Trump and Trudeau

Trudeau’s imminent meeting with Trump carries substantial political risk

By Chris Hall, CBC News Posted: Jan 31, 2017 5:00 AM ETLast Updated: Jan 31, 2017 7:49 AM ET

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Prime Minister Justin Trudeau is preparing to meet as early as this week with U.S. President Donald Trump, a visit intended to underscore the deep economic and security ties between the two countries.

But it also carries substantial political risk.

While the date and location have yet to be confirmed, Canadian sources say the prime minister wants to sit down with Trump as soon as possible to explain the importance of the cross-border trade relationship that’s worth more than $660 billion annually and supports millions of American jobs.

Trump, as anyone who follows the news will know, is a free-trade skeptic. He’s said the Keystone XL pipeline should be built, but only with American steel. He’s made it clear that companies looking to expand or build should do so in the U.S. or face stiff tariffs.

USA-TRUMP/INAUGURATION

Trump addresses the ‘Make America Great Again! Welcome Celebration’ at the Lincoln Memorial in Washington on Jan. 19. He and Trudeau have already spoken three times by phone. (Mike Segar/Reuters)

But economics is only one of the course requirements Trudeau needs before his first face-to-face encounter with Trump. National security and values are the other big ones.

The prime minister will have to convince Trump that Canada’s decision to admit 40,000 Syrian refugees doesn’t pose any security risk to the U.S.

That task took on far more importance on the weekend when Trump signed an executive order banning all citizens from Syria and six other predominantly Muslim countries from entering the U.S.

The decision created chaos for travellers and has been condemned by many around the world. On Saturday, Trudeau tweeted, “To those fleeing persecution, terror & war, Canadians will welcome you, regardless of your faith.”

It was retweeted more than 420,000 times, the kind of activity that might very well have caught the eye of a U.S. president who uses Twitter to take on his critics and make policy announcements.

“The prime minister will have to tread very carefully,” says former Canadian diplomat Colin Robertson, a vice-president and fellow at the Canadian Global Affairs Institute.

“He has to make it clear that Canada is a reliable ally and important trading partner, but at the same time Canadians will expect him to be the champion for progressive policies.”

The risks

Trump invited Trudeau and Mexican President Enrique Pena Nieto to Washington this week for separate, bilateral meetings, to be followed by a Three Amigos summit to discuss North American issues.

But the Pena Nieto visit was cancelled after Trump signed an executive order to begin the design and construction of his promised wall along the U.S.-Mexico border.

Mexican government officials tell CBC News they understand Canada will go ahead with its meetings to defend its own interests. Mexican newspapers have been less charitable. “Canada abandons Mexico in NAFTA negotiations” was a headline in El Excelsior.

Officially, the Mexican officials remain hopeful that Canada will continue to stress the importance of NAFTA and Mexico’s role as a partner.

USA-TRADE/NAFTA-MEXICO

Mexico’s President Enrique Pena Nieto gestures as he delivers a message about foreign affairs in Mexico City on Jan. 23. He cancelled a visit to Washington after Trump signed an executive order to begin work on a wall along the U.S.-Mexico border. (Edgard Garrido/Reuters)

There’s also a risk of alienating progressive Canadians by meeting with Trump at all.

New Democrats argue Trudeau needs to be much more forceful in denouncing Trump’s travel ban. But Conservative MP Randy Hoback says priority No. 1 is to keep the border open to Canadian goods.

“He should focus on those things that reinforce the partnership.”

In other words, when Trump talks about getting back into coal-fired power generation, Trudeau should talk up Canada’s carbon-sequestration technology.

If Trump wants to talk about border taxes, the prime minister should remind him that 35 states list Canada as their largest trading partner.

Whatever he does, Trudeau is sure to be criticized.

British Prime Minister Theresa May, the first foreign leader to meet Trump at the White House, is under considerable pressure to withdraw an invitation to have him visit the U.K. The Independent newspaper reported Monday that a petition calling on the government to cancel the state visit has a million signatures.

US Trump Britain

Trump and British Prime Minister Theresa May walk at the White House on Jan. 27. May invited Trump to visit Britain, but a million petitioners have reportedly asked her to cancel. (Pablo Martinez Monsivais/Associated Press)

Greg MacEachern, a former Liberal staffer who runs the Ottawa office of Environics Communications, says Trudeau has a duty to meet with Trump even if the president’s statements about women, Mexicans and other groups are so at odds with his own commitment to inclusiveness and equality.

“The prime minister can still stand up for Canadian values,” he says. “But the U.S. is just too important a trading partner, and Trump’s campaign was so heavily focused on jobs and trade, that there’s no other choice.”

The goal

Trudeau and Trump have spoken on the phone three times since the president’s election victory in November, most recently on Monday when Trump called to offer his condolences and support following the shooting at a Quebec City mosque that killed six and left five others with critical injuries.

Key cabinet ministers like Natural Resources Minister Jim Carr and Transport Minister Marc Garneau are planning visits to Washington, as soon as their American counterparts are confirmed by the U.S. Senate, to discuss energy and infrastructure priorities and to show how Canadian and American interests in these areas intersect.

And Andrew Leslie, the new parliamentary secretary for Canada-U.S. relations, who knows a number of Trump’s cabinet ministers from when they were all ranking military officers, has already been several times.

The goal here is to show Trump that Canada is a safe, dependable and valued partner. Even when, as last weekend shows, there are issues on which the two will disagree.

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Ambassadors

What to expect from new ambassadors out of Canada and the United States

As Canada and the U.S. change up key diplomatic appointments, Colin Robertson lays out the challenges — and opportunities — for today’s diplomats.

By:

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January 24, 2017
Heyman
New U.S. Ambassador to Canada Bruce Heyman speaks to journalists after presenting his credentials at Rideau Hall in Ottawa April 8, 2014. REUTERS/Chris Wattie

The recent appointment of John McCallum as Canada’s ambassador to China and the recall of all of Obama’s political appointees has put the role of the diplomat back into the spotlight.

The McCallum appointment by the Trudeau government is a smart move.

An increasingly confident China believes it is due the same respect as the United States. It is no secret that the Chinese wanted an envoy commensurate with our ambassador to the United States, David MacNaughton. A confidante of Prime Minister Justin Trudeau, MacNaughton has close relationships within the Prime Minister’s Office, the cabinet and the Liberal Party, as well as deep knowledge and experience in governing and managing strategic relations with the private and public sector.

Likewise, as an experienced parliamentarian and senior cabinet minister who held diverse portfolios, including Citizenship and Immigration and Defence, and as former RBC Chief Economist, McCallum has place and standing. His family connections to Asia, through his wife, Nancy Lim, herself an immigrant to Canada, are not lost on the Chinese. 

With the appointment of McCallum, Canada raises the likelihood of the as-yet unnamed new Chinese ambassador to Canada having the confidence of President Xi Jinping and the senior party leadership. 

The previous Chinese ambassador, Luo Zhaohui, was cross-posted from Ottawa to New Delhi last year. Now the ball is in the Chinese court to appoint a replacement.

McCallum will likely arrive with a mandate to negotiate a closer economic relationship with Canada. From the Chinese perspective, their asks will include better access to our resources, especially energy and agriculture, as well as improved investment access for Chinese state-owned enterprises. We have to ensure McCallum has a clear mandate on what the Canadian asks are.

A new U.S. ambassador in Canada

As Canada attempts to strengthen its ambassador appointments, the major U.S. embassies await new appointments from President Donald Trump. (Some are starting to be made, notably Nikki Haley, governor of South Carolina, as U.S. ambassador to the United Nations.) 

Former president Barack Obama followed convention in asking his appointees, on the day after the Nov. 8 election, for their resignation, to coincide with his own last day in office (Jan. 20). George W. Bush had done the same with his political appointees. Trump’s decision to accept the resignations of all the political appointees named as ambassador by Obama — about one-third of U.S. top envoys, including most of those to the G7 and G20 nations — should have come as no surprise.

And so, just days before last week’s inauguration in Washington, U.S. Ambassador Bruce Heyman and his wife Vicki bid farewell to Canada at an elegantly friendly reception at the U.S. Embassy on Sussex Drive.

Ambassador Heyman, a former Goldman Sachs executive from Chicago and an early supporter of then-Senator Obama, spoke to the accomplishments of the Obama administration, including his own work as ambassador. He underlined the trade, people-to-people relations and cultural diplomacy in which Vicki Heyman took a lead role. Ambassador Heyman spoke, for example, to the pre-clearance agreement to expedite passage of goods and people across the border. When positioned well, this is what ambassadors do.

Heyman’s successor as ambassador is likely to be of a similar mould: someone who has the confidence of Trump. U.S. ambassadors require Senate confirmation and this can take some time. In the interim, the chargé d’affaires will be the deputy chief of mission, Elizabeth Aubin, a career foreign service officer.

From the Canadian perspective, a political appointee is a good thing: an ambassador with the personal confidence of the president, who can pick up the phone and get through to the White House or cabinet secretaries and agency heads. Canada has been fortunate in having a run of political ambassadors who understand the levers of power and know how to get things done. 

What kind of ambassador will Trump choose?

If history is a guide, then it is likely to be someone with a business or political background.

Obama’s ambassadors to Canada, David Jacobson and Bruce Heyman, were both from the private sector in Chicago.

George W. Bush named experienced politicians: Paul Cellucci, a former Massachusetts governor, and then David Wilkins, a former Speaker in the South Carolina House of Representatives.

Bill Clinton’s choices were a blend: Jim Blanchard, a former governor of Michigan, and then Gordon Giffin, an Atlanta lawyer, organizer and member of Clinton’s electoral college.

All of them were effective representatives for their president. Canada-U.S. relations were well served. While none of them were career diplomats, they quickly adapted to the diplomatic role.

Doing diplomacy in a tech-savvy world

Canada’s senior men and women in the field — ambassadors and high commissioners, consuls general and consuls — are mostly career diplomats.

While the professional foreign service still provides the backbone for our representation abroad, our diplomats increasingly come from a variety of backgrounds — other government departments, our Armed Forces and the private sector. This diversity gives us additional depth and necessary bench-strength.

While the ability to listen, analyze and report in a timely fashion has not changed, advocacy, increasingly public, is now an essential skill. Our diplomats need to use the tools of social media — notably Facebook and Twitter — to get the job done. In one of his first instructions, Trudeau encouraged our diplomats to use these tools. Canada’s foreign service should aspire to, once again, become a leader in public diplomacy.

“Successful diplomats need be comfortable with public diplomacy.”

Canada once led in public diplomacy, as Evan Potter describes in his book, Branding Canada: Projecting Canada’s Soft Power Through Public Diplomacy. We can lead again by developing the kinds of skills that Daryl Copeland outlines in his book, Guerrilla Diplomacy: Rethinking International Relations.

The Canadian Embassy ‘tailgate’ party around the Trump inauguration is a good example of outreach. Foreign Minister Chrystia Freeland and cabinet colleagues entertained the 1800 plus guests from the three branches and different levels of governments as well as those who make Washington work — the lawyers and lobbyists.

Public advocacy involving a Team Canada approach, not just in Washington but in all 50 states, will be necessary if we are to safeguard our interests as Trump puts “America first.”

For centuries diplomats had a near monopoly on analysis and there was time for reflection. But with the coming of the fax (Tiananmen Square) and global broadcast (the CNN effect around the first Gulf War), cheap and digital telephony (Skype, Facetime etc.) and the Internet, there is now a diversity of sources.

Today, the question is the reliability of sources. This puts pressure on our diplomats to ascertain what is true and what is false and, in the glut of information, to parse between what is noise and what is truly relevant.

Protocols, politesse and tête-à-tête with official interlocutors still have their place but successful diplomats also need be comfortable with public diplomacy.

This means developing the skills of a good saloon-keeper and impresario. It also takes creativity. Increasingly diplomats are expected to deliver a champagne-class event on a beer budget.

Aside from the requisite analytical skills, what also has not changed is a familiarity and comfort with foreign cultures, knowledge of languages, and especially empathy with one’s host nation. Adaptability has always been a necessary characteristic. And in a world in disarray, diplomacy matters more than ever.

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Trump and Trudeau

How Trudeau could play nice with Trump

If physical security and economic growth are priorities for Trump, Canada might be in a good shape, says expert

Mike Blanchfield and Jordan Press, The Canadian Press

Edmonton Mayor Don Iveson looks on as Prime Minister Justin Trudeau makes opening remarks before meeting with the Federation of Canadian Municipalities in Ottawa, Friday, January 20, 2017. THE CANADIAN PRESS/Adrian Wyld

OTTAWA – Boost defence spending, dial down the volume on battling climate change and find a bridge or energy project to build together.

That was the expert advice Prime Minister Justin Trudeau received Friday on how to get along with new U.S. President Donald Trump and make Canada relevant to his “America First” policy.

Derek Burney, a former Canadian ambassador to the U.S. under Brian Mulroney, said Trump’s protectionist, pro-American inauguration speech need not be cause for the Trudeau government light its “hair on fire” because there is plenty of policy space for Canada to plug into.

“If physical security and economic growth are his priorities, we’re in good shape to be constructively co-operative with him on both,” said Burney.

“We have common infrastructure that needs modernizing along our border.” He suggested joining forces to modernize the Canada-U.S. electricity grid, or jointly building the proposed Gordie Howe Bridge between southern Ontario and Michigan.

Boosting defence spending should also be seriously considered, said Burney because the U.S. is spending a disproportionate amount in NATO — something Trump has complained loudly about this past week.

Roland Paris, Trudeau’s former foreign policy adviser, said increasing defence spending makes sense regardless of Trump, because it’s a necessary “insurance policy” in an unstable world beset with security threats.

“The ‘America First’ model that Trump has articulated poses a signal challenge to all of America’s partners, whether it’s Europe partners, other members of NATO, Mexico, Canada.”

RELATED: And the biggest economic uncertainty for Canada under Trump is…

Canada doesn’t need to be scared of the Trump administration as long as it creates “a relationship where they see us as partners, not competition,” said Georganne Burke, an American-born Trump supporter who is a vice-president of a Toronto public relations firm.

But Trudeau and his ministers have to hold firm to their constructive approach towards wanting to find common ground with Trump and “stay away from the snark” in its messaging, she said.

That means toning down the rhetoric on the threats posed by climate change because most U.S. conservatives were angered by Barack Obama’s characterization of it as the greatest threat to the world, she said. “They will be willing to talk about environmental issues but they’re going to talk about it in a more conservative fashion.”

Colin Robertson, a veteran ex-diplomat with extensive U.S. experience, said it is crucial for Trudeau and his team to continue pushing the fact that millions of American jobs depend on trade with Canada and that 35 U.S. states count Canada as their top customer.

Robertson said Trudeau took the right approach when said he looked forward to working not only with Trump’s administration but with Congress, state and local governments “to restore prosperity to the middle class on both sides of the border and to create a safer and more peaceful world.”

Trudeau reminded Trump of Canada’s historically close ties with the U.S. in his congratulatory statement issued minutes after the billionaire businessman was sworn in as the 45th president.

“This enduring partnership is essential to our shared prosperity and security,” Trudeau said, citing “robust” trade, investment and economic ties that have long linked the two countries, while supporting millions of jobs.

“We both want to build economies where the middle class, and those working hard to join it, have a fair shot at success.”

Trudeau also spoke to the provincial and territorial premiers about the new administration.

His office said he and the premiers stressed the importance of the Canada-U.S. relationship and discussed the opportunities presented by the transition in Washington.

RELATED: How the Trudeau government is bracing for Trump

Earlier Friday, the prime minister urged the mayors of Canada’s biggest cities to keep close ties with their American counterparts to maintain an open border with the U.S. Those relationships will be vital to ensuring open dialogue and trade between the two countries, he said.

The mayors say their relationships with municipal leaders on the other side could serve as a counterbalance to any protectionist movements initiated by the Trump administration, given the trade ties between Canada and American cities and states.

“The United States is not just one president,” said Montreal Mayor Denis Coderre, who pointed to an upcoming meeting he has with Chicago Mayor Rahm Emanuel on the issue of climate change.

“It’s a complex system and we’ll do what we have to do. We are already working really hard with different colleagues from south of the border.”

Calgary Mayor Naheed Nenshi said he hopes Canada remains open to immigrants from all over the world should Trump follow through on his protectionist threats.

“Let’s ensure that we are open to the world, to trade, to brains to money to ideas and make sure that we seize on this opportunity.”

Toronto Mayor John Tory said taking a seat in the Oval Office could change Trump.

“You realize you have to represent and lead everyone. So I’m hopeful that President Trump will understand that with that office.”

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Inauguration Party at Canadian Embassy

Canadian embassy the hottest ticket in town for inauguration

The embassy’s invite-only inauguration “tail-gate” party and VIP brunch is going ahead as planned Friday, and officials insist it could be even larger than similar events held for previous incoming U.S. presidents, including Barack Obama in 2009.

As many as 1,800 people are expected at the embassy, which has hosted inauguration parties every four years dating back to 1993 – for Bill Clinton – leveraging its strategic location on the Pennsylvania Ave., parade route, between the Capitol and the White House.

Bigger, but also a little more awkward than usual, given that Mr. Trump has railed against much of what Canada holds dear, including open borders, free trade and international institutions such as NATO.

Read more: When is Trump the president? Your guide to the U.S. inauguration

Read more: Canadian embassy the hottest ticket in town for inauguration

Read more: What does the Trump era mean for Canada? A guide to what’s coming

But Canadian ambassador David MacNaughton isn’t about to pass up a rare opportunity to mingle with guests, expected to include key players in government, along with diplomats, lobbyists and policy experts. Among the expected guests will be a contingent of Canadian officials led by Chrystia Freeland, Canada’s new Foreign Minister, along with MP and retired lieutenant-general Andrew Leslie, slated to become parliamentary secretary to Ms. Freeland with special responsibilities for Canada-U.S. relations.

“Hosting an event at our embassy gives Canada an excellent opportunity to welcome important guests, further build on our relationships and continue to advance Canada’s interests in the United States,” embassy spokeswoman Christine Constantin said.

The embassy’s sixth-floor terrace offers sweeping views of the Capitol and the parade route, making it one of the most sought-after spots for Washington A-listers to catch the pomp, circumstance and a glimpse of the new president – with the possible exception of Mr. Trump’s newest hotel, also located on Pennsylvania Ave.

Michael Wilson, who was ambassador in 2009, recalls standing on the embassy steps, surrounded by saluting Mounties in their iconic red serge jackets, as Mr. Obama’s motorcade passed by.

“We have pictures … and inside the darkened windows, you can see the President with a big smile on his face, waving at us,” Mr. Wilson said. “It was quite a fun day.”

Mr. Wilson acknowledged that Mr. Trump’s presidency will be uniquely challenging for Canada, but he insisted that the inauguration is primarily a day of celebration. And the embassy remains a powerful draw on inauguration day. Now, more than ever, it’s important to be telling “the Canadian story” to Americans, he said.

The vantage point to watch the presidential inauguration from the Canadian embassy “is just terrific,” said Maryscott Greenwood, head of the Canadian American Business Council, which represents about 100 companies with business in both countries.

“If you’re going to be in D.C., there isn’t a better place to be,” said Ms. Greenwood, who will be attending the party on Friday.

“It’s a hotly coveted invitation, because it’s a great location, it’s beautiful, it’s convenient. It’s kind of like being in the VIP box at a hockey game or something. You have a bathroom, you have food, interesting people, great view, TVs.”

As with previous inaugurations, the embassy will use the event to promote all things Canadian, including trade, tourism and Canadian fare. This year’s offerings will include Canadian beer, B.C. salmon, tourtière and poutine. The pillars of the embassy’s rotunda facing the parade route will be adorned with words of hope and optimism – “friends, neighbours, partners, allies” – in giant letters.

The party is typically a well-attended, bipartisan event, which represents the celebration of American democracy – not just a particular president.

But of course, Mr. Trump isn’t an ordinary president.

“This is a president who campaigned on, among other things, tearing up NAFTA and questioning NATO. Everything about Donald J. Trump is different. So, yes I think it will different,” Ms. Greenwood said.

Colin Robertson, a former Canadian diplomat who helped organize the 2005 inauguration party for George W. Bush at the embassy, acknowledged this event could be a little trickier than previous ones for Canadian officials.

“The politics are always particular,” he said. “But for us, it’s an opportunity to meet people we haven’t met and connect with them. Because it’s such a great viewing spot, you just never know who’s going to show up.”

The embassy usually posts spotters at the door to identify important guests in the crowd, Mr. Robertson said. In 2009, Arizona Senator John McCain and former House speaker Newt Gingrich rubbed shoulders with actor Michael J. Fox and Canadian astronaut Chris Hadfield.

The all-day event starts at 10.30 a.m. Guests will be able to watch the swearing-in and inaugural address from the Capitol building on big-screen TVs. Most of the thousand-plus guests will get to party in the embassy courtyard and the large Canada Room reception area. A more limited number of VIPs are invited to share brunch in the ambassador’s sixth-floor suite, taking in views of the parade as well as the embassy’s art collection, which includes works by the Group of Seven.

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Canada and Mexico

If Canadians are wary about the incoming Donald Trump administration, think about the Mexicans. For them, Mr. Trump presents a clear and present danger.

His threats have moved beyond promises to deport “two … it could even be three million” and to build a “Great Wall” across the entire land border that “will be paid back by Mexico.”

Threatening to impose a 35-per-cent border tax, president-elect Trump has cajoled American, Japanese and German companies to abandon their investment plans in Mexico. The peso has plummeted to its lowest levels ever against the U.S. dollar.

To prepare for a President Trump, President Enrique Pena Nieto recently appointed a new Foreign Minister, Luis Videgaray, and yet another new ambassador to the U.S. (the third in nine months). In speeches to Mexico’s diplomatic corps last week, both Mr. Nieto and Mr. Videgary said that in any negotiations with the U.S., the entire bilateral relationship would be on the table, and that Mexico will not pay for the wall.

For Canadians to feel smug or secure would be a mistake. We may not yet be a direct target, but we are within Mr. Trump’s range of vision.

Inevitably, we would become collateral damage, especially when it comes to protectionist border measures. A survey last month of Trump supporters revealed that 73 per cent expect either a better deal or withdrawal from NAFTA within the first 100 days of the Trump presidency.

Mr. Trump promises more enforcement capacity to secure U.S. borders and, at last week’s Senate Homeland Security confirmation hearing for secretary-designate Gen. John Kelly, both Democrats and Republicans told him not to ignore the northern border and pressed for more security. Eight of its 15 members come from northern border states.

Nor would Canada be exempt from any new border tax, said Mr. Trump’s press secretary last week. The National Bank of Canada has estimated a 10-per-cent border levy would cause Canadian exports to slump 9 per cent within a year.

Canada and Mexico need to make common cause in the face of Trumpian excess. A visit to Mexico, before the summer, by Prime Minister Justin Trudeau would visibly underline our enduring partnership at a time when Mexicans are feeling vulnerable and alone.

While our borders are different and our responses will reflect our particular circumstances, we need to stay close, especially in any NAFTA discussion with Washington.

An active advocacy campaign – a joint effort led by our consuls, suppliers and their customers – needs to inform Americans, especially those living in the 31 states won by Mr. Trump, that their first or second markets are either Canada or Mexico.

Studies conducted for the Canadian Embassy and by the Wilson Center estimate that our commerce accounts for over 14 million American jobs. Underlining our integrated continental market is the fact that 40 per cent of the finished goods that Americans buy from Mexico, and 20 per cent of what they buy from Canada, is “made in the U.S.A.”

Linda Hasenfratz, CEO of Linamar, got it right when she warned there is “too much emotion and not enough fact” out there. Ms. Hasenfratz, who also chairs the Business Council of Canada, argues that adding cost and inefficiency would undercut our global competitiveness. The ultimate cost will be borne by the consumer.

We should look at expanding Canada-Mexico trade in produce – their tomatoes and vegetables for our beef and pork. There are major Canadian investments in Mexico – producing trains, planes and automobiles – as well as banking and mining operations. We need an active investment outreach to encourage Mexican firms to follow the lead of Grupo Bimbo, the world’s leading baker, that owns Canada Bread.

Then there are the people-to-people ties. With the visa lifted we can and need to encourage more Mexican tourism and study in Canada.

Any renegotiation of NAFTA should begin with including the improvements already negotiated through the Trans Pacific Partnership (TPP): preclearance of goods; increasing the number of professionals eligible for fast-track passage and temporary employment; and a trilateral approach to new infrastructure to enhance North American competitiveness.

If Mr. Trump repudiates NAFTA then we should keep it (U.S. withdrawal does not kill NAFTA like it does the TPP) and look for prospective new partners, including Britain, the Pacific Alliance (that includes Chile, Colombia and Peru) and to new partners across the Pacific.

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

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Trade Opportunities in the USA

Even in the age of Trump, there are U.S. trade opportunities for Canada

Even with an anti-trade President, from aerospace to consumer goods, Canadian companies can still find plenty of trade partners in the United States

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Truck driving over bridge

Fluidconcepts has produced office furnishing for MGM Studios, H&R Block and Variety magazine, among other U.S. clients. Indeed, while the workspace designer and manufacturer may be based in Oakville, Ont., roughly 60% of its sales take place on the other side of the border. So the U.S. election results have caused some anxiety for Byron Leclair, the firm’s president.

President-elect Donald Trump plans to renegotiate or “break” the North American Free Trade Agreement and scrap the Trans-Pacific Partnership, which would have further reduced trade barriers. Despite the threatening rhetoric, Leclair is not overreacting just yet, opting to hold a wait-and-see position. “It’s speculation at this point, as it always is,” he says. “Right now we are focused on keeping contact with our U.S. customers and letting them know we value our relationship.”

That’s the best course of action for any Canadian business owner right now, says Colin Robertson, a former diplomat and vice-president of the Canadian Global Affairs Institute. “Canadian companies need to remind their American counterparts that this relationship is working for both parties,” he says. “Likewise in Congress, there are both Democrats and Republicans who see the value of closer trade relations with Canada because it serves America’s prosperity.”

The Ottawa-based Canadian Manufacturers and Exporters trade association has advised its 10,000-plus members to avoid any drastic business decisions based on hunches. Senior vice-president Mathew Wilson has faith in the unparalleled relationship between Canada and the U.S.“We don’t just import and export with the U.S. We build things together,” he says, still adding that now is as good a time as any to start thinking about trade diversification.

Putting aside what might or might not happen, there are still some promising export opportunities between the two nations. Energy exports, specifically crude, experienced a year of flat growth due to the Alberta wildfires, but they’ll see a 12% gain next year as demand catches up with supply, according to Export Development Canada (EDC). Consumer goods, a star performer this year thanks to a weaker loonie and robust American spending, will continue to grow next year, albeit moderately, in areas such as household appliances, clothing, and jewellery.

One industry with a shaky but still promising outlook is forestry. About 70% of softwood lumber exports go to the U.S. and 2017 could bring hefty U.S. duties on Canadian timber, increasing costs for producers at home. However, the rebounding U.S. housing market provides some optimism; demand for construction materials such as lumber and wood panelling is expected to stay strong.

“One thing that Canada has to offer to the U.S. is proximity,” says Robert Pelletier, EDC’s U.S. chief representative. “If you think of transportation costs or just-in-time inventories, we certainly have an advantage. That’s not going to go away despite changes in policy.”

Homegrown companies also have one more advantage in their arsenal: the Canadian brand. Says Pelletier: “Companies really like working with Canadian firms because the country is known for reliability and quality.”

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Next US Ambassador to Canada

CTV Host Omar Sachedina interviews Colin Robertson on Power Play on transition of US ambassadors.

http://www.ctvnews.ca/video?clipId=1030300

Screen Shot 2017-01-07 at 3.53.34 PM

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Internet Governance

The time is now to forge Internet governance

Last year’s economic contribution of the Internet was estimated at $4.2-trillion (U.S.). If the Internet were a national economy, it would be G5. By 2025, management consulting firm McKinsey & Co. estimates that the Internet of Things will generate upward of $11-trillion in efficiency gains and economic growth.

But the dark side, the cost of cybercrime – notably fraud and data theft – was estimated to be as high as $445-billion in 2016. And governments continue to censor and crack down on social media apps to curb dissent.

In its latest annual review, Freedom House, a U.S.-government-funded NGO based in Washington, named Estonia, Iceland and Canada as the top “free nations,” but it reported that Internet freedom declined in 2016 for a sixth consecutive year.

China was identified as the “worst abuser” of Internet freedom because of its “information security” policy and its crackdown on free expression. Brazil dropped from “free to partly free,” while Turkey dropped into “not free” because of its blocking of social-media platforms.

We need some ground rules on Internet use.

Last June, the Global Commission on Internet Governance concluded two years of deliberation. Its report, One Internet, should be the starting point for informed action.

An initiative of Britain’s Chatham House and Canada’s Centre for International Governance Innovation (CIGI) think tanks, the commission was chaired by former Swedish prime minister Carl Bildt, with significant Canadian participation from co-chair Gordon Smith, co-director Fen Osler Hampson – both distinguished fellows at CIGI – and McKinsey CEO Dominic Barton, who now chairs Ottawa’s advisory panel on economic growth.

The report maps the complex landscape of Internet governance, with its distributed institutions and procedures. The Internet has succeeded, it argues, because it is a network of interoperating networks and was constructed using carrots, not sticks. But national rules are increasingly having global effects – and the trends, Freedom House reports, are cause for corrective action.

One Internet argues for an open Internet system that allows data to flow freely based on efficiency, non-discrimination and freedom of expression. It makes a series of practical recommendations designed to ensure an Internet that is open, secure, trustworthy and inclusive, including:

  • Regular reports by Internet companies naming the governments that block access and listing what they are blocking.
  • Government agreements on targets that are off limits to cyberattack, with a mutual-assistance pact to deter cyberintruders.
  • Public education on cyberhygiene while ensuring broad public access to the Internet.
  • Standards on data protection, privacy and the use of algorithms.
  • Incentives to encourage competition to make the Internet and its devices accessible to all.

Given the experience of Russian hacking in the recent US election and the elections later this year in France, Germany, Netherlands and elsewhere there should also be a prohibition on cyber-interference in the democratic process

The commission argues that any oversight regime (or regimes) must be adaptable and resilient.

In terms of regulatory models, the International Telecommunication Union (ITU) is perhaps the closest in function, but for effective private-sector participation, designers should also look to the Montreal-based International Air Transport Association (IATA). It provides global governance and standards for airline safety, security, efficiency and sustainability.

Championing Internet governance is an initiative the Trudeau government could usefully incorporate into its multilateralist agenda. The Internet and digital literacy should be a key component in the government’s new development plan. More than 60 per cent of the world remains offline, and the disconnected are disproportionately rural, illiterate and female. In our increasingly digital world, we need to develop a new social contract, one that works to narrow the divide between digital haves and have-nots.

The Internet has created a global commons for commerce and discussion that continues to expand. At its best it accelerates the exposure of corruption and enables research leading to scientific discoveries and medical cures that benefit humanity.

At its intolerant worst, the Internet is a vehicle for fake news, trolling, bullying, anti-Semitism, homophobia, racism and xenophobia.

For the gullible, the Internet encourages the spread of conspiracy theories and breeds suspicion of elites and the establishment. Facts have become fungible in an emerging post-truth, alternative universe of multiple media. This contributes to the Berlusconization of politics: the rise of clownish leaders who say ridiculous things and then laugh them off.

We need standards and norms of Internet behaviour. An international convention on Internet governance would be a useful step forward.

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Mexico A good place to invest

Why Mexico is one of the hottest spots for Canadian exporters right now

Mexico’s middle class is now larger than the entire population of Canada. That’s a huge opportunity for firms looking to boost their exports

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Mexico City streetscape

Jason Greenspan hadn’t thought of Mexico. The Toronto-based entrepreneur behind Whoosh!, a line of screen cleaners for electronic devices, wanted to expand beyond Canada’s borders last year but focused on the United States and Western Europe. But when he started getting calls about Mexico, he couldn’t ignore the country’s huge potential. “Given the growth in cellphone use in Mexico, it made perfect sense for us to export there too,” says Greenspan. Indeed, the country’s emerging middle class is gadget obsessed—and has money to spend.

Whoosh! now relies on international markets for 80% of its revenue; 20% comes from Mexico alone. To prepare for expansion, Greenspan reviewed import regulations to make sure his product’s ingredients were compliant. He redesigned his bright orange packaging to have both English and Mexican Spanish on the label. And he hired commission-based sales representatives in the market. “It’s important to have people on the ground so you can understand the local customers better,” says Greenspan.

Mexico’s middle class now boasts more than 40 million people, surpassing the total population of Canada. Moreover, households in that demographic will increase their spending by 7% annually through 2018, according to a report from the American firm Boston Consulting Group.

These consumers are particularly focused on education, food, and health care products that will improve their standard of living. “Mexico’s middle class is looking for better, high-quality brands from the Canadian market,” says Colin Robertson, vice-president of the Canadian Global Affairs Institute.

Canada and Mexico have shared a strong economic relationship, thanks to the 1994 North American Free Trade Agreement (NAFTA). The combined GDP of the three member countries has nearly tripled since the deal, but its potential renegotiation by the new U.S. administration under President Donald Trump could put trade relations on wobbly ground. Still, Teri Nizzola, chief representative for Export Development Canada (EDC) in Mexico, says it doesn’t change the fact that there are big opportunities for Canadian companies to serve Mexico.

Mexico’s newly liberalized energy sector, for example, has started welcoming private companies interested in investing in everything from oil production to storage. It’s also seeking Canadian expertise to help it expand its natural-gas pipelines. “A lot of Mexican players are looking to Canadians because of our historical strength in that sector,” says Nizzola.

Meanwhile, Mexico’s decade-long import ban on Canadian beef was lifted this October. Consumers’ impression of Canada is a land of blue skies and beautiful mountains, says Sven Anders, an agricultural economist and associate professor at the University of Alberta. “That reputation can be an asset to agricultural producers whether they export beef, poultry or grains,” he says.

Despite ample export ventures, companies may still shy away because of language and cultural barriers. Nizzola recommends business owners start by visiting the country and meeting with other Canadian companies already in the market. “Once you’re here, you’ll see that Mexico wants to work with Canadian brands,” she says.

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