SHUFFLING THE DECK
After Trump replaces key members of administration, Canada’s NAFTA negotiating team is confronted with a new set of U.S. counterparts,
A favourite Chinese negotiating tactic is to periodically, and without warning, replace a negotiating team with a fresh one. Canadians negotiating for a company or government show up to find an entirely new set of faces at the table.
This is unsettling, obviously, and deliberately so. More often than not, the new Chinese team insists on returning to where the talks began.
Canada’s NAFTA negotiating team is now similarly confronted, without warning, with a new set of U.S. counterparts. The folks across the negotiating table haven’t changed, but two of their bosses have.
Ottawa officials, up to Justin Trudeau and Chrystia Freeland, the foreign affairs minister, have spent the better part of a year getting to know U.S. Secretary of State Rex Tillerson and Gary Cohn, U.S. President Donald Trump’s chief economics adviser.
Abruptly, Trump recently replaced those two key players, at State by trade hardliner Mike Pompeo, the former CIA director; and by Larry Kudlow, the right-wing radio personality, as Trump’s new top economics adviser.
Much is said about Pompeo’s brass-knuckle tactics and Kudlow’s memorable description of Trudeau, on his CNBC show, as a “left-wing crazy guy.” But the real story is that Trump has, by design or accident, thrown the Canadian and Mexican negotiators off their stride.
For the next few weeks, as the talks head into their final round, the Canadian negotiators will commit as much energy to figuring out what makes Pompeo and Kudlow tick as they will to focusing on their trade objectives.
And politics being what it is, Pompeo and Kudlow will each want to make their mark on these talks. So watch for issues previously of slighting consequence to suddenly loom large, and for new U.S. demands to appear from out of left field.
Good news on the trade front (really)
Free trade has been in retreat for most of this decade, the roots of current discontent with globalization tracing to the Great Recession.
For the free-trade faithful, March 8 marked a turning point; that was the date when delegates from Canada and 10 other Pacific nations, meeting in Santiago, Chile, quietly signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
The lack of fanfare belies what is described by Deborah Elms of the Asian Trade Cen- tre think tank as the “most important trade agreement we’ve had in two decades.” The CPTPP covers about 13.5 per cent of the world’s economy. It will bolster the GDP of its 11 member countries by an average of 1.7 per cent over the next 12 years (or as much as 3 per cent for poorer members such as Vietnam and Peru). And it counters China’s growing influence in the Pacific Rim.
The 580-page agreement, more ambitious and wideranging than most trade deals, is designed not only to boost GDP growth but to improve workplace standards, safeguard intellectual property rights and raise environmental standards.
Worth watching in the short term is how quickly the national legislatures of the 11 countries ratify the pact, which will be occasions for national debates on the merits and drawbacks of free trade and of this deal specifically. And Japan, which spearheaded the effort to create the CPTPP, is more likely now to push ahead with economic and labour-market reforms that have long been stalled.
The CPTPP leaves the door open to future U.S. membership, a possibility that Trump hinted at during the latest Davos summit. If either the U.S. or China joined the CPTPP, the other would be compelled to do so, rather than allow one country to dominate what would then be the world’s biggest free-trade region.
Straight flush
When you next visit China, check out the public restrooms.
Pristine public washrooms are becoming a leading economic indicator in determining the pace of progress in the world’s second-largest economy. Saying, “Although the toilet is small, it is a big issue for people’s lives,” President Xi Jinping in 2015 launched what’s now called the “toilet revolution.” By last November, some 68,000 public loos had been built or upgraded, mostly in urban centres.
Nanjing, in Jiangsu province, upgraded about 650 public washrooms last year alone. The new-generation facilities are soothing, with music and greenery, and are eco-friendly. An electronic sign outside tells visitors how much water and electricity has been consumed by the facility that day, compared with daily and monthly averages.
World-class washrooms are an obsession with Xi, who last November called for a redoubling in efforts to eradicate the unpleasant experience that public toilets continue to offer for many Chinese. The revolution’s current phase is an expansion into rural areas, where some 400 million residents “do not enjoy a pleasant restroom experience,” as authorities delicately put it.
There’s much more at work here than public-health concerns. The affluence tied to the country’s industrial revolution has yet to reach a great many Chinese, and Xi hopes 21stcentury restrooms will provide a tangible sign of better living standards across the country. The new restrooms are also a showcase for Chinese technology, in their computer-controlled use of limited supplies of power and fresh water.
And Four Seasons Hotels likely can’t boast in its chain an ultra-modern restroom to match a celebrated public loo in Beijing that is equipped with Wi-Fi connections, ATM machines, recharging stations for mobile devices and personal TV screens.
As the toilet revolution expands into rural and remote regions, economists will have a new yardstick for measuring the speed of improvement in China’s living standards: the number of revolutionary restrooms per 100,000 people.