With NAFTA, Freeland sees an opportunity
Since Donald Trump managed to put trade back at the centre of the Canadian political agenda, the dominant response has been to see this as a threat. In her speech at the University of Ottawa this week, Foreign Minister Chrystia Freeland seems to have decided to treat the renegotiation of the North American Free Trade Agreement (NAFTA) as an opportunity. Hers is a welcome approach, and despite the naysayers, it just might work.
Freeland outlined a vision for a “more progressive” trade agreement that would give greater focus to workers’ rights and environmental protections, as well as incorporating new chapters on gender and Indigenous issues. While the foreign minister offered few details on what she hopes these provisions might look like, her speech was an acknowledgment that any new NAFTA must do more to protect globalization’s potential losers than does the existing one.
Freeland also promised a more progressive approach to the controversial Investor-State Dispute Settlement process, pointing to advances made in the recently struck Canada-EU trade deal. Under NAFTA and other trade agreements, this mechanism allows foreign firms to challenge domestic laws if they feel they are being unfairly discriminated against — a process that has often been criticized for giving corporations undue power to shape government policy.
Under the deal with Europe, the EU and Canada agreed to change the system with the intent of tipping the balance away from corporations in favour of governments. That’s the right direction. In her speech, Freeland rightly insisted that “governments have an unassailable right to regulate in the public interest.”
There was much in Freeland’s remarks to admire, but inevitably important questions remain unanswered. For instance, while the talk of improved labour and environmental protections is most welcome, how exactly does Ottawa intend to give these measures teeth, especially as the EU trade deal does not? Moreover, Freeland has suggested that Ottawa is unwilling to budge on Canada’s system of dairy protectionism. But given that this is one of Washington’s stated priorities, and given the costs to Canadian consumers of so-called supply management, is this really a hill Ottawa wants to die on? On a number of other issues, from government procurement to the movement of professionals across the border, we need to know much more about not only our objectives, but our priorities.
What Freeland has made clear, however, is that Canada is not starting from a point of concession. That’s as it should be. Since Freeland delivered her speech, some have pointed out the oddity of Canada pushing a more progressive deal as it enters negotiations with the highly regressive Trump administration. But in fact Freeland is right to boldly set out our goals.
For one thing, it would be foolish to concede objectives on the basis of what Donald Trump seems to believe or not. Trying to follow the every caprice of this president is a recipe for dizziness.
And even if Trump knew what he wanted, it’s not at all clear he could get it. Faced with dismal approval ratings, the nagging Russia probe, a string of failures on health reform and a decreasingly deferential Congress, the president enters negotiations weaker than ever. We should not conflate Trump with the American government. Nor can we forget, as the U.S. and many state governments surely have not, that both countries benefit from our strong trade relationship and both countries stand to lose a great deal if it is harmed. Capitulation, then, would be a strange starting position.
In its approach to the EU trade deal and now in its rhetoric around NAFTA renegotiations, the Trudeau government has shown a welcome sensitivity to the changing global conversation on trade. In recent years, we have seen a growing awareness that while globalization has yielded enormous benefits, it has also left too many behind. This view has gained traction not just on the right and left fringes, but also among a good number of mainstream critics who acknowledge that market-driven trade deals have exacerbated economic inequality and environmental degradation.
The future of trade negotiations, these critics suggest, ought now to focus less on promoting economic integration, and more on mitigating globalization’s worst consequences by, for instance, harmonizing public policies on labour rights, environmental protections and the integrity of the tax system. Even those trying to hang on to the old model of trade have been shaken by displays of anger at the globalization project.
Whether or not Trump truly believes in these new directions or understands these concerns, he has no doubt benefited politically from anti-globalization rhetoric and has a stake in seeing some version of this reflected in a new NAFTA. Canada can be a leader in redefining the grammar of global trade. The foreign minister’s approach may at first seem out of step in the current context, but in setting a more ambitious course for Canada she may just have read the moment right.
The foreign minister’s more progressive direction is a welcome approach and, despite the naysayers, it just might work