowCTV News Ottawa Producer and Digital Lead | Ottawa
Analysts cut Canadian dollar forecasts as CUSMA uncertainty clips rate hike chances
Published:
TORONTO -- Canada’s dollar will strengthen less than previously expected over the coming year as uncertain negotiations to revise the Canada-United States-Mexico Agreement (CUSMA) weigh on the domestic economy, reducing the prospects of interest rate hikes from the Bank of Canada, a Reuters poll showed.
The median forecast of 39 foreign exchange analysts in a June 26 to July 1 poll expected the Canadian dollar to gain 1.3 per cent to 1.40 per U.S. dollar, or 71.43 U.S. cents, in three months, which is weaker than the 1.37 per U.S. dollar forecast in a survey last month.
In 12 months, the loonie was expected to strengthen 4.3 per cent to 1.36, compared with 1.34 in the previous forecast.
The Trump administration on Wednesday declined to extend CUSMA, starting a decade-long clock to wind down the trade deal as it seeks changes to try to reshore manufacturing jobs and reduce U.S. trade deficits with its North American neighbours.
Canada sends about 70 per cent of its exports to the U.S., including steel, aluminum, autos and lumber, which have been hit by U.S. tariffs. The most recent quarterly GDP data showed the economy was slipping into a technical recession.
“The loonie has weakened considerably against the greenback over the past few weeks given shifting rate expectations vis-à-vis the U.S.,” said Bradley Saunders, North America economist at Capital Economics.
“We expect that trend to continue, as CUSMA-related uncertainty holds back growth - and therefore rate hikes - in Canada this year, while sticky core inflation and solid GDP growth push the Fed to reverse some of their earlier rate cuts.”
Speculators have raised their bearish bets on the Canadian dollar to the highest level since December.
Last week, the currency touched a 14-month low at 1.4248, while Canada’s 2-year yield fell more than 140 basis points below the U.S. equivalent, marking the widest gap since May last year.
The Bank of Canada has said it sees limited evidence that higher energy prices are fueling broad-based inflation. Swap markets have priced in around 10 basis points of tightening this year from the central bank, down from about 60 basis points in May.
U.S. Federal Reserve Chairman Kevin Warsh said on Wednesday he will stick firmly to the U.S. central bank’s two per cent inflation target and “disappoint” anyone who expects loose monetary policy.
A separate Reuters poll on the U.S. dollar showed the weaker dollar view is facing resistance from a growing camp predicting smaller declines - or even gains in the near term.
(Reporting by Fergal Smith; Polling by Mumal Rathore and Indradip Ghosh; Editing by Thomas Derpinghaus)
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