Newman on NAFTA (And More): Events Dear Boy, Events

Newman on NAFTA (And More): Events Dear Boy, Events

Don Newman

Those unforeseen occurrences that suddenly demand immediate attention. That is how former British Prime Minister Harold MacMillan ‎summed up his most difficult challenges as he was leaving office in 1963.

Fifty-five years later another Prime Minister in a different country might well be pondering the wisdom of those words.

This past week Justin Trudeau has had come into focus two problems that will bedevil him from now until the next election in 2019, and perhaps beyond. One is to some degree out of his hands. The other is directly in his control.

The first, of course is NAFTA. Cautious optimism in Montreal last weekend that negotiations between Canada, the United States and Mexico were finally getting somewhere came to a crashing halt ‎on Monday, when U.S. Trade Representative Robert Lighthizer rejected Canadian counterproposals on automobile content rules of origin.

Many people had believed that the Montreal talks might be the last round of negotiations before the United States stopped the meetings and U.S. President Donald Trump made good on his threat to give notice to pull out of NAFTA‎.

At least now there will be two more negotiating rounds before that happens. One at the end of this month in Mexico, and another in March in the U.S.

However, it is now even more certain that what the Canadian Government has feared since last October is indeed true. If there is to be a continuation of NAFTA it will be a radically altered agreement heavily slanted towards the United States. Ottawa will have to decide if there is still enough benefit to Canada to re-sign, or to cut and run.

One place we might run is to a free trade agreement with China. But so far that idea isn’t going very well either. One of the Chinese requirements for a trade deal has been increased pipeline capacity from the Oil Sands of Alberta to Canada’s west coast.

That was one of the factors, although not the only one, in Ottawa’s approval of the expansion of the Trans Mountain Pipeline from Alberta to the lower mainland in British Columbia.

New pipelines have always been a difficult tightrope for the Trudeau Government to walk. This past week it became even more difficult.

The New Democrats formed a minority government in B.C. last‎ summer. A minority propped up by three members of the Green Party. The NDP and the Greens are opposed to expansion of Trans Mountain. They were also opposed to a giant hydro project in B.C. called the Site C dam.

The dam falls under provincial jurisdiction. The NDP government of Premier John Horgan could have cancelled it, but the NDP risked the wrath and losing the support of the Greens by announcing that the project was so far along it could not be cancelled. The Government could have fallen and an election called. But the Greens did not abandon ‎the NDP.

It is important to know that background to understand what happened this week. Premier Horgan announced that the B.C. Government would do everything it can to stop the Trans Mountain expansion — even though the constitutional power to approve pipelines lies with the federal government, not the provinces.

In other words, he will try to stop a pipeline he has no power to stop, after giving the go-ahead to the Site C dam which he could have stopped‎. Coalition politics can be confusing. To save his Government Horgan has triggered not just a confrontation with Ottawa, he is also into a pitched war with the Government of Alberta, for whom an oil sands pipeline to tide water on the West Coast is a matter of economic life and death.

But it is not confusing for Justin Trudeau. He has no alternative but to push the federal authority to have the Trans-Mountain expansion built. To do otherwise would be an abdication of the Constitution‎, a breakdown of how the country works.

He has to do it in the face of provincial opposition and protests, in the context of legal challenges and potential civil disobedience. He has to do it in the face of electoral setbacks and disruption and fissures with in his own party.

Not only will the Liberal Government be tested. The opposition parties will have to clearly state their positions as well. With less than two years until the next federal election we can now see at least two of the major issues: Pipelines and the environment, and NAFTA and our relationship with the Americans.

And they were brought into clarity this past week’s events.

Don Newman is Senior Counsel at Ensight and Navigator Limited, a Member of the Order of Canada, Chairman of Canada 2020 and a lifetime member of the Canadian Parliamentary Press Gallery.