NAFTA Renegotiation

NAFTA GETS NASTY

Wendy Mesley reports on how trade between the U.S. and Canada got some unwanted attention this week

http://www.cbc.ca/news/thenational/nafta-gets-nasty-1.4091817 00:00 05:29

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Common interest will ensure Canada-U.S. trade conflicts get solved: Chris Hall CBC

Beyond the ‘noise’ of Trump’s rhetoric are compelling interests for trade co-operation, experts say

By Chris Hall, CBC News Posted: Apr 29, 2017 5:00 AM ETLast Updated: Apr 30, 2017 2:35 PM ET

NAFTA renegotiations won't be completed quickly, says former ambassador to the U.S. Raymond Chrétien, which provides an incentive for the Trump administration to complete a deal with Canada on softwood lumber.

NAFTA renegotiations won’t be completed quickly, says former ambassador to the U.S. Raymond Chrétien, which provides an incentive for the Trump administration to complete a deal with Canada on softwood lumber. (Sean Kilpatrick/Canadian Press)

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Sunday Scrum: Mixed signals on NAFTA 9:45

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Canada remains confident a deal can be reached with the United States on softwood lumber without repeating the drawn-out trade litigation of the past.

Natural Resources Minister Jim Carr says reaching a new long-term deal is the best option, even as he repeats his warning that jobs will be lost in Canada as a result of the U.S. lumber industry’s lobbying for new duties on Canadian imports.

“The complications are that you have lobbies at work, lots of political pressures. But our experience is, in all of these conversations, at every level of the United States government and beyond … people see the common interest.”

The U.S. Commerce Department imposed preliminary duties of between three and 24 per cent on Canadian softwood imports this week. More anti-dumping duties are expected in the future.

‘We won’t sign a bad deal’

Trump’s Commerce Secretary Wilbur Ross said that the White House had hoped to get this dispute out of the way before NAFTA negotiations begin.

Michael Froman, who served as former president Barack Obama’s top trade negotiator, told CBC News that a deal was in reach, but the Canadian side felt it could get better terms with Trump.

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Prime Minister Justin Trudeau and President Donald Trump shake hands after a joint news conference at the White House in Washington in February. (Sean Kilpatrick/Canadian Press)

But in an interview with CBC Radio’s The House, the natural resources minister said there was “no good deal possible from the Canadian perspective” with the Obama administration.

“We weren’t prepared to sign a bad deal. We won’t sign a bad deal. If we have to wait it out we will,” said Carr. “And we’ll use all the options available to us, but I don’t think that’s in the interests of either Canada or the United States.”

Even so, Carr believes there’s an opportunity to get a deal. It’s a view shared by Quebec’s lead negotiator, Raymond Chrétien, who served as Canada’s ambassador to Washington in the 1990s.

“I’m confident that there’s a window perhaps for a negotiated settlement for the following reason: Mr. Trump has indicated that he wanted a quick … renegotiation of NAFTA, but this is not possible in my view,” Chrétien said.

“So why not solve the lumber dispute before you tackle the more comprehensive, complicated NAFTA negotiations? So hopefully there’s a small window there, and I’m sure that in Ottawa they would welcome a softwood lumber deal.”

Pushback from U.S. exporters

Softwood is not the only trade irritant Trump is highlighting. He’s blamed Canada for being unfair to American dairy producers. He’s still threatening to rip up the North American Free Trade Agreement unless he can negotiate a fair deal for American workers.

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Trade experts say U.S. President Donald Trump’s aggressive posture on trade has alarmed the U.S. agriculture sector, which relies on foreign markets. (Kevin Lamarque/Reuters)

Laura Dawson, director of the Canada Institute at the Wilson Centre in Washington, D.C., said Trump’s rhetoric this week claiming NAFTA has been horrible for the U.S. and a disaster doesn’t match the reality that the trade deal “has been pretty darn good” for the U.S.

“When Donald Trump’s announcements were coming out this week, the U.S. agriculture sector pushed back really hard. U.S. farms depend on exports to Canada and Mexico, and they were having none of this. So he’s gotten a lot of pushback.”

Dawson said the Trump Administration is trying to stir up American opposition to free trade following the failure to get rid of Obamacare and as it meets congressional opposition to a budget plan.

That’s why Dawson thinks Trudeau’s approach is the right one, reminding Trump in one of their phone calls this week of the negative impact that scrapping NAFTA would have on jobs and businesses on both sides of the border.

Partner with Mexico

Dawson said Canada should also work with Mexico as both countries prepare to discuss changes to NAFTA.

Trump Trade

Mexican President Enrique Pena Nieto shakes his fist as he talks about the value of made-in-Mexico products. Canada and Mexico should work together in advance of NAFTA talks, says trade expert Laura Dawson. (Rebecca Blackwell/Associated Press)

“Mexico has really strong retaliatory power in the United State. Every bit of corn the U.S. exports is bought by Mexico. If they stop buying U.S. corn that would be a big deal for U.S. agriculture. Similarly, the security front — if they stop co-operating on the U.S. southern border … that’s a big deal for the United States.

“So I think Canada needs to be a partner for Mexico.”

Colin Robertson, a former Canadian diplomat in the U.S., wrote this week for the Canadian Global Affairs Institute that managing the Trump file — and getting it right — has to be Trudeau’s first priority.

“While much of Mr. Trump’s rhetoric is merely noise, what is dangerous about the noise is the effect it is having on business confidence, both domestic and foreign.”

What’s gone beyond noise now is the dispute over softwood lumber. Carr said the federal government is prepared to assist those in the forest sector who are affected.

“There will be closures. Sawmills will be under pressure. But nothing yet is certain except that we are prepared with a number of policy options that we will work out with our provincial counterparts, and we will be ready.”

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Managing Trump: Canadian Response after 100 Days

Managing Trump: The Canadian Response

Managing_Trump_Montages.jpg

Image: New York Magazine

by Colin Robertson
Vice-President and Fellow
Canadian Global Affairs Institute
April, 2017

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Table of Contents


Managing Trump: The Canadian Response

Every prime minister has three files resting permanently on their desk, requiring their personal attention: national security, national unity and the Canada-U.S. relationship. For Justin Trudeau, the election of Donald Trump has meant putting the Canada-U.S. file on the top of the pile.

Trump campaigned in punchlines, with a signature blend of bombast, bravado and bullying. His platform was nativist, protectionist and populist. His campaign, featuring big rallies and a minimal ground game, defied the new-age electoral conventions based on data-driven micro-targeting. In its successful capture of the Republican nomination and then the presidency, he defied the pundits, the GOP establishment (including its national security establishment that publicly deemed he would put the nation’s security “at risk”) and its conservative wing.1

As president, Donald Trump continues to be a ‘renegade in power’. His tweets have redefined the power of the ‘bully pulpit’ and his administration’s alternative facts and his own truthiness (according the Washington Post during his first 91 days in office Mr. Trump has made 417 false or misleading claims).2

In as much as President Trump has governing principles, they are about the bottom line and what good they will do for the USA. Whereas previous presidents avoided linkage between economics and security, for Trump they are a natural match. It is all part of the ‘art of the deal’.

As he approached his hundred days in office. President Trump took jabs at Canadian dairy, lumber, energy, and threatened withdrawal from the North American free-trade agreement declaring from the White House that “people don’t realize Canada has been very rough on the United States.3 Everyone thinks of Canada as being wonderful, and so do I. I love Canada. But they’ve outsmarted our politicians for many years, and you people understand that.” It was a reminder to Canadians that we do not enjoy any special exemption from the “Full Trump.”

While much of Mr. Trump’s rhetoric is merely noise, what is dangerous about the noise is the effect it is having on business confidence, both domestic and foreign, and about investment in Canada. If investors think Canada is going to lose its ease of access to the United States, Mr. Trudeau’s commitment to create middle-class jobs will not happen.

The Trudeau government’s response has been one of careful, calibrated, fact-based engagement. The opposition and provincial governments, especially premiers, are part of the outreach effort, making it a “Team Canada” initiative. Buttressed with local content, the initiative builds on three core messages: Canada is a fair-trade partner and a market that creates jobs for Americans; Canada is a reliable ally; Canadian resources fuel American growth and jobs.

The relationship and managing Mr. Trump is one that Prime Minister Trudeau must manage personally and get right. Canadian prosperity, and his own re-election, depend on it.

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The Challenge of Trump: Noise and Reality

The Trumpian challenge: separating noise from substance

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Bulk Drug Sales to the USA

Canada must resist the lure of bulk U.S. drug purchases

 

‘Beware of Greeks bearing gifts” is advice that Canadians should heed on U.S. legislation permitting the bulk purchase of pharmaceutical drugs from Canada for the U.S. market.

At a time when we are about to renegotiate our preferred access for people, goods and services, it makes no sense for Canada to involve itself in this very American controversy.

Vermont Senator Bernie Sanders is the driving force behind a bill in the U.S. Senate aimed to give Americans “Canadian” prices for their prescription drugs. A similar bill was defeated in January (52-46) but not on the usual Democrat versus Republican partisan lines. A dozen Republicans, including senators Ted Cruz, Chuck Grassley and John McCain, voted for the measure.

Americans spend more per capita on health care than anyone else in the world – $9,451 (U.S.), according to the OECD (the comparable figure for Canada is $4,727). Donald Trump and the Republicans were elected, in part, on their promise to abolish Obamacare, and their recent spectacular failure in the House of Representatives only underlines the challenges around U.S. health care.

Groups of American seniors crossing the border to buy drugs or having prescriptions filled in Canada and then sent to them in the United States – this also accommodates Canadian snowbirds – has long been a feature of cross-border “trade.” This will continue. But Canada is not the solution to the United States’ drug-pricing controversy.

Our pharmaceutical industry – innovators and the generics – is stretched providing for the Canadian market. Last year, Health Canada introduced regulations requiring drug manufacturers to report on anticipated and actual drug shortages. There is even a website – Drug Shortages Canada.

Involving ourselves in this American problem would not serve Canadian interests. Given that many of the prescription drugs that Canadians consume are manufactured elsewhere, Canada would simply be a trans-shipment point.

The failure of Canadian authorities to inspect for counterfeits in goods trans-shipped through Canadian ports is a continuing irritant to the United States. With the opioid epidemic in the United States (a problem also in Canada), there is also concern that Canada would become a back door for international drug smugglers. The bulk transfer of pharmaceutical drugs makes no sense. As with the prohibition on the bulk transfer of our water, Parliament and provincial legislatures should act now to prevent wholesalers from exporting drugs in bulk from Canada.

With aging populations in both Canada and the United States, there is only going to be more demand for drugs and biologics that improve and sustain life. This is where Canada and the United States should be co-operating.

It is estimated that, with research, clinical trials and licensing by governments, it takes eight to 11 years and costs almost $3-billion to bring a drug to market. The creators, mostly private companies, deserve a fair return on their investment but pricing must be fair as consumers and their legislators will intervene, as illustrated by the EpiPen controversy.

Innovation is a Trudeau government priority. Innovative Medicines Canada says that there are more than 500 new products in development supported by more than $1-billion in annual research and development. Genome Canada and its provincial partners are making a difference employing using new approaches, such as Open Science, involving the sharing of data and samples.

If health care in the United States is the most expensive in the world, Canada’s is also costly – about 11 per cent of our GDP. Every provincial government is engaged in efforts to bring down health care, which absorbs about 40 per cent of their budgets. More attention needs to be devoted to outcomes. This will require hospitals and health-care professionals to share data and then crunch them so we can see what is working and what can be improved. This is another area where co-operation with the United States makes sense.

In the meantime, let’s not risk our reputation and our own supply to address a “Made in America” problem that must be fixed in America. Mr. Sanders’s “Trojan horse” should be emphatically rejected and the sooner the better. Canada has much bigger stakes in play with our American neighbours.

A former diplomat, Colin Robertson is vice-president and fellow at the Canadian Global Affairs Institute.

 

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Trudeau Government outreach into the USA

Bill Morneau drawing links between anxiety that elected Trudeau, Trump

Morneau, whose most recent U.S. visit took him to New York and Indiana this week, said he’s been telling American political leaders that the same middle-class angst that fuelled Trump’s victory also helped propel the Trudeau government to power.

“As we go out to the United States, we reinforce the importance of jobs — that’s a common factor that we share with Americans,” Morneau said this week in a post-trip interview.“Having secure, well-paying jobs over the long term is the surest antidote to anxiety about the future.”

Morneau’s visit was part of Canada’s ongoing political charm offensive in the U.S., which has been intensifying since Trump took office in January.

Canadian leaders from all levels of government have been travelling stateside and highlighting the economic benefits for both countries of their cross-border business relationship.

It’s prompted by fears north of the border that several U.S. trade and tax proposals under discussion would, if implemented, have significant economic impacts in Canada.

Morneau said he recently met with Indiana Gov. Eric Holcomb, and they discussed the similarities between conditions in their respective countries.

Earlier this week, he told a World Economic Forum event in New York that he made a point of telling his U.S. counterpart, Treasury Secretary Steven Mnuchin, the same thing when they spoke last month at a G20 meeting in Germany.

“We talked about the challenges that fuelled our election in Canada and the challenges that fuelled the new administration in the United States — and the very real sense that we both need to strengthen the middle class in our countries,” he said.

The Trudeau government is trying to show Americans that their Canadian counterparts share many of the same fears and challenges as Trump supporters, said Christopher Sands, a U.S.-based political science professor and Canada-watcher.

“Politically, it’s smart. Don’t treat Trump as crazy or impossible, but try to find a way to seem as normal and as comfortable with him as possible and he’ll be the same with you,” said Sands, director of the Center for Canadian Studies at Johns Hopkins University.

The most recent national elections in both countries came as middle-income workers were feeling squeezed, said Sands. But Canada didn’t see the same kind of “populist, nationalist, frustration with the establishment” present in the U.S., he noted.

Colin Robertson, a retired Canadian diplomat with extensive U.S. experience, said Morneau’s approach suggests the Trudeau government continues to seek “convergent points” with the Trump administration and with state governments.

“I think that’s probably wise,” said Robertson, who noted that while the two governments’ approaches on issues like refugees and climate are different, they have shared interests in achieving growth.

Many Trudeau cabinet ministers have been asked to focus some of their outreach efforts on key states with strong economic relationships with Canada.

Morneau has been asked to pay close attention to Indiana, in addition to his finance minister’s roles in the U.S. capital and New York.

His office sent out a release this week saying that Canada is Indiana’s top customer. It also said nearly 190,000 jobs in the state are directly connected to trade and investment with Canada.

Indiana’s importance runs even deeper because it’s the home state of U.S. Vice-President Mike Pence, the former governor.

“I found that the relationship with Vice-President Pence started off on a very strong footing when we were in the White House,” Morneau said.

“He’s very interested and because of his background in a state like Indiana, which has such a strong relationship with Canada. He already has a good starting point in understanding how important the relationship is.”

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Donald Tansley Lecture

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https://www.schoolofpublicpolicy.sk.ca/

CANADA AND PRESIDENT TRUMP: HOW DO WE MANAGE?

2017 Tansley Lecture

Johnson-Shoyama Graduate School of Public Policy

April 5, 2017

Colin Robertson

 

It is an honour to deliver this lecture. I thank the Johnson-Shoyama School for the invitation and those at the University of Regina who have helped me get here. A particular thanks to my friends Dale Eisler and Doug Moen for their advice and to my brother Neil who literally got me here tonight.

 

The Saskatchewan Mafia

 

I met Donald Tansley, Al Johnson and Tommy Shoyama when I first arrived in Ottawa. While I do not pretend to have known them I knew their reputations and I took their measure.

 

What always struck me about that generation of public servants was that this was a generation tempered by war.

 

Tansley served with the Regina Rifles. Neil and I would retrace their steps – characterized by valour and sacrifice –  at Juno Beach on D-Day and after. It gave them a perspective of life that guided their public service.

 

Nor did they suffer fools. I know this from personal experience having later served under their colleague Simon ‘Gunner’ Reisman when we negotiated the Canada-US Free Trade Agreement-

 

As public servants – they were never bureaucrats –  they believed in the power of ideas and in vigorous policy discussion. As Johnson would later write of their time in Saskatchewan they “dreamed no little dreams” and believed in government as a force for good.

 

They took this attitude to Ottawa when they migrated as members of the ‘Saskatchewan mafia’ who served the governments led by Mike Pearson and Pierre Trudeau.

Policy implantation was a piece – you had to make things work. But putting things in auto-drive was not their thing – they all sought to build a better Canada.

 

The disappointment of our current government’s – that of Justin Trudeau –  in the public service is not their lack of enthusiasm or loyalty but the lack of ideas and the inability to dream big dreams.

 

Donald Tansley, Al Johnson and Tommy Shoyama were exemplars of what public service can and should be. They set the bar for succeeding generations of public servants. It is why we continue to honour their contribution to our public life.

 

My interest in the USA

 

Like most things in life, I came to Canada-US relations through time and chance.

 

I am a child of the fifties, a Prairie boy who came to public service through a combination of admiration for Lester B.  ‘Mike’ Pearson’s internationalism and the stature and self-confidence that ‘helpful fixing’ gave to Canada. And public service – thanks to the example set by Tansley, Johnson and Shoyama, was both high calling and an honourable profession.

 

As an undergraduate I read Charles Ritchie’s The Siren Years. Ritchie, who would go on to become our ambassador to Washington during John F, Kennedy’s presidency, wrote of life in London during the Blitz. He worked with Pearson, George Vanier and Vincent Massey at our High Commission, met the King and Queen and bedded ballerinas. It convinced me that the Foreign Service was the life for me.

 

I was never disappointed in the Foreign Service although in later years the advent of political correctness, senseless accountability, and a government that didn’t care much for its Foreign Service, tested my endurance.

 

My first assignment was to the UN Bureau where I worked for Geoffrey Pearson, son of Lester Pearson. Through him I met the inimitable Charles Ritchie. I was posted to the General Assembly to the United Nations in New York where I met John Holmes, a protégé of Pearson, who by then was at the Canadian Institute of International Affairs.

 

Holmes was one of that generation of Canadians who helped engineer the post-war international institutions – the United Nations, the IMF, World Bank, GATT (now the WTO), and the alphabet soup of agencies including FAO, WHO, UNHCR that continue to underwrite international peace and security.

 

Holmes was in the process of writing a book on Canada-US relations. He remained a steadfast advocate for the rules-based, liberal international system that gave middle powers like Canada a seat, even temporarily, at the great powers table.

 

Holmes embodied the Pearsonian idea of ‘functionalism’ – the recognition within the international system that competence, not power, should determine membership and weight to the specialized agencies dealing with issues like food and refugees that give middle powers like Canada place and standing.

 

But Holmes recognized that the United States was the anchor and guardian of our rules-based, liberal international system. His advice to me was to specialize and to better understand the United States. For Canada, he told me, it would always be the United States and then the rest.

 

Holmes didn’t like anti-Americanism or the Canadian temptation to be smug and superior: “Stern daughter of the Voice of God” was how Dean Acheson, a former American Secretary of State, famously described this unfortunate Canadian characteristic.

 

Like most Canadians I plead guilty to describing myself by what we are not – Americans and I will never forget after a session of self-satisfied grousing with fellow junior diplomats in the UN delegates lounge, a Polish diplomat, older than the rest of us – he endured the  Second World War, the Nazis and then Soviet occupation – quietly observed to me: “Would you rather be us?”

 

There is a natural insecurity that comes from living next door to Goliath. As Prime Minister Pierre Trudeau memorably quipped to the National Press Club in Washington, “Living next to you is in some ways like sleeping with an elephant: no matter how friendly and even-tempered the beast, one is affected by every twitch and grunt.”

 

Fortunately, my childrens’ generation don’t suffer from this affliction. Instead, as the jingle from the Vancouver-Whistler Olympics put it, they want to own the podium. That’s progress of which we should be proud.

 

One of my mentors and our longest serving ambassador to the United States, Allan Gotlieb, reminds me that the United States is more than a country, it is a civilization.

 

And the rules-based liberal international order that most of us grew up under and which has preserved the peace, not imperfectly but certainly better than any other period in world history, was created by and sustained by American leadership.

 

Holmes believed that we had to cut the US some slack – there is always a trap door for the great powers and, as great powers go, the US used this privilege sparingly.

It was important, he argued, that we be a good and trusted neighbour to the United States because then, as he wrote in his book Life with Uncle, “we could tell them when their breath is bad,”

 

For me, Holmes’ Life with Uncle and Allan Gotlieb’s I’ll be with you in a minute Mr. Ambassador, remain the two best guides for active practitioners in Canada-US relations.

 

I kept copies on my desk when I served in Washington. Their advice helped focus my own thinking on managing Uncle Sam in the Trump Administration.

 

As you can see, I took Holmes’ career advice to focus on the USA. I returned to New York to work at the Consulate General for Ken Taylor – that most cool of Canadian diplomats and a true hero. I later served in Los Angeles as Consul General and then in Washington as the first head of the Advocacy Secretariat.

 

I was also a member of the Canadian teams that negotiated the Canada-US Free Trade Agreement and the North American Free Trade Agreement.

 

My travels have taken me to every state in the Union.

 

On Canada-US relations, I reckon I’ve done my 10 000 hours – Malcolm Gladwell’s definition of deliberate practise to become competent – but I will confess the election of Donald Trump surprised me.

 

The Trump Phenomenon

 

Donald Trump is not a typical president. According to the Washington Post, during his first 70 days in office he has made 343 false or misleading claims. As Winston Churchill once observed, democracy is the worst form of government except for all the others.

 

Mr. Trump is not an establishment Republican – he quickly dispatched Jeb Bush, little Marco and the rest. He defeated the conservative standard-bearer ‘Lying Ted’ Cruz. And while he didn’t win the popular vote he took the electoral college from ‘Crooked Hillary’.

 

That the Russians intervened in the US election is incontestable according to intelligence agencies, although whether he won because of their intervention is an open question.

 

Don’t underestimate Mr. Trump. He went into the campaign with only a 1 percent probability of winning the Republican nomination and on the day of the election was still given odds of less than one in three of becoming president.

 

Trump confounds not just Canadians and, if the surveys are right, most Americans and certainly the rest of the world.

 

I think he won because Americans wanted change from a Washington that they felt no longer worked for them. Trump appealed to this feeling of loss of control. The Wall would restore integrity to borders. The Muslim ban would keep out migrants and terrorists. As master of the Art of the Deal he’d restore ‘Made in America’ and keep out foreign goods. And he’d drain the swamp in Washington.

 

As one journalist put it Trump’s supporters took him seriously but not literally while the elite took him literally but not seriously.

 

Trump’s messaging – including his early hour tweets – continue to be a simple, persuasive and appealing: ‘Make America Great Again…America First…Buy American…Hire American’.

 

As he said in his Inaugural Address, “the forgotten men and women in America” are “forgotten no longer…Everyone is listening to you now.” Donald Trump the tribune of the people.

 

Some of the messaging– the appeal to protectionism and nativism –  accounts for the surprising Brexit vote and is now at play in the forthcoming French and German elections.

 

Is Canada immune from these frustrations? By this I mean

the sense that the system isn’t fair and that the system has created advantages for some, the lack of trust in our institutions, the divide between those who have and those who don’t, and the sense that our kids will be worse off than we are.

 

I don’t think so.

 

I think that the conundrum around fairness and inequality – not climate, not terrorism – is the really big public policy challenge for our time.

 

Dealing with President Trump

 

We need to take President Trump seriously and, as we are learning, often literally.

 

With three-quarters of Canada’s exports headed to the USA this is our key market. We cannot change our geography, nor would we want to.

 

We enjoy preferred access to United States. Now we are going to have to negotiate to preserve that access.

Our prosperity and security depends on it.

 

Canadian policy will require care, circumspection and engagement. But above all engagement.

 

As we go into trade negotiations with the Trump administration and Congress, active engagement by Canadians, armed with a clear sense of our national objectives, is crucial to success.

 

This means all hands-on deck and a game-plan supported by all levels of government.

 

This being Canada, this also means achieving consensus, not unanimity. To remind ourselves, we fought an election around free trade in 1988. Only three provinces – Quebec, Alberta and Manitoba -gave the Progressive Conservative government of Brian Mulroney a majority of their votes.

 

But free trade worked for Canada. It resulted not just in prosperity but an attitudinal shift on the part of Canadians.

 

Where once we wondered about our capacity to compete internationally, we now are confident that we can truly own the podium.

 

I am aware of the controversy around the Global Transportation Hub, but the concept of inland ports with global reach is exactly what Saskatchewan and Canada should be doing.

 

Where once premiers were divided about the merits of free trade, today every premier, regardless of political stripe, is out on the international circuit promoting trade. Premier Wall is in Washington this week engaged in developing new relationships and building on existing ones. His overriding message is about the vitality and mutual benefits of our trading relationship.

 

NAFTA worked well

 

Although it is not appreciated in the United States, NAFTA worked for Americans as well as Canadians. The NAFTA, which improved the FTA and brought in Mexico, helped spark a decade-long economic advance in all three nations.

 

Some facts gathered by the Council on Foreign Relations that are not generally known or appreciated by Americans:

 

  • S. trade with its North American neighbors has more than tripled, growing more rapidly than U.S. trade with the rest of the world.
  • Research from the Peterson Institute concluded that the nearly two hundred thousand export-related jobs created annually by the pact pay 15 to 20 percent more on average than the jobs that were lost.
  • Canada and Mexico are the two largest destinations for U.S. exports, accounting for more than a third of the total.
  • Some fourteen million jobs rely on trade with Canada and Mexico – nine million with Canada alone according to a study conducted for the Canadian Embassy. Canadian companies operating in the U.S. directly employ 500,000

 

These facts need to be underlined to our American friends again and again in the coming months.

 

A word about Mexico: Mexico is now Canada’s third largest trading partner and our entrée to the Americas. While Canada and Mexico will pursue their own interests in these negotiations, as sovereign countries do, we need to keep in close contact because divide and conquer is integral to Mr. Trump’s ‘Art of the Deal’.

 

Getting Ready: All Hands on Deck

 

Prime Minister Justin Trudeau and his cabinet are doing an effective job of outreach to the Trump Administration, Congress and now into the states, especially those states that voted for Mr. Trump.

 

In a speech before the election Justin Trudeau remarked that “a former Prime Minister – and not the one you think – once said to me that the PM has three big responsibilities:

  • Grow the economy;
  • Unify the country; and
  • Successfully manage our relationship with the United States.”

For our American cousins, said Trudeau, the relationship is consequential. For us, “it has often been definitional.

 

The advice on priorities came from Brian Mulroney, the prime minister who best understands the Canada-US dynamic. As Mr. Mulroney, whom Mr. Trudeau has smartly enlisted in the outreach to the Trump team, observed:

 

“The golden rule of Canada-US relations is very simple. We can disagree without being disagreeable. The Americans are very important to us. We know they are, notwithstanding the differences, our best ally, our closest neighbour, our biggest customer. “

 

Mulroney, speaking at the time in Washington at a tribute to Ronald Reagan, went on to add, “There is also a rule of global politics – Canada’s influence in the world is measured to a significant degree by the extent to which we are perceived as having real influence in Washington.”

 

Trudeau is also practicing well what former US Ambassador Gordon Giffin called the Goldilock’s rule of Canada-US relations: Don’t let the relationship get too close – we Canadians like some distance. But don’t let it get too cold, either.

 

I think Mr. Trudeau has found the right temperature and created the right team for our negotiations. Putting Chrystia Freeland, who brought home both country of origin labelling and the Canada-Europe agreement, as both Foreign Minister and minister responsible for trade with the USA, is brilliant.

 

Having former General Andrew Leslie as parliamentary secretary is also very smart. He knows personally Generals McMaster (National Security Advisor), Mattis (Secretary of Defence), and Kelly (Homeland Security Secretary).

 

General Leslie joined Premier Wall recently in Iowa where they spoke to Iowa legislators and met with Governor Terry Branstead (whom Mr. Trump has nominated as US ambassador to China).

 

This kind of strategic federal-provincial collaboration that Canadians want to see.

 

Prime Minister Trudeau was in Houstpn recently  –  he told an American energy executive audience that pipelines and action on climate were entirely compatible – he was joined by Albert Premier Rachel Notley. He also warned, to the applause of his American audience, that a border adjustment tax would hurt both economies.

 

We have the right team in Washington.

 

Our ambassador, David MacNaughton, is shrewd and unflappable – the right temperament for these volatile times. He has the trust of the prime minister and, in quarterbacking the outreach to the Trump team, he has been very effective.

 

Our negotiating team will be headed by Steve Verheul, our Chief Negotiator for the Canada-Europe trade agreement/ He is well known to his provincial counterparts through his role as our CETA Chief Negotiator. Saskatchewan farming community will be pleased to know that he cut his negotiating teeth on agriculture. Like MacNaughton, Verheul is low-key and effective.

 

He will lead an experienced team, many have just come off the CETA and/or the Trans Pacific Partnership negotiations.

 

President Trump has foolishly jettisoned the TPP – the comprehensive deal with 12 other Pacific nations, including the USA and Mexico. There is a lot in that agreement that, inevitably, will be applied to the upcoming negotiations.

 

Preparing and negotiating the Canada game-plan has to involve all levels of government and our most experienced hands, regardless of partisan affiliation.

 

The fact that Mr. Mulroney and Derek Burney, his former chief of staff who later served as ambassador to Washington (and was both my boss and one of my mentors) are attending the cabinet committee on Canada-US relations tomorrow is visible demonstration of this ‘Team Canada’ approach.

 

This also means the provinces and the national government working together like lips and teeth in preparations and negotiations. The model should be the Canada-Europe trade negotiations where provinces were full partners and at the negotiating table.

 

Of critical importance will be the premiers with their governor counterparts and provincial members with their state counterparts. If we are to make the gains we want in terms of access to procurement – and that means sales and contracts for Canadians – we need the states to be onside.

 

Premier Wall needs to repeat his 2010 effort when he took a delegation of premiers to Washington during the Natioanl Governors Conference and negotiated a reciprocal agreement on procurement purchasing. If Mr. Trump gets his way the US procurement plan could be worth a trillion dollars.

 

In the meantime, the premiers should create a standing committee of the Council of Federation and figure out what it is we want from the USA and what we are prepared to give in return for gains. They should start with softwood lumber because next month we are going to start paying through the nose for our lumber exports to the USA.

 

Softwood is a dispute dating to George Washington’s second term – Canada has a natural advantage in wood. Softwood lumber and its variation – ‘shakes and shingles’ – threatened to derail the negotiations that eventually led to the Canada-US Free Trade Agreement in 1988.

 

Forestry practises are a provincial responsibility and the premiers need to figure this one out. Until then the Americans will happily collect our dollars. Softwood lumber is also a reminder of the importance of having alternate markets than the USA.

 

Business has an important role.

 

The big companies – the GEs and GMs need to step up and warn President Trump of the threat to their supply chains, especially for manufactured goods –  from soup to computers to trains, planes and automobiles. Supply chains work for North Americans.

 

We need to apply the people-to-people relationships, especially when the prevailing policy is ‘America First’ and because, as President Trump declared in his Inaugural Speech, “We will follow two simple rules: Buy American and Hire American.”

 

Plus ça change

 

The congressional hearings that will begin shortly will generate a lot of heat and noise. Much of it will be aimed at Mexico but Canada will also come in for its share of criticism.

 

Canadians should not panic. It’s a useful venting session and it will give our negotiators a better sense of what will be on the American agenda when they sit down later this year to open up the now 23 year-old NAFTA.

 

Some perspective:

 

“I have recently talked quite a lot to Americans about how they perceive, or misperceive, Canada-U.S. trade. I have called their misperceptions the seven deadly myths. l listed them as follows: Canada is not the American’s biggest trading partner; that we try to keep our dollar low to gain an unfair trade advantage; that we have piled up huge trade surpluses; that we subsidize trade and the Americans don’t; that public sector ownership automatically equals subsidy; that we are not the biggest energy supplier to the United States; and that a free trade agreement would benefit only Canada and not the U.S”

 

Those words aren’t mine but those of Allan Gotlieb, our longest serving ambassador to the USA in a speech he delivered almost in 1987 -thirty years ago – to Toronto’s Empire Club.

 

As the French say Plus ça change, plus c’est la même chose.

 

Main Messages to Americans

 

My mother used to tell me that on an exam the key is to answer the question asked, not what I’d like to tell them. It is a lesson that has taken me years to learn. So how do we manage Mr. Trump?

 

How many of you have travelled to the USA in the last year or plan on travelling in the next year?

 

We start with three main messages to Americans:

  • First: We are a reliable ally and security partner. In the USA, security trumps everything else so start every conversation reminding Americans that we have their back.
  • Second: We are a fair and trusted trading partner. Canada is the main market for 35 states and the second market for the rest. US trade with Canada generates 9 million jobs. It’s more than trade, it’s ‘making things together’ through supply chains to our mutual advantage. And one of my favourite factoids: The average Canadian eats $629 worth of US agri-food products annually. The average American spent $69 on Canadian agri-food products.
  • Third: Canada is a secure, stable and reliable source of energy. It lights up Broadway, keeps the cable cars going in San Francisco and powers the Mall of America in Minnesota and it fuels American manufacturing. With $2 billion dollars in trade daily, Canada has a slight surplus because we provide 40 percent of US energy imports. Otherwise, they enjoy the surplus.

 

Rules of the Road

 

Let me now give you ten rules of the road that we Canadians need to think about in managing Mr. Trump and the US relationship.

 

  1. What is our ’Ask’? What will we ’Give’? Know our Facts.

 

Messaging must be blunt and on point. And get to the point. It is not a level playing field. We only have a better than even chance when we are playing on ice.

 

  1. We need to get our act together within governments, with business, labour, and civil society.

 

The Americans will exploit our differences to our cost as we are learning, once again, on softwood lumber where they will happily collect their import levy until we get our own act together.

 

We have a good brand but we need to develop it and use it more strategically. Americans like us more than we like them. As Margaret Atwood famously observed, when Americans look north they look into a mirror and see a reflection of themselves. There are always more Americans who think like Canadians than there are Canadians.

 

Canadians, of course, too often define themselves by what we are not – Americans. It’s an insecurity we have to get over.

 

  1. NO SURPRISES.

 

Americans don’t mind differences but they don’t like being blind-sided especially on security issues like ballistic missile defence or Iraq. And linkage between issues is tricky and rarely works to our advantage.

 

  1. Relationships are everything. We would never have got the Canada-US FTA but for Brian Mulroney’s friendship with Ronald Reagan.

 

Our networks need a thousand points of contact. I applaud Saskatchewan legislators John Nilson and Wayne Elhard for their continuous and constructive efforts with their fellow state legislators including the Mid-West State Legislators, the Pacific Northwest Economic Forum and NASCO. Nilson and Elhard may have represented sat on different sides of the aisle in the legislature but when they traveled to the USA they took a Team Saskatchewan and Team Canada approach. Nilson and Elhard set the bar for their successors in the Legislature.

 

Make it a US issue and identify US allies. This is how we’ve gotten around various ‘Buy America’ restrictions. Recently, for example, the US acted against aluminium imports. The target was China but, as is often the case wwith US protectionism, we got sideswiped.

 

We make aluminum in Quebec. The workers are members of the United Steelworkers Union. The Steelworkers have been particular advocates of Buy America. But they consider their Canadian brothers and sisters to be part of ‘America’ so we got an exemption. It helps that their president, Leo Gerard, is a Canadian. A reminder that we need to make use of the international union ties between Canada and the USA.

 

And play by their rules so use lobbyists and lawyers.

 

If at first you don’t succeed try and try again. If you still aren’t getting through change your pitch. Practice and persistence makes perfect.

 

Pitching is retail and a contact sport. As an icebreaker, knowledge of US college football and basketball is very useful. A good way to meet Americans: join a church … or a gun club.

 

  1. Ottawa does not have all the answers.

 

The provinces have competence and experience.

 

Trust the staff at our missions in the USA – the Embassy and our Consulates for their read of the local environment. They know a lot and have a superb rolodex of contacts.

 

  1. The Administration is our entry point but the battleground is Congress and the states. We need to devote more attention to legislators – both in Congress and in the states.

 

Special interests – business, labor, environmentalist, minorities represented by lawyers and lobbyists – fund legislators and drive domestic policies eg ‘Buy America’. Protectionism is as American as apple pie – a deep-rooted political response to structural problems in the U.S. economy. For legislators, who must fundraise daily, all politics is local.

 

  1. Beware of noise and don’t get spooked.

 

A lot of what we are hearing now and what we will hear in the coming weeks of congressional hearings on NAFTA is positioning. The Americans are masters at positioning and it will excite the excitable and give the Toronto Star a daily feed of dramatic headlines.

 

We need to differentiate between the real and the improbable.

 

The bogeyman out there is the border adjustment tax – a real threat because it is endorsed by House Speaker Paul Ryan.

 

But the Americans also recognize that, as in in physics, for every action there is a reaction and if they adopt a border tax so will we and other nations. The closest parallel would be the Smoot-Hawley tariffs that contributed mightily to the Great Depression. No one wants to go down that road.

 

Most congressional legislation fails but we tend to behave like Chicken Little every time we see something we don’t like.

 

Again, their system is different from ours with checks and balances and separation of power.

 

  1. Go for Gold.

 

We are better than we think we are but there is a Canadian tendency to think about compromise from the outset – a natural reflection of our national character that has had to come to terms with geography and climate.

 

But compromising before we sit down is a mistake with the Americans. We should not out-negotiate ourselves beforehand. In other words, ask for what we really want rather than what we think they will give us. Nor should we ever expect gratitude on what we think we did for them.

 

This is not a problem for the USA. Business is business and the business of America is business.

 

  1. It’s a permanent campaign that needs all hands on deck – all levels of government, business, labor and civil society and ordinary Canadians who have American friends and family and who spend time in the USA.

 

Further Reading

 

Former US Ambassador David Jacobson used to say “Canadians think they know everything about Americans and Americans think they know all they need to know about Canadians.” We are, Jacobson concluded, “both wrong”.

 

And here are some books that you might want to look at to help you learn more about our favourite neighbour.  I particularly recommend Richard Haass’ A World in Disarray. Haass was head of policy planning in the Bush Administration’s State Department and now heads the Council on Foreign Relations. And for an insight into Trump America read J D Vance’s Hillbilly Elegy.

 

On America

 

I am worried about our southern neighbour but the Founding Fathers designed a Constitution to prevent another King.

 

While Mr. Trump and George III may share certain attributes, the Constitution with its checks and balances and separation of powers also applies to Donald Trump.

And it works.

 

The courts over-tuned his executive order to keep out Muslims and his Supreme Court nominee, Neil Gorsuch was emphatic about the independence of the judiciary. Despite holding a majority in Congress, Obamacare remains the law of the land. And his national security team – Mr. Tillerson and Generals McMaster, Kelly, Mattis are sound. Waterboarding is not coming back.

 

I leave you with this observation from the greatest modern observer of the United States, Alastair Cooke.

 

As a boy, I listened to Alistair Cooke’s Letters from America. He delivered his fifteen minute broadcast weekly from 1946-2004, nearly sixty years to audiences around the world through the BBC. Those of you with hair my colour will remember him as the host of Masterpiece Theatre.

 

While posted in New York I met Cooke at the English-Speaking Union. He had recently finished his epic television series on America: A Personal History of the United States.

 

America in 1979 was going through a bad patch. New York City was dirty and crime was a problem.There were gas lines and Jimmy Carter told people to turn down the heat and wear cardigans. The Russians had gone into Afghanistan and I wondered about the West.

 

I had the impression of a nation in decline. I asked Cooke what he thought of the future of the United States. He then told me that “In America, the race is on between its decadence and its vitality, and it has lots of both’.

 

Cooke paused and added that one should never underestimate another American quality- its remarkable resiliency.

 

I think Cooke is right and to end on a hopeful note I give the last words to Winston Churchill: You can always count on Americans to do the right thing – after they’ve tried everything else.”

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Vimy Anniversary

with Nicolas Chapuis VimyFormer Canadian diplomat Colin Robertson and French Ambassador Nicolas  Chapuis at a March 22 reception marking the 100th anniversary of Vimy Ridge hosted at the French Embassy.. Photographs courtesy of Cynthia Munster

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Trudeau, Ivanka Trump and Come From Away

Daughter diplomacy: Trudeau’s unorthodox play for Donald Trump’s approval

Hanging out with Ivanka offers an in to a president who seems to value personal relationships over ideology — but whose brand is coming out ahead in this new friendship?

The cameras couldn't get enough of Prime Minister Justin Trudeau and Ivanka Trump at their first meeting in Washington on Feb. 13, 2017.
The cameras couldn’t get enough of Prime Minister Justin Trudeau and Ivanka Trump at their first meeting in Washington on Feb. 13, 2017.  (Evan Vucci / AP)  

WASHINGTON—A businesswoman whose lifestyle brand is struggling with liberals. A liberal-multilateralist prime minister who needs an in with a conservative-nationalist president.

Diplomacy is rooted in interests. And Ivanka Trump and Justin Trudeau both have an interest in hanging out with each other.

Read the latest news on U.S. President Donald Trump

The prime minister sat with the president’s daughter Wednesday night at the Broadway musical Come From Away, the Canadian show about the Newfoundland town that took in stranded Americans on Sept. 11, 2001. It was his second olive branch to her in just over a month.

Some U.S. news outlets suggested Trudeau had been sending a kind of passive-aggressive message: “Justin Trudeau brought Ivanka Trump to a Broadway show that celebrates generosity towards foreigners in need,” the New York Times tweeted to its 34 million followers. Whether or not that was true, he was also offering a kind of cashless donation to her company.

Trudeau joked of his “bromance” with former president Barack Obama. Shared youth and mutual interest in women’s issues notwithstanding, his new bilateral bestiehood appears much more a marriage of convenience.

“It is just so Game of Thrones‎,” said John Higginbotham, a former Canadian diplomat in Washington, referring to the television show in which warring family dynasties strike strategic alliances in ruthless pursuit of power.

Like Donald Trump before her, Ivanka Trump has made a brand out of her name. Her name has been tarnished, in the eyes of millions of progressive American consumers, by her father’s xenophobia and sexism. Who better to be seen with than the fashionable foreign progressive feminist who hugs refugees?

For Trudeau, daughter diplomacy offers the prospect of a lifeline to a president who shares almost none of his principles but who often appears to value personal relationships over ideology and policy — and who appreciates a political gift. Donald Trump has lavished praise upon chief executives who have let him take undeserved credit for their investments.

“It looks as if foreign leaders think the way to approach Trump is by direct or indirect appeals to his ego and personality, rather than in terms of national interests,” said Charles Stevenson, a former State Department policy planner who teaches foreign policy at Johns Hopkins University. “Business leaders have already discovered this, so they bring their announcements of job creation as if they had birthday presents for the king.”

Donald Trump, not Ivanka Trump, was Trudeau’s original invitee to the play, communications director Kate Purchase said. Trump told Trudeau he couldn’t make it, Purchase said, “but suggested that perhaps Ivanka Trump could join instead.”

“We were happy to arrange that,” she said.

“We’re friends and neighbours, partners and allies. We are committed to continuing to build on that relationship in a positive, constructive way. That means talking to U.S. senators, members of Congress, governors, Cabinet secretaries, business leaders, and importantly: the president and those close to him.”

Ivanka Trump has been portrayed in anonymously sourced stories as a powerful figure in the administration, a kind of de facto first lady. In February, Politico reported that she helped convince her father not to roll back protections for LGBT people. In March, Reuters reported that she was “a key advocate for the more measured, less combative tone” he adopted in his address to Congress.

Trudeau and Sophie Grégoire-Trudeau greet people after watching "Come From Away" in New York on Wednesday night.
Trudeau and Sophie Grégoire-Trudeau greet people after watching “Come From Away” in New York on Wednesday night.  (SAM HODGSON)  

But there is considerable skepticism in Washington that the leaks are anything other than self-serving public relations — and that Ivanka Trump has either the inclination or the ability to push her father toward moderation. The president has so far pursued a hard-right agenda that has betrayed few hints of liberal influence.

“Ivanka’s the only one of his children I think he listens to. But it’s just very, very small, and around the edges,” said Joshua Kendall, author of the book First Dads, about presidents as parents. “I think every once in a while he pays a little lip service to child-care, but I think those tiny inroads have led to sort of a feeding frenzy. Everyone says, ‘Maybe we can go much further than that.’ And I don’t think that’s going to happen.”

It is not only the president with whom Ivanka Trump might help Trudeau. Her husband, Jared Kushner, has emerged as one of the most powerful people in the country. As Donald Trump sidelines the professional diplomatic corps, Kushner, a 36-year-old with no government experience, has been shovelled responsibilities that range from soothing Mexico to striking Middle East peace.

Colin Robertson, a former Canadian diplomat, praised Trudeau for astute “realpolitik,” saying his rapport with Ivanka Trump serves Canadian interests. But the NDP has criticized his friendly posture toward a president whose policies foreign affairs critic Hélène Laverdière calls “racist.”

“Justin Trudeau took Ivanka Trump to an excellent Canadian play about kindness to strangers. It’s a play President Trump really should see. However, Trudeau continues to give Trump and his family political cover,” Laverdière said.

Trudeau’s early work with Ivanka Trump has paid at least superficial dividends. Trump boasted in his high-profile address to Congress of the new Canada-U.S. council on women in business; Trudeau was the only foreign leader he mentioned by name.

The council was an invention of Trudeau’s office designed specifically to include Ivanka Trump. She sat next to him at the inaugural meeting at the White House in February, cameras clicking away. Their Broadway appearance made new international headlines — some of the stories wrongly framing it as a quasi-date, omitting the presence of Trudeau’s wife Sophie Gregoire Trudeau.

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NAFTA and the Next Election

The next big federal election agenda item has been set: Trump and trade

By the time Canadians next go to the polls, all the players will be lined up to fight over the biggest trade agreement in a generation

US President Donald Trump and Canadian Prime Minister Justin Trudeau hold a joint press conference in the East Room of the White House in Washington, DC, February 13, 2017. (Saul Loeb/AFP/Getty Images)

Here we go again. Another federal election that will hinge on free trade.

This is not so much a prediction as it is a simple matter of following the timelines. By 2019, the next federal election, the NAFTA re-negotiations will either be in the dramatic end game or the very contentious ratification phase. The Liberal government will be consumed by the deal, as it already is today. The Conservatives and the NDP will both have new leaders desperate to define themselves by the biggest economic deal of a  generation. What to protect and what to give up? Unions will want a new deal on car manufacturing and will try to stick it to Mexico. Dairy farmers in Quebec will be fighting for supply management. You will hear the phrase “country of label origins” so often it will sound like the name of a band. Softwood lumber, beef, pharmaceuticals—oh, the lawyers are already priapic at the possibilities. We’ll even have the soundtrack of Brian Mulroney singing “When Irish Eyes Are Smiling” to Donald Trump. Get ready to negotiate like it’s 1988.

“At the earliest I think the renegotiation—with or without Mexico—will take at least a year, probably 19 months,” says Colin Robertson, the vice president of the Canadian Global Affairs Institute and a former diplomat who implemented NAFTA back in 1993. “After that we have to go for ratification, which adds on another year plus. My guess is that NAFTA, or whatever we call it, doesn’t get wrapped up until spring or summer 2019, meaning it will be front and centre in our October 2019 election.”

READ MORE: A Trump trade war with Mexico would be a disaster for both sides

But wait. Isn’t this all supposed to unfold a lot quicker than that? Didn’t Donald Trump say this was just a matter of a few “tweaks”? How long could that take? Isn’t Trump all chummy with Justin Trudeau over their Women’s Business Council?

If you believe that then you might as well believe your microwave is spying on you. Just listen to the Trump people who are in charge of the NAFTA renegotiation. They are not predicting a trade war with us; they believe they are already in one. We just refuse to believe it.

“We’ve been in a trade war for decades,” new U.S. commerce secretary Wilbur Ross told Bloomberg News recently, as he clarified why the U.S. is launching a radical series of trade negotiations that will include a head-on collision with China and ripping up NAFTA. Comparing trade negotiations to war is standard fare for the Trump administration, where hyperbolic, confrontational rhetoric is the vernacular. Turns out the art of the deal is really a euphemism for an eye-gouging brawl.

Ross and Trump are obsessed with the dangers of trade deficits. It is their white whale and they’re likely just as mythical. The fact is, most economists agree that trade deficits are not necessarily bad for the U.S. economy nor do they reflect some camouflaged version of a trade war, as Ross asserts. There are many reasons why the U.S. imports more than it exports, and some of those reasons actually help the economy. But billionaires like Trump and Ross don’t trifle with details. Every minor issue is elevated to its maximum threat level, so a trade imbalance becomes a trade war. That’s why when Trump casually remarked that the coming changes to NAFTA will merely be “tweaks,” he was so off brand. Trumps don’t tweak, they transform—or, at least, they say they will. Ross has now corrected the record. “It’s not going to be a shooting war,” he continued to Bloomberg, as if the bench mark for an acceptable negotiation was merely a lack of bullets. “If people know you have the big bazooka, you probably don’t have to use it.”

So there it is. Either Wilbur Ross has a bazooka in his trade pocket or he’s just really excited to negotiate with Canada. Whatever it is: by his own admission, a trade war is coming. That warning was reiterated this week during the confirmation hearing for Robert Lighthizer, the incoming trade secretary. Both Republicans and Democrats pressed him to crack down on trade with Canada, including digital piracy, counterfeit products and softwood lumber. “I’ve had a variety of issues with respect to Canada that have been raised by senators,” Lighthizer said. “There are a number of things we have to address with respect to Canada.”

None of this is a surprise to Team Trudeau. They have done the pragmatic thing and fanned out across the U.S. this week like the snowstorm Stella itself—blanketing politicians with information about the benefits of an open border and free trade with Canada. To their credit, they have not been lulled into complacency by the purring of the Trump lions. They have set up a special Trump team inside the PMO, shuffled the cabinet to get competent and connected people like Chrystia Freeland and Andrew Leslie in key spots, and taken advice from everyone who can help, from Derek Burney to Brian Mulroney. Conservatives I have spoken to have grudgingly acknowledged that the PM is doing all the right things.

The only person griping is NDP leader Tom Mulcair, who believes that unless Trudeau is out there calling Trump a fascist, he’s nothing more than a quisling. Mulcair can say stuff like this because he’s now in his Easy Rider phase, wildly gunning it down the last miles of his political highway and sticking it to the man. Go man go. He deserved better from his party and if he wants to bring back some hippie anger to the NDP, damn the consequences.

READ MORE: Why Canada—and its economy—has plenty to fear from Trump

For the Prime Minister, though, all things must be put through the political calculator, especially with Canada’s largest trading partner. We don’t get to pick the U.S. President any more than we pick our own parents, so Trudeau’s tactical charm offensive is a legitimate response. This week the Prime Minister is in New York to reinforce the close bond of Canada and the U.S. during 9/11. Last week he was in Texas at an energy conference talking about oil. Meanwhile, other ministers, MPs and premiers are hitting 11 states, from Kentucky to Wisconsin, Indiana to Florida. It’s better to jaw-jaw than war-war, as Winston Churchill liked to say.

The problem is, it might not make much difference. The next election will still be about the trade deal: What was won, what was lost, what concessions were made, what victories were gained. Look at the timeline. The President needs to gives Congress 90 days’ notification in order to kick start the renegotiation of NAFTA, but he can’t rush too much because Wilbur Ross’s team still isn’t in place. Still, for the sake of argument, let’s follow Ross’s “bazooka approach”—the fast-track option—and assume the President gives notice in the next few weeks. Then what?

Here are the blocks of time you have to bake into the process at the bare minimum. Congress needs 180 days’ warning before signing the deal, as the Globe and Mail has reported, and another 105 days for the International Trade Commission to look over the deal and put out a report. Then there is another 6o-day period for amendments. That’s already 435 days, deep into 2018—and that’s if everything goes smoothly.

No serious person thinks it will go smoothly, even if Congress tries to fast-track the timelines. Contentious issues like softwood lumber, automobiles and, wait for it, water, could blow this thing up. The free trade deal with the European Union took years and it was almost derailed by the Walloons. We don’t even know who the U.S. version of the Walloons will be, but in America, Walloons are super-sized, so expect a few hurdles. Just look back at the former trade deals with the U.S. as precedent.

“We finished negotiations of the Canada-U.S. Free Trade Agreement in October 1987 and then made some more changes in December before signature in January 1988,” says Robertson. “Then we fought an election on it. Then on NAFTA we finished negotiations in early 1993 and put it through the implementing legislation, finishing in June 1993. Then came the October election and we had to do the labour and environmental accords. Clinton only got the U.S. Congress to pass it in November 1993, a year after he was elected and signed in December.”

Talking to Robertson about trade timelines makes a mockery of the idea that there are simple tweaks out there. There aren’t. The first U.S.–Canada Free Trade Agreement took four years. When we brought in Mexico to make it NAFTA, it took another four years. The Trans Pacific Partnership, which Trump just crushed, has been 11 years in the making. People talk about the Doha Development Round, which started in 2001, as if was a mythical character in a box-office flop called Fantastic Trade Beasts and Where to Find Them.

Saul Loeb/Getty

Let’s add one more wrinkle here: Washington gridlock. Even though Republicans control the House, the Senate and the presidency, the debate over replacing Obamacare has revealed the unified government to be more like a dysfunctional family at a Christmas dinner. “Trump is no Lyndon Johnson,” says Robertson, “and while he is better than Obama at working congressional leadership, my friends tell me there are already antagonisms at the staff level between the Speaker/majority leader in the Senate and the White House.” Pass the gravy.

READ MORE: Trudeau can’t afford to just play Trump one-on-one

Not everyone thinks it will go this long. I spoke with Eddie Goldenberg, Jean Chretien’s former senior political advisor, who believes the process could wrap up faster. “The Trump Administration will do its best to finish before the midterms in the U.S., so it is unlikely that the negotiations will be continuing during the next Canadian election campaign,” he says. Maybe. But as Robertson points out, the implementation and ratification will take another year-plus. “If there is any election issue,” Goldenberg says, “it will be about the government’s record—positive or negative—with respect to the outcome of the negotiations.”

That is true and the battle lines will quickly be drawn. The NDP needs to regain the union vote as it tacks back to the left and will likely oppose much of the deal unless it is radically changed to protect Canadian jobs, something no one here has signalled. But until Jack Layton, opposing free trade was the ticket to the NDP’s best success, and that formula will no doubt be back. The Conservatives are in a full identity crisis now, and will have to figure out if they want to play tough with the U.S. and go back to the Sir John A. MacDonald days of a National Policy—essentially copying Trump’s Buy American stance with a Buy Canadian—or if they want to follow the pro-free trade Mulroney-Harper path, which is more likely but offers less differentiation from the Liberals. Either way, the free trade deal will be the target. Everyone better grab a bazooka.

Trade with the U.S. has defined many Canadian elections, from 1867 to 1911 to 1988. Might as well get ready now and pencil in 2019 as another election fought over free trade.

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Getting Ready for NAFTA Negotiations

For Canada, all hands on deck during NAFTA renegotiations

The rules of the road for trade with our biggest trading partner are about to be renegotiated. We need an all-of-Canada effort to get ready.

The stakes are critical: Three-quarters of our exports head south to the United States. Trade with the United States represents almost a third of our GDP and it sustains close to one in five Canadian jobs.

In the coming days, U.S. Commerce Secretary Wilbur Ross will formally advise Congress of NAFTA renegotiations, setting in play a 90-day consideration by House and Senate committees. By the latter part of the year, Mr. Ross expects that we will be into “real” negotiations that he predicts will take at least a year.

Following his White House meetings with Prime Minister Justin Trudeau last month, President Donald Trump described the Canada-U.S. relationship as just needing some “tweaking.” But, as Mr. Ross told Bloomberg this week, “there is a lot of meat to be dealt with,” including addressing the digital economy and revising the rules of origin.

After meeting recently with her Mexican counterparts in Toronto , Foreign Minister Chrystia Freeland said that Canada’s preference is for trilateral negotiations. Mr. Trump prefers bilateral deals but Secretary Ross says he is “open-minded” about the form. Regardless, Canada and Mexico need to stay close to avoid the divide-and-conquer techniques that are integral to Mr. Trump’s “art of the deal.”

Getting Canada’s act together means real collaboration between the federal and provincial governments and close, continuing consultations with business, labour and civic society. We need consensus on two questions:

  • What do we want from the negotiations?
  • How do we get there?

The more creative we can be, the better. The expertise of sectoral advisory groups proved vital to the successful negotiation of the Canada-U.S. free-trade agreement (1988) and NAFTA (1993-4). They should be resurrected and made permanent. We need to co-opt the best brains in our research community to rapidly crunch data and provide timely analysis for our negotiators.

The Canadian strategy going into the talks must be bold. A new agreement should be broad and comprehensive, providing for the free flow of people, goods and services with enforceable standards for labour and the environment. Let’s take the best from the stillborn (at least for now) Trans-Pacific Partnership. Prime Minister Justin Trudeau spoke to our mutually beneficial energy relationship in putting forward a Canadian policy that is both pragmatic and progressive.

Most of the American “asks” are readily identifiable. As Mr. Ross told Congress during his confirmation hearings, the United States wants to reduce its trade deficits and to restore manufacturing through increasing the “Made in America” content for rules of origin.

The United States Trade Representative annual National Trade Estimates report lists United States’ complaints with Canada. These include extending the intellectual property protection for pharmaceuticals; ending supply management for dairy and poultry; and inspecting for counterfeits, especially for Chinese goods shipped to U.S. destinations through Canadian ports like Vancouver or Prince Rupert.

The easiest solution on rules of origin would be to move to a customs union, but the Americans are unlikely to buy in unless it is a strictly Canada-U..S agreement. Otherwise we need to redefine rules of origin as “Made in North America.” American manufacturers should be our allies, especially those in the automotive industry, where supply-chain integration dates from the 1965 Canada-U.S. Auto Pact.

We should agree to counterfeit inspection in return for extended pre-clearance of goods and easier business travel access. Reforming supply management is long overdue, but let’s get something in return, such as access to U.S. shipbuilding contracts.

Where they were once divided, today Canada’s premiers are of like mind on the value of trade, leading missions across our oceans. Now they need to focus on our biggest customer, especially through cultivating their governor counterparts in regional meetings and through visits to their states. Premier Rachel Notley sets the bar through consistent visits to the US capitol and other US cities.

Access to procurement is vital, especially at the state and provincial government level and, for the premiers, this should be job one. Working with governors, they did a procurement reciprocity deal around the Obama infrastructure investments in 2010. Now we need to make it permanent.

The Americans like us, indeed, more than we like them. The Trudeau government has created good working relationships within the Trump administration. But complacency is a mistake. Mr. Trump’s priority is “making America great again.” The business of America is business. Canada needs to be ready.

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