Stephen Chase, Greg Keenan and Adrian Morrow, writing in the Globe and Mail, say that “Canada will give no ground on the Trump administration’s protectionist demands when the renegotiation of the North American free-trade agreement resumes this week in Mexico City, but will try to quickly reach deals on easier issues in hopes of showing goodwill, sources familiar with Ottawa’s strategy said … [and] … The Trudeau government is well aware that taking a hard line on Washington’s “poison pill” proposals risks blowing up the talks, said the sources, who spoke on condition of anonymity to describe confidential discussions. But Ottawa believes failing to reach a deal on NAFTA is better than agreeing to a bad one.“
I think that is a good tactic. I appears, to me, that President Trump is intent of bailing out of NAFTA for his own (incredibly stupid) reasons … maybe because he’s such a poor businessman that he cannot recognize a good deal when he sees one. Canada, and the world, may have to wait until America comes to its collective, political senses, and dispenses with the Clintons, Trumps and Sanders and looks to the moderate middle, again, for real leadership.
“Outside the talks,” the Globe reports say, “Canadian officials will continue their long-running outreach campaign to NAFTA-friendly U.S. businesses and politicians, in hopes of both cranking up domestic pressure on the White House to back off its toughest demands and mobilize Congress to oppose President Donald Trump if he tries to pull the United States out of the pact, the sources said … [and] … No matter how badly talks go, the sources said, Canada is determined to stay at the table and force the Trump administration to decide whether it will pull the plug. One person said that if negotiations become permanently deadlocked – or Mr. Trump ends up in a standoff with Congress on whether he has the unilateral power to pull the United States out of the pact – this would not be the worst outcome for Canada as the current deal would simply remain in place.” I believe it is important to be, and to be seen to be, a reasonable, responsible negotiating partner in ALL trade negotiations … even when negotiating with Donald Trump.
They also report that “In Ottawa’s view, Washington’s main protectionist demands are so far beyond the pale of any modern free-trade agreement that – at least for now – negotiators must continue to hold a hard line against them all, according to sources with knowledge of the Canadian thinking. These include proposals to require that vehicles made in Canada and Mexico contain 50-per-cent U.S. content; gut or eliminate the dispute-resolution mechanisms in Chapters 11, 19 and 20; severely limit the amount of U.S. public procurement Canadian and Mexican firms can bid on; and add a sunset clause that would kill NAFTA in five years unless all three countries agreed to keep it.” I agree with what the Globe and Mail suggests is the Trudeau regime’s position: better no deal than Trump’s terms.
Canadians, including those in government, need to remember that our most vital and valuable foreign relationship is with the USA: it is more important to us, day-in and day-out, than China and the EU combined. NAFTA is good for us and for America and, as the Globe reports point out, “The President’s own congressional caucus could also prove a counterweight to the White House. Unlike Mr. Trump, most of the Republican Party hews to a traditional pro-business line on free trade … [and] … During Prime Minister Justin Trudeau’s meeting last month with the House ways and means committee, not a single member advocated tearing up NAFTA, said one person who was in the room. Members of the committee, which has jurisdiction over trade, suggested various ways to improve the deal, but all were supportive of largely keeping the open market in place, the source said.” The article also says that US industry association lobbyists, including from the Big Three automakers, are pressuring the White House to hold on to NAfTA, but President Trump seems intent on having his own, wholly illogical way. It needs to be remembered that for most US states Canada is their biggest export market.
Meanwhile Canada must work to make the CETA (Canada-EU free(er) trade deal) work and to get into either the TPP or, better, in my opinion, the RCEP to enhance free(er) trade with Asia. We also need a Canada-UK deal or, even better, a CANZUK pact. Negotiating, seriously, including giving ground on some contentious issues like dairy supply management will demonstrate to the US that Canada is serious about improving trade deals And trading freely and fairly … IF NAFTA fails then it will be 100% President’s Trump’s decision and he will wear the US job losses, especially in the service industry.
As I have pointed out, just days ago, President Trump appears to have lost the confidence of pretty much the whole world … largely because he is perceived to be a dishonest, untrustworthy, bullying buffoon. But most thinking people believe that America is down, but not out, so we do not want to burn bridges with anyone except, perhaps, Donald Trump.
While I think Team Trudeau is using good tactics to deal with President rump, I am worried about its overall strategy. I understand that many, many, perhaps even most Canadians are wary of if not downright opposed to free(er) trade with anyone ~ protectionism is simple, easy to understand and appeals to the weak minded. But Canada needs to be a trading nation: our own, domestic, internal market is too small and factors like geography make real productivity hard to achieve. Our leaders ~ if they are real leaders, not just cardboard cutouts ~ should want to make Canada an exemplary trading nation: willing to negotiate firmly and fairly, wiling to give as well as to take, willing to accept short term pain for long term gain. That’s a political hard sell, especially to the laurentian Elites and the Quebec dairy farmers, and the labour unions, but it is the right strategic position for a huge, resource rich, sophisticated, mix economy country like Canada.