Resisting the Trump tide
Anyone who hoped Canada might be able to stand quietly by while Donald Trump takes out his anti-trade fury on more likely targets like China and Mexico can think again. According to a memo leaked from his transition team, Canadian lumber and beef will be squarely in the crosshairs of the new U.S. president the instant he takes office on Jan. 20.
The Trudeau government has reacted by rushing to embrace the idea of renegotiating the North American Free Trade Agreement. The day after Trump’s election, Canada’s ambassador to Washington, David MacNaughton, declared the government would be “happy” to talk about NAFTA with the new administration. And on Wednesday, Finance Minister Bill Morneau cheerily said he expects it all to end in a “win-win” for everyone involved.
That’s taking it awfully far. It’s one thing to recognize the inevitable, that Trump is bound to follow through on his pledge to reopen what he railed against as “the worst trade deal in history.” It’s another to volunteer eagerly to renegotiate without even being formally asked.
Much better for the government to show public restraint on this issue while marshalling strong arguments and allies for the tough fight ahead.
Because the fact remains that, despite Trump’s huffing and puffing about trade deals, the economic relationship between Canada and the United States is of huge benefit to both sides — including the Americans. And the states that benefit most include the so-called rust belt states that went for Trump.
Trump should be quickly reminded — if he doesn’t already know — that close to nine million U.S. jobs depend on trade and investment with Canada, according to an authoritative 2014 study.
China has edged ahead of Canada as the United States’ biggest trade partner, but it’s a much more lop sided relationship. Canada still buys far more from the U.S. than does China — more than twice as much — and that creates the kind of good middle-class jobs Trump has pledged to save.
Despite the rise of China, Canada is still the biggest trading partner of 35 U.S. states. And that includes most of the states Trump carried on Nov. 8. Does he really want to risk disrupting such a tight relationship by tearing up NAFTA just to make a political point?
Probably not; the conventional wisdom is that it’s all part of his “art-of-the-deal” philosophy. Talk tough, intimidate the other side, and cut a deal to your advantage. Negotiating is always about give and take, he has famously said, “but it’s gotta be mostly take.”
Appealing to fairness or simple reason isn’t going to work with someone like that. And indeed that isn’t the way trade talks have worked under any president; it’s always about mutual self-interest. Canada has long realized that its most effective strategy in such situations is to mobilize American constituencies that share our interests, and get them to speak out not for us but for themselves.
In this case it will mean making sure Trump and his team hear from governors, mayors, businesses, labour unions and others in states that rely on cross-border trade. They know better than anyone that “Blame Canada” (or Punish Canada) would be an idiotic and pointless path to take for a president who wants to be the champion of ordinary working Americans. The anger against trade in places like Michigan and Pennsylvania is indeed about lower-wage countries like China and Mexico, not Canada.
Still, the risk is that Canada gets side-swiped in a backlash against trade deals, and the sectors singled out in the Trump team’s memo involve big stakes. Forestry employs some 230,000 Canadians, including many in Ontario, and almost as many jobs come from beef production. If the Trump administration penalizes them, our economy will suffer.
The Trudeau government needs to keep its powder dry and encourage Americans who share our interest in a strong relationship to talk sense to the incoming president. Right now, for the most part, the less said the better.
Instead of volunteering to renegotiate without being asked, Canada should show public restraint on the issue