The former Conservative leader told the Montreal Board of Trade that Clinton's decision to accept the "wacky arguments" about trade put forward by socialist former rival Sen. Bernie Sanders is troubling.
Clinton has come out against the Trans-Pacific Partnership agreement she worked on as secretary of state and criticizes NAFTA, which her husband enacted as president.
Former prime minister Brian Mulroney speaks at the University of Calgary on Sept. 13, 2016. (Photo: Larry MacDougal/CP)
Her positions make the situation more complicated, Mulroney said.
"If the Democrats retake control of the Senate, which seems to be the case, it will be a defeat for Canada in the area of international trade."
Mulroney is a fervent defender of free trade as one of the architects of the 1988 deal with the United States and subsequent extension to include Mexico.
He called Trump's call to cancel the North American Free Trade Agreement "illusory."
'Mr. Trump doesn't yet understand that'
Mulroney said the Republican nominee would face political blowback from senators in 38 states that depend on trade with Canada to support 11-million jobs.
And despite Trump's anti-Mexican rhetoric, he said NAFTA is having the desired impact since for the first time in 25 years, more Mexicans are returning home from the U.S. to chase prosperity.
"Mr. Trump doesn't yet understand that. The treaty at the same time resolved economic questions and problems surrounding immigration," Mulroney said.
International Trade Minister Chrystia Freeland said protectionist forces in the U.S. should worry Canadians, especially relating to challenges in securing a new softwood lumber agreement.
"It was always complicated for Canada and the United States, but it's a challenge that has become more complex because of the protectionist wind that currently blows," she told reporters in Ottawa.
Also on HuffPost