We discuss hot topics such as tariffs, trade diversification and the impact of trade policy on North American competitiveness and Canada’s economic security in conversation with trade expert Meredith Lilly of Carleton University.
Host Kate McNeece speaks with Professor Meredith Lilly of Carleton University about the topic that is top of mind for everyone in North America: trade policy! What does the shift from the Biden Administration to the Trump Administration mean for North American competitiveness? How does trade policy impact foreign investment in Canada and interact with the national security provisions of the ICA? What other trade and investment tools does Canada have to improve Canadian productivity and competitiveness? Is this the end of “North Americanism” or is there still some hope for multilateral relationships? These topics and more are covered on this episode of Counterfactual.
Listener note: this episode was recorded prior to the announcement of U.S. tariffs on March 4. Please excuse any comments that have fallen out of date in today’s fast-moving political climate.
For further reading on North American competitiveness, see the report of the North American Competitiveness Working Group at the UCSD Center for U.S.-Mexican Studies, authored by today’s guest Professor Meredith Lilly: https://usmex.ucsd.edu/_files/240626.1_WEB_Report_NorthAmericanCompetitivenessWorkingGroup-24Q2.pdf.
00:02.04
Kate McNeece
Hi, welcome to Counterfactual. I'm Kate McNeece. I'm the chair of the CBA's podcast committee, and I'm delighted to be joined today by Meredith Lilly. Meredith is a full professor and Simon Reisman Chair in International Economic Policy at Carleton University's Norman Patterson School of International Affairs. Her research focuses on North American trade relations, Canada's trade diversification strategy, economic sanctions, and the use of research evidence in policymaking. We're here to talk to you today about trade issues, North American competitiveness, the impact of this and on competition and foreign investment policy. And I'm really excited. So thank you very much, Meredith, for joining us today.
00:40.89
Meredith
Thanks for the opportunity to be here. It's great.
00:43.62
Kate McNeece
Absolutely. So Meredith, I first encountered your work through the North American competitive work, sorry, the North American competitiveness working group report that you released in May 2024. And I suppose in the spirit of full disclosure, my paternal uncle John McNeece was also involved in the working group. So that's how I came upon it. So the competitiveness working group report I found very interesting because it sort of took where we were at that period of time. So again, in 2024, and I guess spoiler alert, things have changed a little bit since then, but we'll focus on where we were at that point. And you looked at the recommendations included a more integrated North American approach to economic issues, including those related to economic security, which of course is of great interest to me as a foreign investment practitioner and others who deal with the Investment Canada Act, and in particular, its national security provisions.
01:41.43
Kate McNeece
So in particular, I think the summary said that the working group proposes policy approaches to ensure that the current moment of US fixation on China strengthens North American economic integration, boosting the productivity, prosperity and competitiveness of the US, Mexico and Canada. So with that as background, could you summarize the key findings of your working group describing the status of the relationship at the time between the members of the North American bloc and the major recommendations to improve North American productivity?
02:10.40
Meredith
Sure. So at the time that we launched this working group, the Biden administration had made historic investments in US industrial policy. So big legislation that contained incentives around chip semi-conductor manufacturing, electric vehicles, green technologies through the Inflation Reduction Act
02:32.95
Meredith
And the focus of a lot of this was also production in the United States. So there was, I think, recognition that this could either be a very positive or potentially quite a negative tipping point for North American integration. And so at the time, there was a desire by Canada and Mexico, I think, to capitalize on these US investments, to find ways to kind of further entrench North American competitiveness.
02:59.41
Meredith
But there was also a very strong view among experts in all three countries that we really needed to, I think, make the case for greater North American supply chain integration, both to ensure Canada and Mexico could benefit, but also to build a stronger North America. And some of the logic around that was that the United States actually needs strong neighbors in order to address Chinese competition. And weak neighbors, Canada and Mexico, if we are weak, then that actually creates ongoing and constant problems for the United States. That's another set of issues that they have to pay attention to all the time. So University of California, San Diego, led by Rafael de Castro convened a working group of 25 experts approximately in trade and supply chains. And they came from private sector,
03:53.47
Meredith
also former government officials as well as academia. And we spent a year meeting and discussing a variety of things and produced a final report, which I authored, but was based on the work of many people. And there were three kind of big themes that we focused on. So the first was around um ensuring that the benefits of USMCA for supply chains. The second theme was around industrial policy and strategic sectors. And specifically, we looked at
04:24.51
Meredith
critical minerals, electric vehicles and batteries, and semi-conductors. And then a third theme was around subnational infrastructure and labor cooperation. So this was more kind of at the state and provincial level.
04:38.05
Meredith
And there were a series of recommendations. I won't describe them all, but I think there are maybe two that are most relevant to what we're talking about today. So one was a recommendation to expand the existing US-Mexico but bilateral foreign investment and national security working group. That's something that already exists. And to expand that to include Canada so that we could have a North American approach to foreign investment and national security reviews.
05:04.26
Meredith
And then a second recommendation was to have a shared North American approach to the treatment of Chinese-made electric vehicles and connected cars. And this focus would really be on safety and threats potentially posed by the technological inputs and capabilities of electric vehicles so that we had a single North American standard. So if we get off of the terror threat with the Trump administration, maybe some of this stuff will get addressed in the six year review of the North American, well, KUZMA, the replacement for NAFTA.
05:40.18
Kate McNeece
Yeah, KUZMA or the USMCA, I think they refer to it south of the border.
05:42.16
Meredith
Yes. Yeah. yeah
05:44.83
Kate McNeece
So I find it very interesting that the working group in particular focused on some of these industrial areas like critical minerals, like the EB sector, because those are areas where we've seen a lot of movement in the sort of Canadian foreign investment and in national security sphere.
06:00.84
Kate McNeece
There have been a lot of public statements talking about the potential threat of Chinese investment in critical mineral minerals. There's a consultation ongoing about sort of different ways for the Canadian government to approach whether through trade, whether through foreign investment control, whether through other means, the potential threat of Chinese electric vehicles sort of coming in to take over Canada. So it's clear that those are real pain points or trigger points for thinking in these issues. On the harmonized foreign investment piece, I'm interested to hear a little bit more about sort of your view on how that works.
06:37.08
Kate McNeece
Now and how it should change in the future. I think from our perspective as practitioners, we see a lot of connection between the Canadian and US national security apparatus in the terms of foreign investment review. You see you know CFIUS and ICA reviews kind of progressing at the same time, depending on when the filings are made.
06:56.05
Kate McNeece
You see questions coming from the flyers team, the branch that administers the ICA that seem to have a really US nexus in terms of what their concerns are.
07:09.67
Kate McNeece
But we see less, obviously, integration between Canada and Mexico. So perhaps you could talk a bit about the Mexican working group with the US and how Canada might fit into that.
07:17.84
Meredith
Yeah,
07:20.61
Meredith
Yeah so it's been suggested very strongly recommended to Mexico that they adopt a process similar to CFIUS. And I've heard informally through Mexicans and others that work in this space that they've actually been encouraged to adopt a process more similar to Canada's because ours is kind of recognized almost as being more stringent than the CFIUS process.
07:40.17
Kate McNeece
Mm.
07:45.09
Meredith
And I honestly think that it's actually inevitable that Mexico is going to have to start paying more attention to this. And if they don't, they're going to be shut out of North American trade in strategic industries in areas like chips and EVs. So for instance, if cars built in Mexico contain Chinese tech and those kinds of decisions haven't been scrutinized, they're just not going to be allowed into the United States. And you know just like I said,
08:16.44
Meredith
earlier, like if Mexico is to allow investment into the United States that the United States itself would reject, then I think production from that investment just isn't going to be allowed to be exported into the United States. And so long as we have sort of the hub and spokes model of North American integration, meaning the United States in the middle and Mexico and Canada on the outside of that, I think it's inevitable that we that we move towards harmonizing. Now, having said that, that was all kind of a almost taken to be an accepted direction, I think, during the Biden administration. And so I would say that there's actually some potential that we're going to see the United States reverse its position under Trump.
09:06.91
Meredith
I have seen some indication that he might welcome Chinese investment provided that production takes place in the United States in a way that we didn't see under the Biden administration. And so if that if that happens, then the United States and its push to kind of treat Mexico with suspicion around accepting certain kinds of Chinese investment, you know, it just can't do that anymore if the United States itself accepts that investment into the US.
09:38.06
Meredith
I think the push back there is going to be from Republicans in Congress. And there would be many within the administration that would oppose a trend of having greater Chinese investment in the United States. But you do kind of hear this language from President Trump now and again, where he suggests that he's, you know, welcoming any kind of investment as long as you want to build things in the United States. so you know If that happens, then we might actually see a different direction altogether. But regardless, it'll be American led.
10:10.13
Kate McNeece
I think that's a great segue into sort of the next topic I wanted to cover, which is, how is the Trump administration going to change where we are? So you've referenced one thing, which is a potential greater openness to direct Chinese investment to the US, so long as it is investment for US production, which also, just sort of in in my experience, also is not aligned with the Canadian position. Right, the Canadians are very skeptical of foreign investment.
10:38.39
Kate McNeece
of China into Canada, even if it's sort of the activity is going to happen in Canada and be able to be sort of subject to Canadian regulation, things like that. What else is the sort of, so Trump will sort of continue a bit of the America first language that or approach that's been coming out of the US for several years. But it seems, you know, we're recording this on what is it January 27. So we're one week into the Trump administration. And I think suffice to say, it's been a very active week in terms of pronouncements on policy going forward. So what do you foresee, you know, recognizing that you don't have a crystal ball? Like, like where do you see the Trump administration going? And how can Canada and Mexico as
11:22.27
Kate McNeece
you know, currently sort of the spokes on the hub and spoke of the North American model react to that, address that, or maybe find common cause and strengthen each other.
11:32.21
Meredith
Yeah. So as you say, it's really difficult to predict where things are going. And you know in the current time that we're recording, Trump is making threats that there will be 25% tariffs on both Mexico and Canada within the week. And so this kind of language you know just really destabilizes the faith of both Canada and Mexico in North America as a region, which is you know, the report we were working on and this idea that we need to work to build a bigger, better North America. And there's very little evidence that that Trump sees North in North America. It's just very much an American first approach. So I think from a policy perspective for our decision makers, it actually makes it difficult right now for Canada and Mexico to sort of to take active measures to further expose ourselves to the US market.
12:25.71
Meredith
And so instead, what you're seeing is greater discussion and speculation around trade diversification away from the United States, and that that would be kind of a more strategic conversation. Now, I've been on the view that that trade diversification is a constant project that Canada must work on, but it's actually not something that we can just focus on.
12:47.82
Meredith
when things are bad with the US administration and then and then kind of return like a rubber band to the United States when things are good because trade diversification takes a long time. And it's firms that trade, not governments, right? But I think the kind of political overtures by Trump around constantly threatening Canada and Mexico, they also make this a politically make any kind of North American conversation quite politically toxic among the populace. The populace wants to hear their leader saying they're going to stand up to Trump and that they're going to kind of turn away from the United States. And whether that's good policy or not, it's politically attractive.
13:31.89
Meredith
So I think the next few months are going to be instructive. um I do think that it that it's clear that President Trump does not respect our current Prime Minister, Justin Trudeau. And so I think a change in leadership in Canada may actually help change course in the relationship a little bit. You don't hear President Trump making the same remarks about President Scheinbaum in Mexico that he makes about Prime Minister Trudeau. and so I'm hopeful that that will help to kind of change gears a little bit but I you know a point that you made at the end around Mexico and Canada I do think that there are things Mexico and Canada should be doing together to further advance our own bilateral relationship.
14:16.04
Kate McNeece
Thank you.
14:16.13
Meredith
And I'm a little bit worried that at the moment we seem to be going in the opposite direction so we seem to be clinging to the Americans and casting aside the Mexicans but I actually don't think that that's really the best approach for the long term and instead we should be continuing to build a long term robust relationship with Mexico which remains one of our largest trading partners.
14:40.03
Kate McNeece
I want to press a little bit more on this trade diversification point, which I think is very interesting. I was reading an article, I was cribbing from your, I guess, ex, or your Twitter to prepare for this, since you're much more expert in trade than I am. And I was I thought there was a very interesting article about trade diversification in which someone from the C.D. How Institute was quoted as saying, Canada doesn't have enough large firms that have the scale to compete well on global markets.
15:10.50
Kate McNeece
And as a, you know, we wear two hats in Canada and the foreign investment space, we tend to also be competition antitrust lawyers.
15:12.56
Meredith
Hmm. Hmm.
15:16.93
Kate McNeece
So a that immediately brought to mind the former efficiencies defense that we had under the Competition Act, which was sort of targeted at allowing domestic Canadian firms to gain scale, even if it was perhaps bad for domestic competition, so that they'd be able to compete abroad.
15:31.84
Kate McNeece
So what it seemed to me is that we have a political environment in which the Competition Act is being strengthened and the tools the Competition Bureau has to address concentration in Canada are being strengthened with a real push towards not having so much concentration because that's viewed as raising prices and making it difficult and impacting Canadian productivity. But then on the other hand, perhaps one of the best ways to approach the current political and trade environment is to allow for greater concentration in the hopes that some of these Canadian firms will go out and I trade more in the global environment and not be so tied to the US.
16:03.99
Kate McNeece
I recognize that we're not going to solve this issue on this podcast. But I'm interested in your thoughts about how we kind of square these two somewhat opposite a approaches and dimensions in this sort of tumultuous political time.
16:16.35
Meredith
Sure. So I mean, I'm not a competition lawyer. You are. But and so I'll kind of skip past a little bit some of the domestic competition piece. But as far as trade diversification goes,
16:29.42
Meredith
you know and it's really much more, yeah like it's easier said than done for Canada. And you highlighted correctly that it's mostly large firms who trade beyond the United States. And the Office of the Chief Economist of Global Affairs Canada produced, I think in its last year's report, it produces an annual state of trade report.
16:58.27
Meredith
They've demonstrated that 10 firms, 10 large firms in Canada account for 30% of our exports, 100 large firms account for 60% of our exports.
17:11.73
Kate McNeece
wow
17:11.83
Meredith
And the vast majority of small businesses in Canada do not export at all. And then of the small percentage who do, they mostly 65% of them trade only with the United States. And then it's a case that whether you're a small business or a large business in Canada,
17:31.61
Meredith
if you trade beyond the United States, you also trade with the United States. So it's a one plus thing, but it is predominantly large companies that are trading outside the United States. So we know from the evidence that larger companies do this more, there are greater efficiency gains and so on to trading beyond the US for them.
17:55.47
Meredith
And the vast majority of small businesses, if they're going to trade beyond the Canadian market, can satisfy most of their interest in trading by trading with the US. So there's some merit to what you're asking on that front, for sure.
18:12.17
Kate McNeece
Yeah, very, very interesting. So just So switching gears a little bit, you know, as I as i keep coming back to you, I'm a foreign investment lawyer. So I tend to think about these issues through a pretty specific lens, which is the Investment Canada Act.
18:24.15
Kate McNeece
And, you know, under the Investment Canada Act, we have both a net benefit regime for inbound investment, which says, you know, you have to make sure your investment is of net benefit to Canada if it exceeds a certain financial threshold.
18:24.68
Meredith
Hmm.
18:34.58
Kate McNeece
And then we have our much broader national security regime, which gives the government sort of very significant powers to stop or to, you know, put some guardrails around investment into Canada, where it's perceived to be injurious to national security. And that perception of what's injurious to national security, even over the relatively short amount of time I've been practicing in Canada, has really seemed to expand. You know, we used to think about it as sort of defense related issues, satellites, things like that. And now we're
19:05.42
Kate McNeece
finding the government interested in a lot more real economic security supply chain issues, some of these critical sectors where China really has gotten a foothold and the in the West has kind of tried to push back on that. So I know you worked in the Prime Minister's office during the Stephen Harper administration when the ICA was being modernist modernized to bring in this national security regime.
19:26.65
Kate McNeece
Could you provide a little bit of background into some of the policy considerations that underpinned that introduction and maybe forecast the extent that we're able to in this context, the considerations that are informing the current approach to the national security regime?
19:41.28
Meredith
Sort of, yes and no. So I wasn't actually in PMO in in those early years.
19:42.92
Kate McNeece
Yeah
19:46.75
Meredith
And then when I did arrive in PMO, the ICA was largely beyond the scope of my work. But I think because of that, it means I can make a few comments.
19:57.14
Kate McNeece
Great.
19:57.37
Meredith
Because I was not subject to conversations that that would remain secret. But I think as a result of the next and takeover decision in the oil sands in 2012, you know, Prime Minister Harper worked, I think, very deliberately on foreign investment policy with a lens of, you know, the net benefit to Canada, what's going to benefit Canadians. And so I think In my time working for him, what I what I keep central today when I think about major foreign investments in Canada, I tend to focus on two lessons that I took from that time. So the first is that
20:38.40
Meredith
Canadian natural resources and so not talking so much about you know satellites and some of that into the ICA, but the rocks in the ground side of the ICA. Canada's natural resources and its non-renewable resources in particular, things like oil and gas and mining,
20:58.36
Meredith
These are Canada's bounty and our natural inheritance. And so it's really Canadian citizens and workers who should be benefiting first and foremost from that bounty.
21:10.57
Meredith
And so I think Prime Minister Harper really wanted to ensure quite strict attention to the ownership and Canadian control of strategic assets for that reason. And then the second thing is that he certainly recognized that all not all foreign investment is equal. He did not regard Chinese state-owned investment the same way as genuine private sector players from allied countries like the UK and Australia.
21:37.30
Meredith
And he believed deeply in reciprocity and he spoke about it publicly and did not believe that Canadian firms that would be seeking to invest in China were going to be treated the same way that that Chinese firms were seeking to be treated in Canada. And certainly the evidence I think over time has demonstrated that to be true. And you know something he said at the time of the next in sale, he said, Canada has not spent years reducing the ownership of sectors of the economy by our own governments only to see them bought and controlled by foreign governments instead.
22:09.77
Meredith
And he felt very strongly about that.
22:10.10
Kate McNeece
Mm.
22:12.14
Meredith
And so um under his leadership, the Investment Canada Act and the operation of it ensured that there was this level of flexibility and discretion available for Cabinet to um scrutinize foreign investment and reject things that were not deemed to be in Canada's interest.
22:32.96
Meredith
So, taking kind of those are my lessons that I've learned from this period I want to be very clear about that and that I never speak on behalf of the former Prime Minister.
22:43.48
Kate McNeece
Of course.
22:44.17
Meredith
You know, then the Trudeau government came in, they took power, they wanted to remove some of that discretion around administration of the act. I think there was a lot of pressure from foreign investors to provide a more transparent process. And as I think about that period, they almost wanted like a formula to follow in order to achieve success. If we do X, Y and Z, then our transaction will be approved. And that process I think wanted to treat all foreign capital much more similarly regardless of its source.
23:13.36
Meredith
And at that time the Trudeau government I think nearly tripled the value threshold for reviews as well over time.
23:20.09
Kate McNeece
hm
23:20.93
Meredith
And so that allowed actually a lot more investment to take place without any kind of scrutiny by Cabinet at all. And some of this was certainly I think intentional by the Trudeau government because they wanted to improve relations with China and that was a stated goal. Then you go forward a few years to the two Michaels affair, the Huawei 5G decision, and at that time there was also proposed takeovers of several Canadian mines by Chinese state-owned enterprises, lithium, neo lithium, and the Trudeau government then
23:57.05
Meredith
started to reverse course. And it reversed course really quickly and kind of put the brakes on things and you would know all of this. And so, you know, if you look at the approach now, I think it's actually much more restrictive in its treatment of foreign investment than it was 10 years ago. And so if I kind of try and put my crystal ball in front of me and look forward, I think given the amount of scrutiny that we may be seeing from the United States, I anticipate that Canada is just going to continue to keep fairly tight rules. If I can be honest, I think in the short term, I don't think now is the moment that we're suddenly going to relax.
24:36.04
Meredith
given the kind of geopolitical climate that we're in.
24:36.41
Kate McNeece
I don't know.
24:39.58
Meredith
And the reason for that will be both, I think, to align with whatever approach the US is taking, but also to ensure that Canada isn't permitting foreign investment that the United States would reject.
24:52.62
Meredith
And so I think we're going to work quite closely to ensure that that doesn't happen. But as I said about a potential that the Trump administration might become more open to some Chinese investment, if that happens, we'll see. And I kind of think that we will fairly closely mirror what they're doing in the U.S.
25:15.53
Kate McNeece
Yeah, I think that makes that all makes perfect sense to me. And I think I have a similar view that I don't think we're going to see the kind of result, I guess, or the outcomes of foreign investment views changing very much, you know, whether it's under the sort of new liberal leadership that likely will come in and in March or whatever administration follows and the current government in in place in Canada. One thing I think is possibles are to you I found your point about investors wanting to have a clear formula for when their foreign investment is going to be approved. to be
25:49.42
Kate McNeece
really interesting because, of course, I see some of that dynamic for my clients who do want to say, well, what do I have to do to get to get this done? And especially in the national security context, it's often very difficult to give that advice because you know you're not working with the information that the security apparatus has. But I mean, I'm certainly on record in Canada as advocating for some greater transparency in the administration of the act. And the minister does, I think, now have some more tools to do that. So as of last year, the minister now has the ability to take binding mitigation of national security concerns without sending it to cabinet. And I think, you know, a lot of this is going to be confidential so the minister can't say exactly why he made a decision or exactly what mitigation was provided. But I think there could be a greater sense at least given from the government, they were they produce an annual report that has information about certain sectors that have been subject to national security abuse, that sort of thing. So in addition of maybe the types of measures that have been taken
26:46.14
Kate McNeece
and this is something CFIUS puts out in the public, the types of measures that have been taken to address national security concerns, just giving investors a bit more of a sense of sort of where the government is on their relative willingness to obtain mitigation and clear transactions rather than simply blocking them, I think would be useful to sort of square that circle. But again, I mean, the Investment Camp Act isn't operating in a vacuum, right? Like we have all of these political concerns that are animating decisions. We have is our broader trade economic financial policy and so what are some other kind of, so sorry, I'm getting bit ahead of myself. Canada you know needs to, I think, find foreign investment, right? We can't just do it on our own. So to some extent, we're going to need to welcome capital from elsewhere in the world. And perhaps it's not going to be from China, or perhaps more of it can be from China.
27:41.81
Kate McNeece
But if the US is becoming a bit more hostile, you know, we're going to go have to find that from somewhere. So are there other policies that you think are hampering for an investment, you know, setting aside the ICA or working in conjunction with the ICA that might be hampering for an investment that we can look at to say, all right, how do we simulate for investment to improve productivity, improve competitiveness of Canadian businesses without exposing us to some of these national security risks by just sort of opening the door and letting Chinese state-run enterprises take over all of our businesses?
28:12.17
Meredith
Yeah. I think there are things we could be doing, And you're right. We have seen a real chill on foreign investment into Canada, partly because as we've become stricter about Chinese foreign investment, there aren't others lining up behind them to kind of fill that space. But there are other reasons as well, including a lot of uncertainty about investing in Canada.
28:39.72
Meredith
I mean, before I get to that, I would say also the kind of rhetoric coming from President Trump around tariffs actually help and kind of continue this uncertain climate in Canada and Mexico.
29:00.60
Meredith
whereby his ultimate goal is to see any investment in the United States, not in Canada, not in Mexico. So the more he talks about tariffs, the more those threats get amplified and repeated ad nauseam by you know every newspaper in the country 24-7, the more we're actually helping to reinforce the idea that investing in Canada is an uncertain thing to do.
29:24.34
Meredith
So you know setting aside um the things said by the president, over which we have very little control, there are things in Canada that we could be doing.
29:35.08
Meredith
An argument that I've made a few times now is that given that geopolitical risk is up, meaning that we are going to continue to scrutinize investments and the Investment Canada Act is there and we're going to continue to be you know careful on that side of things. What do we have control over? What other um certainty could we provide to foreign investment to make foreign investment more attracted to Canada?
30:02.63
Meredith
And also, I think, to increase certainty that their investment is actually going to you know be seen through and have a return. So you know we have very, in the natural resource sectors, we have incredibly broken regulatory processes. It takes 10 to 15 years minimum for a mine to become operational. And that's between environmental, community, indigenous consultation processes, and different federal and provincial processes.
30:33.33
Meredith
and while all of those things are good and must take place, we must do so much faster and we must provide a lot more certainty around investment. So we can reform those processes and accelerate things and that would provide additional reasons for foreign investment to look to Canada. We also frankly have really rampant nimbyism in Canada. So we want all the things that are powered by batteries and critical minerals, but we actually don't want to take any of the tough decisions necessary to translate that natural endowment I talked about into operational mines and pipelines. And
31:13.95
Meredith
You know, I worked on a paper a few years ago around critical minerals and I was researching cobalt and a lot of the world's cobalt is mined in sub-Saran Africa. that work is performed by enslaved children in artisanal mines. They have zero environmental and labor standards. And you know these are all things we can do much better in Canada. um And we can do it in an environmentally responsible way. We can and ensure that adults are working in the mines and that they have all the you know labor um protections and technology in place, both so they can be safe and they can earn a good living. and
31:49.20
Meredith
you know These would be jobs in remote communities. Those communities are often economically disadvantaged. We should be working in partnership with Indigenous populations to ensure they can profit. So these are all things that are in our control to change and to accelerate, and none of them really require advancing or changing the Investment Canada Act. And then I you know I think just a very different political conversation is necessary. If we are truly in an existential crisis as a result of the Trump administration, then it means Canada needs to make different existential choices about investment in our country. And so that requires a different political conversation and making decisions much faster. So you know I think we could be doing a lot of things that would improve the investment climate without necessarily having to touch our national security review processes.
32:46.92
Kate McNeece
Do you think that there is yeah more the Canadian government can be doing to support outbound investment by Canadian companies elsewhere to help bring growth back into Canada? Or is it or should we be focusing more on sort of growing these businesses that are you know generating sort of in Canada benefits from our sort of natural resource benefit bounty?
33:11.75
Meredith
Certainly. I mean, I think the Trade Commissioner Service in Canada does a lot to support, in particular, large firms to trade and invest outside of Canada. And there is more that the government could be doing. I will be honest, though, it is not a political winner. Trying to explain to Canadians why the government would be spending time and energy to help Canadian firms invest elsewhere is not politically logical for the average person and so it's never going to be you know up in lights as something that any government is going to be talking about loudly but certainly
33:53.41
Meredith
It does help us when our firms are invested in foreign countries and so and there's a lot of recognition for specific large firms in in the Indo-Pacific, for instance, and that actually is to benefit to Canada.
34:11.69
Kate McNeece
Just to finish off, you know we talked a little bit when we were preparing for this about ways that trade policy can be used to sort of simulate this more North American approach. Two things, and you talked a little bit about I'm probably about trade dispute mechanisms and some key issues that maybe the Canadian government or the Mexican government or the US government might want to see those being used more often to address some of these issues. Can you speak a little bit more about that? Because I found that just very interesting as a potential solution or potential add-on to some of these issues.
34:46.10
Meredith
Well, yeah, I mean, doing working on dispute settlement is, again, a constant focus for
34:51.60
Kate McNeece
Yeah.
34:55.03
Meredith
for trade policy folks. And the report that we wrote does talk about how um rulings under dispute settlement for USMCA should be observed by all countries. I think the problem right now is that the US s is very much using American um exceptionalism, American unilateralism to kind of say, well,
35:18.41
Meredith
I am right and when I'm wrong, I'm still right. And so that that really means that it's a trade dispute mechanism for Mexico and Canada, but not for the United States.
35:30.16
Kate McNeece
Yeah.
35:30.27
Meredith
And so that that really makes it difficult to continue to advocate for that. There was a time, I think, under the Biden administration that there was, I think, a goal to ensure that that our dispute settlement processes were stronger so that they could demonstrate the value of USMCA to Americans. But under the current, even towards the end of the Biden administration and now in the early days of Trump, I'm not optimistic that we're going to see dispute settlement get fixed in any manner that doesn't always sort of have the thumb on the scale of American interests.
36:13.59
Kate McNeece
Yeah, given the incoming Trump administration and the tenor of the last week, do you think that 2026 is going to be sort of the end of KUSMA as we currently or USMCA as we know it? Or do you think there's still some hope for some kind of North American collective approach to trade issues?
36:32.92
Meredith
I have to be yeah optimistic that USMCA will endure. And I say that because USMCA was one of the legacy achievements of Trump in his first administration. It was one of the things he got done. And so if he if he tears it up, then it doesn't exist. And then there isn't that legacy piece there.
37:00.27
Meredith
But in addition, in the first day of his swearing in, while he did make this comment about 25% tariffs, which is what you know the entire Canadian media is focused on, there were half a dozen executive orders signed by him that have direct relevance to Canada's trade interests. And in one of those was a focus on the USMCA review.
37:29.92
Meredith
And so I completely anticipate that USMCA review will take place, that it will be accelerated. I think that the Americans have a very strong hand. So any issues that Mexico and Canada have concerns about, we'll see how much gains we make in those areas. But I think USMCA and the review will continue.
37:58.44
Meredith
It is difficult so long as there's this threat of tariffs. And obviously, if tariffs are brought in, then the entire USMCA review, I think, gets put on ice. I wouldn't advise any Canadian leader to negotiate USMCA so long as the tariffs are in place. But if those remain a threat and not a reality, then I think that the USMCA review actually will proceed.
38:28.36
Kate McNeece
Great. Well, I think we can all hopefully take that hopeful attitude into the future. And I think I guess if I can sum up our conversation, it's really watch this space and we'll see how things continue to develop. I think we're just about out of time here. So Meredith, thank you so much for joining us. This has been a fascinating conversation in an area that I at least don't get to spend a lot of time thinking about, but that directly impacts us as both people living in Canada and people trying to practice law in this somewhat upheaval type of environment we have. So thanks again for your time and for joining us here on Counterfactual.
39:04.07
Meredith
Great, thanks very much for the opportunity Kate, it was great.
39:06.87
Kate McNeece
Thanks a lot.