Canada has Edge in NAFTA Negotiations

Experience, outreach give Canada an edge in achieving NAFTA renovation goals

Colin RobertsonThe Globe and Mail

Ministers and negotiators from Canada and Mexico fly to Washington this week to hear how the Trump administration wants to change the North American free-trade agreement (NAFTA).

For Canada, the overriding objective is a deal that sustains and improves access to the U.S. market. The U.S. market accounts for nearly three-quarters of our trade and sustains an estimated 1.9 million Canadian jobs.

As the Trudeau government’s NAFTA consultations have demonstrated, the southern border continues to be as much choke point as gateway. We made progress in the Harper era to reach beyond the border and to embrace regulatory co-operation. But this work needs a reboot.

We also have some housekeeping of our own – passing the legislation enabling U.S. customs preclearance operations for cross-border passage by air, sea and rail.

Foreign Minister Chrystia Freeland has defined the government’s specific goals – modernization to help business and counter protectionism, advance the progressive trade agenda and strengthen dispute-settlement mechanisms – as designed to create freer, but fairer trade.

Partnering with the Mexicans, Canada is well-equipped to advance its objectives and use the talks to even greater advantage.

First, the Canadian team is experienced, having honed their skills negotiating free-trade deals across the Atlantic and the Pacific. Surveys show that Canadians are confident in the Trudeau government’s ability to negotiate a good deal on their behalf. Canadians (and Mexicans) don’t like U.S. President Donald Trump, according to Pew surveys. This antipathy will give the Trudeau government more elbow room.

Second, the U.S. idea of a border tax is off the table. This could have been a showstopper. The Americans want to rescind part of the current NAFTA dispute-settlement provisions, but we should be able to work this out again (as we will eventually with softwood lumber).

Third, the economic auguries are good. Canadians are optimistic about their prospects. The Organization for Economic Co-operation and Development projects unemployment in Canada (6.1 per cent) and the United States (4.3 per cent) at their lowest points in a decade – lost jobs are always blamed on trade – while growth in Canada (2.3 per cent) and the United States (2.4 per cent) will lead the Group of Seven.

Fourth, there is broad public support in all three countries for continental free trade. A Pew survey conducted in May reports NAFTA enjoys the support of three in four Canadians and six in 10 Mexicans. Surprisingly, half of Americans (51 per cent) say NAFTA has been a good thing for the United States.

Mr. Trump’s NAFTA fulminations have brought hitherto silent support for NAFTA to the surface, especially in the U.S. farm community. A core Trump constituency, their support for NAFTA helped convince Mr. Trump to renegotiate, rather than scrap, NAFTA.

Ms. Freeland compares the talks to “renovating a house while you’re still living in it … getting there can be a little messy and uncomfortable.” We can expect bumps, threats and counter threats, midnight tweets and other noise.

Our extraordinary outreach campaign into the United States identified more allies than we thought amongst U.S. governors and legislators. Continental trade works for them. Canada and Mexico must continue cultivating their support. We will need it when the revised agreement reaches the U.S. Congress.

Negotiations are traditionally conducted in secrecy, but the U.S. system is leaky by nature and by design. It is exacerbated by the current factionalism on Capitol Hill and within the Trump administration. To sustain public support, Canadian negotiators will have to keep consulting with stakeholders and then explain, explain, explain.

Canadian governments should use the negotiations as an opportunity to improve Canadian competitiveness.

Canadians want their governments to regulate for public safety and sovereignty but there are still thickets of red tape that need weeding. We need new and better connections – rail, road and pipe – to our ports. And let’s take another swing at interprovincial trade barriers.

Trade promotion could do with a boost. Trade deals open doors, but it’s the marketing that delivers the deals.

Canada can compete continentally and globally. We proved this in the decade of trade-led growth that followed the 1988 Canada-U.S. free-trade agreement. The premiers have taken to sales and marketing like ducks to water. So should our big-city mayors, home to so many of our service industries.

The “Canada brand” is strong and, for now, Prime Minister Justin Trudeau is the popular face of Canada. We can leverage this into more trade and investment, creating and sustaining the Trudeau goal of more middle-class jobs. As Canada’s top salesman, Mr. Trudeau needs to lead this parade. Mexico, our NAFTA partner, should be his first stop.

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Colin Robertson, August 15th 2017 | Tags: ,
Posted in op-ed

Is Canada really back?

How Canada must navigate the new normal of global relationships

Colin Robertson The Globe and Mail

What does “Canada is back” really mean? Some answers will come this week in Foreign Affairs Minister Chrystia Freeland’s foreign policy speech and in the release, overdue, of the Defence Policy Review.

Success will hinge on answering three questions:

• What are the priorities?

• How much new money will be invested?

• What are the means to achieve them?

From day one, the Trudeau government vigorously re-embraced multilateralism, declaring that Canada would seek a seat on the UN Security Council.

But a council seat is a means, not an end. Will Ms. Freeland spell out our electoral platform and tell us what we want to achieve? And what is happening with peace operations? Are we going to Mali?

The election of U.S. President Donald Trump has shaken the rules-based liberal international system in the same fashion that the tumbling of the Berlin Wall presaged the end of the Soviet Union.

It is too soon to tell whether President Trump’s changes will endure but, for now, as guardian of the order that it created the United States has gone AWOL.

Middle powers such as Canada need to step up to save our global operating system.

In the wake of Mr. Trump’s withdrawal from the Paris Accord, we should focus on the practical side of climate mitigation through, for example, the open sharing of technological innovation achieved by Canada’s oil sands companies, coupled with more science diplomacy. Evidence-based research still matters.

The Trudeau Government has rightly made the U.S. relationship its top priority, shifting cabinet officers, connecting with the new administration, reaching out to Congress and, in its outreach into Trump territory, bringing in premiers and business to make the case for Canada. Our livelihood – and the government’s own re-election – depends on managing this relationship.

In response to Mr. Trump’s “Buy American, Hire American” policies, Justin Trudeau is going full bore into trade diversification. His father did the same after Richard Nixon imposed a U.S. import surcharge in 1971. Pierre Trudeau’s third-option strategy was aimed, with limited success, at closer links with Europe and Japan.

Ms. Freeland brought home the Canada-Europe trade agreement. International Trade Minister François-Philippe Champagne is helping to resuscitate the Trans-Pacific Partnership and is leading talks with China. In renegotiating NAFTA, we are working with Mexico, our third-largest trading partner. Continental ties are also deepening through the Pacific Alliance.

We are good at trade policy. Now we need to invest more in trade development. We also need the infrastructure, especially pipelines, that get our resources to market.

Ms. Freeland is sure to mention the progressive trade agenda in her policy speech. It will take real form, with the addition of a chapter on gender to the Canada-Chile free-trade agreement, as part of the announcements during this week’s visit of Chilean President Michelle Bachelet.

It is a smart initiative. Women are steadily increasing their place in global business. Women are very good entrepreneurs when given the opportunity, as micro-financing has demonstrated in Asia and Africa.

A progressive trade agenda must also address trade adjustment.

Canada’s social safety net – medicare, pensions and unemployment insurance – helps shield us from the populism that propelled Mr. Trump to power but, as we witness in Europe, it does not guarantee immunity.

Addressing inequality would be a useful theme for Canada to champion as we host next year’s G7 summit and, in the meantime, we should make it a focus for collective attention in multilateral forums such as the Organization for Economic Co-operation and Development and the International Labour Organization.

The Trudeau government has sustained our commitment to collective security, with a brigade headed to Latvia and a sustained naval presence in the Arabian Gulf. But there is a readiness gap as we await new warships and fighter jets. When it comes to defence, money matters.

Successive Canadian governments have skimped and we stand accused, with some justice, of “freeloading”. We should set as goals of good international citizenship a contribution of 2 per cent of GDP to defence spending – the NATO norm – and 0.7 per cent of GDP for development – the Pearson Commission standard. If the United Kingdom can manage it, so can Canada

Canadian foreign policy, like all middle powers, is inevitably reactive. Choices must be weighed against interests, values and resources. With effort and money, we can make a difference in the niches. This week will give us a better sense of the Trudeau niches.

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Colin Robertson, June 5th 2017 | Tags: , , , , , , , ,
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Bulk Drug Sales to the USA

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

Colin Robertson The Globe and Mail

 

‘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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Colin Robertson, April 14th 2017 | Tags: , ,
Posted in op-ed

Getting Ready for NAFTA Negotiations

For Canada, all hands on deck during NAFTA renegotiations

Colin Robertson  The Globe and Mail Mar. 12, 2017

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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Colin Robertson, March 12th 2017 | Tags: , , , , , ,
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Trudeau Trump meeting

Trudeau plans to connect with Trump on jobs but steer clear of immigration ban

Robert Fife – OTTAWA BUREAU CHIEF

The Globe and Mail

Published

Last updated

Prime Minister Justin Trudeau intends to forge a personal connection with Donald Trump by playing to the U.S. President’s central campaign themes of job creation and a secure America when the two leaders sit down at the White House on Monday.

But a senior official said Mr. Trudeau will not use the Oval Office meeting to criticize the President’s executive order temporarily banning Syrian refugees and immigrants from seven Muslim-majority countries – now the subject of a legal battle between the White House and U.S. courts.

“No. I don’t expect Donald Trump to come to Canada and criticize our refugee and immigration policies. [Mr. Trudeau] is not going to do that,” the official told The Globe and Mail.

Explainer: As Trudeau and Trump prepare to meet, here’s a guide to where Canada-U.S. relations stand so far

Adam Radwanski: Can Trudeau’s optimism survive Trump’s unpleasant surprises on Monday?

Related: Trudeau visits Trump: A guide to their first meeting in Washington today

Mr. Trudeau will be the third leader to hold bilateral talks at the White House since Mr. Trump became President on Jan. 20, after the prime ministers of Britain and Japan.

“At the White House, they want this to be a success,” said another Liberal official involved in Canada-U.S. relations. After the President’s rocky start with the Australians and his tensions with the Mexicans, the official said that the Americans “don’t want to miss their chance” to get off on the right foot with Mr. Trudeau.

For the Prime Minister, the goal is to assure Mr. Trump that the United State’s closest ally and biggest trading partner is in sync with the President’s priorities, which are jobs for American workers and secure borders.

“We’re going to talk about all sorts of things we align on, like jobs and economic growth, opportunities for the middle class – the fact that millions of good jobs on both sides of our border depend on the smooth flow of goods and services across that border,” Mr. Trudeau said Friday at a town hall in Yellowknife. “But I am sure issues of security will also come up and I look forward to having very productive and constructive discussions.”

The Prime Minister, a strong advocate for free trade, the United Nations and progressive policies on immigration and refugees, said it’s likely “we are going to talk about things where we disagree on [but], we will do it in a respectful way.”

But Mr. Trudeau intends to speak positively about the President’s plan to renegotiate the North American free-trade agreement, laying out the case that this could benefit workers on both sides of the border, while stressing the deeply integrated nature of both economies.

“They are very much into job creation,” the senior official said. “They want to talk about how we are going to create jobs in the U.S., but the reality is the way to help create jobs in the U.S. is to have us work together rather than working at cross purposes.”

David Wilkins, a former Republican ambassador to Canada, said he is confident Mr. Trudeau will be able to charm the President, whose business instincts will recognize the value of the two-way trading relationship.

The added advantage is that Canada ran a modest trade surplus of $11-billion (U.S.) for all of 2016 compared with the U.S. trade deficit of $58-billion with Mexico, he said. “The U.S.-Canada relationship is so important to both of our countries in creating jobs and this President is all about creating jobs,” Mr. Wilkins said. “So how do we modernize NAFTA and make it better? How do we improve it so it creates more jobs on both sides of the border?”

The senior official said Mr. Trudeau is confident he can bond with Mr. Trump despite their ideological differences and avoid the bad vibes that occurred between the President and leaders of Mexico and Australia.

Mexican President Enrique Pena Nieto abruptly scrapped a White House visit after Mr. Trump signed an executive order to start building a border wall, while Australian Prime Minister Malcolm Turnbull got into a heated exchange during a phone call with Mr. Trump about a deal Australia struck last year with the United States over the resettlement of refugees.

“When [Mr. Trudeau] had his first call with Trump right after the election, he said, ‘first of all, congratulations,’ and the other thing is ‘you are going to face a lot of problems around the world, Canada is not going to be one of them,’” the official said. “It is incumbent on the people who are the leaders of our two countries to find a way to get along. It is too important a relationship.”

A lot of preparatory work has gone into this visit from a Liberal government that expected Hillary Clinton to win the presidency, forcing Mr. Trudeau to recalibrate his strategy to deal with a President known for his bluster and America-First policies.

“No one expects the kind of bromance that characterized the relationship with Barack Obama. Having a good, working relationship with Mr. Trump will be sufficient,” said Colin Robertson of the Global Affairs Institute.

Mr. Trudeau shuffled his cabinet and recruited former Progressive Conservative prime minister Brian Mulroney to open doors to Mr. Trump and other senior members of his cabinet and administration.

Mr. Trudeau’s principal secretary, Gerald Butts, chief of staff Katie Telford and Ambassador David MacNaughton have already struck up positive relations with Mr. Trump’s chief strategist Stephen Bannon, chief of staff Reince Preibus and the President’s son-in-law, Jared Kushner.

A parade of cabinet ministers – Foreign Affairs Minister Chrystia Freeland, Defence Minister Harjit Sajjan and Finance Minister Bill Morneau – travelled to Washington this week to exchange views with their U.S. counterparts and set the stage for the Prime Minister’s visit.

The three ministers discussed everything from NAFTA to talk of a possible U.S. border tax to Canada’s role in the fight against the Islamic State and how to beef up NATO and NORAD.

“I think both the President and the Prime Minister are going into this meeting well-briefed on some of our key positions and one would hope that it is going to be a very friendly, cordial visit,” Conservative foreign affairs critic Peter Kent said. In advance of the trip, Mr. Trudeau has held talks with provincial premiers to seek their advice on the discussions with Mr. Trump and other U.S. officials. There is a great deal of concern about a border adjustment tax promoted by Republican Speaker Paul Ryan.

“Our strongest case, at a high level, is that the benefits that we experience here in Canada are shared across the border, and trying to deconstruct them at this point, actually jeopardizes economic prosperity and jobs for people on both sides of the border,” Alberta Premier Rachel Notley told reporters Friday. “There’s a pretty strong consensus among premiers and the Prime Minister that probably the best way to do that is to get in front of as many people as we can to describe how much the relationship with Canadian business actually benefits American business.”

Ms. Notley is planning to visit Washington at the end of this month to meet with officials and remind them how intertwined the economies are.

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Colin Robertson, February 10th 2017 | Tags: ,
Posted in Newspaper

Trudeau, Trump and the Goldilocks Strategy

Why Trudeau’s ‘Goldilocks’ strategy with Trump is the best approach

Colin Robertson The Globe and Mail 

Canada’s relationship with the United States is deep and profound. The Trump challenge is going to test Prime Minister Justin Trudeau’s sunny ways and then some. No other country, excepting Mexico, has such vital interests at stake.

As President, Donald Trump has tempered neither his language nor his behaviour. His campaign punchlines on the Trans-Pacific Partnership, NAFTA, Muslim refugees and the Mexican wall have become executive orders.

We need to take Mr. Trump very seriously, and often literally. This means planning, not panic; a co-ordinated, all-of-Canada strategy demonstrating that we are a fair trading partner and reliable ally.

Mr. Trudeau understands that the most important relationship for any Canadian prime minister is that with the president of the United States.

With Barack Obama it was a bromance built on a shared commitment to climate, internationalism and progressive politics. A working relationship with Mr. Trump will need to be constructed on different lines, beginning with points of convergence: shared perimeter security, continuing regulatory reform and joint infrastructure projects.

Mr. Trump likes attractive celebrities. The Trudeaus have both qualities. If this helps convince Mr. Trump of our security and trade bona fides, then Canadian interests will be well served.

The first face-to-face encounter will be important. A working visit to the White House would be preferable. It would allow Mr. Trudeau to take the cabinet ministers responsible for security, trade and energy, and they must spend time on Capitol Hill with congressional leadership.

Mr. Trudeau has handled the initial phase well: inviting Mr. Trump to Canada; having ambassador David MacNaughton signal a willingness to reopen NAFTA; the reach-out to Mr. Trump’s senior staff.

Importantly, Mr. Trudeau has kept the lid on anti-Trump comments, in contrast to the unforced errors by cabinet, caucus and senior staff during the Jean Chrétien, Paul Martin and Stephen Harper governments that unnecessarily marred relations with the George W. Bush and Obama administrations.

The Trump cabinet – bankers, billionaires and generals – are globally experienced executives whose views, as their Senate confirmation hearings demonstrated, often differ from Mr. Trump’s. This does not trouble him.

We can hope that after setting the general direction, Mr. Trump will leave the application to his cabinet secretaries, with Vice-President Mike Pence acting as chief operating officer. Mr. Trudeau should consider naming a deputy prime minister as counterpart to Mr. Pence. The Trudeau cabinet should be all over their Trump counterparts with practical initiatives that serve both our interests.

Given Mr. Trump’s transactional approach and business-minded team, Mr. Trudeau also needs to enlist business leaders in Canada and the U.S. to make the case for our mutually profitable economic integration.

The Trump challenge is testing governments everywhere.

Fellow G8 and G20 leaders will monitor the Trudeau approach. In testing our interests, Mr. Trump’s actions are reaffirming our values on pluralism and internationalism, underlining the recent Economist cover: “Liberty moves North.”

For now, Mr. Trudeau is playing it cool. The Goldilocks strategy is the right one: quiet engagement while not letting relations get too hot nor too cold. Mr. Trump will provoke. This is the “art of the deal.” Our general operating principle must be to keep calm and carry on.

Sticking up for our friends, especially Mexico, is important. During his visit to Mexico last week, Natural Energy Minister Jim Carr reaffirmed Canada-Mexico collaboration with a new accord on mining, energy security and clean energy. It should be followed up with by a Trudeau visit to talk about Trump, trade and hemispheric priorities.

Blazing across the global skies like a comet, Mr. Trump’s every action dominates the headlines and sets the news cycles. Not since Napoleon has a leader bestrode the global stage with such forceful unpredictability.

Like Napoleon, Mr. Trump appears to be championing the rearrangement, if not disintegration, of the world order created and sustained by predecessor presidents, Republican and Democrat. In redefining the conduct of diplomacy through his tweets and telephone calls, he is testing the norms of U.S. engagement with the world.

How far can Mr. Trump’s disruptive approach go? We have to trust in the U.S. Constitution, with its checks and balances and separation of powers. The founding fathers, whose statecraft has endured for nearly two and a half centuries, were determined to prevent a king.

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Colin Robertson, February 6th 2017 | Tags: , , ,
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Canada and Mexico

Canada and Mexico must stand together amid trade threats

Colin Robertson The Globe and Mail

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Colin Robertson, January 16th 2017 | Tags: , , , , , , , , , , ,
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NAFTA , Trump and Trade

Trump wants to overhaul NAFTA? Bring it on

Colin Robertson

The Globe and Mail Wednesday, Dec. 07, 2016

President-elect Trump wants to “renegotiate” NAFTA. Bring it on.

The gains we made from NAFTA (1993), spectacular during its first decade, have mostly plateaued. The Trans Pacific Partnership agreement would have updated our continental accord but now that Mr. Trump has shelved it, re-opening NAFTA makes sense.

For Canada, a North American economic pact is vital. The U.S., our biggest trading partner since the Second World War, currently accounts for about 75 per cent of our trade. Our trade with Mexico has grown sixfold since NAFTA.

For Canada, our main objective in re-opening NAFTA should be the freer movement of people, goods and investment within North America. Last year more than $700-billion in goods flowed across our southern frontier and more than 150 million people crossed our shared border by land, air and water.

As with any negotiation, to get we have to be prepared to give. Let’s be bold. Let’s put our costly dairy supply-management, a perennial U.S. target, on the table in return for better procurement access, including shipbuilding.

Last week’s Auditor General’s report on the Beyond-the-Border Action Plan – the latest in a series of initiatives aimed at improving border access – identified shortcomings that should be Canadian priorities with U.S. negotiators. The Entry/Exit and trusted traveller programs, including customs self-assessment and the Single Window initiative, are all behind schedule. Some of this is our responsibility but we also need to see more openness to change from the U.S.

Despite recent efforts at regulatory reform, our supply chains still suffer from the “tyranny of small differences.” Regulatory reform could benefit from a Trump re-boot.

The provinces, who were not in the room for the NAFTA negotiation, should be full partners in the coming sessions because many of the necessary improvements fall under their jurisdiction. The premiers should reach out to their governor counterparts with specific proposals around reciprocity for procurement, especially given Mr. Trump’s promised “Big Build” program.

The North American advantage is our people and a new trade accord should include:

  • Bringing the list of professions eligible for fast-track cross-border access into the digital age. The skilled trades workers who are enabling North American energy independence also need to move back and forth with ease.
  • Speeding up the re-qualification system for professionals needed on the job now.

Mr. Trump wants a better deal for American workers.

Main Street America never appreciated the value of NAFTA in part because U.S. leaders did a lousy job in explaining – and sharing – the value of continental trade while failing to adequately help those left behind through global competition and technological changes.

We did it better in Canada but an overhaul of the NAFTA accord on Labour Cooperation is in the interests of all three countries. Why not make a joint commitment to adjustment assistance and retraining as a basic right for workers?

Mr. Trump’s promise to build a wall and to increase deportations to Mexico has led some to wonder whether we’d be better to go it alone with the U.S. leaving Mexico to fend for itself. Divide and conquer is integral to Mr. Trump’s Art of the Deal. Working with Mexico will avoid that trap.

Mexico is now our third largest trading partner. We have major investments in Mexico and, with a middle class of 44 million people, Mexico is a market that will only increase. By 2050, Mexico is expected to rank fifth in global economic weight.

Mr. Trump wants another look at country-of-origin-labelling (COOL), a protectionist measure that curtailed our meat exports. Working closely with Mexico, our joint efforts resulted in Congress repealing COOL last December.

On COOL and those many issues where Canada and Mexico share common cause – including trade, climate and energy – we need to continue working together. On the border and security, we will diverge at times, reflecting our own interests but we should work in tandem. Our shared and overriding principle with Mexico should be no surprises and constant communication at all levels.

Re-opening a deal that is past its best-before date is an opportunity that all three nations should embrace. It’s time to bring NAFTA into the digital age.

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

NEW PODCAST: ‘THE GLOBAL EXCHANGE’
“NAFTA and Trump: a Discussion on the Future of Trade“

On today’s ‘Global Exchange‘ Podcast, we invited two experts on trade to discuss the implications of a Trump Presidency for NAFTA, TPP, and the status-quo trade regime as it stands today. Join Colin, John Weekes, and Rob Wright as they probe the future of trade in an era of rising populism and protectionism.

Bios:

  • Colin Robertson (host) – A former Canadian diplomat, Colin Robertson is Vice President of the Canadian Global Affairs Institute and a Senior Advisor to Dentons LLP.
  • Rob Wright – Rob Wright served as Canadian Ambassador to China from 2005-2009, and as Ambassador to Japan from 2001-2005. From 1995-2001 he was the Canadian Deputy Minister for International Trade.
  • John Weekes – Canada’s ambassador to the WTO from 1995-99 and a chief negotiator of the NAFTA trade agreement.


Related Links:

 

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Colin Robertson, December 7th 2016 | Tags: , , , , , ,
Posted in op-ed

Canada, Mexico et Trump

Experts urge Ottawa to strengthen ties with Mexico

Michelle Zilio

OTTAWA — The Globe and Mail

Published

Canada must continue to engage with Mexico if Donald Trump withdraws from the North American free-trade agreement and isolates the Latin American country, two leading experts in Canada-U.S. relations urge.

Speaking to the Senate foreign-affairs committee Thursday, Laura Dawson, director of the Canada Institute at the Woodrow Wilson Center in Washington, said Canada must make every effort to strengthen its relationship with Mexico as Mr. Trump moves into the White House with his anti-trade policies and plans to build a wall along the Mexican border.

“If the worst happens and the United States does withdraw from NAFTA and does impose the punitive policies that we hear about towards Mexico, it does not benefit Canada at all to pull away from that relationship as well,” Ms. Dawson said.

Campbell Clark: Amid fear over Trump, Mexico could lose Canada as an ally

Read more: What’s at stake for Canada, Mexico and the U.S. in Trump’s new NAFTA

Opinion: What would Canada-U.S. trade relations look like without NAFTA?

Colin Robertson, a former diplomat and vice-president and fellow at the Canadian Global Affairs Institute, says that Mr. Trump’s election has been incredibly troublesome to Canada’s relationship with the U.S. and Mexico.

“The election of Donald Trump is proving, at least in the short term, as disruptive to Canada-U.S. relations and Canada-Mexico relations as 9/11,” Mr. Robertson said. “Strengthening the partnership with Mexico makes strategic sense for Canada.”

Mr. Robertson said the Liberal government’s decision to lift a visa requirement on Mexicans wishing to enter the country is a good first step to improving relations with Mexico, but more needs to be done.

He suggested Prime Minister Justin Trudeau make the relationship a priority by putting Mexico on his travel agenda for 2017 and bringing the premiers with him on the trip. He also suggested that Governor-General David Johnston visit Mexico with the presidents of various Canadian universities in an effort to encourage Mexican students to study in Canada.

Mr. Robertson said Canada can also boost trade with Mexico, regardless of whether Mr. Trump follows through with his with his anti-trade agenda. With Mr. Trump promising to withdraw from the Trans-Pacific Partnership, essentially killing the trade deal without U.S. support, he said Canada and Mexico – both of which are signatories to the TPP – still have a chance to salvage parts of the TPP and the North American free-trade Agreement.

“If the United States were to pull out of NAFTA, NAFTA in fact remains in place between Canada and Mexico and I think that we should be looking at a number of the things we were going to be doing with the United States in the Trans-Pacific Partnership and apply them, which we could do, to an updated Canada-Mexico agreement,” he said.

However, it appears Mr. Trump may be rethinking his campaign promise to pull out of NAFTA. In a 2½-minute video statement Monday where he unveiled his plans for his first 100 days in office, he did not mention NAFTA.

Ms. Dawson said Mr. Trump may change his tune on the trade deal once he hears the American business community’s reaction.

“Business was understandably silent during the U.S. election,” she said. “Now that we have a president-elect, I think business is going to be lined up down Pennsylvania Avenue explaining to the new administration how important trilateral supply chains are.”

In the case that the United States stays in NAFTA, Canada could use the opportunity to renegotiate parts of the massive trade deal to its benefit. Mr. Trudeau has already said Canada is more than happy to talk about trade deals, including NAFTA, if other countries want to reopen them.

Mr. Robertson said Canada would likely negotiate more professions onto the NAFTA mobility list and improved border access for Canadians entering the United States. On the American side, he suspects the United States would push for better protection of intellectual property.

In the meantime, Mr. Robertson said it’s time for the government to start re-educating the Canadian public on the importance of trade to the country.

“We stopped doing that in the mid-nineties and I think that’s a big mistake. I think we have to go back because Canada, of all the countries in the G8, we are really dependent on trade,” Mr. Robertson said.

Also on The Globe and Mail

Is TPP dead after Trump vows to pull out? (Reuters)

More Related to this Story

Élections de Donald Trump: le Canada ne doit pas abandonner le Mexique

Guillaume St-Pierre | Agence QMI

| Publié le – Mis à jour

Donald Trump Holds Meeting At The New York Times

AFP

Alors que le président élu américain Donald Trump est prêt à brûler les ponts avec le Mexique, le Canada doit à l’inverse resserrer ses liens avec ce pays.

C’est du moins l’avis de deux experts entendus devant un comité du Sénat, jeudi.

Le chercheur de l’Université de Calgary, Colin Robertson, a dressé un constat sans appel: l’élection de Donald Trump à la Maison-Blanche perturbe avec la même intensité que les attentats du 11 septembre la relation tripartite entre le Canada, le Mexique et les États-Unis.Bien qu’il ait adouci ses positions depuis les élections, Donald Trump a promis de renvoyer des millions de Mexicains «illégaux», de construire un mur à la frontière du Mexique et de déchirer le traité commercial liant les trois pays d’Amérique du Nord.

Dans ce contexte, le gouvernement canadien doit résister à la tentation de tourner le dos à son partenaire mexicain, comme l’ont suggéré certains depuis l’élection de M. Trump.

«Je pense que c’est la mauvaise approche, a affirmé M. Robertson. Nous devons au contraire collaborer avec le Mexique sur les enjeux qui nous concernent.»

Sur l’environnement, par exemple, si les États-Unis décident de se retirer de l’Accord de Paris, «il y a beaucoup de choses que nous pouvons accomplir avec le Mexique», a-t-il expliqué.

Concernant les dossiers touchant à l’énergie, au commerce, ainsi que le sort de l’ALÉNA, Ottawa doit aussi garder ouverts les canaux de communications avec le gouvernement du président mexicain Enrique Peña Nieto, a ajouté l’expert.

La directrice de l’Institut canadien, Laura Dawson, est tout aussi catégorique: «Se désengager du Mexique ne nous permettra pas d’atteindre nos objectifs stratégiques», a-t-elle dit.

«Cela ne va pas améliorer notre relation avec les États-Unis», a-t-elle prévenu. Selon la chercheuse, l’importance des relations canado-mexicaines est souvent sous-estimée en raison de barrières géographiques, culturelles et linguistiques.

Conserver des liens étroits avec le Mexique est aussi une bonne idée du point de vue des affaires, a plaidé Mme Dawson.

«Le Mexique ne vole pas des emplois au Canada. Il en crée, a-t-elle dit. Il offre de la main-d’oeuvre spécialisée et performante.»

Le marché mexicain est aussi une mine d’or pour les entreprises canadiennes, avec ses quelque 40 millions de personnes faisant partie «de la classe moyenne».

«Cette population veut se procurer des biens que le Canada a à vendre», a-t-elle affirmé, citant les «produits de beauté, les aliments de luxe, et les services financiers».

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Colin Robertson, November 24th 2016 | Tags: , , , , , , ,
Posted in Newspaper

Managing Trump

Trudeau-Trump will be no ‘bromance’

Colin Robertson The Globe and Mail 

This week’s election result surprised most Canadians, but now we need to prepare for a Trump administration.

The kind of “bromance” Prime Minister Justin Trudeau developed with U.S. President Barack Obama is unlikely to be repeated. Nevertheless, Mr. Trudeau needs to personally lead Canadian efforts to exercise, as he once put it, “effective influence” in Donald Trump’s Washington in order to advance Canadian objectives.

Premiers and legislators have to help. Our political leadership needs to reach out to Mr. Trump’s transition team and to Republican and Democratic leadership in Congress and in the States. Business and labour leaders need to step up with their counterparts to underline the shared value of our “strong integrated economies.”

Our message is simple: An integrated North American (including Mexican) approach to economic development, especially around energy, serves our mutual interests. Canadian outreach means identifying and calling our American friends to action.

Mr. Trump’s campaign agenda was mostly delivered in broad strokes. Now, we need to register our positions to help shape his administration’s policy direction. Rather than trying to boil the ocean, our efforts should focus on three areas:

  • Security: Mr. Trump expects North Atlantic Treaty Organization allies to pull their weight.
  • Trade: Mr. Trump wants a revision of the North American free-trade agreement because of American job losses.
  • Energy: Mr. Trump calls for more drilling of fossil fuels, fewer regulations and withdrawal from the Paris Agreement.

On trade, we need to remind Mr. Trump’s team that Canadian trade and investment is behind an estimated nine million American jobs. Nearly 80 per cent of what Canada sells to the United States goes into American-made goods and services.

Mr. Trump wants an ambitious infrastructure building program. We need to figure out how to integrate our governments’ infrastructure programs into this effort and so improve our mutual competitiveness.

The message on burden-sharing is not new, although Mr. Trump delivers it in his characteristic blunt fashion. We need to look anew at the defence review, especially the pace and scope of our figher-jet replacement and fleet renewal. Reaching the NATO spending target is important. U.S. national security leadership will confirm that co-operation between our military, security and intelligence services is excellent. We are also contributing to the campaign against the Islamic State, putting boots on the ground in Latvia and reinvigorating Canadian peace operations.

On energy, Mr. Trump promises approval of the Keystone XL pipeline. We need to persuade his team to look at energy as a continental resource that, if we manage it well, will fuel the manufacturing renaissance he wants to create.

While Mr. Trump may not be immediately receptive, there are allies in Congress who support continuing collaboration on clean energy because it makes sense and creates jobs. Meantime, we need to move on pipelines to tidewater within Canada so we can get full value from our natural inheritance.

At his first meeting with Mr. Trump, Mr. Trudeau must avoid falling into what former secretary of state Condoleezza Rice described as the Canadian penchant for focusing on “condominium issues,” and instead focus on getting to know one another.

If we have one ask, it should be to continue the North American energy ministers’ meetings. It has been a successful catalyst for practical action. Leave the “transactionals” for later discussions at the ministerial and ambassadorial level.

The byword going forward, for federal and provincial governments, should be constant engagement with their counterparts in the United States. The best way to shield ourselves from populism and protectionism is by personally making our case to Americans.

Success will depend on cultivating and sustaining relationships at all levels through a thousand points of contact. For example, Canadian premiers and legislators should attend inaugurations for the new governors, especially those elected in the five border-state elections. Canadian parliamentarians, business and labour leaders should plan to head south for the presidential inauguration and then join Americans to watch the parade from the Canadian embassy. Our snowbirds need to remind their American friends how Canada supports their security and how our trade and investment creates their jobs.

To help better understand the public mood that led so many Americans to vote for Mr. Trump, read J.D. Vance’s Hillbilly Elegy. One astute former U.S. ambassador has observed that Canadians think that they know all they need to know about the United States, while Americans think they know all they need to know about Canada – but we are both wrong.

As Canadians learned again this week, there is still a lot we need to learn and understand about our southern neighbours – and, just as important, that we need to help them understand about us.

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Colin Robertson, November 11th 2016 | Tags: , , ,
Posted in Uncategorized
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