Note: This article originally appeared in iPolitics on Friday, Jan. 13, 2017.
Following a U.S. presidential campaign marked by bold, provocative gestures, it was a move fit for the times: Not long after the confetti was swept off the floor at Trump’s victory party, the Trudeau government signalled, via diplomatic channels, that it would be receptive to opening up the North American Free Trade Agreement.
For those on the opposition benches, Trudeau was being naïve at best — approaching our largest trading partner with an overweening eagerness to set the frame. It did not take a great deal of strategic insight to read Trump’s sabre-rattling about ripping up NAFTA as being all about Mexico, not us.
Yet there was more to the gesture than the initial interpretations saw. As we look ahead to the first 100 days of a Trump government, we can see the components of a new approach to relations with our largest trading partner in Trudeau’s overture.
Now more than ever, in the kabuki theatre of international trade relations, what occurs behind the scenes defines the gestures on stage. What truly set the tone for our dialogue with a Trump government was what was not said during the presidential campaign. There was little commentary from the prime minister or his cabinet in the months leading up to Election Day, and for a good reason: This is a trading relationship that accounts for approximately $2.4 billion in goods and services crossing the border daily, supporting over 10 million jobs on both sides. The Trudeau government’s message discipline assured the incoming government that we would come to the table in good faith, and that the NAFTA gesture would be seen in the best light. It’s about trust.
The commentariat in Canada and around the world has made much of the stark contrasts between Trump and Trudeau: the former allegedly inward-looking and polarizing, the latter a global brand ambassador, defining Canada as an innovation champion and the last centrist outpost in a rapidly polarizing world.
What these profiles in broad strokes conceal are the similarities between the two governments. You can be assured that Trump’s team will keep a strong focus on the priorities and concerns of a beleaguered middle class, just as the Trudeau government did with three big policy announcements in its first year — its middle class tax cut, the Canada Child Benefit and the Canada Pension Plan agreement with the provinces.
Republicans will stray at their peril from the president’s focus on ‘making good deals’ for the American people. It will be incumbent on the Trudeau government to be just as pragmatic, just as transactional with the Trump administration.
In the first year of its mandate, expect a similar ‘retail’ approach from the Trump government to the demographic that feels most acutely the impact of limited real GDP growth, the erosion of the manufacturing sector and the struggles faced by the energy, agricultural and resource sectors.
Much has been made of the fact that all of the progress made working out the details of the Trans-Pacific Partnership (TPP) trade agreement has now been lost with Trump in the Oval Office. Throughout the summer, the official line was that we were making steady, incremental progress towards an agreement that would redraw the map for global trade, foregrounding the Pacific Rim region as a hub for accelerated growth and stronger trade relationships.
Yet the TPP was always a flawed document, and it is questionable whether it would have fared any better had Clinton won. A Trump government is not going to focus its energies on such sweeping multilateral agreements. Trump wants to make deals — better deals — as bilateral agreements. What this means for the Canadian economy is that a sector-by-sector approach to the U.S. — one that ensures both governments can claim victories — is the only way forward.
The good news is that, through the cross-country consultations on the Trans-Pacific Partnership that the government initiated last year, then-International Trade Minister Chrystia Freeland received the best briefing possible, at the grassroots level, of the current state of play for Canada-U.S. trade relations. From dairy farmers in Quebec to lobster fishermen in the Atlantic provinces, these conversations are going to be key to ensuring that Canada’s interests are articulated and stoutly defended in the months ahead.
The challenge will come in how fast-moving the anticipated big ticket announcements from the Trump administration will be, in every area from corporate tax reform to health care. The Republicans “won big,” as the president would say. Freed from the kind of partisan gridlock that marred the progress the Obama administration could make moving legislation forward, the Republicans will be looking to get things done in a hurry. And it will be the GOP’s congressional agenda, rather than simply the president himself, that will determine his legislative record.
But the Republicans will stray at their peril from the president’s focus on “making good deals” for the American people. It will be incumbent on the Trudeau government to be just as pragmatic, just as transactional with the Trump administration. Clear-eyed, focused and resolute in defending Canadian interests — our neighbours and strongest trading partners on the international stage would not expect any less of us. It’s time to bring our ‘A’ game to the table and refine our version of the art of the deal.