Trump’s ‘leaked’ NAFTA letter is a gift to Canada
TheGlobeandMail.com – ROB/Commentary
Apr. 05, 2017. BARRY CAMPBELL
Barry Campbell is president of Campbell Strategies and a former member of Parliament.
A draft letter from the White House to Congress setting out the Trump administration’s goals for trade talks with Canada and Mexico has been much in the press. For Canada, the draft is a useful document signaling where the United States is coming from and where it wants to get to.
In keeping with the zeitgeist, one might ask who leaked the “draft” communication from President Donald Trump, why, and why now?
This was no skullduggery nor the unauthorized release of a purloined draft. This was the floating of a trial balloon by the administration to see how its plans for trade talks will play in the hinterlands. Because the President’s authority to negotiate trade deals flows from Congress’ tariff-setting power, the audience for the draft is primarily in the United States. Leaking the draft now is a good strategy to find out what will fly. It is intended to be circulated widely so it can be added to if a congressman cares about something that’s been missed.
The draft document makes sense if you remember the context that produced it. The rhetoric around trade has been that the United States is a fragile market that has been taken advantage of by clever foes. These foes have apparently out-negotiated and outsmarted every U.S. administration since the Americans set up the post-Second World War trading system and the institutions that run it. Whining like this has usually been the purview of weak states who have had to be policy takers and not policy makers. The mighty United States as Gulliver, bound by tiny threads on the shores of Lilliput, comes to mind.
That this image and those beliefs do not marry with the fact that the United States is the world’s leading economy by every measure doesn’t matter. We must deal with an administration that, tweet by tweet, blames foreign culprits for the very real dislocation and disruption that has roiled parts of the U.S. economy. This White House will make policy pronouncements based on that perception.
The draft is a laundry list of every slight and every grievance that anyone has ever had about “trade.” But most importantly, it is not an ultimatum. The draft appears to have been produced by very knowledgeable and clear-eyed officials who know the lingo, know where the skeletons are buried and know what needs to be changed to give maximum advantage to the United States. The document displays maturity in setting out what the administration “seeks” to achieve and makes no threats. This wasn’t a document shaped so much by hard election rhetoric, but by U.S. mercantilist interests of the first order. Gulliver stands!
Ironically, half the things the United States is demanding of Canada and Mexico (e.g. access to local government procurement, meeting international labour standards) would be on Canada’s list, too. If the U.S. would commit to many of these same things, we might be happy to put down our pens and to go home happy campers. “Transparency, efficiency and predictability,” “fair, equitable non-discriminatory access,” “eliminate artificial or trade-distorting barriers to investment.” Sure! Bring it on.
That’s the funny thing about trade. It goes both ways. They need some of our stuff. The trade war you want is not usually the one you get. The United States will take aim at limits Canada has on foreign ownership of major financial institutions and in telecommunications, and we will ask about formal and informal limits in the United States of ownership in banking, aviation and communications, and the wide-open process whereby the United States determines what are strategic assets subject to review.
The document demands that NAFTA be modernized. Well and good. The world has changed in the last 20 years. But demands for greater openness and opportunity in data and culture is not something new. The United States has consistently pushed to open up opportunities where it has advantages. No nation develops its trade policies devoid of any analysis of where its relative advantage lies. For the United States, that is with the Apples and the Disneys. Remember that and focus on data and intellectual property.
But fear not. Canada has always known where its interests lie and will protect and project its comparative advantage. We have a wish list, too. We have trip wires like the need to attract foreign investment, protect culture and privacy and our sovereignty. But let’s take President Trump’s advice and not let the Americans know what’s on and off the table before the talks even start .
And remember that trade negotiations do not take place in a vacuum. The United States will not get to set the entire agenda for the talks. And there will be other things that will get in the way. Does the United States want a failed state on its southern border? Does the United States need Canada’s support here or there on the world stage for a secure and prosperous North America? Do they want it?
“Fee, fi, fo, fum,” says the U.S. administration. “I’ll grind your bones to make my bread.” But as the story goes, little Jack has an agenda of his own and we know how the story ends.