Trade Commissioner Service and Promoting Canadian Trade

With CETA and TPP in limbo, here’s how Canada can give trade a practical boost

With our big trade-policy initiatives – the Canada-EU trade deal and the Trans-Pacific Partnership – in limbo, Canada’s leaders need to turn their attention to trade promotion.

Canada lives by trade. It represents 60 per cent of our GDP. One in five jobs is linked to trade. There are more than a million small- and medium-sized enterprises operating in Canada. A 2013 survey concluded that only 41,000 were exporting. We can do better.

We need a trade strategy that has the support of the provinces and regional leadership. International Trade Minister Chrystia Freeland should turn her considerable skills to achieving consensus on a new trade plan and then deliver it through a re-energized Trade Commissioner Service.

The Harper government’s Global Markets Action Plan is a good starting point. It established priority markets that also integrated the services of Export Development Canada, Canadian Commercial Corporation and the BDC.

Ms. Freeland needs to achieve buy-in from the provinces and our cities. Since the successful implementation of the Canada-U.S. free-trade agreement (1988), our premiers and civic leaders, regardless of political stripe, are among the strongest advocates of expanding our global customer base and attracting foreign investment.

Saskatchewan’s Trade and Export Partnership (STEP) just celebrated its 20th anniversary. It works because it aligns government resources with exporter needs. Recognizing that city regions are the hubs for innovation and home to our service industries, the 11-city Consider Canada alliance has launched a series of initiatives to attract foreign investment and talent.

Ms. Freeland should revalidate the Action Plan’s target markets. But the focus of the Plan should be on identifying customers, investors and technology partners. A revised strategy also needs to address:

  • International investment by Canadian firms, a necessary part of competing globally, including the role of pension funds;
  • Canadian business participation in development bank projects, especially infrastructure;
  • Foreign direct investment in Canada including state-owned enterprises and public-private partnerships;
  • Internationalization of start-ups through reciprocal soft-landing arrangements in incubators and accelerators in the United States and abroad;
  • Scaling-up Canadian companies lacking sales and marketing experience;
  • Identifying opportunities for Canadian cybertools, technologies and services, especially in emerging markets;
  • Utilization of the Canadian diaspora and the family ties created by immigration to advance trade and investment;
  • Integrating international education, immigration and tourism into our strategy.

The ultimate test of our trade agreements is their ability to generate new business for Canada. Ms. Freeland should produce an annual report card on progress in expanding our customer base.

To give the new plan a boost, Prime Minister Justin Trudeau should draw from the Jean Chrétien playbook and resurrect the Team Canada missions that included premiers and mayors, business leaders and university presidents. These initiatives help sell Canadian goods and services and create a sense of common purpose among our leaders.

Canada’s Trade Commissioner Service is our sales force but it needs re-energizing.

Trade commissioners are door-openers, matchmakers and a source of market intelligence for Canadian business. When local governments are not living up to their investment and trade obligations, the trade commissioners are our front-line advocates to achieve compliance. Trade commissioners find paths through the challenges of foreign languages, customs and regulatory thickets.

Every dollar spent by the Trade Commissioner Service generates $27 in increased exports. Firms that access its services export 18 per cent more than those who don’t.

Our trade commissioners would benefit from more specialized training, including assignments with Canadian business. They also need the right tools. Budget-paring obliged, for example, dropping memberships in American and European chambers of commerce, a small investment that gave them wider networks and market intelligence.

The reality of global competition is that government assistance in competing in global markets benefits Canadian business and our economy.

Canadian business is successfully integrated into the North American markets that account for nearly 80 per cent of our trade. Increasingly, it is earning its place in global supply chains, especially in the transportation and communications sectors.

Canadian agricultural products and foods harvested from our land and seas have earned a reputation for quality. Canadian services in banking, insurance and engineering are efficient and trusted. We are global leaders in medical and energy innovation and digital technology.

A good trade plan will set the compass for expanding our reach into global markets. But success – measured in contracts, investment and talent – requires sustained advocacy and marketing. The necessary first step is revitalizing Canada’s Trade Commissioner Service.

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US Election with Ambassadors Gary Doer and Gordon Giffin

A panel discussion is held in Ottawa entitled The US Election – A Wild Ride Ahead for Canada? The discussion features Gary Doer (former Canadian Ambassador to the United States), Gordon Giffin (senior advisor to the Clinton campaign and former U.S. Ambassador to Canada) and Colin Robertson (Vice-President of the Canadian Global Affairs Institute) discussing the upcoming US election and what impact it will have on the Canada-US relationship. (October 25)

2016)http://www.cpac.ca/en/digital-archives/?search=Giffin+Doer

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What a Clinton or Trump Victory would mean for Canada

How a Clinton victory could affect Canada

Democratic presidential candidate Hillary ClintonDemocratic presidential candidate Hillary Clinton speaks at a campaign event at University of North Carolina at Charlotte, Sunday, Oct. 23, 2016, in Charlotte, N.C. (AP Photo/Mary Altaffer)

Laura Payton, Ottawa News Bureau Online Producer

@laura_payton

Published Monday, October 24, 2016 6:30AM EDT
Last Updated Monday, October 24, 2016 11:02AM EDT

It can be disconcerting for Canadians following the U.S. election to hear the candidates talk about renegotiating NAFTA or withholding NATO support unless members vastly increase their defence spending.

Given her decades in politics, it’s likely easier to predict what Democratic nominee Hillary Clinton would do as president than Republican nominee Donald Trump.

CTVNews.ca breaks down the impact her policies could have on Canada, and how they compare to those of Prime Minister Justin Trudeau.

The economy

With $2.4 billion in goods and services exchanged every day between Canada and the U.S., the potential effect on the economy is likely the greatest concern for Canadian policymakers.

The North American Free Trade Agreement governs much of that business, with a dozen Pacific Rim countries looking to the possibility of an even more ambitious Trans-Pacific Partnership. Both deals have had a starring role in the debate about U.S. economic policy.

Clinton criticized NAFTA in her first run for the democratic nomination in 2007-08, and has been critical of the Trans-Pacific Partnership – after calling it the “gold standard” early in negotiations. But a leaked email released earlier this month through a campaign hacking suggests she’s warmer to free trade than she admits. In an excerpt from a 2013 speech to a Brazilian bank, Clinton says her “dream” is “a hemispheric common market, with open trade and open borders.”

Clinton’s private position more closely mirrors Prime Minister Justin Trudeau’s position than do her public pronouncements. Trudeau – and U.S. President Barack Obama – both spoke strongly in favour of free trade during the North American Leaders’ Summit last June. Trudeau has frequently said export-intensive industries pay higher wages than non-export industries and that people benefit from free trade.

Canada-U.S. trade map CLINTON

SOURCE: Global Affairs Canada and RealClearPolitics.com, based on data from October 25, 2016. (Tahiat Mahboob)

Joy Nott, president of the Canadian Association of Importers & Exporters, says it’s not unusual to hear NAFTA or free trade come up during an election.

“The fact that NAFTA’s being discussed in a U.S. election: not new and not terribly unnerving because it’s been talked about a lot and then whoever is elected gets elected, and then they enter the White House, and NAFTA is never touched.”

Moreover, Nott points out, to change NAFTA, the president would need Congress behind him or her.

Clinton has proposed having a trade enforcer to make sure the detailed regulations are carefully followed and to punish any rulebreakers, but Nott said the U.S. has always enforced its rules pretty strictly.

“Could they potentially become more active in enforcing and auditing and that kind of stuff? Yeah, they could, but they’re already quite active in that area,” she said.

Former foreign affairs minister John Baird, however, sounded a more warning tone.

In an interview with Don Martin, host of CTV’s Power Play, Baird said Clinton supports a strong relationship with Canada, but Congress is increasingly protectionist.

“A more inward-looking landscape will make it really hard even for a President Clinton to tackle trade irritants where their predecessors might have been able to,” he said.

“You could see an increasingly protectionist tone from Washington that could reverberate around the world.”

Climate change

It’s hard to talk about Canada-U.S. economic issues without referring to TransCanada’s Keystone XL pipeline extension, the permit for which President Barack Obama denied 11 months ago.

While then-secretary of state Clinton said in 2010 that she was inclined to approve the Keystone XL pipeline extension, she announced last fall that she had changed her mind and opposed it. It would likely be harder for her to revert back and approve it as president, analysts say, given the late-stage support she received from former rival Bernie Sanders.

Hillary Clinton

“It might have been easier a year or two ago for her to endorse Keystone than it would be today,” said Mark Cameron, executive director of Canadians for Clean Prosperity.

“But after the election, particularly if the Republicans still control the Congress, it’s the kind of thing that you could possibly see a compromise occurring on.”

Clinton’s environment platform bears similarities to that proposed by Trudeau’s Liberal Party. Both discuss the need to invest in clean energy to create good-paying jobs, end subsidies to oil and gas companies, and limit emissions. Clinton is likely to maintain the course set by Obama on climate change, including implementing the clean power plan that’s currently making its way through American courts. Trudeau, meanwhile, promised to work with the U.S. and Mexico to “develop an ambitious North American clean energy and environmental agreement.”

Cameron says the clean power plan would look a lot like carbon pricing for the electricity sector, if it’s fully implemented.

“That would probably open up discussion about how Canada and the U.S. can cooperate more on carbon pricing,” said Cameron, who has political expertise as a staffer in former prime minister Stephen Harper’s office.

Defence

Despite serving as secretary of state in the Obama administration, Clinton is widely expected to take a stronger stance on foreign policy than the outgoing president. For those trying to read tea leaves, her time as secretary of state and her record as a public figure over the last 25 years suggest a President Clinton would probably be more interventionist than Obama has been, says Thomas Juneau, assistant professor of the University of Ottawa’s graduate school of public and international affairs.

Nato Allies Defence Spending

SOURCE: World Bank, Military expenditure (% of GDP) 2015. (Tahiat Mahboob)

“That means Syria, that means the Middle East as a whole and that means overall,” said Juneau, whose research focuses on the Middle East and U.S. foreign policy in the region.

“As secretary of state she favoured a no-fly zone over certain parts of Syria. That’s a very, very complicated intervention,” he said. “What would the U.S. ask of its allies? What would Canada do, politically, diplomatically, militarily?”

While Clinton’s national security plan calls for an intensified coalition air campaign against Islamic State militants in Iraq and Syria, Trudeau pulled Canadian fighter jets out of the mission. The Liberals instead increased the number of Canadian trainers and added three helicopters and an intelligence centre to the mission.

Canada could also face pressure to increase its defence spending – a call Obama made in person during a visit to Ottawa last June, but one Clinton would likely make more aggressively, Juneau said.

Canada currently spends one per cent of its GDP on its defence budget, although NATO countries have pledged to spend two per cent.

Still, Juneau says, “it’s a safe assumption that a Clinton presidency would be more consistent with most Canadian interests than a Trump one.”

How a Trump victory could affect Canada

Donald Trump Republican presidential candidate Donald Trump speaks during a campaign rally at the Delaware County Fair, Thursday, Oct. 20, 2016, in Delaware, Ohio. (Evan Vucci/AP)

Laura Payton, Ottawa News Bureau Online Producer

@laura_payton

Published Monday, October 24, 2016 6:30AM EDT

In a presidential race with its fair share of jaw-dropping pronouncements, it’s hard to choose just a few. But for Canadian officials, a handful of Donald Trump’s statements stand out.

The political neophyte has promised to reopen the North American Free Trade Agreement and throw it out if he doesn’t get what he wants, get tough on America’s NATO allies and increase coal production in the face of a world moving increasingly to clean energy.

All of these policies would have a dramatic impact on Canada. CTVNews.ca compares his policies to those of Prime Minister Justin Trudeau, and breaks down the impact they could have.

The economy

Without a history of public service, it’s difficult to judge how closely Trump would stick to his promises. But Trump has said plenty that would raise concerns for Canadian policymakers.

The Republican nominee opposes the Trans-Pacific Partnership, a proposed free trade agreement between a dozen Pacific Rim countries, including Canada. He also says he’d tear up the North American Free Trade Agreement. Trump’s main targets are Mexico and China, but observers say Canada would be collateral damage if he starts to torpedo trade deals.

Trump’s avowed protectionism runs counter to Prime Minister Justin Trudeau’s vocal support for more free trade, and would surely lead to tension between the two countries.

It’s not unusual for Americans running for president to campaign as protectionists: both Clinton and U.S. President Barack Obama criticized NAFTA during their 2008 races, but Obama didn’t push to reopen NAFTA once he was in the White House. The question is whether Trump would follow through, and how.

Canada-U.S. trade map TRUMP

SOURCE: Global Affairs Canada and RealClearPolitics.com, based on data from October 20, 2016. (Tahiat Mahboob)

There is a measure in NAFTA that would let one signatory provide six months notice and then withdraw, says Daniel Kiselbach, a partner at Deloitte Tax Law LLP, but it’s likely not as simple as that. While the U.S. president signs trade deals, it’s up to Congress to pass the legislation that makes it law.

“At least one U.S. constitutional lawyer has said you just can’t withdraw by withdrawing from the treaty,” Kiselbach said.

“The president has to respect the enabling legislation unless and until Congress has repealed it.”

That means Congress would have to be on board. And, while former foreign affairs minister John Baird has raised the alarm about increasing protectionism in Congress, the president of the Canadian Association of Importers and Exporters says she’s not worried yet.

“There’s no sense at this point in time that, whether it be Hillary Clinton that wins the White House or Donald Trump … that the House would necessarily go along with what they’re thinking,” Joy Nott said in an interview with CTV News.

Canada, in fact, is the top export destination for 35 states – a market they’d be at risk of losing if a president withdrew from NAFTA. A move to ditch NAFTA would likely result in American importers taking the U.S. government to court, Kiselbach said, but it’s hard to know exactly what would happen since there’s almost no precedent.

“The last time the U.S. withdrew from a trade agreement was 1866,” Kiselbach said.

Even if quitting NAFTA isn’t in the cards, former diplomat Colin Robertson says Trump can find other ways to make life difficult for Canadian exporters. That includes having the U.S. trade representative and Department of Commerce initiate trade actions.

“That would have a chilling effect on investment in Canada,” said Robertson, vice president of the Canadian Global Affairs Institute.

Climate change

When it comes to climate change, there’s little similarity between Trump’s and Trudeau’s positions. Trump once tweeted that global warming “was created by and for the Chinese in order to make U.S. manufacturing non-competitive,” while Trudeau campaigned on the need for tougher regulations and a price on carbon. Trudeau has since maintained the targets pledged under the previous government, but announced he’ll impose a carbon tax in 2018 on any province or territory that doesn’t price carbon on its own.

Donald Trump

According to Mark Cameron, executive director of Canadians for Clean Prosperity, the question for a Trump presidency would be: can he undo some of the measures Obama has brought in? That includes Obama’s Clean Power Plan, which is currently working its way through the American courts.

“He’s taken some pretty strong stands against climate policy,” Cameron said.

“There are some people on his environmental advisory group …who have taken pretty extreme stands,” he added. “So I think they would try to unravel things. I’m just not sure that they would be able to dismantle everything that’s been done already.”

Trump has also promised to boost the coal industry, while Trudeau talks of clean energy.

One area on which Trudeau and Trump could agree is a re-do of the Keystone XL pipeline decision. Trudeau supports the pipeline extension, which U.S. President Barack Obama vetoed last fall. Trump says he would approve the pipeline extension, but wants “a piece of the profits” to “make our country rich again.”

Robertson says that argument wouldn’t get Trump very far. Canadian officials would privately remind the White House that the U.S. now has pipelines running north, nevermind a supply of shale gas they’re exporting north.

“Do you want us to put a tariff on the 30 pipelines running north?” Robertson predicts the discussion would go.

“So I think that his claim on this one could be easily rebutted and put in perspective. Energy flows both ways now.”

Defence

Among Trump’s proposals is a threat to withhold American military support from NATO if its partner countries don’t meet their targeted defence spending. All NATO countries pledged to devote two per cent of their GDP to their defence budgets, but Canada is among the countries that don’t hit that target – something noted by Obama when he was in Ottawa last June.

Nato Allies Defence Spending

SOURCE: World Bank, Military expenditure (% of GDP) 2015. (Tahiat Mahboob)

Not backing up a NATO partner would be a dramatic move.

“Some of the statements he’s made question the very basic raison d’etre of NATO. When he questioned whether he would actually come to the defence of NATO members under aggression by Russia, nobody has ever done that in the history of NATO at that level,” said Thomas Juneau, assistant professor of the University of Ottawa’s graduate school of public and international affairs.

But would he follow through? Trump’s unorthodox style and lack of political experience make his proposals difficult to plan for, Juneau says.

“The thing with Trump is, we don’t know what he thinks. He has been so inconsistent on everything, and specifically on foreign and defence policy,” he said.

“If I were an American senior official in the national security apparatus, I’d be freaking out at the possibility of a Trump presidency just because it would be so unpredictable at every level.”

Trump’s NATO comments drew a mild rebuke by Canadian Defence Minister Harjit Sajjan, who said they weren’t helpful. The sentiment behind them certainly contradicts Trudeau’s pronouncements on how Canada should “re-engage” with the world as he promoted his international visits and attendance at global summits. While his government believes in working with allies and communicating with foes, Trump’s campaign rhetoric is about doing the opposite.

Still, Juneau says there are too many variables to assume a Trump presidency would mean the end of NATO.

“That’s so hypothetical that I wouldn’t go there that fast,” he said. “For me, the point is that, at this point, the uncertainty is what we have to plan for.”

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Liberal Internationalism for the 21st century

How to keep the Western consensus from falling apart

CETA’s just a symptom. Is it too late to get back on track?

Colin Robertson IPOLITICS October 21, 2016

The liberal international order, based on free trade and open markets, is under severe strain. Reform and renewal must begin within the trans-Atlantic alliance of democracies.

These were some of the conclusions of a group of serving and former policy-makers and thinkers, from both sides of the Atlantic, recently brought together by the Ditchley Foundation for a weekend retreat at the Greentree Estate on New York’s Long Island.

Change — economic and social, demographic and environmental — goes beyond shifts in the balance of powers. A host of challenges — nativism, isolationism and protectionism — threaten liberal democracies. Brexit defied conventional wisdom and in the United States Donald Trump channels the angry populism of a vast number of Americans who think the system is not working for them.

The fix to this democratic discontent begins at home, through policies that address inequality while also rethinking how governments can better interact with their citizens.

In a practical sense, this means tax fairness designed to promote inclusiveness and investments in infrastructure that promote sustainable growth. The United States could learn from Europeans’ traditional focus on fairness while the Europeans could take lessons from American innovation and resiliency.

The next step: repair the western alliance. The habits of cooperation have deteriorated and old mistrusts have resurfaced. The U.S. is fed up with carrying the burden of defence, while the Europeans see American standards for the new economy as neo-imperialist.

We need a 21st century version of liberal internationalism that re-endorses free trade and open markets — but makes inclusion and fair distribution dominant themes.

open quote 761b1bThere’s a risk that we’re headed into a period of ‘beggar-thy-neighbour’ mercantilism.

Elected leaders need to explain why we are democracies. We deal with complexity but it is just as important to communicate it — and this requires the support of business, labour and civil society. Current and new mechanisms need to be developed to deal with issues like climate and cyber-security.

Trade has become a particular flashpoint. There’s a risk that we’re headed into a period of ‘beggar-thy-neighbour’ mercantilism. We have moved to a post-tariff world where the barriers are now increasingly regulatory. Fiscal policies will vary — but can we figure out agreed boundaries around currency, taxation and trade adjustment to avoid a race to the bottom? How do we bring to heel global corporations that have perfected tax and regulatory avoidance?

While great powers have weight and capacity, especially in military might, middle powers like Canada are often better at coalition-building and working at the diplomatic seams.

Middle powers are more nimble and they can make a difference when they find their niche. At the United Nations last month, Justin Trudeau promised that Canada is “here to help”.

Specifically, Canada can help bring a focus on gender equality, offer up our experience in the integration of refugees and demonstrate a renewed commitment to peace operations. Can we also figure out a way to export our successful experiment in pluralism?

If the first year of the Trudeau government was about telling the world that ‘Canada is back’, then the years to come must be about visibly demonstrating how, where and what Canada is doing to ‘help’. Words are fine but dollars are better — and we are a long way from our NATO pledge of 2 per cent of GDP for defence and the Pearsonian benchmark of 0.7 per cent of GDP for international development.

The bigger challenge for Mr. Trudeau, as for all democratic leaders, is sustaining commitments for longer than the life of one government. This means creating consensus, across partisan lines and with the public, that will endure changes of government.

Democratic governance today is increasingly about transactions, accountabilities and meeting operational objectives. But good public policy — especially now that the boundaries between what is foreign and what is domestic have effectively merged — depends on finding time to think and reflect.

The Ditchley approach — rigorous policy discussions during a long country weekend — is a throwback to an age before 24-7 news cycles and constant connectivity. Next month’s annual Halifax International Security Forum, with the backdrop of our principal Atlantic port, is a very useful variation on this approach. These kinds of forums may not provide all the answers — but they raise many of the right questions.

In a complicated world, we need more constructive thinking on the practical application of democracy and the liberal international order that sustains it.

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Canada and Mexico

 

Why Canada should work to strengthen its ties to Mexico

Colin Robertson, The Globe and Mail, October 14, 2016

The Trudeau Government should prioritize its strategic partnership with Mexico. The June visit of Mexican President Enrique Pena Nieto to Quebec City, Toronto and Ottawa set a plan for closer collaboration. Both nations need to deliver on specific initiatives, especially those that emphasize our people-to-people ties.

The signature of the 1993 North American Free Trade Agreement (NAFTA) established a framework through which we have become each other’s third-largest trading partner. It is built largely through the investment of Canadian banking and resource industries in Mexico and through continental supply chains in manufacturing industries. Together, we make planes, trains and automobiles.

With a 44 million strong middle class, Mexico’s market will only increase. By 2050, Mexico is expected to rank fifth in global economic weight.

There is no shortage of collaborative instruments. The Canada-Mexico Partnership, with its private-public membership, has been in place since 2004. Its agenda covers the waterfront: energy; agri-business; labour mobility; human capital; trade, investment and innovation; environment; mining; forestry; and recently we have commenced annual security discussions.

With the election of the Trudeau government, we have developed a common North American approach to climate.

And, last December, after collaborating at the World Trade Organization, we persuaded Congress to roll back the protectionist US country-of-origin labelling requirement that threatened both of our country’s meat exports into the USA.

Canadians have begun once more their annual migration south. More than two million Canadians spend over 22 million nights in Mexico, making it our second most popular destination after the USA.

But despite the declared ambition and collaborative framework, the relationship seems less than the sum of its parts. The arbitrary imposition of a visa in July, 2009 offended Mexicans. It damaged the vital people-to-people ties that underwrite lasting relationships.

Mexicans stopped coming to Canada, complaining that the information required for the visa was excessive, intrusive and the processing time too long. Tourism and student study from Mexico sank. Mexican investors looked elsewhere. Today, we get more visitors from South Korea and Australia than Mexico, even though those flights are at least three times as long.

The visa will be replaced in December with the much-delayed Canadian Electronic Travel Authorization (eTA) system.

In anticipation of this change, the Trudeau government should work with the provinces to aggressively market student study in Canada.

We have more than 400 interinstitutional agreements and Canada’s International Education Strategy identifies Mexico as a priority market. What is missing is Mexican students; there are only 5,000 among the 200,000 foreign students in Canada.

To give the initiative momentum, why not have Governor-General David Johnston lead a group of Canadian university presidents to Mexico to promote joint study opportunities and co-operation in innovation? Mr. Johnston, a former university president, represented Canada at the inauguration of Mr. Pena Nieto and recently played host to him in Quebec City.

High-level visits are catalysts for action. Justin Trudeau should also put Mexico on his travel agenda for 2017. Why not make it a trade and investment mission with the premiers?

The Trans Pacific Partnership agreement, that effectively updates NAFTA, will depend on whether U.S. President Barack Obama can secure its congressional approval during the lame-duck session. To prepare, we should be discussing with Mexico what provisions we can jointly salvage and make bilateral, to our mutual benefit.

Mexican ministers are making regular visits to the United States to make the case for continental trade and the jobs they create. Canadian ministers should join them.

As the Trudeau government contemplates a renewal of Canadian involvement in peace operations, it should look first to the challenges in our own hemisphere.

Citing its “global responsibilities,” Mr. Pena Nieto has committed Mexico to peace operations. Helping Mexico with training of peace troops would be a useful contribution as we increase our own participation.

Last week’s failed referendum on a peace pact in Colombia will oblige renewed efforts to end the more than half century conflict that has displaced 6.7 million Colombian citizens. Canada and Mexico should pursue the talks begun earlier this year on a possible joint peacekeeping role.

Can we also help Mexico with its southern frontier problems as a result of the continuing turmoil in Guatemala, Honduras and El Salvador?

Both governments need to pick shared initiatives on which we can achieve tangible results. Success will develop more trust and create a better basis for a shared approach when dealing with the new U.S. administration.

Over the years, the Canada-Mexico story has resembled a spasmodic series of tango-like bursts of intensity followed by long siestas. This time, let’s keep the dance going and put the emphasis on our people-to-people ties.

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US Elcction and Canada as target

Canada leery of protectionist U.S. campaign

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The Canadian embassador to Washington says the Republicans’ and Democrats’ tough stand on trade is concerning

OTTAWA (Reuters) — Canadian diplomats are fanning out across the United States to talk up the benefits of trade with state and local leaders and counter what senior officials see as a worrying mood of protectionism swirling through the U.S. election campaign.

Amid voter anger about the supposed harm done by international trade deals, both Republican presidential nominee Donald Trump and Democratic rival Hillary Clinton have talked about altering the North American Free Trade Agreement. That could have calamitous results for Canada, which sends 75 percent of its exports to the United States.

From trade forums in Kentucky, California and Illinois addressing state legislators and small-business owners to meetings with mayors, labour unions and interest groups, a team of diplomats has gone coast to coast to explain how important Canada is as a trading partner.

The diplomatic offensive comes amid concerns in Ottawa about both candidates, who opinion polls show are in a tight race ahead of the Nov. 8 election.

Trump has talked about renegotiating the NAFTA treaty with Canada and Mexico to secure more favourable terms for the U.S.

However, he has also said he would revive TransCanada Corp’s cross-border Keystone XL pipeline project, which Democratic President Barack Obama’s administration blocked over environmental concerns. Clinton has said she opposes Keystone XL.

Current and former government officials in Ottawa said a Clinton presidency posed its own challenges for Canada.

They see the Democrat as tough on trade and more hawkish than Obama, who quickly struck up a warm relationship with Prime Minister Justin Trudeau.

While tough talk on trade has occurred in previous U.S. election campaigns, “there is an undercurrent and a mood here which is concerning me,” said David MacNaughton, Canada’s ambassador to Washington.

MacNaughton, who took up the job in March, has already visited Denver, Colorado Springs and Boston and plans trips to Massachusetts, Michigan and California.

An embassy spokesperson said diplomats were intensifying their outreach effort and doing more events than usual. At every meeting, they hand out tip sheets showing Canada is the top export destination for 35 U.S. states and that nine million U.S. jobs depend on trade with Canada.

Trudeau will not say which candidate he favours, stressing he is happy to work with whomever U.S. voters elect. However, his Liberals have more policies in common with U.S. Democrats. Elected last October, he and Obama have become close, exchanging visits to each other’s countries.

“Some of the issues that we are going to be facing will be very much the same regardless of who wins,” MacNaughton said.

“I think we have to prepare to deal with some pretty difficult situations on the trade front.”

Some Americans had little idea about the size of the U.S. trading relationship with Canada, he added.

Roland Paris, who served as Trudeau’s foreign policy adviser until late June, said Trump had tapped into some strong anti-trade sentiment.

“Those feelings aren’t going away any time soon,” he said.

“We may be heading into some protectionist headwinds, even with a Hillary Clinton presidency.”

Trump and Clinton also oppose a proposed Pacific trade deal that could benefit Canada.

One person with day-to-day knowledge of the U.S.-Canada trade file also predicted strains over Canadian exports of softwood lumber, as well as Canada’s system of protection for its dairy industry, which U.S. producers strongly dislike.

Another potential area for concern is Canada’s defence spending, which is .98 percent of gross domestic product, far below the two percent commitment agreed on by NATO members.

MacNaughton said that in his talks with Republicans and Democrats, both had raised the issue of “U.S. allies stepping up to the plate” in military terms.

Trump stirred concerns among allies and even some Republicans earlier this year by saying he would decide whether to come to the aid of Baltic NATO allies in the event of Russian aggression only after reviewing if they “have fulfilled their obligations to us.”

Former Canadian diplomat Colin Robertson, who had several postings in the U.S., also predicted hard discussions with Clinton administration officials over defence.


“We will be circled because we are at .98 percent,” said Robertson, vice-president of the Canadian Global Affairs Institute.


That may not sit well with Trudeau’s government, which is pledging to run large budget deficits for at least the next five years to fund investment in infrastructure and social programs.

A government source said Canada had taken part in a number of high-profile NATO missions and was ready to push back on de-mands to increase spending in the military.

“We’re quite prepared and proud to stand up on our record and explain why there might be a discrepancy between numbers … and our actual contribution,” said the source, who asked not to be identified given the sensitivity of the topic.

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