How a Clinton victory could affect Canada
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.
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.
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.”
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.
“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.
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.
“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
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)
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.
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.
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.
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.
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.”
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.
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.”