Canada and TPA debate in USA

Canada has stayed out of TPA debate, feds insist‘A lot to be done’ before Pacific trade talks are completed.

Architect of the Capitol Photo
The US Capitol building on April 30.

Peter Mazereeuw
Published: Wednesday, 06/24/2015 12:00 am EDT

Canada’s government has watched from the sidelines as American political interests have gone to the mat over legislation holding up Trans Pacific Partnership talks, unlike its much more aggressive approach lobbying for the Keystone XL pipeline, say a former diplomat and a government spokesperson.

Progress on the TPP deal has been stalled since the Guam round of negotiations at the end of May, as the parties waited to see whether the United States government would secure trade promotion authority, say lobbyists, interest groups and trade watchers.

That authority—which would force the US Congress to vote on trade agreements without having an opportunity to amend them— has crawled through a series of close votes in the Senate, the House, and back in the Senate again in the past days and weeks.

Republican Congressmen in both Houses have worked together with US President Barack Obama’s administration to pass TPA, which the majority of Democrats have resisted. Business and labour groups have loudly advertised their opposing positions on the legislation, which many have framed as a proxy vote on the TPP.

When asked whether Canada was lobbying Congress in support of the TPA legislation, Trade Minister Ed Fast’s spokesperson Max Moncaster, said TPA “is for US lawmakers to decide” and that Canada has been “monitoring” the situation, in an emailed statement.

Canada’s government has boosted the TPP as a part of its efforts to open new markets for Canadian business. But this time it has likely stayed out of what is “very much an American” TPA debate because the harm of doing so could outweigh the benefit, said Colin Robertson, a former Canadian diplomat who worked in Washington, Los Angeles and New York. 

“What you don’t want to do is play into the hands of the adversaries, who would say, ‘this is all about outsourcing jobs’,” said Mr. Robertson, adding staff in the Canadian embassy in Washington would be watching the TPA deliberations “very closely.”

TPA no Keystone XL

Canada’s government took a much more aggressive approach a few years ago when US legislators, interest groups and the White House were at odds over the future of the cross-border Keystone XL pipeline, another economic project close to the heart of the Harper government.

The government ran a $24 million public relations campaign in the US, with adds popping up in the Washington metro, and Canada also lobbied on the issue heavily. Later assessments would conclude the ads were largely ineffectual.

Mr. Obama himself has lobbied Congress intensely to pass TPA—a key difference between the two issues from a Canadian perspective, said Mr. Robertson.   

Lobbyists and trade watchers on both sides of the border said they were optimistic Congress would pass the trade promotion authority legislation in a June 24 vote, and that the White House would sign the bill quickly.

If TPA is secured, TPP negotiations would move to the most politically sensitive areas, particularly agricultural and intellectual property protections, said Canadian and US lobbyists.

Progress on the negotiations may be quick, but it could be some time before the deal is done, said Ron Davidson, a spokesperson for the Canadian Meat Council.

A “legal scrub” and translation of the text into the many languages of TPP members will likely need to be completed before a deal is signed and made public, he said. Even if everything goes smoothly, “there’s a lot to be done.”

Mr. Davidson said he is hoping to see Canada secure an agreement in principle completed this summer, but he was not confident an agreement could be finalized before Canada’s federal election in October.

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Canada and NATO

Collective security comes at a cost. Canada should pay its way

Colin Robertson The Globe and Mail Tuesday, Jun. 23, 2015

NATO defence ministers meet tomorrow in Brussels to confront continuing conflicts on their eastern and southern flanks. Complicating their deliberations is the knowledge that big chunks of their populations oppose using military force if Russia attacks a fellow NATO member. For NATO leaders, making the case for why we fight is as important as having the capacity to fight.

From fir trees to palm trees, NATO forces are engaged. Simulated conflict exercises on NATO’s eastern frontier respond to what Secretary-General Jens Stoltenberg describes as President Vladmir Putin’s “unjustified nuclear sabre-rattling”. The U.S.-led coalition in Syria and Iraq engages in daily, deadly sorties against ISIS.

The takeaways from Afghanistan and Libya for NATO are that while armed force can bring temporary stability, enduring peace and security requires continuing diplomacy, development assistance and some means of preserving order. Call it peacekeeping for the 21st century.

NATO forces also play a key role as the first responders to humanitarian crises, such as rescuing migrants crossing the Mediterranean and helping to contain Ebola in West Africa.

Despite the NATO leaders agreeing in Wales last September to “reverse the trend of declining defence budgets” only five – U.S., U.K., Estonia, Poland and Greece – meet the NATO guideline to spend 2 per cent of their GDP on defence.

Canada has committed whole-heartedly to NATO missions. It took a disproportionate number of casualties in Afghanistan and were at the sharp end of the campaign in Libya. Canadian forces are actively engaged in Syria and Iraq. Canada is training Ukrainian troops and during a visit to Warsaw earlier this month Prime Minister Stephen Harper said Canada will station troops at NATO’s new command centre at Szczecin, Poland.

Canada’s defence spending, however, falls short of NATO’s benchmark. Despite the Canada First Defence Strategy and a refined procurement policy, former parliamentary budget officer Kevin Page observes that with the Harper government “spending in real terms is even lower than when they came into office in 2006.” April’s federal budget will lift Canada’s contribution to slightly more than 1 per cent of GDP.

As the country prepares to enter its election campaign in earnest, it needs a healthy debate over its defence capacity and capability, especially around the made-in-Canada naval procurement policy.

Canada accepts the rationale of supply-chain economics for almost everything else it manufactures. Auto and aviation industries, civilian and defence, are specialized and integrated. Canada buys tanks from Germany and fighter planes from the U.S., with significant offsets creating jobs for Canadians. Why is shipbuilding different?

At the Wales summit, leaders reaffirmed that the “greatest responsibility” of the Alliance is to “protect and defend our territories and our populations against attack.” But when the Pew Foundation recently asked major NATO nations if they would use military force if Russia “got into a serious military conflict” with another NATO member, the findings revealed troubling divisions.

Most Americans (56 per cent) and Canadians (53 per cent) would support intervention. So would a plurality in the U.K. (49 per cent) and Poland (48 per cent). But, more than half in Germany (58 per cent), France (53 per cent) and Italy (51 per cent) would oppose intervention. The Spanish divided 48-47 per cent for intervention. Together these nations collectively account for 88 per cent of NATO’s GDP and 78 per cent of its population.

NATO leaders reaffirmed at Wales their willingness to “act together” and “decisively to defend” freedom, liberty, human rights, democracy and the rule of law. They have work to do in persuading their citizens that the collective defence of our shared values obliges a willingness to use armed force.

Equally troubling for the Alliance was that only 49 per cent of Americans view NATO favourably. The U.S. pays 74 per cent of NATO’s costs. President Barack Obama says the U.S. “can’t do it alone” and this plea is repeated by successive U.S. defence secretaries.

Communiques at the end of summit meetings are usually mind-numbing bromides and aspirations of good intentions. What really counts is each nation’s interpretation of the collective commitments. Success in this week’s meeting depends on each NATO defence minister saying some variation of the following:

  • First, we commit to meeting NATO’s 2-per-cent defence spending target by 2017, recognizing that, when your neighbourhood is combustible, investing in defence is smart insurance. Only when our armed forces have sufficient capability and the readiness to react, can we be confident in their deterrent capacity. The trendline is moving in the right direction with 18 allies expected to increase their defence spending.
  • Second, we commit to a national public education campaign on the meaning and responsibilities of collective security. To its credit, Germany’s leadership has begun their debate on the need for greater engagement.

Attitudinal shifts take time and constant reinforcement.

Courage, resolution and endurance are qualities not always associated with democracies or their leaders. But they are essential.

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Canada-US trade disputes: Country of Origin Labeling

Canada: America’s frustrated trade partner

Colin Robertson Globe and Mail

What’s $3-billion? It’s the price that Canada will exact from the United States in reparations over the country-of-origin labelling dispute.

Armed with a World Trade Organization (WTO) ruling, Canada is threatening to slap retaliatory surtaxes of up to 100 per cent on U.S. products, including chocolates, wine and jewellery, cereal and orange juice, barbecues, stoves, swivel seats and mattresses.

Final WTO authorization will take some months. The tax goes into the national account. That’s small comfort to Canadians who will pay higher prices for those products, especially when our drooping dollar means that we already pay more for U.S. imports.

The country-of-origin labelling (COOL) dispute is rooted in U.S. protectionism – American ranchers who do not like competition from Canada and Mexico. Their lobbying of Congress resulted in COOL’s inclusion into the 2008 Farm Bill.

The rule defied the logic of North American livestock supply chains. For decades, U.S.-born cattle were sent to feed-lot alley in Alberta or south of the Rio Grande into Mexico and then returned to the United States for slaughter.

Canada and Mexico fought the measure in U.S. courts – without success – and through the WTO. Successive WTO rulings have sided with Canada and Mexico. It’s another reminder of the advantages that multilateralism provides to Canada. Through its rules-based institutions, multilateralism levels the playing field for small and medium nations against big countries.

The threat of retaliation has concentrated congressional minds and the Republican majority in the U.S. House of Representatives is moving to rescind the legislation. Canada and Mexico need to stay united and keep up the pressure on the U.S. to repeal COOL.

Congress also will soon decide the fate of President Obama’s Trans-Pacific Partnership (TPP). Mr. Obama’s request for fast-track authority, obliging an up or down vote in Congress on trade deals, has passed through the Senate. It now requires a majority in the House of Representatives.

Without fast-track authority, Canada and the other TPP partners won’t conclude negotiations. Why would we renegotiate the deal a second time with Congress, the cradle of special interests?

Any skilled negotiator holds their cards close until the final round. Canada has held out responding to the American request that we open to competition our heavily protected dairy, chicken and egg industries.

It should be an easy decision for Prime Minister Stephen Harper, for whom advancing freer trade is a government priority.

Reform of supply management is overdue. It is costly to the consumer and the industry should be able to compete internationally with the kind of adjustment assistance given, after the Canada-U.S. free trade agreement (FTA), to our now successful wine industry.

In bargaining the reform of supply management at the TPP table, we should push for better access for our forest products. We are likely to do better at the multilateral negotiating table, especially given the approaching expiration (October) of the current Canada-U.S. lumber agreement.

Lumber disputes with the United States predate Confederation. At U.S. insistence, lumber is managed through regional quotas. The lesson is twofold: diversify our markets while seeking improvements through multilateral agreements such as TPP.

Last week, Derek Burney, who as a foreign service officer persuaded Brian Mulroney to take the “leap of faith“ on the FTA, gave the O.D. Skelton Lecture in Ottawa’s Pearson Building.

Mr. Burney, who helped close the FTA deal when he was Mr. Mulroney’s chief of staff and later served as our ambassador to the United States, argued that we need to “recalibrate and counterbalance” the U.S. relationship. The United States is neither willing nor able to give us a “special relationship,” he said.

He declared that it is time for us to “exploit our strengths beyond North America.” This means a coherent, consistent strategy on China and repositioning our security role, especially in the Pacific. It also means putting our economic house in order. Mr. Burney warned against coasting on our resources and overreliance on the U.S. market.

Mr. Burney is persuasive. We should be opening doors to markets within the Pacific and Atlantic.

But the opportunities for trade within North America remain immense, especially as President Enrique Pena Nieto’s reforms make Mexico an even more attractive partner.

Three billion dollars is roughly the value of Canadian exports last year to India or Brazil. It’s also the value of what we export to the United States every 36 hours.

The disputes over lumber, labelling and pipelines are frustrating. They underline why we need to fully engage in trade negotiations and the insurance provided to us through muscular multilateralism.

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