UPDATED: ‘I don’t know’ — Biden noncommittal on including Canadian vehicles in EV tax credit

The trilateral summit saw the three leaders speak of prioritizing physical, economic health of their shared continent

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Joe Biden appeared in no mood for compromises Thursday as he welcomed Prime Minister Justin Trudeau to the Oval Office for the first North American Leaders’ Summit, and offered the usual bilateral pleasantries but no hints he’s willing to budge on a controversial tax credit for American-made electric vehicles.

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He and Trudeau did however, sing one another’s praises before a phalanx of U.S. and Canadian reporters and cameras, a show of unity and continental solidarity before a three-way meeting with Mexican President Andres Manuel Lopez Obrador.

Biden complimented Trudeau on “one of the easiest relationships you can have as an American president and one of the best.”

Trudeau returned the favour, telling Biden the two leaders had “a lot of work to continue to do,” but that was “something that we’re always great partners on.”

But when the customary shouted questions turned to the subject of the US$12,500 zero-emissions vehicles tax credit — a proposed measure the Canadian auto industry has described as a potential body blow — Biden showed no latitude.

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“We’re going to talk about that to some extent,” he said. “We haven’t even passed it yet in the House … there’s a lot of complicating factors.”

It’s too early to assume — and highly unlikely anyway — that the proposal, which is part of the US$1.75-trillion climate change and social spending package currently awaiting a vote in the House of Representatives, will emerge unscathed.

Biden’s signature “Build Back Better” bill is widely expected to pass in the House, but it will get a rougher ride in the evenly divided Senate, where one moderate Democrat — West Virginia Sen. Joe Manchin — has already said he doesn’t like the fact that the tax credit uses taxpayer money to pick winners and losers.

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Later Thursday, Trudeau, Biden and Lopez Obrador gathered in the ornate East Room of the White House for a trilateral summit — their first since 2016.

Seated at a large oval table with Biden on one side and Trudeau and Lopez Obrador safely physically distanced on the other, the three leaders — their various cabinet entourages seated along the perimeter of the room — spoke of prioritizing the physical and economic health of their shared continent and respective residents.

“Our North American vision for the future draws on our shared strengths, as well as three vibrant democracies with dynamic populations and economies, wishing to work together,” Biden said.

“We can meet today and we can meet all the challenges, if we just take the time to speak to one another, by working together.”

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Trudeau thanked Biden for playing host and described himself as being among friends with a shared priority of “ending” COVID-19 and ensuring strong supply chains between all three countries.

“We are three countries with extremely strong ties between our people, with our values and visions for the future strongly united,” he said.

He described the U.S.-Mexico-Canada Agreement as a “world-class” deal that protects workers’ rights and allows all three countries to work together on the climate crisis.

U.S. President Joe Biden, left; Andres Manuel Lopez Obrador, Mexico’s president, lower right; and Prime Minister Justin Trudeau, top right; in the East Room of the White House on Nov. 18.
U.S. President Joe Biden, left; Andres Manuel Lopez Obrador, Mexico’s president, lower right; and Prime Minister Justin Trudeau, top right; in the East Room of the White House on Nov. 18. Photo by Chris Kleponis/CNP/Bloomberg

None of the three leaders mentioned the tax credit, which both Canada and Mexico believe is too heavily geared towards U.S.-made vehicles and is a violation of both the spirit and the letter of the USMCA.

However, White House press secretary Jen Psaki said the Biden administration doesn’t believe it violates the trilateral free trade agreement.

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“We don’t view it that way, I think it’s safe to say,” said Psaki. “I would say that, in our view … the electric vehicle tax credit is an opportunity to help consumers in this country.”

Biden, who has made it clear he shares some of his predecessor’s protectionist instincts, also designed the credit to favour vehicles made with U.S. union labour.

In our view … the electric vehicle tax credit is an opportunity to help consumers in this country

White House press secretary Jen Psaki

But in his opening remarks during the Oval Office encounter, he offered nothing but praise for Trudeau and Canada.

“I think we both think we’re at our best when opportunity, equity, and justice all coincide, and they’re the core values of Canadians and the United States,” he said.

Trudeau praised the U.S. for its partnership and help in fighting the COVID-19 pandemic, saying the “hard work” on combating the virus around the world has only just begun.

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“The hard work around the world is making sure we’re bringing people along — and that’s something that we’ve always been great partners on.”

Biden, Trudeau and López Obrador in the East Room at the White House, with their compatriots along the perimeter.
Biden, Trudeau and López Obrador in the East Room at the White House, with their compatriots along the perimeter. Photo by Alex Wong/Getty Images

A number of issues the three leaders were to discuss had been agreed upon in advance.

For instance, Canada and Mexico have already agreed to redistribute millions of COVID-19 vaccine doses they received from the United States to other Western Hemisphere countries.

Senior U.S. government officials outlined the measure in advance of Thursday’s meeting, speaking on the condition of anonymity as authorized briefers.

A North American working group on violence against Indigenous women and girls — an initiative Trudeau announced with former U.S. president Barack Obama in Ottawa in 2016 — is being revived by Biden.

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The three leaders will also look at strengthening trilateral co-operation on the Western Hemisphere’s unprecedented migration crisis that has seen millions of asylum seekers from Central America crashing Mexico’s borders while Venezuela’s economic and political crisis is expected to produce six million refugees by the end of the year.

Trudeau — with several cabinet ministers in tow, including Deputy Prime Minister Chrystia Freeland, Foreign Affairs Minister Melanie Joly, Trade Minister Mary Ng and Public Safety Minister Marco Mendicino — met one-on-one Thursday morning with Lopez Obrador at D.C.’s Mexican Cultural Institute.

Lopez Obrador, who was meeting Trudeau in person for the first time, described the two countries as “sister nations” in advance of their trilateral meeting with Biden.

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“We are both countries that belong in North America,” the Mexican president said. “We are countries that collaborate and co-operate.”

He also said he was grateful for the “treatment of respect” from the United States, though energy policy has recently driven a wedge between Biden and López Obrador.

President Joe Biden listens as Andres Mexico’s president Manuel Lopez Obrador speaks.
President Joe Biden listens as Andres Mexico’s president Manuel Lopez Obrador speaks. Photo by Chris Kleponis/CNP/Bloomberg

The Mexican president has proposed a large-scale reform of his country’s electrical system which U.S. business leaders say would discriminate against American energy producers. U.S. ambassador to Mexico Ken Salazar this month said the U.S. had “serious concerns” about the overhaul.

As for Canada and Mexico, Trudeau acknowledged that the two countries have “lots of great things to talk about, lots of things that we agree and align on.”

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Freeland described the tax-credit proposal Wednesday as potentially “the dominant issue” in the Canada-U.S. relationship if the two countries can’t come together on an agreement. In the same breath, however, she said she believes there’s plenty of room to negotiate a “win-win” for both sides.

The overarching theme of the summit is joining forces to rebuild after the COVID-19 pandemic and make the North American continent more resilient and self-sustaining against global supply chain bottlenecks.

The overarching theme of the summit is joining forces to rebuild after the COVID-19 pandemic

The plan for Canada and Mexico to share their American-supplied excess vaccines is part of that economic rebuilding plan. When the U.S. loaned Canada and Mexico millions of vaccines, there was an agreement that they “would pay those forward” to regional partners, said one official.

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The exact details of the distribution are to be worked out later by public health experts, said the officials.

The U.S. officials said that there can be no economic competitiveness without equity and justice, so Biden is keen to forge a continental partnership on racial equity and inclusion.

Biden also wants to engage with Canada and Mexico on dealing with the root causes of the mass migration of asylum seekers south of the Mexican border.

Biden wants “to lock arms with Canada and Mexico” on a joint approach to tackle the economic inequities that are forcing people in the Western Hemisphere to flee their countries in record numbers, officials said.

Given the labour shortages in North America, new approaches need to be found to match economic migrants with potential employment opportunities in the U.S., Canada and Mexico, officials said.

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But Mexican officials have voiced frustration with the constant stream of U.S. demands that Mexico do more to curb migration.

At a news conference Thursday, López Obrador said restrictive immigration policies make little sense given the current need for migrant labour.

“Migrants should not be rejected when growth requires a workforce that in reality is insufficient both in the United States and in Canada,” he said. “For that reason, we should study the labour demand and open, in an orderly manner, the flow of migration.”

Migrants should not be rejected when growth requires a workforce that is insufficient both in the U.S. and Canada

Manuel López Obrado

Further, the three leaders were to cover the supply chain snarls that are hampering the post-pandemic economic recovery.

Canada is expected to be added to the U.S.-Mexico supply chain working group to make it a North America-wide effort aimed at minimizing future disruptions for the continent. The new working group will look at defining essential industries, including critical minerals, officials said.

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Trudeau used his first day in Washington on Wednesday to talk up Canada’s competitive advantage on critical minerals, which are used in batteries for computers, cellphones, electric vehicles and other essential items.

Trudeau told a think-tank audience that his government began talking with the U.S. two or three years ago about Canada’s abundant supply of critical minerals.

China is the world’s leading supplier of those minerals, but pandemic-induced bottlenecks have created major shortages.

Following the summit, one of the biggest challenges may be what remained unspoken — that any commitments could shift almost instantaneously with a new president, including the possible reemergence of Trump — in 2024.

— with additional reporting from The Washington Post

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