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A Trumping of the Screw: Canada-US Trade and the New Reality

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Is Canada in Trump’s Crosshairs Regarding Trade?

by Peter Ewart  - 250 News


November 20, 2016

Donald Trump railed and blasted at how the “rest of the world” was getting away with murder in terms of trade with the US, a statement fraught with irony given the US’s long record of bullying other countries. The two countries he mentioned the most were Mexico and China. However, although Trump often brought up NAFTA as an object of scorn, he rarely mentioned Canada, which is odd given that Canada is deeply enmeshed in NAFTA and is America’s largest trading partner.

Does this suggest, as some politicians and pundits claim, that Canada may not be targeted as harshly as Mexico, China and other countries? Far from it. To think that way could prove naïve. Indeed, a leaked memo to CNN apparently from the Trump transition team suggests the opposite (1).

 

The memo reveals that the Trump team is considering a 200-day plan built around five main principles to drive the negotiation. The plan clearly states that “new trade agreements will be negotiated that provide for the interests of US workers and companies first” (2).

If the memo is authentic, this suggests that any thought of trade for mutual benefit is thrown out the window and other countries like Canada will necessarily come “second.” The memo indicates that the process will start on Day 1 with the US plans for NAFTA reform and conclude on Day 200 when the US will consider formal withdrawal from the trade pact if an agreement is not reached with Canada and Mexico.

According to CNN, Day 1 negotiations will begin with the US Trade Representative notifying Canada and Mexico that the US will propose amendments to NAFTA and other trade arrangements, including “measures on currency manipulation, lumber, country of origin labeling and environmental and safety standards.”

Beyond NAFTA, the US side will aim to stop what it calls “unfair imports” and “unfair trade practices”. It is interesting to note that two of the four “measures” that are singled out for attention apply especially to Canada, i.e. lumber and country of origin labelling (meat exports, etc.), both of which have been extremely contentious issues in trade between Canada and the US, and involve billions of dollars. Such a negotiating thrust from the US side could have huge consequences for the Canadian economy, and, more specifically, on British Columbia's workers and communities that depend on forestry manufacturing.

As the CNN article points out, “Canada gets in more NAFTA trouble than Mexico” with the US bringing 35 complaints against Canada over the last twenty-two years, while bringing only 20 complaints against Mexico. It also mentions the Softwood Lumber dispute as being “a very sour point in Canadian-American relations for quite a while” and even hearkens back to the bitter US – Canada trade war in the 1930s when the US, through the Smoot-Hawley Act “slapped tariffs on all countries that shipped goods to America.”

In a pointed jab, the CNN analyst argues that US tariffs on various goods from other countries are not nearly as high as Canada’s. Some Canadian officials are suggesting that, if NAFTA is ended, Canada could simply fall back on the older Canada-US Free Trade Agreement (FTA). But Establishment analysts, such as Terence Corcoran of the National Post, argue that the US side might put the FTA itself back on the table for re-negotiation, which could impact “agricultural protections, intellectual property, environmental regulations, telecom rules, and labour provisions” in Canada (3).

For his part, Perrin Beatty, president of the Canadian Chamber of Commerce, claims that “statements Mr. Trump made during the campaign suggest every aspect of Canada-US trade is up for negotiations.” All of this suggests that trade with Canada is squarely in the Trump administration’s crosshairs, perhaps in certain ways (which will be discussed in future columns) even more than Mexico.

So, if the Trump team felt so strongly this way about trade with Canada (as revealed in the leaked memo) why did Donald Trump not emphasize the Canada “trade problem” during the presidential election campaign as frequently as he did Mexico? Is there some kind of deception or misdirection going on here?

Some media pundits claim that Donald Trump is often erratic and unscripted, which is why he says different, sometimes contradictory things about the same topic, while leaving other things out. But to completely believe that about Trump could be a big mistake. More information is coming out about how Trump’s digital/social media election campaign was organized. It appears that some or even many of his so-called unscripted and off-the-cuff statements, including the inflammatory and contradictory ones, may have been quite deliberately put forward as tests and then adjusted and revised in response to surveys and feedback from assembled online groups.

So, Trump leaving out references to trade with Canada and emphasizing Mexico may not have been so accidental after all. Perhaps in hopes of winning votes, Trump made inflammatory, hostile statements against Mexico, claiming that many Hispanic undocumented immigrants from there were “rapists, drug dealers and murderers”.

How would similar Canada bashing have gone over with US voters? Probably not so well for various reasons, including the reality that there are far fewer undocumented Canadians inside the US. Did Trump craft his message to deliberately exclude Canada with the aim of playing hard ball after the election smoke clears?

Indeed, will Canada be the main target, not Mexico or China? We will see. Clearly, the next four years will not be business as usual on the trade front and could be something much worse for both Canadian and American workers, especially if trade wars break out. In the face of Trump administration arrogance and bullying, what will Canada’s own nation-building strategy be?

A big problem in developing one is that the Canadian big business Establishment gave up nation-building many decades ago and embraced continentalism and unfair trade arrangements like NAFTA and the FTA, which, in effect, have made Canadian workers, as well as, small and medium businesses based in Canada, particularly vulnerable to the chauvinistic demands of the US / North American oligarchy. We, the people of Canada, need a new nation-building strategy that, while embracing global trade for mutual benefit, moves toward a more all-sided, self-reliant economy, one that can stand firm against global economic storms and big power pressure.

Notes:

(1) Gillespie, Patrick. America’s NAFTA nemesis: Canada, not Mexico. CNN. November 16, 2016. http://money.cnn.com/2016/11/16/news/economy/nafta-canada/

(2) Kopan, Tal. Trump transition memo: Trade reform begins Day 1. CNN, November 16, 2016. http://www.cnn.com/2016/11/15/politics/donald-trump-trade-memo-transition/index.html

(3) Corcoran, Terence. Canada could be in for a lot more trade trouble under Trump than just NAFTA. Financial Post. November 17, 2016. http://business.financialpost.com/fp-comment/terence-corcoran-canada-could-be-in-for-a-lot-more-trade-trouble-under-trump-than-just-nafta

Peter Ewart is a columnist and writer based in Prince George, British Columbia. He can be reached at: This email address is being protected from spambots. You need JavaScript enabled to view it.

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