Canada USA Relations

‘It’s a very dangerous political place to be for the Conservative Party,’ Ambrose warns Tories not to attack Liberals on NAFTA

NAFTA advisory council member Rona Ambrose and other panelists also paint a gloomy picture of future Canada-U.S. trade relations and of U.S. President Donald Trump’s impact on the free trade consensus.
Moderator Colin Robertson, former Quebec premier Jean Charest, former interim Conservative leader Rona Ambrose, and former Chrétien-era communications director Peter Donolo, pictured May 8 on a panel at the Canadian Global Affairs Institute conference at the Rideau Club. The Hill Times photograph by Andrew Meade

OTTAWA—Former interim Conservative leader Rona Ambrose is warning the federal Tories to watch their attacks on the Liberals over the crucial NAFTA renegotiations because it could make them look “anti-Canada” which is not a big “vote-getter.”

“It’s a very dangerous political place to be for the Conservative Party of Canada to attack the Liberal government, which is working hard to come to a deal that’s in the best interest of Canada,” she told a packed room Monday at the Canadian Global Affairs Institute conference at the Rideau Club. “That would mean almost like you’re having to look like you’re taking the other side, which is Donald Trump’s side. That is not a politically smart place to be.”

Ms. Ambrose, who is now a Liberal-government-tapped member of the NAFTA Advisory Council and is based in Washington, D.C., with the Wilson Centre, said the NAFTA issue doesn’t garner a lot of votes and it isn’t a No. 1 issue for constituents or even the No. 10 issue. Ms. Ambrose was speaking at a panel discussion called ‘Positioning Canada in the Shifting International Oder.’ The panel focused on managing Mr. Trump’s ‘America First’ approach to foreign affairs and international trade, moderated by former diplomat Colin Robertson.

Ms. Ambrose was responding to Peter Donolo, former longtime communications director to former prime minister Jean Chrétien, who told the same audience that he believed the political consensus on NAFTA will eventually disappear and that Canada-U.S. relations will become a “live issue” again.

He said U.S. President Donald Trump’s approach to politics, often based on demonstrating “his opponent’s face has been grounded into the dirt” and humiliated, will not go over well with Canadian politicians.

“The term win-win is not in Mr. Trump’s lexicon,” said Mr. Donolo, now vice-chairman of Hill and Knowlton in Toronto. “I don’t think Mr. Scheer or Mr. Singh, who have been part of this elite consensus on NAFTA negotiations, are then going to congratulate Prime Minister Trudeau and his government for a great deal on the NAFTA renegotiation when that’s not the way politics works.”

Mr. Donolo predicted the political atmosphere is going to look like how it was when the United States invaded Iraq in 2003, when political parties were split on whether to participate in the conflict.

He pointed to how Mr. Trump’s rhetoric and actions have swayed Mexican politics, where leftist leader Andrés Manuel López Obrador is now leading in polls and is running on challenging Mr. Trump.

“There will be firm sides drawn and there won’t be a national consensus issue; where it will end, I don’t know. It’s not a healthy development.”

Ms. Ambrose, Mr. Donolo, and Jean Charest, former Quebec premier and Progressive Conservative leader, all spoke in Ottawa while Foreign Affairs Minister Chrystia Freeland (University-Rosedale, Ont.) and trade officials are in Washington for another critical round of talks, the last such discussions before renegotiations are halted to accommodate for presidential elections in Mexico in July and the midterm congressional race in the U.S. in November.

The negotiations fall under a global political backdrop of right-wing, populist, and trade-skeptic movements rising in many western democracies, including the United States, the United Kingdom, and France.

But in Canada, conservative politicians haven’t swung to the hard right and remain enthusiastically supportive of free trade, despite the belief, including from Ms. Ambrose, that movements in other countries have influenced some Canadians.

While Ms. Ambrose said she remains optimistic that a trade deal can be reached, she also painted a gloomy picture of Canada-U.S. relations, even if Mr. Trump doesn’t receive a second term in 2020.

“This romantic notion that the Americans are our best friends and biggest allies; that’s not the reality anymore,” she said.

“That’s not how they’re treating us in the trade arena. It’s how they’re treating us in other arenas. And it speaks to the fact we have to recognize their agenda, when it comes to ‘America First,’ is Canada is not just second, Canada’s maybe third, fourth, or maybe fifth down the line.”

Ms. Ambrose also said she doesn’t believe that Mr. Trump’s politics will be confined to one-term or that he’s a one-off politician the country won’t ever see again.

“I think the people who support him are alive and well and in fact growing, the type of politician that he is. We see some of these elements right in our own country. We see it in a number of western democratic countries,” she said.

But she also noted that a recent deal between the U.S. and South Korea was celebrated as a victory by both governments, possibly signalling that the Trump administration won’t take as hardline of an approach to trade deals in the future.

Ms. Ambrose said striking a deal on auto parts in the ongoing round of negotiations would mark a major breakthrough because it would give Mr. Trump a major political victory and a win for his political base, located in the country’s industrial heartland.

“If we can get something around autos, which is the absolutely sweet spot for Donald Trump…I think that is a win-win for Canada and the U.S.,” Ms. Ambrose said. “And I don’t think we’ll see him rub our faces in the dirt over that.”

Ms. Ambrose said Trump voters don’t care about wonkier issues such as the Chapter 19 dispute resolution mechanism, but striking a deal on auto parts will leave negotiations in better shape heading into election season.

“I’m a little more optimistic if those are the last things on the table,” she said. “As a politician, you’re looking at these things and going ‘Okay, we really want to get rid of Chapter 19, but what is that going to gain me in the states where I need votes.’ Not much because they don’t even understand it.”

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North American Energy Ministers meeting

As oil prices continue to slide, what North America really needs is a common energy strategy

Colin Robertson The Globe and Mail Wednesday, Dec. 10 2014, 3:00 AM EST

A North American energy strategy to help kickstart continental competitiveness. It is a tall order for our energy ministers who meet in trilateral discussion next week in Washington.

The Canadian, American and Mexican ministers – Greg Rickford, Ernest Moniz and Pedro Joaquin Coldwell, respectively – meet as followup to the leaders’ summit held last February in Toluca, Mexico. Their assignment: to promote common strategies on renewables, energy efficiency, infrastructure, innovation, and trade.

They chart a course against a turbulent international backdrop.

First, there is the economics of increased supply and diminishing demand. The price of a barrel of oil has dropped by a third to levels not seen since 2009. As energy expert Daniel Yergin observes, the demand for oil by China and emerging economies is “no longer the dominant factor”.

Rather it is the surge in U.S. (now the largest oil producer) and Canadian production that is decisive. But less demand has significant implications for Mexican and Canadian development and lower prices undermine governments’ revenue projections.

Second, there is the shifting energy geopolitical chessboard. Europe would like to wean itself off Russian and Middle East dependence but the logistics of getting oil and gas from North America to Europe are still years away. Nonetheless, the recent fall in oil prices demonstrates that OPEC is divided and no longer calls the shots and that Russia’s influence is falling along with the value of the ruble.

Third, there are the pressures of climate change. The World Meteorological Organization projects 2014 to be the hottest on record. Fourteen of the fifteen warmest years on record have occurred in the 21st century.

With these developments in mind, the energy ministers need to declare their intent to plan and collaboratively implement a North American energy strategy.

We live in an age of austerity and there is no appetite for yet another government body, so the first step should be to identify our existing centres of energy excellence and innovation.

The U.S. Energy Information Administration does a superb job in providing and presenting information in a comprehensible, comprehensive fashion. A stronger alliance with like agencies in Canada and Mexico could produce a “continental energy outlook” that would help guide investment decisions and smart choices on vital energy infrastructure.

Collectively, we need to define our vital infrastructure – pipelines, transmission lines, shipping, rail and trucking– and connectivity, that needs renovation (much of it is aging) to improve reliability and harden it against climate or cyber-assault.

We need a simpler approach to energy regulation.

For advice on the mechanics of energy regulation, the newly created Alberta Energy Regulator (AER) is well on the way to meeting its aspiration of becoming “best in class”. Mexico’s energy regulator, the Comisión Nacional de Hidrocarburos signed an agreement with AER in June to work collaboratively on regulatory best practices in the development of hydrocarbon resources.

We need sharing between companies on best practises in improving the environment..

An obvious model for continental adaptation is Canada’s Oil Sands Innovation Alliance (COSIA). It was established in 2012 as a collaborative consortium of the major companies in environmental stewardship. With investments of almost a billion dollars, COSIA’s 13 members have shared 777 distinct technologies and innovations reducing greenhouse gas emissions, water and land usage, and accelerating reclamation.

We need sustainable approaches to big development especially in terms of social license.

Quebec’s Plan Nord, the creation of Jean Charest, now resurrected by Premier Philippe Couillard, blends private-public partnerships with equity stakes for the aboriginal population. Covering 72 percent of Quebec – the equivalent of France and Texas combined – it will generate jobs and development. The Pew Trust describes Plan Nord as demonstrating global leadership in conservation and climate change and it is an obvious model for Mexico’s large-scale development projects.

In terms of deliverables, the energy ministers should encourage the North American energy industry to draw on best practices and establish common continental fracking standards. Our leaders could table them at the UN Climate Conference in Paris next December.

They also should look for opportunities to collaborate on promising areas of research and development related to renewable and low-carbon energy technologies.

North American leaders titled their February communiqué: ‘Building the Most Competitive and Dynamic Region in the World’. Presumptuous, perhaps, but Mexico’s ambitious reforms, the energy industry’s commitment to innovation, and shifting geopolitics create new opportunities. A North American energy strategy would be a great leap forward in continental economic integration.

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Free Trade in Canada

Why free trade is the unfinished business of Confederation

The Globe and Mail Friday, Aug. 22 2014

When our 13 provincial and territorial leaders meet next week in Charlottetown for their 55th annual conclave, they will discuss, yet again, how to create free trade within Canada.

It is the unfinished business of our Confederation.

The intention in the Constitution is clear: “All Articles of the Growth, Produce, or Manufacture of any one of the Provinces shall, from and after the Union, be admitted free into each of the other Provinces.”

But it didn’t work out that way. During our first half century a combination of interests – local and provincial, supported by the courts – resulted in a narrow definition of the federal commerce power. This yin yang over constitutional powers continues, as demonstrated in the Supreme Court’s 2011 decision to curb a national securities exchange.

Nearly 40 per cent of Canadian trade occurs within our borders. Economists estimate provincial protectionism costs us billions annually.

With Canada’s growth increasingly trade-driven, the premiers have become major advocates in the making of new deals and marketing our goods and services.

Then-premier of Quebec Jean Charest drove the campaign in 2007 to launch free-trade negotiations with the European Union. Saskatchewan Premier Brad Wall led the premiers to a Washington parley with U.S. governors in 2010 that sealed the procurement reciprocity agreement. Premiers sustained trade relations with China when the “new” Harper government had no time for the Middle Kingdom.

An Agreement on Internal Trade (AIT) was cobbled together 20 years ago by the federal and provincial governments but it lacks scope and teeth. As Industry Minister James Moore tells audiences: “The sad reality is that currently foreigners have greater trade benefits in Canada than our fellow Canadians do.”

Mr. Moore is not the first to observe that it is easier to find for sale across Canada a much wider variety of foreign products, notably beer, wine and cheese, than products made-in-Canada.

They are not the only examples of discriminatory differences. Truckers face different rules for weights, dimensions, tires, height and clearance. There are 39 different bodies regulating accounting standards. And good luck if you are an apprentice seeking to work in another province.

The business community, Western premiers and now the federal government are offering plans to achieve freer internal trade.

The Western premiers want to expand the vision of their New West Partnership (NWP) to the rest of Canada. Created in 2010, the New West Partnership opens the doors to trade, investment and labour mobility between British Columbia, Alberta and Saskatchewan. It also opens up procurement and creates a single business registry.

In a recent letter to their fellow premiers, advancing their principles for internal trade, NWP premiers’ Brad Wall, Christy Clark and Dave Hancock warned that the alternative is “anti-free trade behaviour which puts us on a slippery slope to protectionism.”

Business leadership has long argued for reform. This month they released a strategy document called A New Vision for Interprovincial Trade in Canada. It calls for a deal “as ambitious and comprehensive” as any with our foreign partners.

This week, Mr. Moore announced a policy paper, “One Canada, One National Economy,” designed to modernize internal trade in Canada, effectively scrapping the AIT, with regulators required to “align or explain.”

Out of these various proposals emerge common themes. The premiers should act on them.

First, all goods and services should be included except that which is negotiated specifically out of the deal. This is the approach used in the Canada-EU agreement and other international trade agreements.

Second, labour mobility. Mutual accreditation of trades – plumbers and electricians, nurses and teachers, including apprentices – is critical to success.

Third, open procurement that would remove the barriers to inter-provincial purchasing.

Fourth, mutual recognition, preferably harmonization, of regulation whereby any good or service made or delivered to one jurisdiction would be admitted into every other province or territory.

Fifth, strong governance, including an enforcement mechanism “with the teeth to make sure that we all play by the rules.”

We should emulate the Obama administration’s approach to regulatory reform and oblige Canada’s regulators to agree on common standards with an ambitious “lookback” to eliminate existing differences.

A hundred and fifty years ago an earlier generation of provincial leaders met in Charlottetown to see if “the sisterhood of the Provinces will form themselves into a great nation.”

Our current premiers need to finish the job and achieve free trade within Canada. They should set the deadline for July 1, 2017, the 150th anniversary of Confederation.

We’ve created freer trade within and between continents. Surely we can open trade within Canada.

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