Rebooting Canada’s Failed NAFTA Strategy
Danny Lam, 13 Jan 18

Canada’s NAFTA strategy is in big trouble. Prime Minister Justin Trudeau is seen here meeting with U.S. President Donald Trump in the Oval Office of the White House in February 2017. (THE CANADIAN PRESS/Sean Kilpatrick)

Canada’s NAFTA strategy is in trouble, to the extent that officials reportedly fear the United States is about to withdraw from the deal.

Canada’s credibility with Americans has been damaged during the past year because political expediency has triumphed over institutional integrity. Understanding how Canada’s credibility has been damaged, and repairing it, will be key to a new start.

Robert Lighthizer, America’s top trade official, reacted to the latest Canadian WTO complaint by calling Canada’s strategy “ill-advised,” saying it could “lower U.S. confidence that Canada is committed to mutually beneficial trade.” He argued that Canada is “acting against its own workers’ and businesses’ interests. …. Other countries would primarily benefit, not Canada.”

This assessment by Lighthizer clearly indicates that Canadian trade strategy is not well-received where it matters.

Chrystia Freeland, Canada’s foreign affairs minister, is seen here at a trilateral meeting with Mexico’s Secretary of Economy Ildefonso Guajardo Villarreal, left, and Ambassador Robert E. Lighthizer, United States Trade Representative, during NAFTA renegotiations in Ottawa in September. THE CANADIAN PRESS/Sean Kilpatrick

Central to the federal government’s failed NAFTA approach is the reshuffled cabinet and “Trump Unit” created in the Prime Minister’s Office in the aftermath of U.S. President Donald Trump’s stunning victory in November 2016.

The unit was formulated to seek the opinions of key Trump figures, reach out in an attempt to change some of those opinions and implement a “rapid response” system in times of crisis.

It is a centrally directed organization in which the Liberal government orchestrates moves like an election campaign “war room” with the goal of dealing with Trump administration initiatives that include the NAFTA renegotiations and its challenge to Canadian subsidies of Bombardier.

Trump ‘war room’

The “war room” is staffed by seasoned political operatives, including PMO figures like Gerald Butts and Katie Telford, cabinet ministers like Chrystia Freeland, Ambassador David MacNaughton and even journalist Michael Den Tandt. Problems and issues with the United States are dealt with as though they are “campaign issues.”

The Trump Unit will likely be disbanded as the 2019 federal election approaches, leaving career civil servants to take over the hard work of managing Canada-U.S. trade issues.

Trade negotiators, after all — unlike politicians — are all about long-term credibility, crafting good deals and sticking around to ensure those deals keep working. They smooth out differences and disagreements that inevitably arise as a deal is implemented over decades.

The late Simon Reisman, a longtime Canadian civil servant, owed no small measure of his success to his reputation and credibility in making not one, but successive deals work. He was relied upon by all political parties to solve the problems that inevitably arise in the implementation and evolution of any trade deal. The decades-long continuity of his deals is testament to his achievement.

The Liberals have seemingly abandoned the Reisman approach and are now treating Canada-U.S. relations as a political campaign against the Trump administration, assigning people to that strategy accordingly. Maintaining Canadian institutional integrity and credibility is apparently not a concern compared to “winning.”

The government has taken a win-at-all-cost, no-prisoners approach to relations with close allies who have historically relied on Canada’s steadfastness, credibility and trustworthiness.

Credibility problem

Canada now has a credibility problem thanks to the well-established pattern for successive governments to renege on commitments made by their predecessors, whether it’s the Kyoto Protocol in 2011 or NATO’s Wales Declaration in 2014.

For a fresh start, Canada has to speak with one voice on NAFTA and on Canada-U.S. relations. The government and trade experts, both in and out of government, must share their knowledge equally with all political parties and provinces.

Dramatically changing Canada’s political culture and established behaviour is out of the question in the short term. But it’s within the parliamentary tradition to form an ad hoc governing coalition for both NAFTA renegotiations and the Canada-U.S. relationship to ensure continuity by successive governments.

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