John Dela­court

Get­ting to NAFTA: The Strategic Prin­ci­ples De­ter­min­ing Canada’s Ap­proach

Policy - - In This Issue - John Dela­court

Many in Ottawa—and in Wash­ing­ton, for that mat­ter— were baf­fled by the Trudeau gov­ern­ment’s pre-emp­tive of­fer to re-open NAFTA in the hours im­me­di­ately fol­low­ing Don­ald Trump’s elec­tion vic­tory. But while the Amer­i­can pres­i­dent’s volatil­ity de­mands the sort of diplo­matic in­no­va­tions nor­mally ex­erted in deal­ing with rogue states, long-time Lib­eral strate­gist John Dela­court says the Trudeau team’s got this.

At the time of this writ­ing, the first round of the North Amer­i­can Free Trade Agree­ment (NAFTA) ne­go­ti­a­tions—or rene­go­ti­a­tions, if you will – has just con­cluded. What prom­ises to be the most im­por­tant pol­icy process for the Cana­dian econ­omy and a piv­otal test for the Trudeau gov­ern­ment has been up­staged by the on­go­ing tur­moil of the Trump ad­min­is­tra­tion. It is dif­fi­cult not to read any pos­i­tive de­vel­op­ments or set­backs in the ne­go­ti­a­tions as pro­vi­sional, given the lead­er­ship cri­sis at the White House. Yet, within the Prime Min­is­ter’s Of­fice (PMO) and the Privy Coun­cil (PCO), the strategic fo­cus on the im­por­tance of these talks has not wa­vered since that first morn­ing Amer­i­cans woke up to Don­ald Trump as their pres­i­dent.

Though the talks may yet dis­solve in ac­ri­mony, Canada’s team comes to the ne­go­ti­at­ing ta­ble with one inar­guable ad­van­tage; sound strategic prin­ci­ples have guided their ev­ery move to get us here. This is an achieve­ment all the more re­mark­able with a gov­ern­ment that was barely into its first man­date when Trump the pres­i­den­tial can­di­date first warned of his am­bi­tions for NAFTA. What fol­lows is a brief enu­mer­a­tion of the ways in which the best con­di­tions for a favourable out­come have been es­tab­lished.

1. The Best De­fence is Of­fence

It seems so very long ago now that an Ottawa mi­cro-con­tro­versy erupted over the Trudeau gov­ern­ment’s first salvo in the NAFTA rene­go­ti­a­tions. In the days that fol­lowed the Trump vic­tory, Trudeau did not wait to find out if the new pres­i­dent was true to his words that NAFTA had to be “torn up” be­cause it was a “bad deal” for Amer­i­can work­ers. There was ev­ery in­di­ca­tion that the tone and in­deed the course of any di­a­logue on trade be­tween our two coun­tries would be op­po­si­tional, if not hos­tile. As in deal­ing with any op­po­nent in the po­lit­i­cal arena, he who sets the frame, de­ter­min­ing the rules of en­gage­ment, has the ad­van­tage.

And so it was that Trudeau sig­naled, through Canada’s am­bas­sador to the U.S., David MacNaughton, that we were “pre­pared to talk … that the agree­ment as it stands has ben­e­fited all three coun­tries but … any­thing can be im­proved and so we’re open to hav­ing dis­cus­sions.”

The crit­i­cism from the Cana­dian op­po­si­tion and in­deed from for­mer Re­pub­li­can pres­i­den­tial can­di­date Rick San­to­rum at the time was that Canada was ill ad­vised to wake the bear, that we would soon be at a dis­ad­van­tage as our pow­er­ful neigh­bour trained its eye on where it could ex­ert in­flu­ence to Canada’s eco­nomic dis­ad­van­tage. And yet, by set­ting the frame, Canada was able to af­firm that we were trade part­ners rather than ad­ver­saries. With a mav­er­ick ad­min­is­tra­tion whose key ad­vis­ers were new to state­craft, Trudeau’s team cor­rectly read that Trump would be look­ing for al­lies on the in­ter­na­tional stage, given how am­bi­tious his team was—and re­mains—in re­defin­ing Amer­ica’s place in the world.

2. Re­la­tion­ships are Ev­ery­thing Re­cently, just prior to the fir­ing of Trump’s key ad­viser Steve Ban­non, much was made in the Cana­dian me­dia of a New Yorker piece by Ryan Lizza, in which Trudeau’s prin­ci­pal sec­re­tary, Gerry Butts, was de­picted as be­ing good friends with alt-right Trump ad­vi­sor Steve Ban­non. Ban­non, now back at Bre­it­bart News, is as close to an arch-vil­lain, emi­nence grise char­ac­ter for Amer­i­can pro­gres­sives as it would be pos­si­ble to cast. Lizza wrote that Butts and Ban­non of­ten talked strat­egy and Butts had even of­fered up some ad­vice on tax pol­icy that would ap­peal to the mid­dle class. The im­pli­ca­tion for Cana­dian pro­gres­sives

was that a new light was cast on Butts, and by as­so­ci­a­tion, Trudeau. Be­hind the cur­tain that blocked out the sunny ways, a cold, cyn­i­cal, cal­cu­lat­ing game was be­ing played.

Less cyn­i­cal and cal­cu­lat­ing than sim­ply nec­es­sary. Any re­la­tion­ship, no mat­ter how trans­ac­tional, re­quires a work­ing rap­port. And it fol­lows that if there is no re­la­tion­ship more im­por­tant to the Cana­dian econ­omy than ours with the U.S., the im­por­tance of the rap­port be­tween key ad­vis­ers is only that much greater. As for the pur­port­edly con­ge­nial re­la­tion­ship be­tween Katie Telford, Trudeau’s chief of staff, and Ivanka Trump and Jared Kush­ner, the abil­ity to find com­mon ground with those clos­est to Trump him­self may yet turn out to be the best in­sur­ance pol­icy we’ll have against im­pul­sive de­ci­sions by the pres­i­dent.

3. This ‘Spe­cial Re­la­tion­ship’ Re­quires Spe­cial Teams

As one se­nior Lib­eral told me fol­low­ing the Trump vic­tory in 2016, the chal­lenge Trudeau’s team faced at the time was that, even prior to his vic­tory in the Lib­eral lead­er­ship race, they had de­vel­oped strong ties to the Democrats and had drawn in­spi­ra­tion, if not a sig­nif­i­cant part of the 2015 cam­paign’s field op­er­a­tions play­book, from the best prac­tices honed by two Obama vic­to­ries. And if there had been any sig­nif­i­cant out­reach at all to Repub­li­cans dur­ing this pe­riod, it would have had mar­ginal in­flu­ence at best, given the Trump team’s frac­tious re­la­tion­ship with the old guard of the GOP. The first pri­or­ity for Canada-U.S. re­la­tions was to fig­ure out who among the Lib­eral cau­cus, the se­nior ranks of the pub­lic ser­vice and yes, among the Con­ser­va­tive op­po­si­tion could ex­ert real in­flu­ence in the months to come.

Much has al­ready been said and writ­ten about For­eign Af­fairs Min­is­ter Chrys­tia Free­land’s rapid as­cent to a pre-em­i­nent role within Cabi­net, given her wide range of key con­tacts both on Wall Street and in Wash­ing­ton, but Free­land re­quired a spe­cial unit work­ing closely with her to lay the nec­es­sary ground­work go­ing into the first round of ne­go­ti­a­tions. This is the Canada-U.S. Re­la­tions Unit work­ing within the PMO. The core of this team, led by Brian Clow, her for­mer chief of staff when she was at In­ter­na­tional Trade, in­cludes a few of her most ef­fec­tive and dependable staffers from that time. The unit op­er­ates within a kind of war room set­ting, man­ag­ing stake­holder en­gage­ment and rapid re­sponse is­sues man­age­ment a short stroll down the hall from where Butts, Telford and team run the PMO.

Yet just as vi­tal to their ef­fec­tive­ness is their link to the Cana­dian Em­bassy’s op­er­a­tions in Wash­ing­ton, with David MacNaughton play­ing an ac­tive role in en­sur­ing no Cana­dian in­dus­try or sec­tor doesn’t have a game plan with a clear-eyed un­der­stand­ing of what’s on the ta­ble—and what’s at risk. For this is key to the of­fence strat­egy: fo­cus on the re­gions and in­dus­tries where the U.S. has more to lose than gain in terms of jobs and eco­nomic de­vel­op­ment and en­sure that the of­fices of U.S. Trade Rep­re­sen­ta­tive Robert Lighthizer and Com­merce Sec­re­tary Wil­bur Ross are duly ap­prised.

This over­ar­ch­ing ob­jec­tive has dic­tated re­lated “spe­cial teams” ac­tiv­ity within the spe­cial Cabi­net Com­mit­tee on Canada-US re­la­tions as well, led by Trans­port Min­is­ter Marc Garneau. Garneau and An­drew Les­lie, in his role as par­lia­men­tary sec­re­tary to Free­land, have taken the lead, work­ing their strong con­tacts within the Pen­tagon and the Wash­ing­ton man­dar­i­nate—links forged dur­ing their years in se­nior roles with the Cana­dian Space Agency and the Armed Forces, re­spec­tively. Yet all key Cabi­net Min­is­ters, in­clud­ing In­no­va­tion Min­is­ter Navdeep Bains and Fi­nance Min­is­ter Bill Morneau, have been play­ing ev­ery an­gle in the key states that have the most to lose if Cana­dian ex­ports are sud­denly priced out of the mar­ket.

All of this work is sup­ported and co­or­di­nated by the ul­ti­mate spe­cial team, the NAFTA ne­go­tia­tors led by Steve Ver­heul, work­ing out of Global Af­fairs. Ver­heul and his col­league Martin Moen kept their com­po­sure and held the line dur­ing the most pre-

car­i­ous de­vel­op­ments in the Canada-Euro­pean Union (EU) Com­pre­hen­sive Eco­nomic and Trade Agree­ment (CETA) talks. It’s that poker-faced de­meanour and eye for the de­tails that could prove piv­otal as the talks progress.

4. Fo­cus on Where the Votes Can’t Af­ford to be Lost

It may yet turn out to be one of the hap­pi­est ac­ci­dents of con­tem­po­rary Cana­dian his­tory that one could over­lay a map of the states that de­cided Trump’s vic­tory on top of those where Canada is each state’s big­gest trad­ing part­ner to re­veal a vir­tual match. The re­gions most vul­ner­a­ble to re­tal­ia­tory mea­sures from Canada have the votes Trump and the Repub­li­cans need to main­tain their grip on power. When “Buy Amer­i­can” and “Amer­ica First” trade pol­icy can lead to sig­nif­i­cant losses of Amer­i­can jobs at the bar­gain­ing ta­ble, those newly un­em­ployed are less likely to cast

Ul­ti­mately, what will dic­tate the course of these ne­go­ti­a­tions, no mat­ter how long they go on, will be how clearly the risks and re­wards in po­lit­i­cal cap­i­tal are wa­gered on both sides of the ta­ble. The chips do not fall where they may—they fall in key con­stituen­cies across the U.S.

their bal­lots—or even show up—for the next elec­tion.

It is as­sured that a team of ad­vis­ers that cam­paigned for Trudeau—and that re­mains work­ing for him—will keep the po­lit­i­cal lens on all strategic con­sid­er­a­tions, first and fore­most. Ul­ti­mately, what will dic­tate the course of these ne­go­ti­a­tions, no mat­ter how long they go on, will be how clearly the risks and re­wards in po­lit­i­cal cap­i­tal are wa­gered on both sides of the ta­ble. The chips do not fall where they may—they fall in key con­stituen­cies across the U.S.

Still, de­spite the sound strategic think­ing at work for Canada, the Rums­fel­dian known un­knowns re­main. Mex­ico’s role in these ne­go­ti­a­tions, much like the chaos within the West Wing, could add plot points that will ei­ther fore­stall or fos­ter un­ex­pected res­o­lu­tions in the mak­ings of a re­newed and mod­ern­ized agree­ment. Yet the Trudeau gov­ern­ment has rightly un­der­stood these ne­go­ti­a­tions as a cru­cible, and quite pos­si­bly the de­ter­min­ing fac­tor for a man­date be­yond the next elec­tion cy­cle.

Adam Scotti photo

Prime Min­is­ter Trudeau and For­eign Af­fairs Min­is­ter Free­land speak with Pres­i­dent Trump dur­ing the G7 in Taormina. May 27, 2017.

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