NAFTA Deadlines

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September 16, 2018

Foreign Minister Chrystia Freeland is facing pressure to return to Washington this week in a bid to conclude a NAFTA deal under a deadline set by the Americans.

Ms. Freeland will be in Ottawa for the resumption of Parliament Monday, where the Liberal government will be defending the view expressed by her and Prime Minister Justin Trudeau that no deal is better than a bad deal when it comes to the North American free-trade agreement.

Top-level negotiations could resume as early as Tuesday between Ms. Freeland and her American counterpart, U.S. Trade Representative Robert Lighthizer, a federal government source said. But that has yet to be decided.

 Ms. Freeland and Mr. Lighthizer are expected to talk by telephone Monday to discuss whether she should return to Washington on Tuesday for more negotiations, the source said. Mr. Lighthizer signalled to the Canadians that he would be available if warranted on Tuesday, Wednesday and Thursday next week.

Several trade experts said she is likely to make the trip given that she is working under a tight timeline to reach a deal that would prevent the United States and Mexico from moving forward with a bilateral agreement as U.S. President Donald Trump has threatened.

Mexico wants an agreement concluded before incoming president Andres Manuel Lopez Obrador takes office on Dec. 1, and the U.S. administration must give Congress 60 days’ notice for a final text, meaning a Sept. 30 deadline. As well, Mr. Trump is keen to announce a new deal − which he wants renamed as the U.S.-Mexico agreement, or the U.S.-Mexico-Canada accord − prior to the November congressional elections, which are being billed as a referendum on his polarizing tenure in office.

“It’s do or die time for a trilateral deal if the goal is to get it done before Lopez Obrador takes office,” said Maryscott Greenwood, Washington-based chief executive of the Canadian American Business Council.

Ms. Greenwood said Canadian and American negotiators are making slow progress, but added that the United States appears willing to make some compromises. She noted that the U.S. side softened its position in a number of areas to reach an agreement in principle with Mexico late last month.

One veteran trade consultant questioned whether the end-of-month deadline is a real one.

“I think a deal is doable but we don’t have to be rushed,” said Colin Robertson, a former trade negotiator and vice-president of the Canadian Global Affairs Institute. He said there is no reason that Mexico’s incoming president, Mr. Lopez Obrador, could not conclude the deal that was reached with his blessing by his predecessor, Enrique Pena Nieto

“We’ve had these false deadlines before and this seems to me to be the weakest of them all,” he said.

Ottawa could disregard the deadline and take time to pursue a more favourable deal, while counting on Congress to block the administration’s effort to exclude Canada from the trade agreement, Mr. Robertson said. Leading members of Congress and the American business community have said that any new trade deal must include Canada, but Mr. Trump is threatening to impose crippling tariffs on the Canadian auto industry if there is no trade deal.

Key stumbling blocks continue to be U.S. demands that Canada provide significantly greater access to its dairy industry and Ottawa’s insistence on maintaining the Chapter 19 dispute-settlement mechanism that gives parties the right to challenge one another’s application of duties and punitive tariffs. There are several other outstanding issues, including the U.S. desire for greater patent protection for a class of drugs known as biologics; Canada’s demand to have access to U.S. government procurement; and an American push to increase the value of purchases that Canadian shoppers can bring back duty free from the United States.

While Mr. Trump would clearly like to tout his success in renegotiating NAFTA for the mid-term election campaign, he will need Congressional approval to pass it into law. He already faces resistance there, but it will be far tougher for him if the Democrats win control of the House of Representatives as many pollsters and pundits now forecast, said Dan Ujczo, an Ohio-based international trade lawyer who has worked for the Canadian and U.S. governments and closely monitors the NAFTA talks.

Concluding the negotiations “are the least difficult part of what is left to do to complete a new NAFTA,” Mr. Ujczo said. “Getting this through Congress is going to be twice as hard as it was the first time around back in the 1990s, given the politics of trade in the United States right now.”

But Canada cannot count on Congress turning down a new deal and keeping the old one in place, he added. Instead, the Trump administration would likely abrogate the existing deal at the same time it puts the new one before Congress.

Dairy and the NAFTA Negotiations

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POLITICO

Morning Trade

A daily speed read on global trade news

With help from Megan Cassella

 A PESSIMISTIC VIEW ON CANADA DEAL TIMING FROM UP NORTH: Colin Robertson, a former Canadian diplomat who is vice president at the Canadian Global Affairs Institute, told Morning Trade he thinks the negotiations could drag on for weeks because of the difficulty Trudeau faces in reaching a deal on dairy before the Oct. 1 election in Quebec.

“I think talks could go on into October. Like the World Series, there are still innings to be played and [we should] expect surprises,” Robertson said.

Quebec is Canada’s largest dairy-producing province, accounting for nearly half of the country’s farms and about 37 percent of its milk productionIn addition to the upcoming vote for the Quebec National Assembly, the French-Canadian province will also be a prime battleground in the next federal election, which many expect in October 2019.

To stay in power, the Liberals will have to pick up seats there to offset likely losses in Atlantic, where they currently hold all the seats, and perhaps in British Columbia because of a pipeline controversy, Robertson said.

A Canadian government spokesman did not directly say whether the elections are complicating the talks but told Morning Trade that “the federal government is in touch and consults regularly with provincial and territorial governments on the NAFTA negotiations. In fact, Prime Minister Trudeau held a call with provincial and territorial premiers just over a week ago to update them on progress.”

As for timing, Freeland knows a swift resolution is important, but Canada will take the time needed to get a good deal, an aide said.

Two industry officials — one American and the other Canadian — speaking on the condition they not be identified, doubted the fast-approaching Quebec election was having much impact on the negotiations. “Sure, the Quebec election adds another political angle to it here, but by no means is the political sensitivity new,” the Canadian industry aide said. “I don’t think the Quebec election is going to be holding back things in the ag context.”

Dairy plays both ways with the electorate, Robertson added. “While all Quebec parties fiercely defend supply management. Some producers favor the end of supply management as they think — and I think correctly — that Canadian cheese can be world busters and that we can be as competitive as New Zealand and Australia. Of course there will have to be adjustment assistance. But it is affordable, if costly in the short term, and there is no reason our dairy and poultry can’t be as successful as our beef pork grains and lentils. Mr. Trump may force us to do what we should do,” he said.

On Peter Boehm

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Retiring G7 sherpa explains what every new diplomat should know

By EMILY HAWS      
Meanwhile, Graham Flack and Chantal Maheu have been tapped to fill Louise Levonian and Lori Sterling’s former positions at Employment and Social Development.
Peter Boehm says building mutual trust with political leaders takes time, but it happens by being frank, open, and collaborative. He retires on Sept. 28. The Hill Times photograph by Sam Garcia

Be nimble and learn the local language: these are two pieces of advice Canada’s G7 sherpa Peter Boehm hopes to pass along to new diplomats before he retires from a 37-year career in the foreign service on Sept. 28.

Getting out from behind a desk and experiencing the culture of a posting, including learning the local language, is one of the best ways to develop interpersonal relationships, he said, which is key to diplomacy.

Learning the language “gets you more into the [cultural] aspect,” he said, and counterparts “will appreciate what you’re saying because you’re making the effort to speak their language.”

He spoke the local language when he arrived at his five foreign postings, he said, as he’s spoken German since childhood—having been born in a city with German roots, Kitchener, Ont.—and picked up Spanish in high school, which was refined by three Latin American postings.

“I told our local staff, certainly in Havana at the start, that I would insist that they speak Spanish with me even though their English and French was good. I really wanted to learn Spanish,” he said. “If you immerse yourself and you try hard, then it works.”

Representing a government doesn’t mean you can’t do some outside-of-the-box activities, said Mr. Boehm, adding that it’s okay to take calculated risks and young people should be nimble. He’s always found the cultural and sports side of diplomacy interesting, he said, and so when he was posted as the Canadian ambassador to Germany between 2008 and 2012, he brought over the Canadian women’s soccer team to play against Germany.

“We only lost by one goal, which had Chancellor [Angela] Merkel, who was sitting near me, biting her nails, but it was great,” he said.

The constant change in diplomacy—both in the work and in the country in which one is posted—means the career is never boring, he said. His approachable nature has led those in the foreign affairs community, including former Canadian diplomat Colin Robertson, to call him a “contemporary diplomat” because he combines old-world techniques with new technology, such as social media. Mr. Boehm has a very good grasp of detail and his implementation skills have allowed him to deliver final products effectively, said Mr. Robertson.

Mr. Boehm started his career in 1981 as a foreign service officer, and held various positions with both the foreign and trade ministries (which were separate at the time) until 1997 when he was made the Canadian ambassador to the Organization of American States in Washington.

In 2001, he became the minister of political and public affairs at the Canadian Embassy in Washington, D.C., making him the third in command during the 9/11 terrorist attacks. That day was significant in his career, he said, because his work changed completely but also “it was about the world changing” and becoming more security-minded.

In 2006, he helped evacuate 15,000 Canadians from war-torn Lebanon, and as deputy minister of international development from March 2016 until July 2017, he helped develop the Trudeau government’s Feminist International Assistance Policy.

Of course, Mr. Boehm ended his already impressive career with a bang, heading the planning of the most recent G7 summit in Charlevoix, Que. The drama between United States PresidentDonald Trump and Prime Minister Justin Trudeau (Papineau, Que.) might have grabbed headlines (Mr. Trump called Mr. Trudeau “meek and mild, and “dishonest and weak”) but Mr. Boehm said he’s proud of the substantial commitments agreed upon by member countries.

“On the girls’ education piece … we were hoping to get $1.3-billion together, we achieved $3.8-billion,” he said. “Being there, it was tiring because negotiations…went through several nights, so a few sleepless nights, but that’s kind of normal for the G7.”

His position was elevated to a deputy-minister level by Mr. Trudeau when he was appointed in July 2017. The move was recommended by an auditor general’s report about the 2010 Muskoka summit, said Mr. Boehm. It makes sense when Canada is hosting, as it allows all aspects of the summit to be housed under one roof with one accountability officer.

Since the summit, he’s been winding down to retirement, he said, but even after Sept. 28, he plans to stay engaged on foreign policy issues, as well as mental health policy. Mr. Boehm has long championed the cause, being on Privy Council clerk Michael Wernick’s mental health advisory committee, and it hits close to home, as Mr. Boehm has a son who is autistic.

“A lot more attention is being put on mental health, and destigmatizing it, and certainly in the workplace,” he said, and he wants to stay involved.

Paul Moen, an Earnscliffe Strategy Group principal who worked with Mr. Boehm when he was a Liberal political staffer, said Mr. Boehm has gained influence in Canadian foreign policy because he “listens as much as he talks” and knows when to push and pull at the right moments.

“He’s able to gracefully navigate that boundary between policy and politics, while maintaining his objectivity and serving governments of different political stripes,” he said.

Mr. Boehm did make headlines, however, for perhaps straying a little too far into the political realm when said the previous Conservative government “suppressed” diplomats’ work during its decade in power. He was speaking during a panel discussion in Ottawa hosted by the United Nations Association of Canada earlier this year before the Charlevoix summit.

Of the idea that he’s politically savvy, Mr. Boehm said it’s learned through observing and “willing to be curious” as well as developing a network both within diplomatic and political circles. A strong network comes into play when important decisions need to be made in a tight timeframe, he said, such as during the 2006 Lebanon evacuations.

Mutual trust allows one to give fearless policy advice and implement a government’s decisions loyally, he said, and comes by being frank, open, and collaborative. One also can’t have too thin of skin because the advice might be rejected, he said, but “that’s the beauty of democracy.”

Not getting caught up in bureaucratic processes is also key, he said.

Boehm’s replacement named in DM shuffle

Mr. Trudeau announced David Morrison as Mr. Boehm’s replacement in a press release on Sept. 21. Starting in October, Mr. Morrison will retain his title of associate deputy minister of foreign affairs, but will add G7 sherpa.

Mr. Morrison was appointed the associate deputy minister in October 2017, and was previously the assistant deputy minister for the Americas. He started with the department in 1989 as a foreign service officer, working in Havana, Cuba.

DM Peter Boehm earns colleagues’ respect as mentor, mental health advocate

By Chelsea Nash      
Leading the government’s foreign aid portfolio, the new DM has worked his way up his department over 30 years in the public service.
Peter Boehm, a longtime foreign service officer recently made deputy minister of international development, in front of a Neil Young poster hanging in his office at Global Affairs last week. The Hill Times photograph by Chelsea Nash

When I emailed Peter Boehm, the new deputy minister for international development, for an interview, he responded almost immediately. He’d be happy to speak with me, either over the phone or to meet me in person at his office. It was a pleasant surprise: high-level government officials such as Mr. Boehm are rarely so accessible and generous with their valuable time.

As Janice Stein, a friend of Mr. Boehm’s and founding director of the Munk School of Global Affairs at the University of Toronto said, “When people become deputy minister, every five minutes counts.” She herself has not spoken to him since he assumed his new role, as acting deputy minister in November, and as confirmed deputy minister in March.

But open and approachable are exactly the words former colleagues and friends use to describe the career diplomat. He’s the “quintessential diplomat,” says former Canadian diplomat Colin Robertson, and “uniformly highly regarded,” says Tim Hodges, former head of the Canadian diplomats union Professional Association of Foreign Service Officers, and a friend and colleague to Mr. Boehm.

He has a large presence. A tall man, he stands out in any crowd, but he also has the sometimes-intimidating aura of someone whose approval needs to be earned. “Professional, curious, well-read, well-travelled, and deliberative in his judgments,” is how Mr. Robertson described him in an email.

He has a dry sense of humour, and is quite soft-spoken, though he doesn’t hold back while answering questions.

Mr. Hodges, who worked directly under Mr. Boehm at Canada’s embassy in Washington, D.C., and regards him as a mentor, said as much. Mr. Boehm was minister in charge of political and public affairs there from 2001 to 2004.

“He’s a tough brief, in the sense that he will read what you send him, and he will digest it, and you had better be up to speed when you get back to have a discussion about what you’ve written,” he said. A demanding boss, but in a good way, said Mr. Hodges, because he doesn’t simply ask for the best, but demonstrates it. Above all else, he is a leader, he said.

“He’s been my mentor, whether he knew it or not, for many years. I think he’s been a mentor for many other people…He not only cares about people, but he cares about people moving up through the system. That is usually voluntary; it’s not required for the job. It usually is after-hours, or find time at lunch time to have a sandwich with someone and talk about a problem,” he said, speaking of the extra effort that Mr. Boehm has given the department over the years.

The DM has been with the department since he first joined as a foreign service officer more than 30 years ago. He is the only deputy minister in the department to bring first-hand experience within the foreign service—18 years worth, in fact—to the position.

Born in Kitchener, Ont., he grew up speaking German and English, and received a bachelor of arts in English and history from Wilfrid Laurier University in the region in 1977, according to biographies of him by his alma mater and his department.

His time at Carleton University’s Norman Paterson School of International Affairs, where he earned his master of arts in 1978, first sparked his interest in the foreign service. He applied then, but never heard back. So instead, he went to the University of Edinburgh on a scholarship, where he completed his PhD in history. At the time, teaching seemed to be the natural course of action for him, however, he wasn’t having much luck with his applications. He decided to try the foreign service again. This time, he heard back.

Next thing he knew, he was on his first posting in Havana, Cuba. He hopped after that to places including Germany as ambassador  from 2008 to 2012, and San José, Costa Rica. He’s also been ambassador and permanent representative to the Organization of American States from 1997 to 2001, and from 2005 to 2008, he was the senior official responsible for the North American leaders’ summits. Along the way, he’s earned the Public Service of Canada Outstanding Achievement Award and the Canadian Foreign Service Officer Award for his help toward achieving peace in Central America.

“It’s fair to say he’s a very results-oriented person, and he wants to deliver. He’s focused always on: what’s this going to deliver? How are we going to execute this? I think that’s a very good combination, to be open at the front end and focused at the back end,” said Ms. Stein.

Aid program review wrapping up

Interestingly enough, “open at the front end and focused at the back end” seems to mirror the format of the international development review the department is in the process of wrapping up. Public submissions on the future of Canada’s foreign aid program stopped being accepted at the end of July, and Mr. Boehm said they are in a period of “internal assessment, and trying to see what are the policy thrusts we are going to suggest to the minister.”

It was the first review of its kind the department has done, he said. Both in terms of the technology used to conduct the review—the department had a portal on its website to accept input—as well as the format of the review itself: the department accepted thousands of submissions from “really anyone in the world.”

Mr. Boehm said “a number of trends are already emerging,” including a focus on women and girls, and their rights and empowerment. Education and climate change are also important themes, he said.

“It’s a very exciting moment because there’s never been a consultation that has been undertaken in this way in our history,” he said, “in terms of really trying to get the most input from as many actors as we can, and trying to come out with a policy that is very 21st century, that is very forward-leaning, and can serve as an example for other countries.”

He said in his capacity as G7 sherpa—representative of the prime minister to the G7 summit—he has also been consulting with his counterparts from other countries for the development review, and talking to them about their challenges and successes.

“There is an exponential need for humanitarian assistance. The needs are high, but we also have traditional development. There’s a squeeze there in terms of how we use the budget, the dollars, to greatest effect. That also suggests looking at new and creative ways of programming and addressing these challenges,” he said.

Mental health advocate

Mr. Boehm also has a reputation for advocating for mental health initiatives, and has made great strides within the department to provide a support structure for foreign service officers.

Ms. Stein said mental health “was an important issue for him long before it became an important issue for many people…He does it in a very quiet, but very persistent, way—which again, reflects who he is.”

Mr. Boehm attributes his determination to advance mental health initiatives and to reduce stigma to his own experience. One of Mr. Boehm’s sons, who was born abroad, is autistic.

“Just travelling with him, and making sure he gets the supports he needs was probably the greatest challenge of my life,” he said. “I’ve been pushing it and I’ve blogged about it internally in terms of my own experience. And if I can talk about it, and write about it, then why can’t others?”

He is the father of three other children as well, ranging in age from 12 to 33. They are all over the globe, from Vancouver to Budapest, doing “different things.” None want to follow directly in his footsteps, he said, though they all seem to have caught his interest in international affairs.

“My 12-year-old, I have a plan for her,” he said with a coy smile. “Prime minister.”

The 62-year-old was reluctant to admit his age, saying he doesn’t think like he’s 62. That’s what his 12-year-old daughter tells him, anyways. And, having only been in his current position since November 2015, Mr. Boehm said retirement is not on his horizon anytime soon.

“Oh I’m not gone yet,” he said. “I’d like to stay involved in international issues. I think I have contributions to make.”

NAFTA: What Next?

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Despite Trump’s threats, it won’t be easy to cut Canada out of NAFTA, experts say

OTTAWA—U.S. President Donald Trump’s threat to leave Canada out of a new NAFTA deal heightened tensions and capped an already dramatic week of negotiations, but some experts say the threat isn’t quite as direct as it seems.

On Saturday, Trump threatened to go it alone with Mexico on a revised agreement or to terminate NAFTA entirely.One U.S. trade lawyer said the “real test” of President Donald Trump’s trade policy lies with his base of support, who may not back any attempt to cut Canada out of a revised NAFTA.

“There is no political necessity to keep Canada in the new NAFTA deal,” he tweeted, while on his way to play golf. “If we don’t make a fair deal for the U.S. after decades of abuse, Canada will be out. Congress should not interfere w/ these negotiations or I will simply terminate NAFTA entirely & we will be far better off.”

Read more:

Donald Trump threatens to terminate NAFTA if Congress stands up for Canada

Donald Trump confirms Star story on his secret bombshell remarks about Canada

Deal, or no deal, NAFTA uncertainty means consumers lose out, say experts

With memories fresh from U.S. tariffs on steel and aluminum, Canadian officials are mindful that Trump’s threats aren’t all bluster.

But experts say it won’t be quite that easy to cut Canada out of a revised North American Free Trade Agreement.

For starters, Congress has a critical say on trade agreements, noted Toronto-based international trade lawyer Lawrence Herman.

“Trump has no authority from Congress to end NAFTA and do a bilateral deal with Mexico as he threatens. I suspect lots of political pushback and, importantly, legal challenges to any such attempt,” Herman said on Twitter.

U.S. trade lawyer Dan Ujczo said he doesn’t see a procedural barrier to going forward with Mexico alone, but he does think political considerations would scuttle such a move.

“The issue is whether Congress will stand up to the president,” Ujczo said in an interview Sunday. “It’s a political question, not a procedural question. At the end of the day, it will be up to Congress to decide whether we can proceed with a bilateral deal as opposed to a trilateral.”

Aside from the procedural questions, including a six-month notice requirement, Trump would also certainly face a backlash from members of Congress, state governors and U.S. business leaders whose constituencies and companies would pay an economic price if Canada — America’s largest goods export market in 2017 — were left out.

Even before trade negotiations got underway, Ottawa had begun a concerted strategy to reach out to U.S. stakeholders to drive home the benefits of Canada-U.S. trade and what it meant economically to their individual districts.

That’s helped build valuable allies.

On Friday, Thomas J. Donohue, president and CEO of the U.S. Chamber of Commerce, issued a statement stressing that a revised NAFTA must include all three countries.

“NAFTA’s many strengths rest on the fact that it ties together three economically vibrant nations, drawing upon each of our strengths to boost the competitiveness of the whole. If you break off one member of this agreement, you break it all, and that would be bad news for U.S. businesses, for American jobs, and for economic growth,” Donohue said.

He warned that unless the new deal is a trilateral one, it won’t get congressional backing or the support of the business community.

In the view of the Canadians, this gives them leverage at the bargaining table, an assessment backed by Ujczo.

“Right now, the U.S. has the negotiating leverage in the negotiating room but Canada has the leverage in terms of Congress, the business community and the general U.S. public, but that balance will not last forever,” Ujczo said.

Ujczo said the “real test” of the president’s trade policy lies not with Trump but rather with his base of support.

“I think the real question is where is Trump’s base on Canada,” he said.

“I can say as someone who lives in Ohio, I don’t think for the time being there’s a great deal of support to proceed with a deal absent Canada,” he said.

But he cautioned that the issues that appear to be sticking points in Canada-U.S. discussions — Canada’s supply management system, dispute settlement and cultural protections — aren’t likely to find many defenders south of the border.

In the meantime, while Trump continues to churn the waters, Ujczo notes that these threats and “theatrics” are part of his negotiating tactics.

“Don’t underestimate the strategy of good cop, not-so-good cop and bad cop,” he said. “Others can decide who falls into what category.”

It’s all part of the president’s no-compromise bargaining style, as he bluntly stated in private comments revealed by the Star’s Daniel Dale on Friday.

In an off-the-record conversation with Bloomberg journalists, leaked to Dale by a source, Trump said that any deal with Canada would be “totally on our terms.”

Trump grumbled about Canada on social media on Saturday, reprising views that the northern neighbour had been taking advantage of the U.S. “for many years” and that NAFTA was one of the “worst trade deals ever” that cost the U.S. “thousands of businesses and millions of jobs.

“We were far better off before NAFTA — should never have been signed … We make new deal or go back to pre-NAFTA!” Trump said on Twitter.

Canada’s Foreign Affairs Minister Chrystia Freeland speaks during a news conference at the Canadian Embassy after talks at the Office of the United States Trade Representative, in Washington, Friday, Aug. 31. Freeland told the press that NAFTA negotiations are “making progress,” but aren’t “there yet.” Freeland added that a “win-win-win agreement is within reach.”

Trump’s comments ignore data that shows U.S. exports in goods and services have soared since NAFTA was signed. The U.S. Trade Representative’s Office says that U.S. exports to Canada are up 181 per cent from 1993 and U.S. exports of services to Canada are up from pre-NAFTA levels by some 243 per cent.

For now, the Canadians are insisting they won’t be rattled by Trump’s Saturday warning that Canada could be left out of a revised North American Free Trade Agreement.

And as they prepare to resume negotiations Wednesday, they say they are optimistic. Driving that optimism was agreement on auto content that would favour Canada and the United States because of their higher-wage workers, making it less appealing for manufacturers to move production to Mexico. While that was part of the preliminary deal reached by Mexico and the U.S., it follows on proposals made by Canada earlier in the talks.

“If implemented it would be very progressive for Canadian workers and Canadian labour. It was important for the United States and Mexico to get that work done,” said one official familiar with the discussions.

“We continue to work, we continue to talk, we continue to make progress. But for the government of Canada to sign an agreement, it needs to be in the best interests of Canada and Canadians,” the official said.

At this key time, Canada cannot let up on its targeted cultivation of U.S. contacts, former Canadian diplomat Colin Robertson said, in order to keep pressure on the White House not to leave Canada by the wayside.

“Keep calm and carry on with our current strategy of working Congress and the states, especially governors, and reminding U.S. business that we matter to each other,” said Robertson, a vice-president and fellow at the Canadian Global Affairs Institute.

Given Trump’s sharp-elbowed trade tactics, that strategy will remain in place going forward, Robertson said, to protect Canada’s interests.

“Normally we use the president/administration as a shield against a protectionist Congress. Now we are using Congress and the states, especially governors, as a shield against a mercantilist president,” Robertson said in an email exchange with the Star.

“I think it will oblige us to make a strategic shift in our long-term advocacy in the U.S.A.,” he said.

Others caution that Trump’s tactics have badly damaged Canada-U.S. relations.

The president’s treatment of Canada through this process is the “definition of insanity,” Bruce Heyman, the former U.S. ambassador to Canada, told CNBC’s Squawk on the Streeton Sunday.

“The U.S. has all the leverage in the world, but just because you can doesn’t mean you should. When you take your best friend, your greatest ally in the world and start squeezing them, you can win but I will tell you, the relationship will be damaged much longer than it will take the ink to dry on a new NAFTA deal,” Heyman said.

John McCain: A friend to Canada

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Canada had a friend in John McCain

iPolitics

Senator McCain was a warrior and he understand the values of collective security. He was also a democrat and indeed championed the idea of a league of democracies sustained by a military alliance.
Location is everything in Washington. Canada’s splendid Arthur Erickson-designed embassy on Pennsylvania Avenue, just across from the National Gallery of Art, is at the start of the presidential inaugural parade that is held every four years. The embassy’s sixth-floor balcony overlooks the Capitol building. Its superb view down Pennsylvania Avenue makes it a prize site for schmoozing while keeping an eye on the parade.

Our invitation to members of the new Congress, incoming administration and the movers and shakers of Washington is always a draw. For the second George W. Bush inaugural parade on January 20, 2005, we welcomed former Speaker Newt Gingrich and incoming West Virginia governor (and now Senator) Joe Manchin . But our prize catch was Arizona Senator John McCain who came along with one of his daughters, who lived in Toronto.

The Senator made straight for the balcony. He was not there for any ‘networking’. He had come to watch the parade.

It was a cold January – mitts, scarf and toque weather. The Senator positioned himself against the balcony and stayed put, long after everyone else had gone in for something warming. I stood beside him and tried to engage him on some of our issues – softwood lumber and beef. He grunted acknowledgement, his eyes on the marching bands.

“I marched myself as a midshipman at Annapolis in the second Eisenhower inaugural… it was another cold day.”

For the next hour, he did colour commentary, displaying an encyclopaedic, opinionated knowledge of the various marching bands, punctuated with his trademark wit and pungent humour. His daughter came out at one point and fastened a scarf around him but he stood bare-headed and with his hands in his dark wool coat.

‘Dad, it’s really cold out here…come in.’

‘No thanks…I’ve been in colder places than this.’

It was another insight into this doughty American hero.

I first met Senator McCain when I served as Canadian Consul General for the southwestern USA. Arizona was part of the territory and the senior Senator from Arizona’s office was supportive of our efforts to create the Canada-Arizona Business Council. The CABC set about increasing by tenfold the number of direct flights between Arizona and Canada. It was eventually realized thanks to CABC efforts, especially those of CEO Glenn Williamson, now our Honorary Consul in Phoenix.

When I was assigned next to establish the new Advocacy Secretariat at our Embassy in Washington, Senator McCain was an obvious target for our outreach efforts. He had served in Congress since 1983 and run well as the maverick ‘Straight Talk Express’ against George W. Bush for the GOP nomination in 2000. In 2008 he would be the GOP presidential nominee.

Senator McCain’s Washington staff was as efficient as those in Arizona. Perhaps not surprisingly, given his similarities to Teddy Roosevelt, we found that he was an environmentalist and his staff gave us useful advice on the somewhat obscure, but important, Devils Lake environmental issue. Run-off from Devils Lake in North Dakota was running into the Red River that flows north into Manitoba. We wanted the Army Corps of Engineers to put in a filtration system. Senator McCain, who early on recognized the dangers of climate change, helped us. He also traveled, with Hillary Clinton, across the north of Canada to Churchill to assess the changes wrought by global warming.

Senator McCain was a warrior and he understand the values of collective security. He was also a democrat and indeed championed the idea of a league of democracies sustained by a military alliance. One of the most successful initiatives of the Harper government that the Trudeau government has wisely continued to support is the Halifax International Security Forum, a three-day world-class security forum for the democracies. Set up under the direction of then Defence Minister Peter MacKay it has succeeded under the tireless direction of its CEO, Peter van Praagh.

Critical to the HISF success is the congressional delegation that flies up from Washington each November. John McCain was a driving spirit behind the American presence. Not only did he attend every year, he personally cajoled and convinced his colleagues, Republican and Democrat, to come with him. This congressional presence, often more than come to Canada in an entire year, ensured high-level participation from ministers and flag-rank officers both trans-Atlantic and trans-Pacific.

In what was his last appearance, weeks after the election of Donald Trump in November 2016, Senator McCain was unequivocal in his support for NATO, as well as the NAFTA. They needed to be preserved and strengthened. And when it came to conduct in war, he was equally forceful telling us “I don’t give a damn what the president (elect) wants to do…we will not waterboard. We will not torture people.”

Yes, Senator McCain is an American hero. He was also a friend to Canada.

The Final Round NAFTA?

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A little more than a year after negotiations began on a revised North American free-trade agreement, a deal looks possible, although big questions remain.

For much of the past two months, Mexican and American negotiators have wrestled with the U.S. demand around the content rules for our most-traded commodity, the automobile. North Americans produce 17.5 million cars or trucks annually. The original U.S. demand of 85 per cent North American content with 50 per cent of that “Made in the USA” has apparently morphed into 75 per cent North American content with 40 per cent to 45 per cent made by workers making US$16 or more a hour.

The devil is always in the details, but Canadian industry and its workers can live with this and, if this gives U.S. President Donald Trump his “win,” then we are on our way to a deal.

So, too, with the “sunset” clause. Originally, the United States wanted the new agreement to lapse after five years – something investors said would freeze investment, especially into Canada and Mexico. U.S. Trade Representative Robert Lighthizer reportedly says it will now be 16 years with a review after six years. We can live with that.

On dispute settlement, or Chapter 19, the picture is murky and we will need clarification. The Trump team originally wanted to jettison the binational mechanism, and it appears there will be investor-state provisions, something U.S. industry lobbied hard to retain, and some form of recourse, beyond the U.S. system, for energy and infrastructure. Canada and Mexico need to stand firm. We need recourse from U.S. trade-remedy legislation – countervail, anti-dump and, as the Trump administration misapplies it, national security.

If reports are accurate, there appears to be near-agreement on agriculture (good for Canadian farmers) and on intellectual property (unchanged) but again, the devil will be in the details.

The negotiators were originally aiming for 30-plus chapters of NAFTA but until now only nine had been closed and, of course, nothing is truly closed until it is all done.

So what remains and how might they be resolved? From Canada’s perspective, assuming we can work out dispute settlement, we need to see action on three more items.

  • Government procurement: Canada wants to retain open access, but the United States is offering a derisory dollar-for-dollar deal. If we cannot work this out, we should leave it to governors and premiers to work out the kind of reciprocal procurement deal that they achieved in 2010. This could be regional or national; the incentive for both sides is that an outside bidder curbs local price-fixing. This will be important especially if Mr. Trump proceeds with his trillion-dollar “Big Build” infrastructure initiative.
  • Labour mobility: We want to update for the digital age the ease of passage for designated occupations. Businesses, especially those with North American supply chains, need this to maintain competitiveness. In the current U.S. environment, this is probably a stretch. We would do well if we can maintain the current list and punt this over to a separate negotiation.
  • Dairy access: Mr. Trump continues to single this out. It is time to reform supply management just as we did with our wine industry through the original Canada-U.S. free-trade agreement in 1987 and then our managed trade in grain. Provide adjustment assistance but open up our dairy and poultry industries, which make good products and, like our beef and pork sectors, and now our grains and pulse production, they can be world-beaters.

While Mr. Trump thinks negotiations can wrap up this week, we will likely see fall leaves and probably snow before the deal is done. Legislative ratification, especially in the United States, is an even bigger question mark. It will likely be the next Congress, chosen in November and taking office in January, that will give “up or down” approval to the new accord. It won’t be easy.

The coming days – more likely weeks – will be a test of Canadian negotiators. They are a very experienced team and they are up to the task as long as the government has their backs.

This is the bigger question: Can the Trudeau government take the political flak that will inevitably come its way? It won’t be sunny ways. If it can stick it out, the Trudeau government will make as big a contribution to Canadian well being and competitiveness as Brian Mulroney and his Progressive Conservative government did with the original Canada-U.S. FTA and then the NAFTA. It would be no small legacy.

Grading NAFTA: A year on

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While some progress has been made, a deal still hasn’t been reached. Autos and the U.S. demand for a sunset clause have been key sticking points. Meanwhile, Canada has become one of Donald Trump’s main targets in recent weeks with the U.S. president threatening more tariffs on Canadian car imports if a deal isn’t struck.

Below, four experts weigh in on Canada’s progress in the talks so far and offer their view on what needs to happen next.

 

What’s ahead for NAFTA as U.S. and Mexico meet again without Canada

Colin Robertson, VP and fellow at the Canadian Global Affairs Institute and member of the team that negotiated the original NAFTA deal, joins BNN Bloomberg to provide perspective on what’s ahead in NAFTA 2.0 negotiations, as the U.S. and Mexico meet.

COLIN ROBERTSON, VP AND FELLOW, CANADIAN GLOBAL AFFAIRS INSTITUTE

Grade: A, for exhibiting Hemingway’s definition of courage: “grace under pressure”

What has been the biggest hurdle for Canada so far?

“Donald Trump. Does he want a NAFTA or not?  Is the administration prepared to negotiate on the remaining critical issues: dispute settlement (chapters 11, 19, 20) and government procurement?”

What has been Canada’s biggest success?

“We are still in negotiation and the Canada-Mexico partnership remains solid.”

What has been the biggest disappointment?

“U.S. intransigence and the sense that their negotiating team is awaiting instructions on their mandate and scope for negotiation.”

What is the most important thing Canada needs to do going forward?

“Keep negotiating and trying to make progress on the issues. Keep in mind the average negotiation for a deal of this size even renegotiated is three-to-five years. We are actually making reasonable progress given the complexities involved. Granted, a lot of what is being negotiated was already negotiated by the U.S., Canada and Mexico in the TPP and many of the negotiators are the same. So there is familiarity with the issues and one another.”

What has been the biggest surprise throughout the negotiations?  

“Donald Trump’s personal involvement. He has so much policy ground to choose from but he has made NAFTA a personal interest as we have learned to our surprise and disappointment in his tweets.”

 

Ottawa mulling steel safeguards: Is this a wise move?

Maryscott Greenwood, CEO of the Canadian American Business Council, joins BNN Bloomberg to discuss Ottawa’s decision to launch consultations with the aim of protecting Canada’s steel industry, and what’s ahead for NAFTA.

MARYSCOTT GREENWOOD, CEO, CANADIAN AMERICAN BUSINESS COUNCIL

Grade: I for incomplete

What has been the biggest hurdle for Canada so far?

“I would say the unpredictability of the U.S.”

What has been Canada’s biggest success?

“Raising awareness in the U.S. and Canada of the importance of our economic relationship.”

What has been the biggest disappointment?

“Not getting a deal done yet.”

What is the most important thing Canada needs to do going forward?

“Canada needs to come to the table with practical deals in mind. Focus on the practicality as opposed to the principle.”

What has been the biggest surprise throughout the negotiations?  

“The fact that [Andres Manuel Lopez Obrador], the new president of Mexico, has been eager to conclude a modernized NAFTA before he takes office on Dec. 1.”

 

Trump’s focus on tariffs still truly remain China: Trade expert

Christopher Sands, director of the Center for Canadian Studies at Johns Hopkins University, joins BNN Bloomberg’s Catherine Murray for a look at the growing ripple effects from Trump’s tariffs.

CHRISTOPHER SANDS, DIRECTOR, CENTER FOR CANADIAN STUDIES, JOHN HOPKINS UNIVERSITY

Grade: C

What has been the biggest hurdle for Canada so far?

“Overcoming an initial impression (given by President Trump) that the renegotiation of NAFTA would involve only ‘tweaks’ with regard to Canada-U.S. trade arrangements. This led Canada to play it safe with a defensive strategy that was hard to abandon when the gravity of the talks became more apparent (lots of clues are visible in retrospect).”

What has been Canada’s biggest success?

“Mobilizing an impressive outreach to the Congress, state governors and legislators on the benefits to the United States of trade with Canada … Combined with a thoughtful outreach to the Trump administration, including White House staff and cabinet departments, the Canadian effort was more extensive that any that a foreign country has ever mounted in the United States.”

What has been the biggest disappointment?

“It would be a tie for me. First, the failure of the impressive Canadian outreach to garner a single concession from the United States – not on softwood lumber, not on gypsum – which was then followed by the self-destructive Canadian attack on U.S. trade remedy practices now pending before the World Trade Organization, a clear sign of Canadian frustration.

“Second, the business community in both Canada and the United States has been far less effective at defending the integrated continental supply chains that link the three NAFTA economies. Why? I still don’t really know.”

What is the most important thing Canada needs to do going forward?

“Heal the breach with the Trump White House.”

What has been the biggest surprise throughout the negotiations? 

“Almost all of the things I have mentioned above surprised me, but the suspension of the NAFTA talks in June followed by their resumption on a bilateral basis by the U.S. and Mexico was the biggest surprise.”

 

Trump playing ‘old-fashioned leverage’ with Canada freeze-out: Trade lawyer

Mark Warner, principal at MAAW Law, joins BNN Bloomberg to provide perspective on Trump’s latest tweet on NAFTA, in which he essentially says he’s freezing Canada out of talks.

MARK WARNER, PRINCIPAL, MAAW LAW

Grade: A+ for effort in engaging with key stakeholders, B+ overall

What has been the biggest hurdle for Canada so far?

“The biggest hurdle for Canada in the NAFTA negotiations so far has been in grappling with the scope of the Trump administration’s demands to roll back some of the perceived gains from NAFTA in the area of dispute settlement (and demand for a sunset clause) and to deal with traditional U.S. demands for concessions in areas like supply management for the price of maintaining NAFTA rather than for new U.S. concessions.”

What has been Canada’s biggest success?

“The biggest success for Canada has been to keep drawing out the negotiations without Trump triggering a notice of withdrawal to Canada and Mexico. That said, the price of doing so has been increased investment uncertainty and the strategy has led Trump to seek other opportunities for leverage in the negotiations outside NAFTA, most notably in Canada’s inclusion in the Section 232 national security tariffs on steel and aluminum and threatened ones on autos.”

What has been the biggest disappointment?

“The biggest disappointment is that Canada has adopted a passive, defensive approach to the NAFTA renegotiation with engagement mostly with U.S. stakeholders rather than proactively engaging stakeholders in Canada for self-interested policy or market access concessions that could be offered up to move Canada out of Trump’s attention (e.g. supply management).”

What is the most important thing Canada needs to do going forward?

“The most important thing Canada needs to do right now is to find something to offer in the NAFTA negotiations to avoid Trump imposing Section 232 national security tariffs on exports of autos and auto parts from Canada. And to end the spiral of ‘tit for tat’ tariff retaliation, which is a game that ultimately Canada cannot win because of the asymmetries in the size of the two economies and relative importance of bilateral trade to each country.”

What has been the biggest surprise throughout the negotiations?  

“The biggest surprise to me is that Canada and Mexico have managed to hang together, at least publicly, until recently, although I wonder whether the time horizons of the newly-elected Mexican president and the Canadian prime minister approaching his re-election year will stay aligned if the NAFTA negotiations continue.”

Saudi-Canada and the USA

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Who would have imagined that a tweet could have sparked such a crisis in Saudi-Canada relations? In this still-developing saga, there is a lesson, questions and a challenge.

The lesson is obvious: Diplomacy by tweet is a bad idea.

The too-clever-by-half tweet on the Friday before the August long weekend was likely written to assuage constituent pressures – the Montreal family of the imprisoned Badawis. But was it given sufficient scrutiny by our professional diplomatic corps?

The tweet would have been fine had it been sent by Amnesty International or Human Rights Watch. Diplomacy needs nuance and circumspection to effect actual change. While a useful social-media tool for priming an event or announcement, 280 characters are insufficient for launching a human-rights initiative to transform Saudi conduct.

The questions: Did Mohammed bin Salman, the Saudi Crown Prince calling the shots in the desert kingdom, check with U.S. President Donald Trump before proceeding with his attack on Canada? Given their close personal relationship – Mr. Trump’s first foreign visit was to Riyadh – was there a conversation before the Saudis launched the diplomatic equivalent of DEFCON 3 on the United States’ closest ally? If so, what was said?

Prime Minister Justin Trudeau needs to call Mr. Trump to discuss the Saudi situation. If it turns out that Mr. Trump gave the Crown Prince a wink and a nod to proceed, then Mr. Trudeau needs to make it clear that this is not acceptable.

The challenge for Canada is what to do next.

The Saudis are ratcheting up their campaign. Their social media have called Canada an oppressor of women and the homeless. The tweeted picture of an Air Canada jet headed for the CN Tower – shades of the Twin Towers – was reprehensible. The Saudis are also calling in their chits. The Arab League, Organization of Islamic Co-operation and the Gulf Co-operation Council have all dutifully lined up behind Saudi Arabia. The Saudi Arab News says Mr. Trudeau should send a delegation on “the first plane” to make amends or there is a “real risk of upsetting the entire Muslim and Arab worlds.”

The Washington Post editorialized (with an Arabic version) that the extreme nature of the Saudi punitive actions requires solidarity from like-minded countries who see human rights as a fundamental value.

The response to date from our Group of Seven partners is disappointing. The U.S. State Department suggested the two countries – “both close allies of the USA” – work it out, as though Canada and Saudi Arabia were on equal footing. Susan Rice, who served as president Barack Obama’s UN Ambassador and then National Security Adviser, got it right: ”the administration left Canada swinging in the wind.”

Foreign Affairs Minister Chrystia Freeland now has to manage the fallout and continue her efforts to persuade like-minded countries to take a principled stand.

Are there sanctions we and our allies should be taking against the Saudis for their human-rights abuses, including treatment of women, oppression of religious freedoms and their intervention in Yemen? And why not invite its Foreign Minister to Canada? Perhaps he could join Ms. Freeland for a walk through our splendid Canadian Museum for Human Rights in Winnipeg.

Ms. Freeland has given some good, punchy speeches defending the rules-based order recently, in Washington and in Singapore. Words matter. On her next trip to Europe, she should speak about human rights and remind our allies that they are fundamental to civil society. Mr. Trudeau should make human rights a principal theme of his UN General Assembly speech in September.

It is doubtful the Trudeau government intended to launch a new initiative targeting Saudi human rights. It already has a charged foreign-policy agenda – tense NAFTA negotiations, NATO commitments, climate talks, G7 chair obligations, peace operations in Mali and now refugee claimants from the United States. But Saudi bully-boy tactics shouldn’t give the kingdom a free pass on human rights.

As we have learned through our initiatives to help the Rohingya in Myanmar and to constrain the Maduro regime in Venezuela, advancing human rights in countries that don’t care is a difficult proposition. But if a feminist foreign policy and advocacy for human rights is to mean anything, we have to stand up, even if we stand alone.

US refuses to back Canada in Saudi Arabia dispute

As the diplomatic feud between Canada and Saudi Arabia worsens, the United States has remained notably silent, leaving Ottawa both perplexed and frustrated.

It all began last week with a tweet from Canada’s foreign minister criticising Saudi Arabia’s human rights record.

That unleashed a barrage of punitive measures from Saudi Arabia including expelling Canada’s Ambassador, recalling its own Ambassador from Ottawa, freezing business and trade ties and ordering home thousands of Saudi students studying in Canada.

The US State Department has urged the two sides to use diplomacy to resolve the dispute but President Donald Trump’s silence for its northern neighbour hasn’t gone unnoticed in Canada.

NAFTA and Trump

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 Sentiment Factoring Into NAFTA Negotiations
Colin Robertson – Canadian Global Affairs Institute
Farmscape for August 13, 2018

The Vice-President of the Canadian Global Affairs Institute suggests a growing protectionist sentiment within the United States is factoring into the NAFA negotiations.
Negotiations aimed at modernizing the North American Free Trade Agreement are essentially on hold until next year awaiting results of the U.S, mid-term elections.
Colin Robertson, the Vice-President and a fellow of the Canadian Global Affairs Institute, says the U.S. public and now a large number of elected representatives in Congress and at the state level, recognize the value of NAFTA but the tide of protectionism is increasing.

Clip-Colin Robertson-Canadian Global Affairs Institute:
Polling, and I rely particularly on Pew, P E W, I think they’re the gold standard for polling in the United States, their most recent poll, which I think was March or April, suggested that a majority of Americans, around 55 to 60 percent see value in free trade agreements.
They think the United States has actually got something out of it.
They see particular value in a Canada-U.S. free trade agreement because they think we’re fair traders.
However the same polling shows that the base of the Republican party is becoming increasingly protectionist, more protectionist indeed than their representatives and it is that base that Donald Trump relies upon.
A good 40 percent to 50 percent of his base is really anti-trade.
When he speaks on trade he’s playing to that base and that is a factor we have to take into account because that’s the group he’s going to rely upon if he wants to seek reelection in 2020.

Robertson  suggests pressure from the farm community, which voted mostly for President Trump, and the manufacturing sector, many of whom voted for President Trump, is probably what has kept him from rescinding the NAFTA but it has not influenced the administration to bend on some of its more unreasonable positions.
For Farmscape.Ca, I’m Bruce Cochrane.