SOMETIMES CANADA HAS TO STAND UP TO AMERICAN BULLIES AND SHOW A LITTLE TOUGHNESS, BUT IT DOESN’T MEAN WE’RE BREAKING UP THE FRIENDSHIP, SAYS CANADA’S AMBASSADOR TO WASHINGTON.
Relationship strong despite disagreements
Canada’s ambassador in Washington says, even though the Americans “can act like bullies,” the Trudeau government’s recent foreign policy statement is a “recognition of reality,” not a sign the relationship is breaking up.
David MacNaughton was in Ottawa to appear before a Senate committee. In an interview, he said dealing with the Trump Administration is a “delicate balancing act.
“We have a good relationship with them — whenever I call I get phone calls returned. That said, we are now at a stage beyond ‘getting to know you’ … Sometimes you’ve got to stand up and show a little toughness. They’re pretty tough negotiators and sometimes can act like bullies. But I don’t think it has to get personal.”
He pointed out Chrystia Freeland, Canada’s global affairs minister, did not refer to Donald Trump by name in her speech last week to the House of Commons that called for Canada to pursue a “clear and sovereign course” backed by hard military power.
MacNaughton said his biggest concern remains the uncertainty for businesses caused by the prospect of a 20-per-cent border adjustment tax on Canadian exports to the U.S., and the modernization of the North American Free Trade Agreement.
He said he feels the threat of a blanket border tax, or of an oil import tax, are fading.
“These types of things are never killed until they are dead, but I think the likelihood of a border adjustment tax is extremely small.”
Steven Mnuchin, the U.S. Treasury Secretary, has talked about a comprehensive tax-reform package in this calendar year but MacNaughton said the prospects are slim.
“The reforms they were talking about, such as bringing (the) corporate tax rate down to 15 per cent — that’s not going to happen any time soon.”
NAFTA renegotiations are also taking their time.
“The biggest problem we have right now is their system and the fact that in the new administration, many people have never been in government before. They thought government would work the way business does, but it doesn’t here (Canada) and it sure as heck doesn’t in the U.S., where the Congressional system adds a level of complexity to getting anything done,” MacNaughton said.
Meanwhile, the number of trade disputes piles up — dairy, softwood lumber, aerospace, and wine in British Columbia.
MacNaughton says he takes encouragement from something said by U.S. Commerce Secretary Wilbur Ross, who said the guiding principle for NAFTA modernization is: “first, do no harm.”
“That’s starting to sink in,” the ambassador said.
He pointed to comments from American citizens and businesses posted on the U.S. Trade Representative’s website. The submissions suggest there is room for improvements but there will be pain in the U.S. if the changes are too draconian.
MacNaughton said he remains confident relations have not been soured by Justin Trudeau’s public chastisement of President Trump for pulling out of the Paris environmental accord, or by Freeland’s speech.
“The prime minister called the president when they got out of Paris and expressed his disappointment. But he also said he will continue to concentrate on areas where we agree. We will have some areas where we disagree but we are sovereign nations and we can’t let that affect our overall relationship. In fact, I think that relationship is getting stronger,” he said.
On Freeland’s speech, and the defence policy review released the following day, MacNaughton said it was merely a “recognition of reality.”
“The biggest emphasis was that we do need to have an independent foreign policy and defence spending where we are credible in the international community, given the new threats that have arisen. We have to step up, if we claim to be a sovereign nation, and sometimes you have to back that up with hard power.”