Trump and trade: Challenges and opportunities confronting Canada
Former foreign affairs minister John Baird is scheduled to speak next week at the Saskatoon Regional Economic Development Authority’s annual economic outlook forum. Before his speech about economic challenges and opportunities for Canada, he spoke with th
Q What is the most pressing challenge for Canada’s economy in light of Trump’s presidency and what you’ve described as the U.S. electorate’s turn toward protectionism?
A I think avoiding a border adjustment tax. I think mitigating the potential for collateral damage to the Canadian economy with (the North American Free Trade Agreement). And then how do we maximize the free trade deal that we’ll have with Europe that the United States won’t, given that the talks, effectively, for a U.S.-EU deal are dead? And how do we maximize the new reality in the Asia-Pacific region without the Trans-Pacific Partnership?
Q What about Saskatchewan’s economy, specifically?
A Some good news. Market access is looking much brighter than it did a year ago. Obviously, the Keystone pipeline getting built is good news for Western Canada (and) the potential for getting the Trans Mountain project built is good for Western Canada. I think the direction that the government is going in terms of our relationship with China is good news for Western Canada. I’d like to see Canada launch free trade discussions with China, and apparently that is something the federal government is really looking at seriously. The stalled free trade discussions with India would be another good potential.
Q You’ve said previously that if the U.S. decides to renegotiate NAFTA, the result will not be better for Canada. Can Canada open new markets and expand trade beyond the U.S. fast enough to offset those effects?
A That’s still the big unknown. The president’s just getting his team in place. (They) are people with a dramatically different view on international trade than Canada’s been used to dealing with. I thought the federal government effectively managed the first visit for Trump. I wouldn’t say (there is) room for optimism, but I’m not nearly as pessimistic as I would have been a few months ago.
Q How should an economy like Saskatchewan’s balance investment in new technologies, like clean energy, against its reliance on natural resources?
A It’s a huge challenge. Ontario had 24 per cent coal generation 13, 14 years ago, and now we have none and electricity prices have skyrocketed and we’re the highest in North America. I think you want to look before you leap, to not make the same mistakes that Ontario has made with incredibly expensive renewable power contracts. If we’re losing manufacturing to places where they don’t have renewable power, we won’t have accomplished much.
Q In the broadest sense, what does U.S. protectionism and stronger relationships with other countries mean for Saskatchewan and Canada going forward?
A Canada having a deal with the EU, and the United States not, will prove to be a huge advantage over the next 10 years. We saw when Korea had a free trade deal with the United States and Canada was left out — our agricultural exports plummeted. So the fact that we’ve got that CETA deal is of huge strategic importance. The fact that TPP is not going forward is not good, but we can still go bilaterally with countries like Vietnam or Japan or India. Or we can also do the other play, to China. There’s huge promise there.