There is much bluster and fear-mongering in the news today. There is rampant speculation on how Canada will fare in trade negotiations with the U.S., now that it is under a Trump presidency. Trump’s presidential bid was successful because of his economic nationalism, and he stated he would re-negotiate all of the U.S. trade agreements, including NAFTA. Of course, this has had the two polarizing effects of creating our own economic nationalists here in Canada, and those who fear our economy is now doomed.
So much of this speculation is asinine, missing two very obvious points. First is the simple fact that the U.S. and Canadian trade economies have been integrated almost since the foundation of both countries. Even prior to the 1988 Free Trade agreement, or the 1993 NAFTA agreement, over 70 per cent of Canada’s trade was with the U.S., and these agreements were merely the formalization of these economic relations, removing some non-tariff barriers.
The second reason is that the Office of the President is limited in what it can do. It can initiate such discussion, and even try to negotiate through its State Department, but in the end it does not approve these deals. Congress does this, and these negotiations take time, most likely exceeding the time that Trump will be in office. It will be Congress whom Canada will have to appeal to in order to further the interests of Canadian businesses and Canadians.
The simple fact about trade is that its greatest influences are both geography and cultural similarities, for trade is like water, it takes the easiest course. Canada and the U.S. are extremely similar countries, whose interests are entwined and have been well harmonized. The last time the U.S. did invoke protectionist trade barriers with the Smoot–Hawley Bill, 1930, the economic impact was quite damaging to their own economy, and those measures were repealed in 1935. Interestingly enough, it was trade with the Commonwealth that allowed Canada to weather that economic storm, something that we should reconsider, as our cultural ties are quite strong. The U.K. is our largest European trade partner, and five of the countries we negotiated with in the TPP are Commonwealth countries.
The fact remains that Trump’s inauguration speech was a reiteration of his stump speeches on the campaign trail, which sought to appeal to an anti-globalization and anti-establishment crowd. It was an emotional appeal to Americans whom had been negatively impacted by neo-liberalism. Sadly, it ignored the fact that the majority of those jobs were lost to technology and automation, domestic corruption and greed. Trump will get his wish, and we will start to re-negotiate NAFTA, but if our Cabinet allows cooler heads to prevail, and follows the lessons that our mutual history has to offer; there is little need to worry. This is little more than a tempest in a teapot, and it will soon pass.
John Kennair is an international consultant and doctor of laws who lives in St. Albert.
