Col­umn / Don New­man

Can NAFTA Sur­vive Trump?

Policy - - In This Issue - Col­umn / Don New­man

It is both sad and ter­ri­fy­ing to re­al­ize that much of Canada’s fu­ture eco­nomic pros­per­ity could de­pend on a man who is, at best, clearly un­pre­pared and un­suited for his job, and, at worst, men­tally un­sta­ble and un­able to con­duct it in any pre­dictable, co­her­ent of ef­fi­cient way. That man, of course, is Don­ald Trump. In mid-Au­gust, Canada and Mex­ico be­gan rene­go­ti­at­ing the North Amer­i­can Free Trade Agree­ment with the United States. Pres­i­dent Trump forced the ne­go­ti­a­tions on the two coun­tries af­ter first cam­paign­ing for and then win­ning the pres­i­dency by slag­ging NAFTA as “the worst trade deal ever signed by the United States.” Then in April, three months af­ter be­com­ing pres­i­dent, he threat­ened to tear up the 23-year-old agree­ment af­ter meet­ing a few Wis­con­sin Dairy farm­ers who com­plained about Canada’s sup­ply-man­aged milk mar­ket­ing sys­tem.

Trump was talked out of ex­it­ing NAFTA then by Prime Min­is­ter Justin Trudeau and most of his own White House eco­nomic ad­vis­ers. But now there is no guar­an­tee that the NAFTA talks that be­gan on Au­gust 16 in Wash­ing­ton won’t end up in the same place.

That’s be­cause since Trump took of­fice on Jan­uary 20, his White House has been in chaos.

First, there was his at­tempt at ban­ning im­mi­grants or vis­i­tors from seven Mus­lim ma­jor­ity coun­tries in the Mid­dle East that has been tied up in the courts since the end of Jan­uary. His at­tempts, along with Repub­li­cans on Capi­tol Hill to re­peal the health in­sur­ance pro­gram known as Oba­macare have been sim­i­larly un­suc­cess­ful. He has made no progress on chang­ing the tax struc­ture in the United States, or get­ting started on a ma­jor pub­licpri­vate in­fras­truc­ture pro­gram, both of which—along with health care and the NAFTA rene­go­ti­a­tion—were ma­jor cam­paign prom­ises. There is also a fed­eral bud­get due this fall, and ne­go­ti­a­tions with Congress to raise the fed­eral debt ceil­ing be­fore the U.S. gov­ern­ment stops pay­ing its bills.

In­stead of tend­ing to this busi­ness, Trump has in­stead been re­cently chal­leng­ing the equally un­sta­ble leader of North Korea, Kim Jong-un, with a war or words that threat­ens to es­ca­late into some­thing much more se­ri­ous. And be­yond that, the pres­i­dent mak­ing Au­gust par­tic­u­larly mem­o­rable by pub­licly sym­pa­thiz­ing with white su­prem­a­cists, neo-Nazis and de­fend­ers of mon­u­ments to Con­fed­er­ate gen­er­als. Un­der­ly­ing all of this is the on­go­ing spe­cial in­ves­ti­ga­tion into links be­tween Trump’s pres­i­den­tial cam­paign and Rus­sia. So far, Trump’s el­dest son, son-in-law and for­mer cam­paign chair­man have all been re­vealed as hav­ing Rus­sian con­nec­tions. The in­ves­ti­ga­tion con­tin­ues, and as long as it con­tin­ues, Trump is go­ing to be se­ri­ously dis­tracted.

Much of the world has, for the past 70 years, re­lied on the United States for eco­nomic, po­lit­i­cal and mil­i­tary lead­er­ship. Now, that lead­er­ship is evap­o­rat­ing in the ni­hilis­tic fog of Trump’s “Amer­ica First” rhetoric and poli­cies. No coun­try is in more im­me­di­ate peril than Canada. Along with Mex­ico over the past decades we have re­aligned our econ­omy to fit the NAFTA frame­work. To some ex­tent, the U.S. has, too. But with a much larger econ­omy and so many other trad­ing part­ners, Amer­ica with­out NAFTA would fare much bet­ter than ei­ther Canada or Mex­ico.

Trump cam­paigned on ei­ther rene­go­ti­at­ing NAFTA so it favoured the United States or leav­ing the pact. De­spite ear­lier say­ing NAFTA would need only a few “tweaks” as far as Canada is con­cerned, Amer­i­can ne­go­tia­tors have tabled a long list of one-sided de­mands. In­cluded in those de­mands is a re­jec­tion of the cur­rent in­de­pen­dent dis­pute set­tle­ment process. Canada has said no in­de­pen­dent dis­pute set­tle­ment mech­a­nism means no NAFTA. Given that the trade ne­go­ti­a­tions are the only item on Trump’s agenda that seems to be mov­ing, he may de­cide to pull the plug on the talks if he can’t get his way, as he threat­ened to do in a speech in Ari­zona on Au­gust 22. In a pe­cu­liar way that would make sense only to him and his base, he could then claim he hon­oured his com­mit­ment to ei­ther change NAFTA to ben­e­fit Amer­ica or break the treaty. The reck­less­ness of such a course of ac­tion would be ap­par­ent to most peo­ple. But not to some­one who at­tacks the me­dia for pre­sent­ing “fake news” when he doesn’t like the sto­ries they run, claims ac­com­plish­ments that are un­true and co­zies up to peo­ple al­most any­one else thinks of as dan­ger­ous and un­de­sir­able.

It is both sad and ter­ri­fy­ing to re­al­ize that much of Canada’s fu­ture eco­nomic pros­per­ity could de­pend on such a man.

Don New­man is Se­nior Coun­sel at Nav­i­ga­tor Lim­ited and En­sight Canada, Chair­man of Canada 2020 and a life­time mem­ber of the Cana­dian Par­lia­men­tary Press Gallery. dnew­

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