About Colin Robertson

A former Canadian diplomat, Colin Robertson is a Senior Advisor to Dentons LLP living in Ottawa, Canada. He is Vice President and Fellow at the Canadian Global Affairs Institute.  He is an Executive Fellow at the University of Calgary’s School of Public Policy and a Distinguished Senior Fellow at the Norman Paterson School of International Affairs at Carleton University. He is on the advisory councils of the  Conference of Defence Associations Institute and the North  American Research Partnership. He is an Honorary Captain (Royal Canadian Navy) assigned to the Strategic Communications Directorate. He writes a regular column  on foreign affairs for  the Globe and Mail and he is a frequent contributor to other media.

Colin can be reached by email at cr@colinrobertson.ca

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Bulk Drug Sales to the USA

Canada must resist the lure of bulk U.S. drug purchases

 

‘Beware of Greeks bearing gifts” is advice that Canadians should heed on U.S. legislation permitting the bulk purchase of pharmaceutical drugs from Canada for the U.S. market.

At a time when we are about to renegotiate our preferred access for people, goods and services, it makes no sense for Canada to involve itself in this very American controversy.

Vermont Senator Bernie Sanders is the driving force behind a bill in the U.S. Senate aimed to give Americans “Canadian” prices for their prescription drugs. A similar bill was defeated in January (52-46) but not on the usual Democrat versus Republican partisan lines. A dozen Republicans, including senators Ted Cruz, Chuck Grassley and John McCain, voted for the measure.

Americans spend more per capita on health care than anyone else in the world – $9,451 (U.S.), according to the OECD (the comparable figure for Canada is $4,727). Donald Trump and the Republicans were elected, in part, on their promise to abolish Obamacare, and their recent spectacular failure in the House of Representatives only underlines the challenges around U.S. health care.

Groups of American seniors crossing the border to buy drugs or having prescriptions filled in Canada and then sent to them in the United States – this also accommodates Canadian snowbirds – has long been a feature of cross-border “trade.” This will continue. But Canada is not the solution to the United States’ drug-pricing controversy.

Our pharmaceutical industry – innovators and the generics – is stretched providing for the Canadian market. Last year, Health Canada introduced regulations requiring drug manufacturers to report on anticipated and actual drug shortages. There is even a website – Drug Shortages Canada.

Involving ourselves in this American problem would not serve Canadian interests. Given that many of the prescription drugs that Canadians consume are manufactured elsewhere, Canada would simply be a trans-shipment point.

The failure of Canadian authorities to inspect for counterfeits in goods trans-shipped through Canadian ports is a continuing irritant to the United States. With the opioid epidemic in the United States (a problem also in Canada), there is also concern that Canada would become a back door for international drug smugglers. The bulk transfer of pharmaceutical drugs makes no sense. As with the prohibition on the bulk transfer of our water, Parliament and provincial legislatures should act now to prevent wholesalers from exporting drugs in bulk from Canada.

With aging populations in both Canada and the United States, there is only going to be more demand for drugs and biologics that improve and sustain life. This is where Canada and the United States should be co-operating.

It is estimated that, with research, clinical trials and licensing by governments, it takes eight to 11 years and costs almost $3-billion to bring a drug to market. The creators, mostly private companies, deserve a fair return on their investment but pricing must be fair as consumers and their legislators will intervene, as illustrated by the EpiPen controversy.

Innovation is a Trudeau government priority. Innovative Medicines Canada says that there are more than 500 new products in development supported by more than $1-billion in annual research and development. Genome Canada and its provincial partners are making a difference employing using new approaches, such as Open Science, involving the sharing of data and samples.

If health care in the United States is the most expensive in the world, Canada’s is also costly – about 11 per cent of our GDP. Every provincial government is engaged in efforts to bring down health care, which absorbs about 40 per cent of their budgets. More attention needs to be devoted to outcomes. This will require hospitals and health-care professionals to share data and then crunch them so we can see what is working and what can be improved. This is another area where co-operation with the United States makes sense.

In the meantime, let’s not risk our reputation and our own supply to address a “Made in America” problem that must be fixed in America. Mr. Sanders’s “Trojan horse” should be emphatically rejected and the sooner the better. Canada has much bigger stakes in play with our American neighbours.

A former diplomat, Colin Robertson is vice-president and fellow at the Canadian Global Affairs Institute.

 

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Trudeau Government outreach into the USA

Bill Morneau drawing links between anxiety that elected Trudeau, Trump

Morneau, whose most recent U.S. visit took him to New York and Indiana this week, said he’s been telling American political leaders that the same middle-class angst that fuelled Trump’s victory also helped propel the Trudeau government to power.

“As we go out to the United States, we reinforce the importance of jobs — that’s a common factor that we share with Americans,” Morneau said this week in a post-trip interview.“Having secure, well-paying jobs over the long term is the surest antidote to anxiety about the future.”

Morneau’s visit was part of Canada’s ongoing political charm offensive in the U.S., which has been intensifying since Trump took office in January.

Canadian leaders from all levels of government have been travelling stateside and highlighting the economic benefits for both countries of their cross-border business relationship.

It’s prompted by fears north of the border that several U.S. trade and tax proposals under discussion would, if implemented, have significant economic impacts in Canada.

Morneau said he recently met with Indiana Gov. Eric Holcomb, and they discussed the similarities between conditions in their respective countries.

Earlier this week, he told a World Economic Forum event in New York that he made a point of telling his U.S. counterpart, Treasury Secretary Steven Mnuchin, the same thing when they spoke last month at a G20 meeting in Germany.

“We talked about the challenges that fuelled our election in Canada and the challenges that fuelled the new administration in the United States — and the very real sense that we both need to strengthen the middle class in our countries,” he said.

The Trudeau government is trying to show Americans that their Canadian counterparts share many of the same fears and challenges as Trump supporters, said Christopher Sands, a U.S.-based political science professor and Canada-watcher.

“Politically, it’s smart. Don’t treat Trump as crazy or impossible, but try to find a way to seem as normal and as comfortable with him as possible and he’ll be the same with you,” said Sands, director of the Center for Canadian Studies at Johns Hopkins University.

The most recent national elections in both countries came as middle-income workers were feeling squeezed, said Sands. But Canada didn’t see the same kind of “populist, nationalist, frustration with the establishment” present in the U.S., he noted.

Colin Robertson, a retired Canadian diplomat with extensive U.S. experience, said Morneau’s approach suggests the Trudeau government continues to seek “convergent points” with the Trump administration and with state governments.

“I think that’s probably wise,” said Robertson, who noted that while the two governments’ approaches on issues like refugees and climate are different, they have shared interests in achieving growth.

Many Trudeau cabinet ministers have been asked to focus some of their outreach efforts on key states with strong economic relationships with Canada.

Morneau has been asked to pay close attention to Indiana, in addition to his finance minister’s roles in the U.S. capital and New York.

His office sent out a release this week saying that Canada is Indiana’s top customer. It also said nearly 190,000 jobs in the state are directly connected to trade and investment with Canada.

Indiana’s importance runs even deeper because it’s the home state of U.S. Vice-President Mike Pence, the former governor.

“I found that the relationship with Vice-President Pence started off on a very strong footing when we were in the White House,” Morneau said.

“He’s very interested and because of his background in a state like Indiana, which has such a strong relationship with Canada. He already has a good starting point in understanding how important the relationship is.”

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Vimy Anniversary

with Nicolas Chapuis VimyFormer Canadian diplomat Colin Robertson and French Ambassador Nicolas  Chapuis at a March 22 reception marking the 100th anniversary of Vimy Ridge hosted at the French Embassy.. Photographs courtesy of Cynthia Munster

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Trudeau, Ivanka Trump and Come From Away

Daughter diplomacy: Trudeau’s unorthodox play for Donald Trump’s approval

Hanging out with Ivanka offers an in to a president who seems to value personal relationships over ideology — but whose brand is coming out ahead in this new friendship?

The cameras couldn't get enough of Prime Minister Justin Trudeau and Ivanka Trump at their first meeting in Washington on Feb. 13, 2017.
The cameras couldn’t get enough of Prime Minister Justin Trudeau and Ivanka Trump at their first meeting in Washington on Feb. 13, 2017.  (Evan Vucci / AP)  

WASHINGTON—A businesswoman whose lifestyle brand is struggling with liberals. A liberal-multilateralist prime minister who needs an in with a conservative-nationalist president.

Diplomacy is rooted in interests. And Ivanka Trump and Justin Trudeau both have an interest in hanging out with each other.

Read the latest news on U.S. President Donald Trump

The prime minister sat with the president’s daughter Wednesday night at the Broadway musical Come From Away, the Canadian show about the Newfoundland town that took in stranded Americans on Sept. 11, 2001. It was his second olive branch to her in just over a month.

Some U.S. news outlets suggested Trudeau had been sending a kind of passive-aggressive message: “Justin Trudeau brought Ivanka Trump to a Broadway show that celebrates generosity towards foreigners in need,” the New York Times tweeted to its 34 million followers. Whether or not that was true, he was also offering a kind of cashless donation to her company.

Trudeau joked of his “bromance” with former president Barack Obama. Shared youth and mutual interest in women’s issues notwithstanding, his new bilateral bestiehood appears much more a marriage of convenience.

“It is just so Game of Thrones‎,” said John Higginbotham, a former Canadian diplomat in Washington, referring to the television show in which warring family dynasties strike strategic alliances in ruthless pursuit of power.

Like Donald Trump before her, Ivanka Trump has made a brand out of her name. Her name has been tarnished, in the eyes of millions of progressive American consumers, by her father’s xenophobia and sexism. Who better to be seen with than the fashionable foreign progressive feminist who hugs refugees?

For Trudeau, daughter diplomacy offers the prospect of a lifeline to a president who shares almost none of his principles but who often appears to value personal relationships over ideology and policy — and who appreciates a political gift. Donald Trump has lavished praise upon chief executives who have let him take undeserved credit for their investments.

“It looks as if foreign leaders think the way to approach Trump is by direct or indirect appeals to his ego and personality, rather than in terms of national interests,” said Charles Stevenson, a former State Department policy planner who teaches foreign policy at Johns Hopkins University. “Business leaders have already discovered this, so they bring their announcements of job creation as if they had birthday presents for the king.”

Donald Trump, not Ivanka Trump, was Trudeau’s original invitee to the play, communications director Kate Purchase said. Trump told Trudeau he couldn’t make it, Purchase said, “but suggested that perhaps Ivanka Trump could join instead.”

“We were happy to arrange that,” she said.

“We’re friends and neighbours, partners and allies. We are committed to continuing to build on that relationship in a positive, constructive way. That means talking to U.S. senators, members of Congress, governors, Cabinet secretaries, business leaders, and importantly: the president and those close to him.”

Ivanka Trump has been portrayed in anonymously sourced stories as a powerful figure in the administration, a kind of de facto first lady. In February, Politico reported that she helped convince her father not to roll back protections for LGBT people. In March, Reuters reported that she was “a key advocate for the more measured, less combative tone” he adopted in his address to Congress.

Trudeau and Sophie Grégoire-Trudeau greet people after watching "Come From Away" in New York on Wednesday night.
Trudeau and Sophie Grégoire-Trudeau greet people after watching “Come From Away” in New York on Wednesday night.  (SAM HODGSON)  

But there is considerable skepticism in Washington that the leaks are anything other than self-serving public relations — and that Ivanka Trump has either the inclination or the ability to push her father toward moderation. The president has so far pursued a hard-right agenda that has betrayed few hints of liberal influence.

“Ivanka’s the only one of his children I think he listens to. But it’s just very, very small, and around the edges,” said Joshua Kendall, author of the book First Dads, about presidents as parents. “I think every once in a while he pays a little lip service to child-care, but I think those tiny inroads have led to sort of a feeding frenzy. Everyone says, ‘Maybe we can go much further than that.’ And I don’t think that’s going to happen.”

It is not only the president with whom Ivanka Trump might help Trudeau. Her husband, Jared Kushner, has emerged as one of the most powerful people in the country. As Donald Trump sidelines the professional diplomatic corps, Kushner, a 36-year-old with no government experience, has been shovelled responsibilities that range from soothing Mexico to striking Middle East peace.

Colin Robertson, a former Canadian diplomat, praised Trudeau for astute “realpolitik,” saying his rapport with Ivanka Trump serves Canadian interests. But the NDP has criticized his friendly posture toward a president whose policies foreign affairs critic Hélène Laverdière calls “racist.”

“Justin Trudeau took Ivanka Trump to an excellent Canadian play about kindness to strangers. It’s a play President Trump really should see. However, Trudeau continues to give Trump and his family political cover,” Laverdière said.

Trudeau’s early work with Ivanka Trump has paid at least superficial dividends. Trump boasted in his high-profile address to Congress of the new Canada-U.S. council on women in business; Trudeau was the only foreign leader he mentioned by name.

The council was an invention of Trudeau’s office designed specifically to include Ivanka Trump. She sat next to him at the inaugural meeting at the White House in February, cameras clicking away. Their Broadway appearance made new international headlines — some of the stories wrongly framing it as a quasi-date, omitting the presence of Trudeau’s wife Sophie Gregoire Trudeau.

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NAFTA and the Next Election

The next big federal election agenda item has been set: Trump and trade

By the time Canadians next go to the polls, all the players will be lined up to fight over the biggest trade agreement in a generation

US President Donald Trump and Canadian Prime Minister Justin Trudeau hold a joint press conference in the East Room of the White House in Washington, DC, February 13, 2017. (Saul Loeb/AFP/Getty Images)

Here we go again. Another federal election that will hinge on free trade.

This is not so much a prediction as it is a simple matter of following the timelines. By 2019, the next federal election, the NAFTA re-negotiations will either be in the dramatic end game or the very contentious ratification phase. The Liberal government will be consumed by the deal, as it already is today. The Conservatives and the NDP will both have new leaders desperate to define themselves by the biggest economic deal of a  generation. What to protect and what to give up? Unions will want a new deal on car manufacturing and will try to stick it to Mexico. Dairy farmers in Quebec will be fighting for supply management. You will hear the phrase “country of label origins” so often it will sound like the name of a band. Softwood lumber, beef, pharmaceuticals—oh, the lawyers are already priapic at the possibilities. We’ll even have the soundtrack of Brian Mulroney singing “When Irish Eyes Are Smiling” to Donald Trump. Get ready to negotiate like it’s 1988.

“At the earliest I think the renegotiation—with or without Mexico—will take at least a year, probably 19 months,” says Colin Robertson, the vice president of the Canadian Global Affairs Institute and a former diplomat who implemented NAFTA back in 1993. “After that we have to go for ratification, which adds on another year plus. My guess is that NAFTA, or whatever we call it, doesn’t get wrapped up until spring or summer 2019, meaning it will be front and centre in our October 2019 election.”

READ MORE: A Trump trade war with Mexico would be a disaster for both sides

But wait. Isn’t this all supposed to unfold a lot quicker than that? Didn’t Donald Trump say this was just a matter of a few “tweaks”? How long could that take? Isn’t Trump all chummy with Justin Trudeau over their Women’s Business Council?

If you believe that then you might as well believe your microwave is spying on you. Just listen to the Trump people who are in charge of the NAFTA renegotiation. They are not predicting a trade war with us; they believe they are already in one. We just refuse to believe it.

“We’ve been in a trade war for decades,” new U.S. commerce secretary Wilbur Ross told Bloomberg News recently, as he clarified why the U.S. is launching a radical series of trade negotiations that will include a head-on collision with China and ripping up NAFTA. Comparing trade negotiations to war is standard fare for the Trump administration, where hyperbolic, confrontational rhetoric is the vernacular. Turns out the art of the deal is really a euphemism for an eye-gouging brawl.

Ross and Trump are obsessed with the dangers of trade deficits. It is their white whale and they’re likely just as mythical. The fact is, most economists agree that trade deficits are not necessarily bad for the U.S. economy nor do they reflect some camouflaged version of a trade war, as Ross asserts. There are many reasons why the U.S. imports more than it exports, and some of those reasons actually help the economy. But billionaires like Trump and Ross don’t trifle with details. Every minor issue is elevated to its maximum threat level, so a trade imbalance becomes a trade war. That’s why when Trump casually remarked that the coming changes to NAFTA will merely be “tweaks,” he was so off brand. Trumps don’t tweak, they transform—or, at least, they say they will. Ross has now corrected the record. “It’s not going to be a shooting war,” he continued to Bloomberg, as if the bench mark for an acceptable negotiation was merely a lack of bullets. “If people know you have the big bazooka, you probably don’t have to use it.”

So there it is. Either Wilbur Ross has a bazooka in his trade pocket or he’s just really excited to negotiate with Canada. Whatever it is: by his own admission, a trade war is coming. That warning was reiterated this week during the confirmation hearing for Robert Lighthizer, the incoming trade secretary. Both Republicans and Democrats pressed him to crack down on trade with Canada, including digital piracy, counterfeit products and softwood lumber. “I’ve had a variety of issues with respect to Canada that have been raised by senators,” Lighthizer said. “There are a number of things we have to address with respect to Canada.”

None of this is a surprise to Team Trudeau. They have done the pragmatic thing and fanned out across the U.S. this week like the snowstorm Stella itself—blanketing politicians with information about the benefits of an open border and free trade with Canada. To their credit, they have not been lulled into complacency by the purring of the Trump lions. They have set up a special Trump team inside the PMO, shuffled the cabinet to get competent and connected people like Chrystia Freeland and Andrew Leslie in key spots, and taken advice from everyone who can help, from Derek Burney to Brian Mulroney. Conservatives I have spoken to have grudgingly acknowledged that the PM is doing all the right things.

The only person griping is NDP leader Tom Mulcair, who believes that unless Trudeau is out there calling Trump a fascist, he’s nothing more than a quisling. Mulcair can say stuff like this because he’s now in his Easy Rider phase, wildly gunning it down the last miles of his political highway and sticking it to the man. Go man go. He deserved better from his party and if he wants to bring back some hippie anger to the NDP, damn the consequences.

READ MORE: Why Canada—and its economy—has plenty to fear from Trump

For the Prime Minister, though, all things must be put through the political calculator, especially with Canada’s largest trading partner. We don’t get to pick the U.S. President any more than we pick our own parents, so Trudeau’s tactical charm offensive is a legitimate response. This week the Prime Minister is in New York to reinforce the close bond of Canada and the U.S. during 9/11. Last week he was in Texas at an energy conference talking about oil. Meanwhile, other ministers, MPs and premiers are hitting 11 states, from Kentucky to Wisconsin, Indiana to Florida. It’s better to jaw-jaw than war-war, as Winston Churchill liked to say.

The problem is, it might not make much difference. The next election will still be about the trade deal: What was won, what was lost, what concessions were made, what victories were gained. Look at the timeline. The President needs to gives Congress 90 days’ notification in order to kick start the renegotiation of NAFTA, but he can’t rush too much because Wilbur Ross’s team still isn’t in place. Still, for the sake of argument, let’s follow Ross’s “bazooka approach”—the fast-track option—and assume the President gives notice in the next few weeks. Then what?

Here are the blocks of time you have to bake into the process at the bare minimum. Congress needs 180 days’ warning before signing the deal, as the Globe and Mail has reported, and another 105 days for the International Trade Commission to look over the deal and put out a report. Then there is another 6o-day period for amendments. That’s already 435 days, deep into 2018—and that’s if everything goes smoothly.

No serious person thinks it will go smoothly, even if Congress tries to fast-track the timelines. Contentious issues like softwood lumber, automobiles and, wait for it, water, could blow this thing up. The free trade deal with the European Union took years and it was almost derailed by the Walloons. We don’t even know who the U.S. version of the Walloons will be, but in America, Walloons are super-sized, so expect a few hurdles. Just look back at the former trade deals with the U.S. as precedent.

“We finished negotiations of the Canada-U.S. Free Trade Agreement in October 1987 and then made some more changes in December before signature in January 1988,” says Robertson. “Then we fought an election on it. Then on NAFTA we finished negotiations in early 1993 and put it through the implementing legislation, finishing in June 1993. Then came the October election and we had to do the labour and environmental accords. Clinton only got the U.S. Congress to pass it in November 1993, a year after he was elected and signed in December.”

Talking to Robertson about trade timelines makes a mockery of the idea that there are simple tweaks out there. There aren’t. The first U.S.–Canada Free Trade Agreement took four years. When we brought in Mexico to make it NAFTA, it took another four years. The Trans Pacific Partnership, which Trump just crushed, has been 11 years in the making. People talk about the Doha Development Round, which started in 2001, as if was a mythical character in a box-office flop called Fantastic Trade Beasts and Where to Find Them.

Saul Loeb/Getty

Let’s add one more wrinkle here: Washington gridlock. Even though Republicans control the House, the Senate and the presidency, the debate over replacing Obamacare has revealed the unified government to be more like a dysfunctional family at a Christmas dinner. “Trump is no Lyndon Johnson,” says Robertson, “and while he is better than Obama at working congressional leadership, my friends tell me there are already antagonisms at the staff level between the Speaker/majority leader in the Senate and the White House.” Pass the gravy.

READ MORE: Trudeau can’t afford to just play Trump one-on-one

Not everyone thinks it will go this long. I spoke with Eddie Goldenberg, Jean Chretien’s former senior political advisor, who believes the process could wrap up faster. “The Trump Administration will do its best to finish before the midterms in the U.S., so it is unlikely that the negotiations will be continuing during the next Canadian election campaign,” he says. Maybe. But as Robertson points out, the implementation and ratification will take another year-plus. “If there is any election issue,” Goldenberg says, “it will be about the government’s record—positive or negative—with respect to the outcome of the negotiations.”

That is true and the battle lines will quickly be drawn. The NDP needs to regain the union vote as it tacks back to the left and will likely oppose much of the deal unless it is radically changed to protect Canadian jobs, something no one here has signalled. But until Jack Layton, opposing free trade was the ticket to the NDP’s best success, and that formula will no doubt be back. The Conservatives are in a full identity crisis now, and will have to figure out if they want to play tough with the U.S. and go back to the Sir John A. MacDonald days of a National Policy—essentially copying Trump’s Buy American stance with a Buy Canadian—or if they want to follow the pro-free trade Mulroney-Harper path, which is more likely but offers less differentiation from the Liberals. Either way, the free trade deal will be the target. Everyone better grab a bazooka.

Trade with the U.S. has defined many Canadian elections, from 1867 to 1911 to 1988. Might as well get ready now and pencil in 2019 as another election fought over free trade.

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Getting Ready for NAFTA Negotiations

For Canada, all hands on deck during NAFTA renegotiations

The rules of the road for trade with our biggest trading partner are about to be renegotiated. We need an all-of-Canada effort to get ready.

The stakes are critical: Three-quarters of our exports head south to the United States. Trade with the United States represents almost a third of our GDP and it sustains close to one in five Canadian jobs.

In the coming days, U.S. Commerce Secretary Wilbur Ross will formally advise Congress of NAFTA renegotiations, setting in play a 90-day consideration by House and Senate committees. By the latter part of the year, Mr. Ross expects that we will be into “real” negotiations that he predicts will take at least a year.

Following his White House meetings with Prime Minister Justin Trudeau last month, President Donald Trump described the Canada-U.S. relationship as just needing some “tweaking.” But, as Mr. Ross told Bloomberg this week, “there is a lot of meat to be dealt with,” including addressing the digital economy and revising the rules of origin.

After meeting recently with her Mexican counterparts in Toronto , Foreign Minister Chrystia Freeland said that Canada’s preference is for trilateral negotiations. Mr. Trump prefers bilateral deals but Secretary Ross says he is “open-minded” about the form. Regardless, Canada and Mexico need to stay close to avoid the divide-and-conquer techniques that are integral to Mr. Trump’s “art of the deal.”

Getting Canada’s act together means real collaboration between the federal and provincial governments and close, continuing consultations with business, labour and civic society. We need consensus on two questions:

  • What do we want from the negotiations?
  • How do we get there?

The more creative we can be, the better. The expertise of sectoral advisory groups proved vital to the successful negotiation of the Canada-U.S. free-trade agreement (1988) and NAFTA (1993-4). They should be resurrected and made permanent. We need to co-opt the best brains in our research community to rapidly crunch data and provide timely analysis for our negotiators.

The Canadian strategy going into the talks must be bold. A new agreement should be broad and comprehensive, providing for the free flow of people, goods and services with enforceable standards for labour and the environment. Let’s take the best from the stillborn (at least for now) Trans-Pacific Partnership. Prime Minister Justin Trudeau spoke to our mutually beneficial energy relationship in putting forward a Canadian policy that is both pragmatic and progressive.

Most of the American “asks” are readily identifiable. As Mr. Ross told Congress during his confirmation hearings, the United States wants to reduce its trade deficits and to restore manufacturing through increasing the “Made in America” content for rules of origin.

The United States Trade Representative annual National Trade Estimates report lists United States’ complaints with Canada. These include extending the intellectual property protection for pharmaceuticals; ending supply management for dairy and poultry; and inspecting for counterfeits, especially for Chinese goods shipped to U.S. destinations through Canadian ports like Vancouver or Prince Rupert.

The easiest solution on rules of origin would be to move to a customs union, but the Americans are unlikely to buy in unless it is a strictly Canada-U..S agreement. Otherwise we need to redefine rules of origin as “Made in North America.” American manufacturers should be our allies, especially those in the automotive industry, where supply-chain integration dates from the 1965 Canada-U.S. Auto Pact.

We should agree to counterfeit inspection in return for extended pre-clearance of goods and easier business travel access. Reforming supply management is long overdue, but let’s get something in return, such as access to U.S. shipbuilding contracts.

Where they were once divided, today Canada’s premiers are of like mind on the value of trade, leading missions across our oceans. Now they need to focus on our biggest customer, especially through cultivating their governor counterparts in regional meetings and through visits to their states. Premier Rachel Notley sets the bar through consistent visits to the US capitol and other US cities.

Access to procurement is vital, especially at the state and provincial government level and, for the premiers, this should be job one. Working with governors, they did a procurement reciprocity deal around the Obama infrastructure investments in 2010. Now we need to make it permanent.

The Americans like us, indeed, more than we like them. The Trudeau government has created good working relationships within the Trump administration. But complacency is a mistake. Mr. Trump’s priority is “making America great again.” The business of America is business. Canada needs to be ready.

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NAFTA Negotiations and Mexico

Bureaucrats ‘literally working around the clock’ to prep for NAFTA talks

‘We’re in a period of great uncertainty,’ one top bureaucrat told Senators last month. The foreign ministry is preparing for anything and everything as a trade renegotiation inches closer.

Justin Trudeau and Donald Trump walk with each other at the White House on Feb. 13. Photograph courtesy of Donald Trump’s Twitter account

By PETER MAZEREEUW

PUBLISHED : Wednesday, March 8, 2017 12:00 AM

The federal government is working day and night to prepare itself as the new Trump administration in the United States eyes restructuring the North American Free Trade Agreement, according to a senior official in Canada’s foreign ministry.

“If my colleague Martin is looking a little tired these days, it’s because he and his trade policy colleagues are literally working around the clock to consider all of [the] different scenarios,” David Morrison, Global Affairs Canada’s assistant deputy minister in charge of the Americas, said of Martin Moen, GAC’s director general for North America and Investment, at a Senate Foreign Affairs and International Trade Committee meeting on Feb. 16.

“We really don’t know at this point how the U.S. wishes to proceed,” Mr. Moen told Senators.

Mr. Morrison said he believed the U.S. government is just now starting to think about how to deliver on President Donald Trump’s promise to renegotiate the NAFTA, or tear it up.

He responded to questions from the Senators about Mexico’s place in any renegotiations—Mr. Trump has lambasted the NAFTA as favouring Mexico over the U.S.—by saying Mexico is “most definitely not being left out of the conversation.” Mr. Moen noted that the existing three-way deal allows just two of the partners to address some trade issues, such as trucking or the sugar trade, without drawing in the third.

Some Canadian government officials speaking anonymously to Reuters in January and former ambassador to the U.S. Derek Burney have suggested Canada distance itself from Mexico, perceived to be the true target of Mr. Trump’s dissatisfaction with the NAFTA, which came into force in 1994.

In response to chatter about whether Canada should go it alone with the U.S., Foreign Minister Chrystia Freeland (University-Rosedale, Ont.) underlined at a panel discussion hosted by the Canadian Council for the Americas on Feb. 21 in Toronto that “NAFTA is a three-country agreement,” and “Were there to be any new negotiations, those would be three-way negotiations.”

In any case, Mexican Foreign Minister Luis Videgaray, who also spoke at the event, said he understood if Canada avoided some of Mexico’s one-on-one concerns with the U.S. Each country would have its own agenda, the CBC reported him saying.

Ms. Freeland’s foreign ministry is preparing for the possibility of bilateral agreements with the U.S. and Mexico if a three-party deal can’t be struck, Mr. Morrison told the Senate committee.

“We’re in a period of great uncertainty, and in a period of uncertainty it’s prudent to prepare for all eventualities, and that’s of course what we’re doing.”

The federal government’s position is that NAFTA has benefited all three countries, said Mr. Moen, adding, “when we talk with business associations in the United States, with specific companies, with local governments, they all agree.”

“Regardless of rhetoric, Canada and many in the United States understand that a secure, stable, and prosperous Mexico is indispensable to Canada’s own prosperity and security,” said Mr. Morrison, listing security, human and drug trafficking, health pandemics, and energy systems integration as issues “best addressed collectively.”

 

Ninety days-plus to go

Mr. Trump has repeatedly said that the NAFTA gives Mexico an advantage over his country, and has moved American jobs to Mexico.

He has been less critical of trade with Canada, calling it “a much less severe situation than what’s taken place on the southern border” during his press conference in Washington with Mr. Trudeau last month. Mr. Trump said the U.S. wanted to “tweak” its trading terms with Canada.

What that means is anyone’s guess. The U.S. and Canada have major or minor trade disputes centred around softwood lumber, dairy and chicken, drywall, wine, and proposals for country-of-origin labelling rules that would require products from north of the border to be tracked separately and labelled as foreign-made.

When Conservative MP Gerry Ritz (Battlefords-Lloydminster Sask.), his party’s trade critic, pressured the Liberal government in the House last month to make public what’s on the table for renegotiation in any NAFTA talks, Liberal MP Andrew Leslie (Orléans, Ont.), the parliamentary secretary for foreign affairs, didn’t do so, but answered that his government would be ready for talks if and when the U.S. was ready to sit down.

That is still at least a few months away. Mr. Trump’s White House held an informal meeting with congressional leaders last month to discuss the NAFTA renegotiation, but has yet to start the clock on a 90-day window in which they will formally negotiate over how the U.S. should try to change the deal.

In Canada, Mr. Trudeau is leading a government-wide political charm offensive to match his foreign ministry’s efforts on the policy side. He restructured his cabinet, many think to better match it to the task of dealing with a Trump administration, and dispatched his top aides and cabinet ministers to the U.S. to build ties with the Trump team and the new Congress. Many of the Liberal-led House committees are also planning to travel to Washington to meet their counterparts in the next few months.

peter@hilltimes.com

@PJMazereeuw

Top Canadian industries exporting to the U.S. last year

Source: Innovation, Science, and Economic Development Canada

Auto manufacturing—$60.6-billion

Oil and gas extraction—$60.3-billion

Petroleum refineries—$12.1-billion

Aerospace parts and manufacturing—$9.1-billion

Pharmaceutical and medicine manufacturing—$8.5-billion

Sawmills and wood preservation—$8.2-billion

Aluminum production and processing—$7.6-billion

Resin, synthetic rubber manufacturing—$6.7-billion

Ferrous metal (non aluminum) smelting and refining—$5.9-billion

Other plastic product manufacturing—$5.3-billion

 

Mix with Mexico, or go it alone?

With U.S. President Donald Trump aiming his disappointment with NAFTA at Mexico rather than Canada, analysts and government officials are weighing in on whether Canada should push for a revised two-way or three-way deal.

 

Take a step back from the trilateral:

“We should not indulge in ridiculous posturing—like getting together with Mexico to defend our interests, when Canada has very different economic interests than Mexico. It is a fundamental error to conflate them.”

—Former ambassador to the U.S. Derek Burney, Maclean’s, Jan. 30

 

“We love our Mexican friends. But our national interests come first and the friendship comes second.”

—An unnamed source quoted by Reuters on the sidelines of a cabinet retreat in Calgary, Jan. 24.

 

“Mexico is in a terrible, terrible position. We are not.”

—An unnamed Canadian involved on the trade file quoted by Reuters Jan. 24.

 

 

Don’t throw Mexico under the bus:

“Our relationship with Mexico is important. We should stand with the Mexican government and help them deal with the discriminatory trends that they are now seeing.”

—Green Party Leader Elizabeth May, speaking to reporters Jan. 30,

 

“Canada may not be in the crosshairs in the same fashion as Mexico but we have no immunity from Trumpian threats. Canada and Mexico need to hang together or, surely, we will hang separately.”

—Former diplomat Colin Robertson, The Globe and Mail, Jan. 16

 

“The Trump presidency should bring Mexico and Canada much closer together, not tear us apart. Whatever trade or investment measures the U.S. applies to our country may end up harming Canada as well and destroying the competitive advantages that the North American value chain has brought since NAFTA came into force 23 years ago.”

—Andrés Rozental, former deputy foreign minister of Mexico, The Globe and Mail, Jan. 27

 

“NAFTA is a three-country agreement. Were there to be any new negotiations, those would be three-way negotiations.”

—Foreign Minister Chrystia Freeland, speaking at a Feb. 21 Toronto panel discussion

 

“Throwing friends and neighbours and allies under the bus is a position for a weak leader. This is not the Canadian tradition.”

—Former prime minister Brian Mulroney, CBC’s Power and Politics, Feb. 21

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Kelly Knight Craft

Donald Trump chooses Republican fundraiser as ambassador to Canada, Bloomberg reports

Craft is a top Republican fundraiser in Kentucky, where she hosted a $5,400-per-couple event for Trump.

Kelly Knight Craft raised money for George W. Bush, Mitt Romney and Trump, hosting a $5,400-per-couple fundraiser for Trump in June and later serving as a finance vice-chair for his inaugural committee.
Kelly Knight Craft raised money for George W. Bush, Mitt Romney and Trump, hosting a $5,400-per-couple fundraiser for Trump in June and later serving as a finance vice-chair for his inaugural committee.  (Courtesy University of Kentucky)  

WASHINGTON—Kelly Knight Craft, a wealthy Republican fundraiser and campaign supporter of U.S. President Donald Trump, is poised to become the next United States ambassador to Canada – and the first woman to hold the post.

Bloomberg News reported Wednesday that Craft, a member of the U.S. delegation to the United Nations under George W. Bush, had accepted Trump’s offer of the position.

She is best known as one of the top Republican fundraisers in Kentucky. Craft has raised money for Bush, Mitt Romney and Trump, and hosted a $5,400-per-couple fundraiser for Trump in June. She later served as a finance vice-chair for his inaugural committee.

Craft, who is in her 50s, is the wife of Joe Craft, the billionaire chief executive of Alliance Resource Partners, a large Kentucky coal producer.

Bush chose her as a “public delegate” to the U.N. delegation in 2007, a short-term role often given to political donors. She is a member of the board of trustees of the University of Kentucky, her alma mater, and sits on the board of directors of the Salvation Army in Lexington.

Former Canadian diplomat Colin Robertson said the appointment – if confirmed – bodes well, showing that Trump picked not just a loyalist, “but somebody he thinks would suit Canada and suit (Prime Minister Justin) Trudeau.”

Indeed, Trump and Trudeau have launched a joint initiative to help female entrepreneurs and business leaders, something the president highlighted in his prime-time speech to Congress Tuesday.

Trudeau responded Wednesday to Trump’s shout-out, saying he was pleased with the efforts on this front. “It highlights one of the things we are very much in alignment on, the need to get more women into the workforce and have women get better jobs,” Trudeau said Wednesday when asked about Trump’s speech.

Robertson said that Craft’s time at the United Nations and her interest in Africa, all play well to Canadian priorities.

“This strikes me as quite a thoughtful appointment in terms of finding somebody who would fit well into Canada,” he said in an interview.

And he said Craft’s husband is also a good fit, with his expertise in business and energy.

“People say, ‘well, it’s coal.’ Look, it’s energy . . . He’s a businessman and the fact he knows the energy trade, I think that’s a good thing,” Robertson said.

Craft’s apparent selection puts to rest rumours about the possible selection of former Alaska governor Sarah Palin, the idiosyncratic right-wing firebrand.

Craft would have to be approved by the U.S. Senate, a process that is usually a mere formality but means the post will be vacant for some time yet.

The news came on the same day Finance Minister Bill Morneau and Transport Minister Marc Garneau visited Washington to meet with their U.S. counterparts and Environment Minister Catherine McKenna spoke by telephone with Scott Pruitt, administrator of U.S. Environmental Protection Agency.

Morneau, making his third trip to Washington since Trump took office, held his first meeting with Treasury Secretary Steven Mnuchin. They talked about infrastructure and the “importance of tax reform,” including the proposal for a U.S.-imposed border tax that could hit Canadian imports, Morneau told reporters later.

“We didn’t go into any details on that as they don’t yet have details that they could communicate,” he said in a conference call.

Morneau said that without a firm proposal on the table, he did not voice Canada’s position to the tax.

“At this stage, without details, it’s not a time for us to express support, or opposition, or, even, insights, into the impact on the Canadian economy,” he said.

Craft has rarely made the news outside of brief Kentucky mentions of her fundraising work.

The Crafts met with Trump at his Trump Tower office in New York in the spring. They told Bloomberg that Trump’s promise not to try to oust House Speaker Paul Ryan or Senate Majority Leader Mitch McConnell, who is from Kentucky, was a key factor in their decision to back him.

In a rare news quote, Craft said she knew was putting her credibility at stake by collecting money for Trump.

“When someone gives us a cheque, we’re looking at that as they’re investing not only in that candidate . . . they’re investing in us, and I take that as a responsibility. I don’t take that lightly. We feel responsible to them,” she said.

The U.S. ambassadorship to Canada is regularly given to an ally of the president, often a wealthy fundraiser, rather than a career diplomat. Barack Obama’s last ambassador was former Goldman Sachs executive Bruce Heyman, who became a fixture on Ottawa’s social scene.

By tradition, Heyman left the diplomatic posting when Trump took office in January.

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Trade Relations with Trump’s America

Trade dynamics haven’t changed despite Trump: expert

By: Martin Cash Winnipeg Free Press

BORIS MINKEVICH / WINNIPEG FREE PRESS</p><p>Senior trade expert and former diplomat Colin Robertson talks about U.S. trade issues to a crowd at the Canad Inns Polo Park. Event organized by the World Trade Centre Winnipeg. Feb. 28, 2017 170228</p>
BORIS MINKEVICH / WINNIPEG FREE PRESSSenior trade expert and former diplomat Colin Robertson talks about U.S. trade issues to a crowd at the Canad Inns Polo Park. Event organized by the World Trade Centre Winnipeg. Feb. 28, 2017 170228

If anyone knows the best strategies for Canadians doing business with the U.S., it’s Colin Robertson.

For 33 years, the former Winnipegger worked in the Canadian Foreign Service, mostly as a trade specialist and mostly in the United States.

He was a member of the team that negotiated the Canada-U.S. Free Trade Agreement and the North American Free Trade Agreement (NAFTA).

His final assignment before he retired in 2010 was to direct a project at Carleton University’s Centre for Trade Policy and Law on Canada-U.S. engagement.

Speaking Tuesday at a World Trade Centre Winnipeg half-day conference on doing business with the U.S., Robertson downplayed the need for Canadians to alter their approach to the U.S. market in light of the new protectionist, nationalistic postures of the Trump administration.

“It is remarkable what is taking place,” he said. “But trade dynamics have not changed. What has changed is the atmosphere in which we conduct trade.”

He said there may be tougher border inspections, but he said Canadian business will not have the same kind of scrutiny U.S. Customs and Border Protection agents apply at the Mexican border. (He said they refer to the Mexican border as the Russian front and the Canadian border as the Western Front.)

Robertson may know all sorts of technical details about how trade deals were negotiated, but he had some pretty useful, down-to-earth advice about how Canadians can achieve success in the U.S.

“We have to start from a perspective that we need them more than they need us,” he said, noting 77 per cent of Canadian exports go to the U.S., and only 17 per cent of U.S. exports are sent to Canada.

After so many years observing the more aggressive capitalist sensitivities of the Americans compared with a more conciliatory Canadian style, Robertson was clear Canadians need to be more persistent.

“We need to get in the face of America, play by American rules,” he said.

When it comes to the Trump era, he said there doesn’t really need to be different strategies of engagement.

“The engagement should be even closer — like the old Italian rule about keeping your friends close and your adversaries even closer,” he said in an interview.

He is a big proponent of repeated and multi-pronged approaches to American contacts, referencing the success former Manitoba premier Gary Doer had in connecting with U.S. state governors, something he parlayed into a successful posting as the Canadian ambassador in Washington, D.C.

One characteristic of the traditional Canadian approach in trade matters with the U.S. Robertson is keen to see change is the predisposition of Canadians to ask of the Americans what they believe they will get rather than what they actually want.

“We should use their language,” he said.

“We used to talk about facilitating trade. The Americans talk about expediting trade. It means the same thing, but we should use their language.”

martin.cash@freepress.mb.ca

Read more by Martin Cash.

From Farmscape

Canada: A Fair Trader and Reliable Ally
Colin Robertson – Canadian Global Affairs Institute
Farmscape for March 1, 2017

The Vice President of the Canadian Global Affairs Institute suggests the key messages Canada needs to deliver to the United States is that Canada is a fair trader and that Canada is a reliable ally.
Canada U.S. Trade under the Donald Trump administration was discussed yesterday as part of the “What’s in it for U.S. Eh” seminar hosted by the World Trade Centre Winnipeg.
Colin Robertson, the Vice President and a Fellow with the Canadian Global Affairs Institute, says the U.S. President’s stand on trade, including his pledge to renegotiate NAFTA, has important implications for Canada.

Clip-Colin Robertson-Canadian Global Affairs Institute:
I think it’s vey important that we deliver two messages.
The first message is that we are a fair trading partner.
I underline the word fair because that is the language that Mr. Trump is using.
He’s arguing that he will do fair trading deals with the world but it has to be fair and I think we are a fair trading partner.
Our trade is almost in balance.
We have a slight surplus, largely on the back of the oil exports we provide which fuels of course the American manufacturing renaissance Mr. Trump wants to create so, you take out energy, then the Americans have a surplus so I think on that issue it is important that we underline that.
The second important message that we deliver to the United States is that we are a reliable ally.
That is something Mr. Trump has also, as have most American presidents, talked about the allies not doing enough in terms of paying their way in the alliance and we need to do more.
I think the defense programs review , which is on right now, you will see an increase in Canadian defense spending, not to appease the United States but for our own interest.
The world is a more dangerous place.
There is a need for Canada for our own reasons to pay more attention to North American security and our contribution to the collective security, which is arguably a Canadian creation as well, the NATO idea that countries work together in alliance.
That is something I think you’re going to see a shift in the government.

Robertson suggests we had reaped all the benefits of NAFTA within a decade and, while its renegotiation represents a challenge, it also offers an opportunity for Canada.
For Farmscape.Ca, I’m Bruce Cochrane.

       *Farmscape is a presentation of Sask Pork and Manitoba Pork

http://www.farmscape.com/f2ShowScript.aspx?i=25911&q=Canada%3A+A+Fair+Trader+and+Reliable+Ally

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Trump and Trudeau: A Primer

Colin —

New Policy Update: “A Primer to the Trump-Trudeau Meeting”
by Colin Robertson

A_Primer_to_the_Trump-Trudeau_Meeting_Montages.jpg                         

For Immediate Release

10 February 2017 – Ottawa, ON – The Canadian Global Affairs Institute released today:  “A Primer to the Trump-Trudeau Meeting” by Colin Robertson, CGAI Vice-President and Fellow.

On Monday February 13, 2017, Prime Minister Justin Trudeau meets with President Donald Trump in the White House for their first face-to-face encounter. We can expect the official photo to show a stern-looking Mr. Trump and a smiling Mr. Trudeau, indicative of their respective public personalities. But what can we expect in terms of security, trade, and energy? Colin Robertson guides us through with this Primer, including:

• What Will Happen
• Setting the Stage
• Security Basket
• Energy Basket
• Trade Basket
• What to do about Softwood Lumber
• An Assymetrical Relationship
• How does Mexico fit into this?
• Further Reading


The complete report, “A Primer to the Trump-Trudeau Meeting” is available at: http://www.cgai.ca/a_primer_to_the_trump_trudeau_meeting

Download the PDF


The Canadian Global Affairs Institute is always looking for
submissions from scholars and practitioners.
Submit your work here.

For More Information Contact:
Meaghan Hobman
mhobman@cgai.ca

Image: Canadian Press/Associated Press

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