Prepare for the Worst

US officials back Trump’s outraged G7 remarks as Canada struggles to mend relationship with its largest trading partner

Chrystia Freeland will travel to Washington this week for a visit which will focus on trade talks – but also attempt to reset US-Canada relations.
 Chrystia Freeland will travel to Washington this week for a visit which will focus on trade talks – but also attempt to reset US-Canada relations. Photograph: Yves Herman/Reuters

Canadian diplomats are scrambling to mend a deteriorating relationship with its largest trading partner after senior US officials maintained the rhetorical barrage first unleashed by Donald Trump at the G7 meeting in Quebec.

Foreign affairs minister Chrystia Freeland will travel to Washington this week for a visit which will focus on trade talks – but also attempt to reset relations between the two countries, which have been pushed to their lowest point in recent memory amid an increasingly bitter row over trade.

In television appearances over the weekend, two senior Trump advisors said that Justin Trudeau “stabbed the US in the back” after the prime minister spoke out against the US president’s aggressive trade policies.

In an appearance on Fox News on Sunday, White House trade advisor Peter Navarro said: “There’s a special place in hell for any foreign leader that engages in bad faith diplomacy with President Donald J Trump and then tries to stab him in the back on the way out the door.”

The sharp escalation has shocked experts and fuelled worries of a devastating trade war, one which Canada, a middling economic power, would likely lose.

“There have been moments of tension in various times in the history of Canada-US relations, but I’ve never seen or heard of anything like the type of language the US administration has used towards Canada,” said Roland Paris, an international affairs scholar and former advisor to Trudeau.

Canadian officials hoped the G7 summit in Quebec over the weekend would be an opportunity to reset discussions around trade after Trump imposed punitive tariffs on the EU and Canada.

But the gathering concluded on a sour note after Trudeau told reporters Canada “will not be pushed around”. Trump responded via social media calling the prime minister “very dishonest and weak”.

“We have to prepare for the worst now,” said Colin Robertson, a former diplomat and head of the Canadian Global Affairs Institute. “There’s a lot of damage control going on today and for the next few days,” he said.

The US remains Canada’s largest trading partner, a relationship valued at $673.9bn, but Trump has claimed Canada has a trade surplus with the US, a statement not backed up by any evidence.

A recent report from the CD Howe Institute finds that the tariffs will cause significant economic pain in both countries: Canada could lose as many as 6,000 jobs and a 0.33% GDP reduction, whereas the US would lose 22,700 jobs, but only a 0.02% disruption to the GDP.

Last week, Canada introduced more than $16bn in retaliatory tariffs against the United States, meant to inflict targeted pain on politically vulnerable industries, such as whisky, orange juice, frozen pizzas and soy beans.

“There are plenty of people in the United States, including in positions of influence, who were just as outraged at those remarks as Canadians were,” said Paris.

Although there is little to suggest that his aggressive trade policy has spirited support within his party, analysts say Trump has seized on the duties as a weapon he can wield without needing congressional approval.

“He’s discovered these weapons and he’s using them for maximum effect to further his ‘American First’ bellicose trade and political agenda,” said Lawrence Herman, a former diplomat and international trade lawyer. “I think the lesson has come home that as a strategic objective: be less dependent on the unreliability of the United States … What Trump is showing is that the United States is an unreliable treaty partner.”

The recent spat has backed Canada into an uncomfortable position: while attempting to remain steadfast against a belligerent trade partner, it must also reckon with the fact that much of its economic productivity is tied to seamless free trade with its southern neighbour.

Trudeau’s father, Pierre Trudeau, famously likened the relationship with the United States to a mouse next to a sleeping elephant. “No matter how friendly and even-tempered is the beast, one is affected by every twitch and grunt,” the former prime minister said.

Justin Trudeau, Donald Trump, Angela Merkel and other world leaders at the G7 summit.
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 Justin Trudeau, Donald Trump, Angela Merkel and other world leaders at the G7 summit. Photograph: Justin Trudeau/JT

Justin Trudeau amended his father’s metaphor at a gathering of American governors last year. “While you, my American friends, may be an elephant, Canada is no mouse. More like a moose: strong and peaceable – but still massively outweighed.”

Trudeau’s firm stance towards the US administration has resulted in a rare unified front amongst current and former political leaders.

Over the weekend, his conservative predecessor Stephen Harper appeared on Fox News to appeal for calm. Conservative leader Andrew Scheer tweeted his support for the prime minister.

Even Doug Ford, the newly-elected populist premier of Ontario – who has pledged to fight Trudeau on a number of policy initiatives – backed the prime minister’s position.

That support reflects a cold economic reality: Ontario is particularly vulnerable to America’s protectionist policies as more than 80% of the province’s exports are sent south of the border, said Robertson.

More recently, Trump has reiterated his threat to impose a 25% tariff on Canadian-made automobiles – a move that would devastate the $80bn industry.

Experts say that as discussions enter uncharted territory, it’s critical that the issues of trade remain the central of focus.

“Trudeau will not personalize this with Trump – and he will not let any of his cabinet or caucus do so. He’ll let public opinion do that for him,” added Robertson.

Meanwhile, Canada should push to ensure two large trade deals – the Trans Pacific Partnership and the Comprehensive Economic Trade Agreement – are finalized in the coming months to hedge against further uncertainty.

“We’ve got these open doors to Europe and the Trans Pacific Partnership. We’ve some housekeeping to do to show we’re serious,” said Robertson.

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Stephen Harper’s World View

Excerpted from October Policy Options ‘Harper’s World View’

…Argue with the taxonomy, but there are essentially three traditions in Canadian foreign policy. The first is the realist, power-and-interest tradition that holds close to the hegemon, initially Britain and then the United States. The external counterpart to Sir John A. Macdonald’s National Policy, it has been followed, in varying degrees, by Macdonald, then Sir Wilfrid Laurier through to Brian Mulroney. The second is the Mackenzie King tradition, nationalist, regional in outlook, and both cautious and skeptical about international entanglements. It also appealed to populist, regional third parties from the Progressives through the Bloc Quebecois. The third is the St- Laurent-Pearson tradition, further refined by Pierre Trudeau and Jean Chretien: strongly nationalist and internationalist – assertive, energetic, with an emphasis on international law and institutions.

Looking at Harper’s record suggests his approach to foreign policy fits comfortably within the realist, power-and-interest tradition.  At the outset the new PM promised to “build the relationships and the capabilities which will allow us to preserve our sovereignty, to protect our interests, and to project our values…In a shrinking, changing, dangerous world,” he declared in his first major foreign policy speech in October 2006. He continued: “our government must play a role in the world. And I believe that Canadians want a significant role – a clear, confident and influential role…they don’t want a Canada that just goes along; they want a Canada that leads. They want a Canada that doesn’t just criticize, but one that can contribute. They want a Canada that reflects their values and interests, and that punches above its weight.”

The debate within Canada around energy and the environment is symptomatic of another rule of politics. What may constitute good public policy – taxing carbon, ending sales of asbestos, abandoning supply marketing, permitting foreign investment in our resources, is not always good politics. Regional differences make national consensus difficult. National unity comes with a price and there is more than a little wisdom to F.R.Scott’s lampoon of Mackenzie King: “Do nothing by halves/ Which can be done by quarters.”

While putting on the blue beret has considerable romantic appeal, Canadians have not led in peacekeeping for a couple of decades and contemporary circumstances make it unlikely we’ll do so again soon. In part, there has been an effort to ‘regionalize’ peacekeeping pools and in part, as Denis Stairs points out, contributing to UN peacekeeping operations is “a source of badly needed foreign exchange” for the main source countries – Bengladesh, Pakistan, India and Nigeria.

Technology and more failing states means what is required is less peacekeeping than peacemaking or peace enforcement or acting as a first responder to disasters. To echo historian Jack Granatstein, we owe former Chief of Defence Staff Rick Hillier a great debt for “changing the conceit that Canadians were peacekeepers first, last and always.” Our experience in Afghanistan has given us the ‘best little army’ in the world and the skills we’ve developed proved adaptable and effective in the relief of Haiti after the hurricane. This is a much more realistic role for Canada and while Canadians wanted us out of a combat role in Afghanistan, there is strong public support for the Forces.

Rather than flog the dead horse of peacekeeping, the bigger policy question for Canadians is how far, and how much, should we commit to duties beyond our border that actively involve us in other people’s conflicts with significant risk to the lives of Canadians. Observes Australian diplomat-scholar Owen Harries: “The successful promotion of democracy calls for restraint and patience, a sense of limits and an appreciation of the wisdom of indirection, a profound understanding of the particularity of circumstances.”

As we have learned in Afghanistan and Iraq, liberal democracy is not an easy transplant and any policy of imposing it through force will also fail. Acting with the best of intentions is inherently difficult to translate into significant change because of the extent to which they depend on other people and other, often intractable, societies.

The  2008 Canada First Defense Strategy gives teeth to our ambitions in homeland defence and in making a necessary contribution to collective security.: “`A handful of soldiers is better than a mouthful of arguments,”’ said Harper in Trapani, Italy the base for RCAF CF-18s flying over Libya, “For the Gadhafis of this world pay no attention to the force of argument. The only thing they get is the argument of force.”
Restoring the traditional designations – Royal Canadian Navy, Canadian Army and Royal Canadian Air Force – to strengthen their identities as national institutions is a positive step.

But the real test for the Conservatives will be to meet the new recruitment targets, ultimately 100,000 personnel (70,000 Regular Force and 30,000 Primary Reserve), and to meet the procurement timetable for the new ships and planes that will “give us the ability to act.” Our procurement process is inadequate. As the Auditor General and the Canadian Association of Defence and Securities Industries (CADSI) and others have pointed out, the likely result is that new kit will be delayed, abandoned or diminished in quality and quantity. We need to quickly develop a defence industrial strategy and a viable ship building industry.  A useful first step would be to look to the experiences of our British and Australian allies…

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Canada-US Trade needs nurturing

The United States and Canada: trade that needs nurturing

COLIN ROBERTSON

Special to Globe and Mail Update Published Tuesday, Apr. 26, 2011

Canada-U.S. relations have not figured much in this election. As Sherlock Holmes said of the dog that did not bark in the night, this is one of the “curious incidents” of the campaign. That Canadians like Barack Obama a lot more than George W. Bush is partial explanation. Mr. Bush was a convenient pinata for the anti-American set, while Obama still represents – for most Canadians if not for Americans – hope that we can believe in.

The Liberals, in particular, have so far resisted the temptation to play the anti-American card as we witnessed from Paul Martin in the 2006 campaign and Stéphane Dion in the 2008 campaign. Michael Ignatieff has a sophisticated sense of the United States that is closer to earlier Liberal leadership from Sir Wilfrid Laurier to Lester Pearson than Pierre Trudeau to Mr. Dion. As Mr. Ignatieff wrote during Mr. Obama’s visit in February, 2009, “We can either complain about unsolved problems or seize the opportunity to excite him with the possibilities of partnership.”

Stephen Harper could easily employ these same words. The PM deserves praise for launching the Washington Initiative around perimeter security and regulatory reform in February. Better border management was promised during the 2009 visit, but in contrast to the administration attention devoted to their southern border, this disappeared into the Potomac fog. Since 9-11 the border has thickened. Drones now fly overhead and Homeland Security has tripled the staff who stand guard. There are new fees. Given American finances this trend will only accelerate without overriding policy direction. Meanwhile, both governments add to the tyranny of small regulatory differences that impose cost and inconvenience on everything from baby seats to the Cheerios that U.S. Ambassador to Canada David Jacobson eats for his breakfast.

Such actions further devalue what has been the most successful trading relationship in the world. Cars constitute 15 per cent of our exports; 80 per cent of the components we use are imported from outside (mostly the U.S.), while 85 per cent of what we produce is exported (mostly to the U.S.). Assembly requires criss-crossing the border seven times – with inspection on each crossing. Meanwhile, boatloads of cars and parts coming from Japan, Korea and China are inspected only once. So much for encouraging North American competitiveness.

Nor is the Washington Initiative a sure thing. The Harper government has defined the vision, yet little has been offered in terms of concrete objectives and even less in terms of public consultation.

Both of us have unfinished business. The top American “ask,” also an impediment to the Canada-EU Accord, has been new copyright legislation. It has failed to pass in either of the last two Parliaments. We want a presidential waiver for the Keystone XL pipeline. The long delay reflects the administration’s ultramontane attitude toward the oil sands, with protectionist “encouragement” from otherwise uncompetitive energy “alternatives.” The threat of American environmental oversight would be a blatant application of extraterritoriality that we haven’t seen since Helms-Burton and Cuba.

Then there is the clock. New Hampshire’s January primary starts the American election cycle that will effectively close our window of opportunity. The hope was to finish the preparatory work by June, but the election has intervened. There is little evidence that the Obama administration is using this time to manage interagency consultation and congressional outreach. Nor is the U.S. business community engaged. Their involvement was critical to the free-trade agreement.

Finally, there is the President. Mr. Obama wants to generate jobs by doubling U.S. exports. It makes sense to begin with your biggest trading partner, but there is little to suggest that he accords Canada the same strategic priority as Ronald Reagan or Bill Clinton did.

Mr. Obama has reached out to China and Europe and has taken trade delegations to India and Brazil, but not to Canada. His re-election will depend on his ability to create jobs. In his congratulatory call to our next prime minister on the evening of May 2, Mr. Obama should re-ignite the initiative and get it done before the snow falls in Concord.

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Working with the Canadian Council of Chief Executives

September 23, 2010

CCCE Partners With Ambassador Gordon D. Giffin To Strengthen Engagement On Canada-U.S. Issues

The Canadian Council of Chief Executives (CCCE) is pleased to announce that it will be working closely with Ambassador Gordon D. Giffin to strengthen its engagement with policy makers in the United States on key bilateral and international issues.

Ambassador Giffin, Chair of the Public Policy and International department at McKenna, Long & Aldridge LLP, will collaborate with the CCCE’s policy staff on all matters related to the Canada-U.S. economic and security partnership, including cross-border trade, energy, the environment, intellectual property, procurement and regulatory affairs.

From August 1997 to April 2001, Ambassador Giffin served as the nineteenth United States Ambassador to Canada. As Chief of Mission at the U.S. Embassy in Ottawa, he managed U.S. interests in the world’s largest bilateral trading relationship, as well as U.S. collaboration with Canada on a wide range of global issues.

“Ambassador Giffin’s deep knowledge of, and commitment to, the Canada-U.S. relationship are second to none,” said The Honourable John Manley, President and Chief Executive Officer of the CCCE. “I look forward to partnering with him and his team in seeking public policy solutions to the shared challenges facing our two countries.”

At McKenna, Long & Aldridge, Ambassador Giffin heads an outstanding team that works seamlessly on a wide variety of matters for businesses and governments on both sides of the border.  In addition to the U.S.-based professionals, Ambassador Giffin’s team includes distinguished former Canadian diplomat Colin Robertson, who established Canada’s first Advocacy Secretariat in the Canadian Embassy in Washington, D.C….

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