Per­rin Beatty

Talk­ing With Amer­i­cans

Policy - - In This Issue - Per­rin Beatty

The world is much smaller than it was a quar­ter-cen­tury ago, when NAFTA was first ne­go­ti­ated. While Amer­i­can politi­cians, stake­hold­ers and ne­go­tia­tors still don’t al­ways know Canada as well as well as we, be­ing the smaller mar­ket, know the U.S., they’ve been catch­ing up. As vet­eran pol­icy maker and Cana­dian Cham­ber of Com­merce CEO Per­rin Beatty writes, the most in­ter­est­ing part of the NAFTA ne­go­ti­a­tions has yet to come.

Afew years ago, Cana­dian comic Rick Mercer had a seg­ment on his show called “Talk­ing to Amer­i­cans,” in which he’d do in­ter­views on U.S. streets with or­di­nary folk to re­veal the lack of knowl­edge about Canada south of the bor­der. In­vari­ably, his gullible guests would go along with his whop­ping lies— one lady strongly con­demned Canada’s plan to pum­mel cari­bou to death with Timbits.

But even when they were in­ad­ver­tently pa­tron­iz­ing us, like the woman who con­grat­u­lated us for fi­nally get­ting run­ning tap water, the Amer­i­cans were well-mean­ing, con­cerned and kind. The seg­ment was hi­lar­i­ous and lovely at the same time.

It also en­cap­su­lates the sit­u­a­tion the Cana­di­ans are fac­ing as the NAFTA talks are be­gin­ning. Cana­di­ans go­ing south of the bor­der to pro­mote the trade re­la­tion­ship be­tween our two coun­tries and de­fend busi­ness in­ter­ests are of­ten met with sym­pa­thetic but un­aware part­ners.

NAFTA has al­lowed the Canada-U.S. trade re­la­tion­ship to coast along, grow­ing steadily since im­ple­men­ta­tion in 1994, but not re­ally be­ing at the fore­front of any­one’s con­cerns. Now that this re­la­tion­ship is in the process of be­ing al­tered, there’s some catch­ing up to be done.

Since the elec­tion of Don­ald Trump, the Cana­dian gov­ern­ment and Canada’s busi­ness com­mu­nity have launched a mas­sive ef­fort to en­gage with and in­flu­ence Amer­i­cans in the halls of Congress and the streets of small towns across the U.S.

The first step is to in­form and en­gage our Amer­i­can coun­ter­parts on just how lu­cra­tive and thor­oughly in­te­grated our economies have be­come thanks to this suc­cess­ful trade agree­ment.

And as Canada’s po­lit­i­cal and busi­ness lead­ers branch out in Wash­ing­ton to meet with vir­tu­ally ev­ery rep­re­sen­ta­tive in Congress, ev­ery se­na­tor and ev­ery cabi­net sec­re­tary, we are speak­ing with one voice, and one sim­ple mes­sage: “We are your cus­tomers and your part­ners. Things that hurt our econ­omy will bounce back into your cities and towns im­me­di­ately.”

The most fa­mous de­liv­ery of this mes­sage oc­curred when Canada’s for­eign af­fairs min­is­ter, Chrys­tia Free­land, re­minded the pow­er­ful speaker of the House, Wis­con­sin’s Paul Ryan, that his dis­trict ex­ported a bil­lion dol­lars of goods to Canada ev­ery year. A smil­ing Mr. Ryan re­port­edly shook his head and com­mented rue­fully, “Some­body’s done some good re­search!”

This en­er­getic cam­paign that has been tak­ing shape—es­sen­tially a crash course on con­ti­nen­tal eco­nom­ics—has worked well in Wash­ing­ton.

But the re­al­ity of Amer­ica to­day is that a huge gulf ex­ists be­tween Wash­ing­ton and small town Main Street. Time and again our Amer­i­can col­leagues have pointed out that po­lit­i­cal and busi­ness elites are not pop­u­lar or trusted. Mr. Trump used that fact to great ad­van­tage: In his in­au­gu­ral ad­dress he said: “Wash­ing­ton flour­ished—but the peo­ple did not share in its wealth.”

So, Canada needs more than its po­lit­i­cal lead­ers and its need to carry its mes­sage far be­yond the Capi­tol. The most cred­i­ble voices in Amer­ica to­day are or­di­nary peo­ple, work­ers and busi­ness own­ers, dis­cussing their own busi­nesses and their own re­la­tion­ships. For in­stance, the Cana­dian Cham­ber of Com­merce has been ar­rang­ing meet­ings with elected of­fi­cials in South Carolina, Vir­ginia, Ten­nessee and Texas, with plans to go to Ge­or­gia and Florida. There, the elected of­fi­cials are put in touch with Cana­dian busi­nesses and in­vestors, show­cas­ing in­vest­ments and col­lab­o­ra­tion be­tween our economies.

These range from a tour of the CN Rail­road In­ter­modal Hub out­side of Mem­phis to a visit to a Bom­bardier Flight train­ing cen­tre in Dal­las and many, many more. All of them have in com­mon that they rep­re­sent Cana­dian in­vest­ments in the U.S. and con­trib­ute to cre­at­ing jobs south of the bor­der. And when elected of­fi­cials or their rep­re­sen­ta­tives are shown the ex­tent to which the Cana­dian and Amer­i­can economies are linked, their re­sponse is gen­er­ally the same: “I had no idea.”

The trick, then, is to get these mes­sages to cir­cle back to Wash­ing­ton, and most im­por­tantly, to the U.S. Trade Rep­re­sen­ta­tive and his team. Be­cause over there, the con­ver­sa­tion is quite dif­fer­ent.

Now that the NAFTA ne­go­tia tions have be­gun, we are faced with a dif­fer­ent kind of Amer­i­can. This is no longer a sym­pa­thetic but ill-in­formed part­ner at the ta­ble, but rather a well-pre­pared, tough and col­lected ne­go­tia­tor. The con­ver­sa­tion can still be a pos­i­tive one, how­ever, as long as it’s about joint progress and mu­tual ben­e­fit.

In the ne­go­ti­a­tions that have taken place so far, ru­mours are that some com­mon ground has been found. Re­fresh­ing some sec­tions to in­cor­po­rate the new re­al­i­ties of elec­tronic com­merce and re­duc­ing the ad­min­is­tra­tive bur­den on man­u­fac­tur­ers are pos­i­tive and use­ful changes that all three coun­tries agree on—in prin­ci­ple—and which will be sup­ported by the busi­ness com­mu­ni­ties. Amer­i­can de­mands that we help in­ter­dict the flow of coun­ter­feit goods is an­other area where Canada should re­spond pos­i­tively.

As al­ways, the devil is in the de­tails, and the key is­sue will be not only to ob­tain changes on these el­e­ments, but to en­sure that the changes ben­e­fit all three coun­tries.

Sim­i­larly, ne­go­tia­tors have started to draw bat­tle lines on the is­sues where Canada will be on de­fence be­cause the Amer­i­cans have sig­naled their de­mands many times. For in­stance, the orig­i­nal Canada-U.S. Free Trade Agree­ment emerged from frus­tra­tion with end­less le­gal wran­gling, so the dis­pute set­tle­ment pro­vi­sions in Chap­ter 19 are vi­tal to the suc­cess of the agree­ment.

On other is­sues, the lines are blurred. The Cana­dian gov­ern­ment could find it­self at odds with some busi­ness in­ter­ests, for in­stance, when the U.S. or Mex­ico starts re­quest­ing changes to Canada’s Patent Act which is a source of re­peated com­plaint from the U.S.

By all ac­counts, the first round of ne­go­ti­a­tions was a ta­ble-set­ting ex­er­cise: the metaphor­i­cal equiv­a­lent of dogs siz­ing each other up. Much of the bark­ing, and likely a few first bites, will come with the sec­ond and third rounds of ne­go­ti­a­tions, when each coun­try starts to re­veal its real mo­ti­va­tions and ob­jec­tives.

Now that the NAFTA ne­go­ti­a­tions have be­gun, we are faced with a dif­fer­ent kind of Amer­i­can. This is no longer a sym­pa­thetic but illinformed part­ner at the ta­ble, but rather a well­pre­pared, tough and col­lected ne­go­tia­tor.

Re­fresh­ing some sec­tions to in­cor­po­rate the new re­al­i­ties of elec­tronic com­merce and re­duc­ing the ad­min­is­tra­tive bur­den on man­u­fac­tur­ers are pos­i­tive and use­ful changes that all three coun­tries agree on—in prin­ci­ple—and which will be sup­ported by the busi­ness com­mu­ni­ties.

Canada will have some hur­dles to over­come. Be­tween the White House se­nior staff changes and Congress dip­ping its fin­gers in the ne­go­ti­a­tion process, there will likely be a di­verse group of stake­hold­ers to con­tend with. And that means a num­ber of con­cerns to ad­dress.

A suc­cess­ful ne­go­ti­a­tion in­volves each party mak­ing con­ces­sions as well as mak­ing progress on el­e­ments of its own wish list. We can only hope this will be an ex­am­ple of such a give-and-take process. Mean­while, Cana­di­ans roll on across Amer­ica, talk­ing with friends, plan­ning with al­lies and work­ing to­wards a fu­ture that is at least as pros­per­ous as the past.

Per­rin Beatty is Pres­i­dent and CEO of the Cana­dian Cham­ber of Com­merce and a for­mer cabi­net min­is­ter in the Mul­roney gov­ern­ment at the time of the ne­go­ti­a­tion of the FTA and NAFTA. pbeatty@cham­ber.ca

Wikipedia photo

Don­ald Trump de­liv­ers his first State of the Union Ad­dress to a Joint Ses­sion of Congress. As Per­rin Beatty points out, it’s the 100 Se­na­tors and 435 Mem­bers of the House, who Canada has been work­ing on, re­mind­ing them of the im­por­tance of NAFTA for jobs in their states and dis­tricts.

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