Ex-U.S. ambassador says Biden wouldn't end protectionism

Wilkins points to `Build Back Better' plan

OTTAWA • A former American envoy to Canada says trade relations between the two countries are unlikely to substantially improve regardless of who wins the U.S. election, suggesting a Joe Biden presidency could be “more protectionist” than the last four years under Donald Trump.

David Wilkins, a former Republican ambassador who served under George W. Bush, said a US$700-billion spending package proposed by Biden would include a raft of so-called “Buy American” provisions that would prioritize domestic manufacturers over foreign ones.

The former ambassador and other experts are largely in agreement that Canada’s trade relationship with the U.S. would be less volatile under Biden, after a bellicose Trump administration over the past four years slapped tariffs on Canadian supplies of steel and aluminum, and threatened to tear up the previous North American trade pact.

But Wilkins warned that Biden’s “build back better” plan could point to broadly protectionist instincts, which in turn would “significantly adversely impact Canadian businesses and exports.”

“Despite the tariffs on softwood lumber and aluminum and steel by the Trump administration, I think a Biden Democratic majority in both the House and the Senate, if he does get that, will be much more protectionist than a Trump administration,” said Wilkins, who was taking part in a panel discussion hosted by the Canadian Chamber of Commerce on Tuesday.

The populist economic vision includes $700 billion in subsidies for manufacturing, clean energy, biotech and artificial intelligence, built where possible using U.S. materials and know-how “to ensure that the future is made in America, and in all of America,” the proposal says.

The former ambassador’s comments come as Ottawa continues to grapple with Trump’s protectionist trade policies, under which U.S. trade representative Robert Lighthizer has placed levies on Canadian raw steel and aluminum, citing “national security” concerns.

In September, Finance Minister Chrystia Freeland effectively accepted quotas on Canadian exports of unwrought aluminum into the U.S. until the end of 2020, which experts say could restrict the Canadian market should the Trump administration win re-election.

On Sept. 15, hours before Canada was preparing to unveil a number of counter-tariffs aimed at a range of American aluminum products, Lighthizer issued a surprise announcement saying that he would remove all tariffs against Canada. In return, he would limit the volume of raw aluminum Canadian manufacturers can export into the U.S. until the end of the year.

Freeland implicitly accepted the new market caps despite claiming in a news conference that “Canada does not accept quotas.”

Biden’s platform hints at removing so-called “Section 232” national security tariffs against Canada but does not mention aluminum quotas.

Also partaking in the Canadian Chamber of Commerce discussion was David MacNaughton, Canada’s ambassador to the U.S. from 2016 to 2019. He urged all trading partners in the U.S., Canada and Mexico to look past recent trade rifts and to increase ties in order to hasten a pandemic recovery.

“I just hope that everybody doesn’t retreat into their corner of the sandbox and play by themselves because this will cause both health risks and economic collapse,” he said.

All panellists were overall optimistic on the outlook for U.S.-Canada trade, even as disputes over softwood lumber and other products persist. The two countries share common interests on big questions like democratic freedoms, and are deeply dependent on one another in their respective supply chains, they said.

“We’re going be fine traders,” said Thomas Donohue, head of the United States Chamber of Commerce. “When the dust settles we’ll all get back to the business of the Canada-U.S. relationship.”

Donohue and many other industry groups in the U.S. lobbied hard against the Trump tariffs, arguing they would only increase costs for American consumers.

One of the most direct trade-related outcomes from the election is likely to be the future of the Keystone XL pipeline, proposed by Calgary-based TC Energy. Trump has long supported the project and is pushing for its progress, while Biden recently said the pipeline amounted to “tarsands we don’t need” in the U.S.

Also discussed on the panel was what a Biden versus Trump presidency would mean for the relationship between America and China, which has also soured on the trade front after leaders in both countries slapped tariffs on tens of billions in traded products.

The U.S. has been pressing its allies to resist the adoption of Chinese-made technologies, particularly the bid by Chinese telecoms giant Huawei to build a next-generation mobile network in Western nations.

“The reality is that there’s a consensus within the United States about the China situation, and I think that we’re in for at least a decade long struggle in terms of redefining the relationship between the West and China,” Mac

Naughton said.

WE'LL ALL GET BACK TO ... THE CANADA-U.S. RELATIONSHIP.

BRENDAN SMIALOWSKI / AFP VIA GETTY IMAGES FILES U.S. Democratic presidential candidate Joe Biden speaks about his Build Back Better economic recovery plan for working families in July. Former ambassador David Wilkins says its provisions would prioritize domestic manufacturers over foreign ones.