The political, economic and social connections between Canada and the United States of America are being kicked and stomped on.
Canada’s Liberal Prime Minister, Justin Trudeau — son of a former Canadian PM, Pierre Trudeau — has been in office for a little more than a year.
South of the 49th parallel, Donald Trump has been the US president for a little more than 100 days.
The primary elephant in the room between the two nations is the North American Free Trade Agreement (NAFTA). It was supposed to make trade — that is, the exchange of goods and material between Canada, the US and Mexico (the latter also a signatory to NAFTA) — easier and maybe even cheaper for all concerned. NAFTA was also supposed to make it easier for certain goods to cross the three borders, faster and with less officialdom and paperwork.
And for a good many years it did just that, and all three countries did benefit from the arrangement. Then the US elected Donald Trump as President, and the man who liked making deals as a private citizen tried the same approach in his new role. In essence, Trump seems to want to either re-negotiate or scrap NAFTA.
I say seems because, depending on who he last talked to, Trump has a slightly different spin on the future of NAFTA.
It has been suggested by Canadian opinion writers, that Trump, as a frustrated President — blocked on Obamacare, forced to retreat on funding for a border wall, backed down on labelling China a “currency manipulator” and stalled by Congress on renegotiating on NAFTA — was searching for a thunderbolt to “celebrate” his first 100 days as President.
In a divided White House, the anti-trade-deal faction were reportedly pushing Trump to withdraw from NAFTA. It wasn’t until after a hastily prepared presentation by, among others, Agriculture Secretary Sonny Perdue, which included a map showing which areas of the US would be most affected by pulling out of NAFTA, that everyone realised those areas overlapped with people who had voted for Trump.
Trump later said he changed his mind on terminating NAFTA after speaking with Trudeau. That wasn’t the impression of the Prime Minister’s Office.
Back in Ottawa, Trudeau staffers were saying Trump told Trudeau he was “very much” considering re-negotiating the trade deal. Then there was the phone call between the two leaders about softwood lumber. President Trump had been surprised to learn that US tariffs would cause substantial job losses in Canada. Later reports talked of a cutbacks in home building in the US because the softwood lumber tariffs would add around $US3000 to the cost of a house.
People wouldn’t buy the house and US builders would be left without an income source.
For the moment, Canada is sticking to its “script”– it objects to the tariffs, and is ignoring the rhetoric. The nub of the softwood lumber dispute is that the bulk of Canada’s softwood lumber comes from forests owned by the federal government. In the US, the lumber comes from mostly privately held land and is more expensive. The US believes Canada’s softwood lumber is “subsidised” because it comes from government-held lands; an impression mostly caused by the fact Canadian lumber is cheaper.
Then there was the dairy dispute. Trump was in Wisconsin when he heard the story about that state’s long-ailing dairy industry. Wisconsin farmers had found a way into a corner of Canada’s protected dairy market, until Canada’s dairy boards undercut Wisconsin prices.
Trump saw it all as Canadian cheating pushing US farms out of business. It was pure and simple politics: Trump could be shown as standing up for beleaguered farmers.
A former Canadian ambassador to the US, has voiced fear that Trump is tailoring his remarks as “a bit of a shakedown”.
The Canadian government of Justin Trudeau can’t tangle with Trump the Tweeter, but Canada and US business leaders have to start talking out about the impact of “unhinged rhetoric”.
As the former ambassador noted: “Mr. Trump and Mr. Trudeau are talking. As long as the channels are open at the top, we’ve got a reasonable shot at keeping this on the road.”
*This article initially appeared in John Menadue’s Pearls and Irritations