Canada-US Relations

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Look to the new NAFTA for the roadmap to the future of the Canada-U.S. bond

The CUSMA odyssey reminds us that our advocacy with Congress and the states must be a permanent campaign.
Then-Mexican President Enrique Peña Nieto, U.S. President Donald Trump, and Prime Minister Justin Trudeau attend a CUSMA signing ceremony on Nov. 30, 2018, in Buenos Aires, Argentina. White House photograph by Shealah Craighead

Canadian leadership needs to move beyond COVID-19 border controls and turn to implementing the Canada-U.S.-Mexico Free Trade Agreement. In what is already a divisive U.S. election, we must also avoid anything that could be construed as interference.

The Nov. 3 elections will decide not just the presidency, but also, crucially, one-third of the Senate plus all 435 members of the House of Representatives as well as 11 governors, including in five border states—Washington, Montana, North Dakota, New Hampshire, and Vermont.

If it’s a referendum on the economy and direction of the country, then change is probable, but as former British prime minister Harold Wilson observed “a week is a long time in politics.” Most Canadians hope for deliverance from the Donald Trump show, but odds-makers still favour the president, so Canadian leaders should keep their thoughts to themselves.

The top table discussions between prime ministers and presidents concentrate on global issues and it’s more complicated with an administration that rejects multilateralism. Our diplomatic game needs to be in top form. Canada is already suffering collateral damage as the Sino-U.S. trade dispute morphs into Cold War territory. There will be more of a requirement for the kind of helpful fixing we are demonstrating through reforming the World Trade Organization’s dispute settlement and on Venezuela though the Lima Group.

For most Canadians, what matters is the intermestic connections. These have been brought home with the COVID-imposed border controls. They fit into three broad baskets: trade and economics; climate, energy, and the environment; and security and defence. With three-quarters of our trade headed south, Canadians naturally prioritize trade and economics, but for the Americans, the top item is defence and security.

COVID-19 has fundamentally shocked both our economies. Our approach to relief is different but, with luck, our recoveries will be in tandem. Fortunately, the CUSMA, taking effect on July 1, gives us a mutually agreed set of rules, including provisions for digital trade that have accelerated with COVID.

COVID raised questions about the reliability of North American supply chains. Despite the planning on pandemics negotiated in 2012 by then-U.S. president Barack Obama, then-Mexican president Felipe Calderón, and then-prime minister Stephen Harper, there was limited North American co-ordination. We have got to do better, because the next time is likely to be sooner rather than later. Business has stepped up and governments should look to their call for a “North American Rebound,” especially around designing North American supply chains and creating strategic stockpiles.

With the Trump Administration in denial on climate change, the best Canadian approach is to work with those in Congress, states, and cities who share our approach. If Joe Biden is elected, then Keystone once more will be a flashpoint, but let’s not make it the litmus test of the relationship.

We also need to keep our eyes on the renegotiation of the Columbia River Treaty. Water management is increasingly complex given the interests involved. For now, the complicity between the different levels of government is what we aim for when negotiating with the Americans.

Trump wants the allies to spend at least two per cent of their GDP on defence. Canada currently spends about 1.3 per cent of GDP. Arguably we are doing our bit: active naval deployments in the Atlantic and Mediterranean; in Latvia where we lead the battle group; in the air with the Trudeau government doubling to 12 our deployable fighter jets.

But the Americans expect more and this won’t change with Biden. We should do more, especially in the Arctic around North American defence. The Russians are testing our defences and the Chinese are already implementing their Arctic strategy. The framework we announced last year is inadequate. We need a detailed strategy with funding for infrastructure and sustained operations. As the Americans remind us: “you claim sovereignty, so exercise it.” It’s also our best “defence against help.”

Then there is the decision on 5G:  do we use Huawei equipment in our next-generation telecommunications platform?  President Trump is clear—use China’s Huawei and Canadian membership in our shared Five Eyes intelligence network with the U.S., Australia, New Zealand, and the United Kingdom will be in jeopardy. Business needs a decision. Punting the decision until after the U.S. election isn’t likely to change U.S. attitudes, as the Democrats are just as adamant about excluding Huawei.

The CUSMA odyssey reminds us that our advocacy with Congress and the states must be a permanent campaign. Close engagement is the responsibility not just of the prime minister and ministers but premiers and provincial legislators, as well as business and labour.

COVID’s social distancing robs us of the regional gatherings of premiers and governors, legislators, and civil society that constitute the hidden wiring of the relationship. In their weekly COVID calls, the prime minister and premiers should identify new opportunities for this vital informal engagement. Our prosperity and sovereignty depend on it.