Knowing when to pour a whisky or dump your cigarette ashes
Colourful history of U.S.-Canada trade talks has lessons as negotiators prepare to do battle
OTTAWA— Not far from the U.S. Capitol building in Washington stands the Willard Hotel. In a time that was different from and similar to our own, when “Can- ada” meant the British colony of what is now Ontario and Quebec, representatives from its fledgling government rented out the Willard. It was a full-on charm offensive meant to secure a trade deal with the United States.
Robert Bothwell, a prolific author and historian at the University of Toronto, describes in his 2006 history of Canada how the government hired agents to help convince congressmen that trade with the British colonies was in their interest.
The governor general of the time, Lord Elgin, also went down to D.C., where he set up what amounted to a “free bar” to woo Americans at the Willard, Bothwell recounted in an interview this last week.
“Senators and representatives would drop in and have a snort,” he said with a laugh.
Chuckles aside, all the cigars and whisky drams consumed at the hotel preceded a done deal: the Reciprocity Treaty of 1854, which historians have credited — partially — with an ensuing decade of prosperity for the colonies of British North America.
The moral of the story, made especially relevant on the eve of the hugely anticipated NAFTA renegotiation: if it worked then, maybe it will work again.
“We’d send delegation after delegation and there’d be shouting matches.” AUTHOR ROBERT BOTHWELL
“We do it a bit more delicately now,” Bothwell said, “but essentially that is what the Trudeau government is doing.
“Lord Elgin is sort of the originator of many of our trade tactics.”
It’s true that much of the national news narrative since the election of U.S. President Donald Trump has followed the efforts of Canadian politicians to prepare for his aggressively touted pledge to reform or rip up the 23-year-old NAFTA agreement. Federal ministers, provincial premiers, bureaucrats and lobbyists have made scores of forays to American cities to shore up their arguments and find friends. And by now, Prime Minister Justin Trudeau can flip his brain to cruise control as he recites his litany of reasons why the agreement is a good thing for both Americans and Canadians.
In short, there may be no ostentatious soirees or rented-out hotels with open bars — none that are known to this reporter, anyway — but the broad scope of what’s going on is not without precedent.
For Francine McKenzie, chair of the history department at Western University, agitations on trade are actually a perennial feature of Canada’s story — far from a unique aspect of today’s politics, or even that of the past few decades.
“There has been constant talk about trade,” she said, pointing to the earliest days of European colonization, when what drew the Spanish, French and British into the continent was, in large part, profits from dealing in fish and fur. The latter was supplied through trading relationships with the many Indigenous peoples of the land.
“Canada has always been linked into global commodity chains, and trade has been going on forever,” McKenzie said.
This continued once the United States came into existence, and after the remaining British colonies on the continent gained a measure of self-determination — in 1848, with the reforms to create responsible government. Political and business leaders began their long history of trade talks with our American neighbours, with Elgin’s1854 deal removing tariffs in some natural products, such as lumber, though it was far from a freetrade deal. It was one of only three trade agreements that the U.S. signed between 1789 and 1934.
Like in subsequent negotiations — such as the free-trade brouhaha during the 1988 election — the prospect of trade with the U.S. brought up concerns about Canadian independence, and fears that closer economic ties would pull us down a slide to political integration. As Bothwell explained, however, Elgin’s argument at the time was that trade with the Americans would bolster the Canadian economy and “keep us prosperous and therefore content and therefore British” (i.e. not American).
The U.S. cancelled the agreement in 1866, in part because of tacit British sup- port for the Confederacy during the Civil War, Bothwell writes. From then on, the idea of trade with the U.S. popped up periodically, with routine diplomatic forays to Washington to discuss it, trips that came to be known as “pilgrimages.” In 1911, Wilfrid Laurier’s Liberal party lost an election arguing for a new reciprocity deal, a proposal that was promptly dropped by the victorious Conservative party under Robert Borden.
For Bothwell, the dynamics of discussions during much of this period were less than trustful. “Periodically the Americans would try to bully us in the hope of getting a better deal,” he said, arguing that economic and military co-operation during the Second World War helped put an end to that, engendering a sense that each side would negotiate any trade deal in good faith, aiming for mutual benefit.
A prime example, he said, was the Auto Pact of1965. That deal has been described as a compromise between Canada and the U.S., which allowed auto companies operating in Canada to import vehicles and parts for assembly, duty-free.
“The Auto Pact was one of the best treaties the Canadians signed,” Bothwell said, pointing to the subsequent growth of vehicle manufacturing, particularly in Ontario.
The harmony and trust aren’t fixed and permanent though. Bothwell said that, with Trump, it appears Canadians are facing an American cohort of a more aggressive stripe. In our postwar history he points to a single precedent: when Richard Nixon’s treasury department was trying to push the Canadians to rejig their currency to the benefit of American exporters in 1971 and 1972.
This was baffling to the Canadians, and the talks were stalled, Bothwell said. Through his research, he’s uncovered colourful anecdotes from the time: the Canadian delegation that included Finance Minister Edgar Benson sweating buckets in the Washington heat, as then-U.S. Treasury Secretary John Connally — a bellicose tough guy that Bothwell likened in temperament to Trump — mistakenly read a statement that was meant for a Japanese delegation.
Bothwell also spoke of Simon Reisman, a Canadian negotiator who later led the 1987 Canada-U.S. free-trade negotiations and was also on hand in the early ’70s. He said that Reisman, who died in 2008, was renowned for his no-nonsense talk; Bothwell told a story, gathered from his research, of how Reisman stood smoking a cigarette while Connally spoke, letting his ashes drift down onto Connally’s desk, which once belonged to Alexander Hamilton.
“We’d send delegation after delegation to Washington and there’d be shouting matches, and Connolly just did not get anywhere with us,” Bothwell said.
Eventually, after Connally resigned in 1972, the Americans relented and Canada wasn’t forced to change its currency valuation.
“That’s the biggest parallel to this,” Bothwell said of Canada’s current conundrum on NAFTA.
“It’s unilateral, and he (Trump) relies on strength and bullying to put it across.”
The biggest question is how Canada will fare this time around.
“We have to get our minds back to that period,” Bothwell said, “where we could not assume that the negotiator on the other side of the room was looking for a mutually beneficial relationship.”
If that’s true, a free bar might be a good idea after all.