About Colin Robertson

A former Canadian diplomat, Colin Robertson is Vice President and Fellow at the Canadian Global Affairs Institute and hosts its regular Global Exchange podcast.  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.  Robertson sits on the advisory councils of  the Johnson-Shoyama School of Public PolicyNorth  American Research Partnership, the Sir Winston Churchill Society of Ottawa and the Conference of Defence Associations Institute  He is an Honorary Captain (Royal Canadian Navy) assigned to the Strategic Communications Directorate. He is a member of the Deputy Minister of International Trade’s NAFTA Advisory Council and the North American Forum.  He writes 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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Trump, Trade Deficits and Trudeau

President Donald Trump repeated his controversial claim on Thursday that the U.S. has a trade deficit with Canada to swipe at Canadian Prime Minister Justin Trudeau, a day after boasting about attempting to bluff the Canadian leader on the subject.

“We do have a Trade Deficit with Canada, as we do with almost all countries (some of them massive),” Trump said on Twitter on Thursday morning. “P.M. Justin Trudeau of Canada, a very good guy, doesn’t like saying that Canada has a Surplus vs. the U.S. (negotiating), but they do…they almost all do…and that’s how I know!”

The Office of the U.S. Trade Representative says the U.S. in 2016 had a goods and services trade surplus with Canada of $12.5 billion. And Trump’s own 2018 economic report, which was released last month and signed by the president, also notes that the U.S. runs “a net bilateral surplus only with Canada and the United Kingdom.”

But Trump and his top trade official, USTR Robert Lighthizer, argue that official statistics understate the size of the U.S. trade deficit with Canada, as well as with Mexico, because the data doesn’t reflect the value of imports from China and other suppliers that first enter the U.S. and are then re-exported to one of the North American neighbors.

“You have a number of — $30, $40, $50 billion worth — of transshipments that have nothing to do with the U.S. economy,” Lighthizer told reporters in January of this year, at the end of a round of talks to renegotiate the North American Free Trade Agreement. “We end up having wrong numbers about Canada, wrong numbers about Mexico.”

The president’s early morning tweet came after he bragged to donors at a closed-door fundraiser in Missouri on Wednesday evening that he recently told Trudeau the U.S. had a trade deficit with Canada, even though he wasn’t sure of the details. He said the Canadian prime minister refuted his claim.

“I didn’t even know,” Trump said, according to audio obtained by POLITICO. “I just said, ‘You’re wrong.’”



Trump also reportedly asked staff to check on Trudeau’s assertion that the U.S. does indeed have a trade surplus with Canada. He then said that the statistics don’t include energy and timber, “and when you do, we lose $17 billion a year,” he said. ‘It’s incredible.”

The White House defended Trump’s comments at a press briefing Thursday afternoon and appeared to embrace his formula, telling reporters that the data showing a surplus are “not complete.”

“The president was accurate because there is a trade deficit and that was the point he was making,” said White House presssSecretary Sarah Huckabee Sanders, adding: “There are plenty of things, once you take into the full account all of the trade between the two countries, that show that there actually is a deficit between those two.”

The latest back-and-forth over the deficit comes as the U.S. is negotiating with Canada and Mexico to modernize NAFTA, which took effect in 1994. Trump in recent weeks has repeatedly mentioned a U.S. trade deficit with Canada in the context of the NAFTA talks. “We have large trade deficits with Mexico and Canada,” he has said, using that to defend his argument that the agreement has been a “bad deal” for Americans.

But Canada’s Foreign Affairs Ministry, which is leading the NAFTA talks for Ottawa, brushed off Trump’s latest remarks.

“Canada and the United States have a balanced and mutually beneficial trading relationship. According to their own statistics, the U.S. runs a trade surplus with Canada,” Adam Austen, a foreign affairs spokesperson, said Thursday. “We are energetically at work modernizing and updating NAFTA to support good jobs and the middle class in Canada, the United States, and Mexico.”

Trump’s latest remarks are unlikely to have any significant effect on the ongoing talks, which are set to resume next month with another formal negotiating round, to be held outside Washington, D.C.

“I think people just look at this and say, ‘There he goes again,’” said Colin Robertson, a former Canadian diplomat who was part of the country’s original NAFTA negotiating team. “I think people think Trudeau has managed Trump well to the national interest. They know that you can’t insult him, because our prosperity depends on our ability to trade with the U.S.”

“So don’t get diverted,” Robertson added. “Don’t get fussed by this.”

Trade Retaliation

Maple syrup from Vermont and perhaps California wine may be on Ottawa’s hit list in response to U.S. President Donald Trump’s proposed tariffs on steel and aluminum.

Lisa Rathke/The Associated Press

Canada will need to either bend or break international trade rules to take quick retaliatory action should the United States slap hefty tariffs on Canadian-made steel and aluminum, but experts say Ottawa has been forced into this position by an exceptionally protectionist White House.

Canadians should expect to pay more for iconic U.S.-produced goods if a trade war breaks out. Ottawa could slap import charges on goods from California wine to Vermont maple syrup – the sort of items that Canada has targeted in previous trade conflicts with Washington.

Canada has not released any lists of products – and the Trudeau government is staying mum on possible retaliation while it continues to seek an exemption from the Trump action. But experts suggest looking back at past trade spats with the United States – such as a 2014 dispute over meat labelling – to see what Canada has been prepared to hit.

Canada will be in good company in this trade fight, however, because more than 20 other countries or trading blocs will be taking similar countermeasures.

The European Union has already outlined a list of U.S. exports it would target after President Donald Trump said he will levy a tax of 25 per cent on imported steel and 10 per cent on aluminum.

U.S. President Donald Trump told a joint news conference that he still backs the idea of adding tariffs to steel and aluminum imports, linking them to a new NAFTA deal. Trump said he will straighten out trade in a “loving, loving” way.

Normally, Canada is supposed to seek retaliatory authority from the World Trade Organization to impose countermeasures on foreign countries but this process can take years. But, unlike past quarrels with the United States, Canada will be hard-pressed to act immediately – regardless of what the rules say.

“I don’t believe any countries affected by these tariffs will wait for WTO procedures to be completed before acting,” international trade lawyer Lawrence Herman said.

“Politics will drive this. Governments, including Canada, will be forced to respond immediately. That’s the dangerous precipice we’re facing, thanks to Mr. Trump.”

Colin Robertson, a former Canadian diplomat, writing in The Globe and Mail, says Canada and other countries threatened by the Trump tariffs should be drawing up a common list of U.S. exports that they could target with retaliatory action.

The EU has already warned it plans to target key Republican leaders with import taxes on items such as Kentucky bourbon – a product from the home state of Senate Majority Leader Mitch McConnell – as well as cranberries and dairy products from Wisconsin, home to House Speaker Paul Ryan.

Mr. Trump threw cold water on hopes for a Canadian exemption this week when he warned Canada would not be spared unless it agrees to U.S. demands for changes to the North American free-trade agreement – a series of protectionist U.S. requests that both Ottawa and Mexico City have characterized as unreasonable.

He said Tuesday that the tariffs will be applied in a “loving way.”

Mr. Ryan, the most powerful member of the U.S. House of Representatives, said the proposed tariffs are too broad and open the country to possible retaliation. Mr. Ryan named China, rather than Canada, as a problem.

The steel tariffs will be raised Wednesday at a meeting between auto industry leaders and officials in Prime Minister Justin Trudeau’s office, said Jerry Dias, president of Unifor, who will attend the meeting.

Auto industry executives sought the meeting to urge Mr. Trudeau to halt Canada’s participation in the Trans-Pacific Partnership trade agreement, which will eliminate Canada’s 6.1 per cent tariff on vehicles imported from Japan.

One U.S. trade expert estimates the annual cost to Canada of the steel and aluminum tariffs could be US$3.2-billion. Chad Bown, a trade adviser to former president Barack Obama, wrote in an article for the Peterson Insitute for International Economics that this amount would be roughly what Canada could justifiably expect to seek compensation for in retaliatory action against the United States.

Former Canadian government officials have said it’s very difficult to pick retaliatory targets. In 2005, when Canada was angry at a U.S. law that funnelled cash collected from tariffs on foreign goods to U.S. companies, Ottawa drew up a list that targeted the states where U.S. politicians voted for the legislation. In that case, Ottawa was forced to abandon some retaliatory targets – such as U.S. motorboats – because of push-back from Canadian industry. Its final list was narrowed down to a few items, such as tropical fish.

Laura Dawson, director of the Canada Institute at the Wilson Center in Washington, said Canada’s best bet to head off the tariffs may be to wait for the U.S. system of checks and balances to run its course, including a likely court challenge of steel tariffs by companies that buy steel.

“People are already talking about how court challenges will be launched, what would the courts be asked to adjudicate; would they be asked to adjudicate what constitutes a national security threat?” Ms. Dawson said.

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Trump Trade Threats

For Canada, Trump times are trying times. In spite of constant provocation, the team around Prime Minister Justin Trudeau’s team has successfully avoided making our policy differences personal. This is the right approach.

The latest ‘Trumplosion’ links the threatened new tariffs on steel and aluminum to renegotiating a “new and fair NAFTA agreement.” Delivered in one of the President’s now-trademark early morning tweets, it is straight out of Donald Trump’s playbook.

The Trumplosions are a distraction to the NAFTA negotiators. They remind us why we need a fair dispute-settlement chapter as insurance of secure access to our largest market.

Getting an exemption from the tariffs means redoubling our advocacy efforts in the United States. To our mantra about Canadian trade sustaining nine million American jobs, we now need to add that Canada is the biggest market for U.S. steel, taking half of U.S. steel exports. That Canada is the largest foreign supplier of both steel and aluminum to the U.S. only underlines our role as a trusted and reliable ally. And, as the President’s own 2018 Economic Report points out, the U.S. enjoys a trade surplus with Canada.

The multipronged Team Canada approach both in and beyond the Washington beltway is working. Ministers and premiers consistently reach out to their counterparts. Federal and provincial legislators work both sides of the aisle on Capitol Hill and in the statehouses. Business and labour engage customers and suppliers.

As a result, we have identified many more American allies than we thought. The dividend from all this activity is the significant number of U.S. legislators now making the case for a Canadian exemption.

The North American free-trade agreement, a leper in U.S. political circles for most of the last 24 years, is finding champions in the United States. The farm community, the auto industry and most business is now telling the Trump administration to “do no harm” to NAFTA.

But the problem, as Foreign Minister Chrystia Freeland recognizes, is that the Trump team approaches trade negotiations as a “zero sum” game. They are mercantilists and the growing U.S. trade deficit only strengthens their protectionist instincts.

The fate of the tariffs and NAFTA is ultimately an American debate.

The 140,000 jobs in the steel industry face continuing pressure not because of foreign competition but because of automation and robotics. The jobs are not coming back. The Trump administration owes these workers retraining and adjustment assistance.

There are 6.5 million jobs that depend on the steel imports. These are the jobs that Mr. Trump should be supporting. They will suffer if tariffs are imposed. It is “straight up stupid,” says Peterson Institute’s Adam Posen, “…you mess up your entire trading system.”

Mr. Trump is wrong on one thing. No one wins a trade war. Using national security as a protectionist cloak to impose tariffs risks unhinging the global trading order. It will backfire on the Trump administration.

Canadians are feeling the impact as the threat of tariffs disrupts our markets, our currency and potential investment. Bank of Canada Governor Stephen Poloz warns that the redirection of investment towards the U.S. will only increase. The Trump tax reforms will only accelerate this flight. Finance Minister Bill Morneau needs to rethink how to sustain Canada’s competitiveness.

Global overcapacity in steel production is testing the global trading system. Both the Organization for Economic Co-operation and Development (OECD) and International Monetary Fund (IMF) have identified the problem – Chinese overcapacity. A useful Canadian initiative would be to bring together China and the U.S., and our fellow U.S. steel suppliers – Brazil, E.U., Mexico, and South Korea – to see what we can work out.

With our fellow targets of the Trump tariffs, we should also draw up a common retaliatory list. By jointly and very publicly threatening to target products such as California wine, Canada and Mexico persuaded Congress to rescind the pernicious country-of-origin labelling requirements.

The tariff threat reminds Canadians that the Trump challenge – an impulsive, unpredictable president who thrives on chaos – requires constant vigilance. We will get through the latest Trumplosion because of our co-ordinated advocacy and careful diplomacy.

Even before being elected Prime Minister, Mr. Trudeau recognized the wisdom of Brian Mulroney’s axiom that the most important relationship for every Canadian prime minister is that with the U.S. president. Like it or not, Mr. Trudeau must continue to work diligently on his relationship with Mr. Trump, including the late-night telephone calls.

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Trudeau travels to India

Prime Minister Justin Trudeau’s visit to India this week will reinforce and underline our growing people-to-people ties. The economic relationship is less buoyant, but if Indian Prime Minister Narenda Modi can deliver on his promised domestic reforms, there is the potential for more two-way trade and investment.

With stops in Agra, Amritsar, Ahmedabad, Mumbai, as well as New Delhi, it will be a rare session that does not include some reference to family living or studying in Canada.

The Indian diaspora includes several members in the Canadian Parliament, with four members in the Trudeau cabinet. Nearly 4 per cent of Canadians claim Indian decent, with 40,000 Indians migrating to Canada last year. The 124,000 Indians studying in Canada are our second-largest group of foreign students. No surprise that tourism is also on the rise, with more than 210,000 Indians visiting Canada last year. There are daily and non-stop flights.

India definitely deserves Canadian attention.

India will soon surpass China in population, with one-sixth of humanity. It is also the world’s largest democracy, which is a cacophony of caste and creeds. The two Prime Ministers will empathize over the challenges of managing federations with strong sectional and regional pressures. Some of these, such as the Sikh separatist movement, play into Canadian affairs.

At the World Economic Forum in Davos last month, Mr. Modi was forceful in his embrace of globalization. He described his “New India” reform agenda and its pillars of structural reform: technological governance; physical infrastructure; business facilitation; and inclusive development. Designed to give “good administration and better amenities,” Canada needs to identify the niche opportunities within each pillar.

Trade and investment will figure in every discussion. Investment from Canadian pension funds in real estate and other sectors has picked up in the past couple of years.

With its steady GDP growth, India is expected to become the third-largest consumer market by 2025.

But Canada and India are still some distance from long-promised deals on foreign investment and closer economic relations.

The foreign-investment protection agreement negotiated by the Paul Martin and Stephen Harper governments that was concluded in 2007 has yet to be implemented. Free-trade negotiations began in 2010. The six-month “road map” to its achievement, that Mr. Harper and Mr. Modi enthused about during the Indian Prime Minister’s Canadian visit in April, 2015, has yet to materialize.

Much of the problem lies, as the World Bank consistently reports, with India’s trade restrictiveness. Mr. Modi talks a good show on reform and, while he is making some progress, the structural impediments are deep and entrenched.

There is also, notwithstanding Mr. Modi’s declaration in Davos, Indian protectionism.

The imposition late last year of a 50-per-cent import tariff on peas and a 30-per-cent tariff on chickpeas and lentils should be high on Mr. Trudeau’s discussions with Mr. Modi. Agricultural sales to India are a major market, especially for Prairie farmers.

Mr. Trudeau will likely get a receptive hearing on climate and the progressive trade agenda that can be parleyed into useful initiatives.

Mr. Modi will raise Indo-Pacific security and likely ask about Canadian capacity and capabilities. Indian policy under Mr. Modi has shifted from “Look East” to “Act East.” His “Neighbourhood First” policy is roughly analogous to the Trudeau government’s new “Strong, Secure, Engaged” defence policy. At last month’s Association of Southeast Asian Nations forum, there were discussions about the “congagement” – containment and engagement – of China. Mr. Trudeau should listen to Mr. Modi’s perspective.

With the Trans-Pacific Partnership now a reality and likely to be implemented later this year, our trade in the Pacific will only increase. It will oblige more attention and commitment to Indo-Pacific security.

The tempo of Indo-Pacific activity by our Esquimalt-based warships has picked up. HMCS Chicoutimi, one of our Victoria-class submarines, is completing a nearly six month successful Pacific exercise that also took it to Japan. If we want to be seen as a serious Indo-Pacific partner, the current tempo will be seen as the bare minimum.

Mr. Trudeau’s India visit is his longest yet to a single country. The Indian backdrop will provide a spectacular picturesque travelogue against a celebration of family ties. But real success will also require serious and continuing conversations on trade and security.

A Conversation with Indian High Commissioner Vikas Swarup

February 12, 2018

On today’s Global Exchange Podcast, we speak with the Indian High Commissioner to Canada, Vikas Swarup. Join Colin and High Commissioner Swarup for a discussion on the High Commissioner’s career, his impressions of Canada, the importance of Canada-India relations, and the significance of Prime Minister Justin Trudeau’s upcoming visit to India.

Participant Biographies

  • Colin Robertson (host): A former Canadian diplomat, Colin Robertson is Vice President of the Canadian Global Affairs Institute.
  • Vikas Swarup: High Commissioner of India to Canada.

Related Links

Book Recommendations

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Trudeau in California

Trudeau to meet with Amazon, eBay CEOs on 4-day U.S. trip

Prime minister to promote trade, look for investment while visiting Illinois and California

By Katie Simpson, CBC News Posted: Feb 07, 2018 4:00 AM ETLast Updated: Feb 07, 2018 10:36 AM ET

Prime Minister Justin Trudeau is expected to use his meetings with influential American CEOs to remind U.S. lawmakers about the importance of NAFTA

Prime Minister Justin Trudeau is expected to use his meetings with influential American CEOs to remind U.S. lawmakers about the importance of NAFTA (Adrian Wyld/Canadian Press)

Related Stories

Prime Minister Justin Trudeau is gearing up for four days of critical meetings with lawmakers and business leaders as he heads out on yet another trade and investment mission to the U.S.

But Trudeau has one closed-door discussion planned that’s certain to get more attention than the rest.

On Thursday, he will be meeting with Jeff Bezos, CEO of Amazon. The tech giant is in the middle of its search for a second headquarters — and Toronto is on the short list.

Trudeau will be under pressure to make a strong pitch on Toronto’s behalf during his face-to-face meeting with Bezos.

Amazon plans to spend up to $5 billion US on its second headquarters, which it says will create 50,000 new high-paying jobs.

More than 200 cities in Canada and the U.S. bid for the facility, but Toronto is the only Canadian city still being seriously considered for the new location.

Canada’s largest city is up against several major U.S. hubs, including Boston, New York and Chicago.

Familiar trade pitch

The Bezos meeting is just one aspect of Trudeau’s trip south of the border.

Over the next four days, he will visit Chicago, San Francisco and Los Angeles to promote NAFTA and the importance of the Canada-U.S. trading relationship.

Former Canadian diplomat Colin Robertson calls these types of missions essential to the Canada-U.S. relationship.

“I think the one thing Donald Trump has taught us is that you can’t take the U.S. for granted,” he told CBC News.


U.S. President Donald Trump welcomes Trudeau at the White House on Oct. 11, 2017. ‘The one thing Donald Trump has taught us is that you can’t take the U.S. for granted,’ former Canadian diplomat Colin Robertson said of the current U.S. president. (Jonathan Ernst/Reuters)

“We do not make enough trips into the United States, given the relative weight of the United States and its importance on the Canadian economy.” 

The pitching begins in Chicago, where Trudeau will deliver a keynote speech today at the University of Chicago and participate in a discussion with David Axelrod, former U.S. president Barack Obama’s chief election strategist.

Before the event, he will sit down with several political leaders, including Illinois Gov. Bruce Rauner and Chicago Mayor Rahm Emanuel, who also served as Obama’s first chief of staff.

Trudeau is expected to use the meetings to remind U.S. lawmakers of the importance of NAFTA at a critical point in the re-negotiation process.

The sixth round of NAFTA talks ended in Montreal last month with all sides agreeing that progress has been slow.

Since then, new signs of hope have emerged that suggest a deal may be possible.

Canada’s ambassador to the U.S., David MacNaughton, told an audience in Ottawa on Monday that he’s pressuring negotiators to wrap up discussions in the next two months.

On Tuesday, U.S. Secretary of Agriculture Sonny Perdue told a U.S. House of Representatives committee that he believes a deal could be reached by December.

‘Go north’

Trudeau will shift his focus to the tech sector on Thursday as he heads to San Francisco, where he will meet with Bezos. But he also will sit down with other influential business leaders, including the CEOs of online shopping giant eBay and pharmaceutical developer Amgen.

The tech sector leg of the visit wraps up with a dinner at the Business Council to discuss new investment opportunities in Canada.

Trudeau’s pitch likely will include the fact that Canada has joined the new Comprehensive and Progressive Trans Pacific Partnership (CP-TPP). The U.S. did not sign on to the pact, which also includes Japan and Australia.

“I think this might be of interest to some American exporters,” said Michael Kergin, Canada’s former ambassador to the U.S. “They can use some subsidiaries in Canada to work through the Asian markets as well.”

Kergin also said the business tax cuts introduced by U.S. President Donald Trump last month won’t necessarily hurt Trudeau’s pitch to the high tech sector.

“Knowing where you can get good markets and good people to work with you … I think is more important than the tax issue,” he said.

Trudeau also may look to urge Canadians working in tech industries in the U.S. to start coming home.

“There’s a ‘Go north’ campaign on right now,” Robertson said. “All the bright young engineers from Sheridan College that worked at Pixar … and from Waterloo that went down to Silicon Valley. If we can bring some of them back … that would be great for Canada.”

While in San Francisco, Trudeau will meet with more lawmakers, including California Gov. Jerry Brown.

Trudeau ends his trip with two days in Los Angeles. While there, he will deliver a second keynote address — this time to a primarily Republican audience at the Ronald Reagan Presidential Library and Centre for Public Affairs.

Trudeau's U.S. tour

The prime minister is set to meet with some of the most influential leaders in the tech industry as he launches a four day trade and investment mission to the U.S. (Rob Easton/CBC)

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Pacific Alliance is right for Canada

Colin Robertson Globe and Mail February 4, 2018

Among the spaghetti bowl of trade deals currently on the Canadian menu, associate membership in the Pacific Alliance should be an easy choice.

The government and House of Commons International Trade Committee are currently holding consultations. Here is what they should consider:

The Alliance members – Chile, Colombia, Mexico and Peru – are business-minded. They embrace the rules-based, democratic order. Their economic well-being affects the economic health of Canadian companies, especially in resources, infrastructure and finance.

The “Pacific pumas” have more than 221 million consumers. Their combined GDP is equivalent to the world’s sixth-largest economy. Canadian investment in the alliance is estimated at $50-billion.

The alliance’s goal is to achieve free movement of goods, services, capital and people. The members are integrating their stock markets, and are even sharing embassies in certain countries.

Canada already has free-trade agreements with individual alliance members, so some ask why we should become an associate member.

The first answer is that we must take our opportunities when they come.

We would have first-mover advantage within the best trade agreement in the Americas, just as we will have with trans-Pacific countries through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and trans-Atlantic through the Comprehensive Economic and Trade Agreement (CETA). That means a bigger payoff as we establish a customer base ahead of the opposition. The cumulative rules of origin would weave the individual free-trade agreements (FTAs) with alliance nations into a seamless web. That would mean improved competitiveness of Canadian products.

Second, the Pacific Alliance is consolidating itself as a platform for economic integration within the Americas.

Canada would become a leader within the Pacific Alliance by virtue of being the biggest economy in the most liberalized caucus of trade nations in the world.

While the alliance is mostly about trade, it is also about building deeper co-operation through regulatory integration and addressing emerging issues such as the digital economy. What better place to advance the progressive trade-agenda goals in gender, labour, environment and small and medium-sized enterprises, than in this group of progressive democracies. And we have already begun. Last year, the Canada-Chile FTA was revised to include gender rights.

Third, stronger links with the alliance would give us better place and standing in the Americas. History and migration have given us strong links across the Atlantic and the Pacific. Our ties south of the Rio Grande, by comparison, are less so.

The Pacific Alliance commitment to transparency and anti-corruption within Latin America is the better model than its protectionist counterpart, Mercosur – Argentina, Brazil, Paraguay, Uruguay – and a contrast to the periodic illiberal governance in places like Venezuela. Canadian participation in the alliance would reinforce its attraction to the rest of the Americas.

But there are potential challenges to membership. For example, the alliance’s mobility provisions – free movement among the member states – might not work for Canada.

One option could be to negotiate trusted-traveller programs for business. Our guest-worker program with Mexico could serve as a model. Operating for more than 40 years, it now brings more than 22,000 seasonal workers to Canada annually.

The provinces must be active partners in considering the Pacific Alliance, just as they have been in the negotiations of the CETA, CPTPP and the talks to renegotiate the North American free-trade agreement (NAFTA). Trade is increasingly less about tariffs at the border and more about standards and regulations in areas of provincial or shared responsibilities.

Trade liberalization acts as a catalyst to domestic economic restructuring. Most are winners, but there are also losers. We have developed institutions between the levels of government to find and implement solutions, including adjustment assistance and retraining. We must continue and refine this.

Against a backdrop of “America First” protectionism and no foreseeable conclusion to the zombified Doha round of talks at the World Trade Organization, we need alternative markets. Middle power groupings, such as the Pacific Alliance, pick up the slack and help sustain the rules-based trading order.

Other key Pacific partners – Australia, New Zealand, Singapore and South Korea – are actively considering associate membership. It is always better to be a driver setting the course in the front seat, rather than a late passenger along for the ride. Canada should move now on associate membership in the Pacific Alliance.

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Round Six

Round seven of NAFTA renegotiation creates room for optimism

  • Corwyn Friesen, mySteinbach
  • Posted on 01/30/2018 at 9:31 am

The Vice President of the Canadian Global Affairs Institute says the fact that the renegotiation of the North American Free Trade Agreement will continue is cause for renewed optimism.

With round six of the renegotiation of the North American Free Trade Agreement having concluded in Montreal negotiators are now preparing for round 7 next month in Mexico.

Colin Robertson, Vice President and a Fellow of Canadian Global Affairs Institute. says what is significant coming out of the Montreal Round is that they’re still standing and there will still be negotiations.

There was much concern going into this round that because we were going to taken on those provision relating to importantly dispute settlement, government procurement, rules of origin as it relates to autos, the sunset clause so called, if we were not able to make progress then President Trump or United States Trade Representative Robert Lighthizer might pull the plug.

The fact is we’re still negotiating and there’s going to be another round, this is all good news. I would say that going into this round there was fair bit of pessimism about whether this might be the end. But in fact we’re still standing and going forward.

One of the more significant things was that, in Montreal ten members of Congress led by the Chair of the Trade Committee within the House of Representatives was present and they acted, I think, as a kind of a positive force saying we who represent our constituents would like to see the NAFTA reformed but we would like to see the NAFTA continue.

~ Colin Robertson, Canadian Global Affairs Institute

Robertson notes last week President Trump was in Davos, Switzerland where he delivered, by Trump standards, a fairly moderate speech where he stated, “Yes, America first but not America alone” and he made no reference to the North American Free Trade Agreement. Round seven of the NAFTA renegotiation is set for late next month in Mexico before heading back to Washington in March for what is currently scheduled as the final round of negotiations.

Round 7 of NAFTA Renegotiation Creates Room for Optimism
Colin Robertson – Canadian Global Affairs Institute
Farmscape for January 30, 2018

The Vice President of the Canadian Global Affairs Institute says the fact that the renegotiation of the North American Free Trade Agreement will continue is cause for renewed optimism.
With Round 6 of the renegotiation of the North American Free Trade Agreement having concluded in Montreal negotiators are now preparing for round 7 next month in Mexico.
Colin Robertson, Vice President and a Fellow of Canadian Global Affairs Institute. says what is significant coming out of the Montreal Round is that they’re still standing and there will still be negotiations.

Clip-Colin Robertson-Canadian Global Affairs Institute:
There was much concern going into this round that because we were going to taken on those provision relating to importantly dispute settlement, government procurement, rules of origin as it relates to autos, the sunset clause so called, if we were not able to make progress then President Trump or United States Trade Representative Robert Lighthizer might pull the plug.
The fact is we’re still negotiating and there’s going to be another round, this is all good news.
I would say that going into this round there was fair bit of pessimism about whether this might be the end.
But in fact we’re still standing and going forward.
One of the more significant things was that, in Montreal ten members of Congress led by the Chair of the Trade Committee within the House of Representatives was present and they acted, I think, as a kind of a positive force saying we who represent our constituents would like to see the NAFTA reformed but we would like to see the NAFTA continue.

Robertson notes last week President Trump was in Davos, Switzerland where he delivered, by Trump standards, a fairly moderate speech where he stated, “Yes, America first but not America alone” and he made no reference to the North American Free Trade Agreement.
Round 7 of the NAFTA renegotiation is set for late next month in Mexico before heading back to Washington in March for what is currently scheduled as the final round of negotiations.
For Farmscape.Ca, I’m Bruce Cochrane.

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Trade on the Table

Screen Shot 2018-01-27 at 10.38.02 AM

The Agenda
with Steve Paikin
Jan 26, 2018  21:53
On January 23, while NAFTA negotiations between Canada, Mexico and the U.S. were underway in Montreal, and world leaders were meeting at the World Economic Forum in Davos Switzerland, a deal was reached for the Comprehensive and Progressive Trans-Pacific Partnership. This deal includes both Canada and Mexico but not the U.S.. The Agenda discusses how the newly minted CPTPP agreement will impact NAFTA negotiations. Steve Paiken talks with Mark Warner and Colin Roberton

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Crunch Time for NAFTA: A Test for the USA

The NAFTA negotiations this week in Montreal will give us a good sense of whether a new agreement is possible. Canada and Mexico are coming to the table with ideas on the “poison pills” but is the United States ready to negotiate?

The test will come on three issues:

– Can we preserve dispute settlement as a check against unfair protectionism?

– Can we find an equitable formula around trilateral content rules for cars, our most traded commodity?

– Will government procurement stay open to all three nations?

If we cannot resolve these issues, then we have to look to Plan B, life without the North American free-trade agreement.

Foreign Minister Chrystia Freeland’s “hope for the best, prepare for the worst” is a fair characterization of NAFTA’s prospects. The Trump administration continues to ramp up protectionist actions against foreign competition. In recent months, the United States has hit Canada with punitive tariffs on lumber, jets and now newsprint.

U.S. President Donald Trump’s repeated threats to rescind NAFTA is galvanizing hitherto-silent U.S. support into action. The farm community and business, two vital groups in the Trump coalition, want NAFTA improved, not rescinded. Surveys show a majority of Americans like NAFTA. Senators and members of the House of Representatives, especially those in the Midwest and from Texas, are now pressing the President to do no harm to NAFTA.

Canada and Mexico have launched unprecedented outreach campaigns. Canadian envoys have met with more than 65 governors and lieutenant-governors and more than 265 congressmen. We are finding allies. We will need them if Mr. Trump rescinds the agreement or if any new deal reaches Congress.

Canada and Mexico must stay engaged in what should become a permanent campaign to cultivate the biggest market in the world.

But the future of NAFTA now depends on the outcome of the American internal debate.

Canadians faced their moment of truth on trade in 1988. We fought an election over closer economic relations with the United States. It brought prosperity, not, as the critics warned, a loss of sovereignty. Mexicans faced a similar moment in 1994 when they embraced the NAFTA.

For both Canada and Mexico, freer trade proved that we could compete, not just with the U.S., but internationally.

Freer trade also became a catalyst for domestic economic reform.

For Canada, the restructuring included the introduction of a national value-added tax, the GST. Federal and provincial governments cut their deficits. For Mexico, NAFTA restructuring supported democratic change in 2000 after 71 years of one-party rule. More recently, it helped spur the “Pacto por Mexico” reforms to education, finance, labour and energy.

For Americans, NAFTA is a litmus test of its place in the world. Will they replace the rules-based order, created and sustained by the United States for 70 years, with Mr. Trump’s vision of America First? Will Americans set aside their traditional generosity towards other countries with one based on mercantilism and beggar-thy-neighbour?

For the first time, the most important global economy wants to renegotiate a trade agreement by increasing trade barriers so as to balance its trade. It’s a world of big rolling over small. Middle powers like Canada and Mexico need to push back.

Previous U.S. administrations, both Republican and Democrat, saw U.S. internationalism not as an act of charity, but as reflecting U.S. values and principles. As practised by Roosevelt through Reagan and Obama, the United States used its weight to better the global condition, willing to give more than it received. This is the “indispensable nation” that Ms. Freeland described when she laid out the Trudeau foreign policy last June. She described a United States that sustains the global order, for the greater global good, through a network of alliances, trade agreements and international institutions.

Mr. Trump’s “America First” breaks with this American tradition. Will Congress and the courts go along with Trumpism? While Canada and Mexico prepare for the worst, we must stay engaged with the many Americans who see the world, and America’s place in it, differently than Mr. Trump. Ultimately, Trumpism is a test of how Americans see themselves and their place in the world.

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NAFTA: Round Six

Canada faces angry Americans in pivotal sixth round of NAFTA talks

The Canadian Press
January 21, 2018

Canada will be hosting an annoyed and angry United States as the sixth round of talks in the North American Free Trade Agreement renegotiation unfold over the coming week.

The Trump administration is making known its displeasure about Canada’s contributions to date and demanding progress over the marathon 10-day session.

Multiple sources aware of the U.S. administration’s views say the acrimony has a variety of causes, including Canada’s recent decision to file a sweeping complaint about U.S. trade practices at the World Trade Organization and its pursuit of a progressive trade agenda that includes Indigenous and labour provisions.

The rhetoric around its implacable rejection of the most controversial U.S. positions — raising continental content provisions on automobiles, scrapping a dispute resolution mechanism, limiting Canadian access to U.S. procurement, and instituting a five-year sunset clause — as well as bitterness over apparent leaks are all fuelling the U.S. animosity towards Canada, say sources.

Sources familiar with the Canadian position dismiss all that and say the tone at the negotiating table is professional and cordial, and that Canada is prepared to table counter-proposals in order to make progress.

They say Canadian negotiators are making constructive proposals to find common ground with the Americans on what some have called poison pills designed to kill the deal.

Indeed, Canada, the U.S. and Mexico are showing signs they all want to see tangible progress in this round in order keep the negotiations on track, and discourage U.S. President Donald Trump from announcing his intent to withdraw from NAFTA.

It will be another week before Foreign Affairs Minister Chrystia Freeland, American counterpart Robert Lighthizer and Mexico’s Ildefonso Guajardo arrive in Montreal on Jan. 29 to close the extended round that gets underway earlier than planned on Sunday.

The way some see it, Lighthizer is in no hurry to come back to Canada.

“The feeling of ill will between Bob Lighthizer’s office and the Canadians — I don’t think you can underestimate it,” said Sarah Goldfeder, a former U.S. diplomat who now represents American clients in an Ottawa consultancy.

“He’s extremely frustrated with China and Canada,” added Goldfeder.

“Those are the two countries he thinks are being most unfair to the United States … Those are the ones taking up a good chunk of his time, and not in positive ways.”

Goldfeder noted that when Freeland went to Washington two weeks ago she met Commerce Secretary Wilbur Ross and members of Congress — but not Lighthizer.

When Guajardo visited later in the month, Lighthizer’s door was open to him, she said.

Colin Robertson, a retired diplomat with extensive experience in the U.S., said the body language between Lighthizer and Freeland is “terrible,” which is telling.

“He’s a bully and she gets under his skin,” said Robertson. “She and Guajardo are amigos. No one would say that about Freeland and Lighthizer.”

Canadian officials say Freeland and Lighthizer intend to meet this week while the two are in Davos, Switzerland for the annual meeting of the World Economic Forum.

Lighthizer isn’t willing to blow up NAFTA over the WTO challenge, but Canada should brace for some bilateral retaliation. Meanwhile, his office isn’t interested in the Canadian progressive trade agenda — entrenching Indigenous, gender and workers’ rights issues in the pact — because it has the whiff of Canada dictating social policy to the U.S., Goldfeder said.

Lori Wallach, the director of Public Citizen’s Global Trade Watch, a group normally at odds with the Republicans, was also critical of the Canadian posture.

“Canada is 100 per cent not engaged. Mexico started engaging in the last month or so,” said Wallach, who knows Lighthizer.

”Probably after the Montreal round, that increases the prospect that there could be a notice of withdrawal.”

Ottawa is defensive. The characterization of Canada as obstructionist is nonsense, and the product of strategic leaking of information, according to another official familiar with the content of talks, and who agreed to speak anonymously citing the sensitivity of the ongoing negotiations.

The official said Canadian and American negotiators, as well as their Mexican counterparts, know each other well and are working methodically in the 30 separate negotiating rooms to make incremental progress.

The official pointed to Freeland’s Jan. 11 comments at the Liberal cabinet retreat in London, Ont. as evidence Canada is doing some “creative thinking” about how to deal with “unconventional” U.S. proposals.

The complaints about Canada’s progressive trade agenda are also a bit rich, the official said, because the real obstacles are more fundamental — the American poison pill proposals that wouldn’t fly in any trade negotiation.

In particular, the official cited the U.S. proposal to ditch the dispute resolution mechanism, saying Americans remember full well that former Progressive Conservative prime minister Brian Mulroney considered that idea a deal breaker during the original Canada-U.S. free trade talks in 1988.

Freeland told CTV’s Question Period on Sunday that the progressive chapters on labour, gender, environment and Indigenous issues are not a problem. She said the Indigenous chapter would be discussed for the first time in Montreal.

Assembly of First Nations Grand Chief Perry Bellegarde said it’s about time — he has pushed Freeland hard on the issue in recent months as part of her NAFTA advisory committee. Bellegarde told The Canadian Press he hopes the Americans and Mexicans support a chapter affirming Indigenous Peoples’ inclusion in the economy.

“Canada is supporting that,” he said.

“Tuesday will be the first formal response by U.S.A., Mexico to that new chapter, and so it’s very important.”

Today’s NAFTA talks are unusual because Canada is being told it needs to give up benefits or lose access to its fundamental trading partner, said Eric Miller, head of the Rideau Potomac Strategy Group in Washington.

“Canada’s economic livelihood is on the line,” said Miller, a former Canadian official who worked on the auto bailout.

“One should expect Canada to be very focused on it, and to react very strongly.”

Mike Blanchfield and Alexander Panetta, The Canadian Press

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