Harper roars but lacks bite on trade

Late last month after Washington thumbed its nose at a trade ruling that supported Canada’s stand in the long- simmering dispute over softwood lumber, acolytes of former prime minister Brian Mulroney voiced their outrage at the U. S. administration. They attacked Washington for repudiating the rules governing Mulroney’s free trade agreement with the U. S. Now, current Tory leader Stephen Harper has gone them one better. Harper hurled no insults at the U. S., unlike key Mulroney advisers and cabinet ministers Derek Burney, Pat Carney and Gordon Ritchie. Those Mulroney- era officials vented their anger to reporters by calling the Americans “ schoolyard bullies” and “ jackboot negotiators,” who have committed “ an egregious, shocking, dishonourable breach of their obligations” by refusing to abide by a unanimous tribunal ruling on softwood lumber that went Canada’s way.

Instead, Harper said adopting an aggressive tone solves nothing. But where the Mulroney trio called for nothing more than tit- for- tat retaliation to get Washington to focus on the lumber issue, Harper in effect told his caucus this week in Halifax that he is ready to give up on the North American Free Trade Agreement if the Americans show themselves unwilling to strengthen the pact’s dispute settlement rules and live by them. Harper claimed he was not making threats. But that clearly is what he seems to be doing when he suggests that if the U. S. won’t play by the rules, then “ we will have to put much higher emphasis on exploiting the growing demand of China, India and others for our natural resource sectors.” To some, that sounds like little more than an echo of former prime minister Pierre Trudeau’s “ Third Way” to reduce Canada’s economic dependence on the U. S. However, it takes on a different character if you replace Harper’s reference to “ our natural resource sectors” with the word “ oil.” Simply put, it would be virtually impossible for Canada to remain in NAFTA while diverting its oil exports from the U. S. to India or China.

Veiled though his threat may be, the Conservative leader has raised the ante in this war of words by linking oil exports directly to dispute settlement in general, and to softwood in particular. How much stock should Canadians put in Harper’s threat to abandon the U. S. in favour of other markets if the Americans won’t agree to his demands? Would he willingly risk Canada’s huge trade surplus with the U. S. over Washington’s longstanding intransigence on softwood lumber? Would he readily expose our entire manufacturing sector to the risk of losing its significant advantage in the U. S. market? No one should lose sight of the fact that opposition leaders can say whatever they want without consequence. Anyone who doubts that would do well to compare what the Liberals said about free trade with the U. S. when they were in opposition with what they say now. Remember when thenopposition leader Jean Chrétien said he would rip up the free trade agreement if the U. S. refused to renegotiate parts of the deal? That was then. But now, despite the fact that Chrétien was unable to win a single concession from the Americans, and despite a complete lack of progress on the festering lumber dispute, a spokesperson for the federal Liberal government was quick to denounce Harper this week, saying, “ We have to keep in mind that over 95 per cent of our trade with our southern neighbour works and works well.” As for Harper’s musings, our advice to China and India and other Asian trading partners is: Don’t hold your breath.