Midterms put USMCA in jeop­ardy

Toronto Star - - THE POLITICS PAGE - Jaime Watt

An­other day, an­other bump in the road for the Canada-U. S. re­la­tion­ship.

Spare a mo­ment for Min­is­ter of For­eign Af­fairs Chrys­tia Free­land.

Af­ter years of ar­du­ous ne­go­ti­a­tions over a re­newed North Amer­i­can trade agree­ment with a tem­per­a­men­tal and fickle Pres­i­dent Don­ald Trump, she had fi­nally come to ground on what the gov­ern­ment be­lieved was an ac­cept­able agree­ment.

The US-Mex­ico-Canada Agree­ment (USMCA) may not have won friends among cer­tain sec­tors of Canada’s econ­omy but, by and large, Cana­di­ans were more than a lit­tle re­lieved to have es­caped the rene­go­ti­a­tion with just a few bruises and scrapes.

In the name of an as­sured and de­pend­able trade re­la­tion­ship and the eco­nomic ben­e­fits that come with that, the coun­try was will­ing to ac­cept a deal that may not have been per­fect.

But just weeks af­ter the three coun­tries de­clared vic­tory, that frag­ile achieve­ment may have been shat­tered.

The midterm re­sults, de­liv­ered on Tues­day, bring with them the like­li­hood of dis­rup­tion to Amer­i­can po­lit­i­cal life.

De­spite the chaos that sur­rounds the pres­i­dent him­self, the last two years have been a rel­a­tively pre­dictable po­lit­i­cally due to the Re­pub­li­cans hold­ing both the House of Rep­re­sen­ta­tives and the Se­nate. Pitched par­ti­san pol­icy bat­tles were more or less con­fined to the me­dia, rather than to the process it­self.

That changed on Tues­day.

While the Re­pub­li­cans ac­tu­ally gained ground in the Se­nate, the House of Rep­re­sen­ta­tives fell to the Democrats.

The re­sult? Nancy Pelosi is likely to as­sume the speaker’s chair. Pelosi is a par­tic­u­larly for­mi­da­ble par­ti­san foe; in­deed, she is one of the few Democrats whose steely ap­proach and steady nerves have won her Trump’s re­spect.

But even if the speaker’s gavel goes to some­one else, the flip­ping of the House will cause ma­jor headaches for the pres­i­dent — and by ex­ten­sion, to his legacy pro­jects, in­clud­ing the USMCA.

The Democrats feel they have been given a man­date to fight the pres­i­dent tooth and nail on his agenda. They are di­a­met­ri­cally op­posed to his ideas al­most across the board and have pub­licly in­di­cated their in­ten­tion to do ev­ery­thing they can to pre­vent the im­ple­men­ta­tion of his agenda.

How­ever, one of the only places the pres­i­dent and the Democrats seem to find some com­mon ground is around their sus­pi­cion of free-trade agree­ments. The Democrats have long eyed such agree­ments war­ily, see­ing them as a way to un­der­mine sovereignty, em­power cor­po­ra­tions and sur­rep­ti­tiously at­tack work­ers’ rights.

Add to that the fact it is no se­cret to any­one that Trump thinks lit­tle of the North Amer­i­can trad­ing re­la­tion­ships as they cur­rently stand.

This means that in an en­vi­ron­ment where the House of Rep­re­sen­ta­tives and the pres­i­dent strongly dis­agree on vir­tu­ally ev­ery is­sue, trade agree­ments may be the one area of agree­ment that can be used to ad­vance other agenda items.

In­deed, the pre­sump­tive chair of the House com­mit­tee on ways and means, Richard Neal, has pub­licly pooh­poohed the USMCA. He has sug­gested that in order to gar­ner the sup­port of Democrats (a ne­ces­sity for the agree­ment to come into force) there would need to be sev­eral ad­di­tional as­sur­ances and he has also im­plied it may re­quire changes. En­ter a pained Min­is­ter Free­land. It will be up to the min­is­ter, who has spent months trekking back and forth to Wash­ing­ton coax­ing the pres­i­dent’s team into the deal, to now sell the deal to an equally skep­ti­cal au­di­ence for wholly dif­fer­ent rea­sons.

The chances that the USMCA be­comes a ca­su­alty of do­mes­tic poli­cies are high — so Min­is­ter Free­land will need to work quickly to build a coali­tion of mod­er­ate Democrats and Re­pub­li­cans in the House who would be will­ing to ad­vance the agree­ment quickly.

The min­is­ter, and her team, have been proven ca­pa­ble of do­ing that many times be­fore — but it will take an­other level of adept­ness to usher through a con­tro­ver­sial deal in an en­vi­ron­ment as fraught and rau­cous as this.

But, just as be­fore, her gov­ern­ment’s fate de­pends on their suc­cess — and a col­lapse of the agree­ment just months be­fore a fed­eral elec­tion would al­most cer­tainly be a har­bin­ger of more neg­a­tive news to come.

Jaime Watt is the ex­ec­u­tive chair­man of Nav­i­ga­tor Ltd. and a Con­ser­va­tive strate­gist. He is a free­lance con­trib­u­tor for the Star. Fol­low him on Twit­ter: @jaime­watt


Spare a mo­ment for Min­is­ter of For­eign Af­fairs Chrys­tia Free­land, who may have to rene­go­ti­ate the USMCA, Jamie Watt writes.

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