THE WEST BLOCK
Episode 33, Season 6
Sunday, April 23, 2017
Host: Vassy Kapelos
Guest Interviews: Matt DeCourcey, Charles Kupchan, Bob Fife
Location: Ottawa
On this Sunday, President Trump blasts Canada for taking advantage of American workers and farmers under the North American Free Trade Agreement. As the rhetoric on both sides of the border ramps up, what’s at stake?
Then, people in France head to the polls today: Marine Le Pen and her right wing Nationalist party, has picked up support across the country, falling on the heels of Brexit, the rise of the right throughout Europe and nationalism south of our border. So what lies ahead for Europe and the West?
Plus, we’ll unpack the politics of the tough trade talk between President Trump and Prime Minister Trudeau.
It’s Sunday, April 23rd. I’m Vassy Kapelos, and this is The West Block.
From tweaks to total renegotiation, President Trump now claims trade between Canada and the U.S. has hurt American workers and farmers. And as Congressional members return to Washington tomorrow, Trump is promising to propose big changes to NAFTA in the next two weeks. Listen to the President take aim at Canada late last week.
President Donald Trump: “Canada, what they’ve done to our dairy farm workers is a disgrace. It’s a disgrace. I spent time with some of the farmers in Wisconsin, and, as you know, rules, regulations, different things have changed. And our farmers in Wisconsin and New York State are being put out of business, our dairy farmers. And that also includes what’s happening along our northern border states with Canada, having to do with lumber and timber. The fact is, NAFTA—whether it’s Mexico or Canada—is a disaster for our country.”
Vassy Kapelos: Joining me now is parliamentary secretary to the minister of foreign affairs, Matt DeCourcey. Thanks so much for being here, nice to have you on the show.
Matt Decourcey: Thanks Vassy.
Vassy Kapelos: I wanted to ask you first off about what we just heard from President Trump. He called trade with Canada under NAFTA ‘a disaster’ and he called our policies around the dairy industry ‘disgraceful’. How surprised were you at how pointed his attack at Canada was?
Matt Decourcey: I think what’s important for Canadians to remember is that ever since the Trump administration has come into office, the Prime Minister, the minister of foreign affairs, all of cabinet, parliamentarians from across the political spectrum, and industry leaders across Canada have been consistently travelling to the United States both to Washington and to other regions of the U.S. to speak with their counterparts about the tremendous integration of our economies and the importance of trade, to jobs and to workers and families on both sides of the border. As relates to the comments about dairy, dairy farmers and producers and all of Canada should know that our government supports the great work that they do. The dairy trade between Canada and the U.S. heavily favours the United States by a factor of almost 5:1. The Prime Minister has reiterated his support for what is a model trade relationship between our two countries. Ambassador McNaughton in his letter to Governors Walker and Cuomo corrected the record around some of the challenges that dairy farmers and producers see on both sides of the border as relates to global pressures like low dairy prices, as well as an over production in some of the dairy market.
Vassy Kapelos: We’ll get into the specifics of dairy later. But you mentioned how Ambassador McNaughton corrected the record the day after President Trump got on TV, and that’s when he swung even harder against Canada and its record on dairy and trade. And you also talk about how many trips and how much work has gone into talking to officials on the other side of the border and reiterating how strong the trade relationship is. So how did we get here then? What happened?
Matt Decourcey: Look, I think Canadians need to know that in the conversations we have with our allies and friends in the U.S., things are moving productively.
Vassy Kapelos: So is then the President not saying anything you’ve heard before from insiders, from people in the administration?
Matt Decourcey: Well we’ve heard these things come out of the President’s mouth before, but in my conversations with my colleagues who have actively been speaking with their counterparts in the U.S., there’s an acknowledgement and an understanding of the importance of trade between our two countries, the fact that $2.4 billion in trade crosses the border every single day, that 9 million American jobs count on trade and investment with Canada. And Canadians need to know that we’ll continue to stand up for the best interest of Canadians and for our industry leaders in all our conversations with the U.S.
Vassy Kapelos: Does that mean though that you don’t put any credence into what the President is saying and has said this past week?
Matt Decourcey: I think it’s important to prepare for any eventuality with the U.S. But again, and to be, I think, cognizant of the words from the President. But again, I reiterate our relationship with the U.S. has been a productive and professional one. We’ve been successful thus far in making the case for continued trade integration between the two countries about ensuring that goods, services and people are able to flow across the border in an expeditious and timely manner, to ensure that our two economies continue to prosper.
Vassy Kapelos: Are you worried though when you hear what the President said last week?
Matt Decourcey: Um—
Vassy Kapelos: That all that work, could be for nothing?
Matt Decourcey: Well it can be concerning to hear these things, but I come back to the point that the Prime Minister in his conversations with the President, the Foreign Affairs minister in her conversations with the commerce secretary and other cabinet members in conversations with their counterparts in the U.S. as well as industry speaking with industry and the U.S. premiers with governors have had tremendously productive relationships and it’s our feeling, and we want Canadians to know that the U.S. and leaders in the U.S. are understanding better and better every day the importance of trade between our two economies.
Vassy Kapelos: I want to ask you about the specifics of what he was attacking, and namely the dairy industry. You mentioned some of the arguments the Canadian government is making in response to what the President was saying. In general, he’s attacking a very specific set of policies, but more largely the idea of supply management in Canada around the dairy industry. Is that on the table during the NAFTA negotiations that are set to take place for Canada?
Matt Decourcey: Important to remind Canadians, first of all, that there have been no negotiations started on NAFTA. The process that would commence that has not taken place in the United States.
Vassy Kapelos: He says it’s coming in the next two weeks.
Matt Decourcey: Well there’s quite a complex government process that has to unfold for those negotiations to start. Robert Lighthizer, the U.S. trade representative has not even been confirmed yet. And so that is a step in the process. We continue to prepare for all eventualities. We continue to make the case in advance of potential negotiations of the importance of our integrated economies. Again, I reiterate as relates to the dairy trade. U.S. imports into Canada outweigh Canadian imports to the U.S. by a factor of almost 5:1. Our government is tremendously supportive of the dairy industry in Canada, the work that it is doing to innovate, to ensure its competitiveness. And again, as was stated by our Ambassador David McNaughton in his letter to the U.S. governors, we think that the dairy trade model between Canada and the U.S. is a model for the world.
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Vassy Kapelos: I understand that. I guess specifically I’d like to know though, is it a hill to die on? Are you prepared at any point to say okay supply management is up for negotiation or are you ruling that out?
Matt Decourcey: Well we’re going to have to wait and see what the U.S. proposes if they do propose modifications.
Vassy Kapelos: It seems pretty clear that they’re going to be asking for some concessions on the dairy side though.
Matt Decourcey: Well we’ll wait and prepare for all eventualities. Again, that process has not been initiated yet, but—
Vassy Kapelos: But you won’t rule out negotiating supply management?
Matt Decourcey: At this point, I think it’s premature to discuss exactly what the negotiations will entail. Certainly there are indications from the U.S., but that gives our officials in Canada an opportunity to prepare and be ready at the point that those negotiations commence.
Vassy Kapelos: Okay, we’ll be watching. Thanks very much for your time.
Matt Decourcey: Thanks so much for having me.
Vassy Kapelos: Still to come, we’ll unpack the politics of the heated trade rhetoric between Canada and the U.S. But first, people in France head to the polls today. What does the rise of a nationalist party mean for France and should the West be worried?
Vassy Kapelos: Welcome back. First there was Brexit, where voters in the U.K. in part, alarmed by rising immigration and problems securing their border, voted to leave the European Union. And now across the water, voters in France are increasingly supportive of the nationalist party headed by Marine Le Pen, who vows to close the French border if her party wins.
In a moment, we’ll talk to European expert, Charles Kupchan. But first, here’s your West Block primer on the rise of the right in France.
She took over leadership of the party after ousting her father, an anti-Semite known for his racist and radical views. Le Pen tried to deradicalize the party and shift the focus to nationalism. She’s anti-immigrant and anti-European Union, and promises to put France first if she wins.
If that sounds familiar, it’s because it is. Donald Trump clinched the U.S. presidency pledging to put American first.
Le Pen is riding a populist wave in Europe. Many call it the rise of the right. Think Brexit. If she’s successful, the end of the European Union as we know it could be near.
Joining us now from Washington is Charles Kupchan. Mr. Kupchan, thanks for being with us, appreciate your time.
Charles Kupchan: Sure.
Vassy Kapelos: From your perspective what is at stake with the elections in France?
Charles Kupchan: Well it’s a huge watershed election in the sense that if Marine Le Pen were to win in the second round and become the next president of France, she would probably work to pull France out of the Eurozone and probably even out of the European Union. If that were to happen, alongside the British exit from the EU, I think it’s safe to say that Europe would not survive. And the project of European integration that was burst in the bitter years after World War II would come to an end. Borders would come back to life, and the idea that the United States and Canada would have an integrated Europe as its partner in the world. That idea would unfortunately go out the window.
Vassy Kapelos: What is at play behind the support for her and her party? And I note specifically the support among youth in France for her party is extremely high. Why?
Charles Kupchan: It’s a combination of things. I would say at the top of the list is immigration, especially in 2015 but continuing into 2016. Europe, Germany in particular, but also France, Sweden and other countries have confronted a wave of immigrants coming both from Syria through Turkey and through the Balkan route. Now more coming from Libya across the Mediterranean into Italy, and this has raised questions about what’s called the Schengen area, the ability of people to move freely among EU countries. A second key issue is stagnation, basically very high youth unemployment in France and in other EU countries. People feel like their future is bleaker than their past, especially in working class areas, and this is a phenomenon that we’ve seen here in the United States. We’ve seen it in the United Kingdom. It raises very troubling questions about what average Americans and average Frenchman are going to do to earn a living wage and whether this populism that we’re seeing could spell serious trouble for centrism and Liberal democracy across the West.
Vassy Kapelos: And what’s your sense of that? What do you think the answer to that question is at this point? Is it spelling major trouble for Liberal democracies across the West?
Charles Kupchan: Well I think we know that the answer is yes for now because Donald Trump is not alone as an example of someone who has ridden this populist wave. Nobody expected him to win. Nobody expected Brexit to happen. Nobody really thinks that Le Pen is going to win, but she could win. My best guess is that she will not. And the good news is that if you look across Europe, France, Germany, Italy and most European countries, centre left and centre right are still in control of politics and those parties are pro-European, pro-integration and very centrist. The problem is that they are losing market share. They’re still in power, but they’re losing market share to populists on the left and the right. So far, it doesn’t look like they’re going to lose enough market share to lose power, but that could always happen and the French election is really going to be a bellwether in helping us sort that question out.
Vassy Kapelos: Is there a lesson for a country like Canada in that? I noticed you kept saying nobody expected, nobody expected, nobody expected. Is there a lesson in that for a country like ours?
Charles Kupchan: Well you know, number one, I’d say let’s be very leery about making political projections because the pollsters are wrong time after time. We live in a political environment in which there is great uncertainty. I also think that’s it’s interesting that Canada is in some ways heading in the opposite direction after having a prime minister who was on the sort of further right of the political spectrum and some ways an outlier among the western democracies. Canada, despite the fact that the populists are gaining strength in many other places is moving back toward the centre left and in that respect it may be incumbent on Prime Minister Trudeau and on Canadians to help uphold some of those traditions that the West has tried to advance since World War II. Liberal democracy, tolerance, immigration, pluralism, these values are under threat, and those of us who support them need to do what we can to defend them.
Vassy Kapelos: You worked for both the Clinton and Obama administrations, and of course you’ve been studying Europe for years. Did you ever see the rise of those threats? Did you ever see the French election being such a bellwether election coming ahead?
Charles Kupchan: Well you know, the National Front in France has always been there and they’ve done well enough in national elections to be a force, but they have never done well enough to win. What is unusual about this election is that Le Pen could win. It is conceivable that the next president of France could be someone from way outside the political mainstream. And so we are potentially witnessing a historic inflection point. The era that opened up with Pearl Harbour, the beginning of Pax Americana, I would say is still alive. But if Le Pen wins, and you see this tilt in a populist direction here, in France and the United Kingdom, I think it’s going to be very hard to keep Liberal democratic countries on an even keel, and, it gives Vladimir Putin, who is very determined to fragment the West, a new opening.
Vassy Kapelos: Sure does, thanks so much. We’ll leave it there. Appreciate your time, sir.
Charles Kupchan: My pleasure.
Vassy Kapelos: Up next, we’ll unpack the politics of Trump’s tough trade talk and how this may affect upcoming trade talks with our southern neighbour.
Vassy Kapelos: Welcome back. Dairy, lumber and energy: President Trump calls trade with Canada in those three sectors a ‘disaster’, his strongest rhetoric yet. He took aim at Canada no doubt, and now officials here are trying to figure out their next move.
Joining me now to unpack the politics of it all is Bob Fife, Ottawa bureau chief for the Globe and Mail. Great to see you, thanks for being here.
Bob Fife: It’s great to be here.
Vassy Kapelos: So how much was using the words ‘disaster’, ‘disgrace’, how much of what President Trump said last week was a game-changer? Is there a panic button being pushed in the government somewhere right now?
Bob Fife: I don’t think there’s a panic button being pressed at all in the government because he’s an unpredictable guy. They know he’s unpredictable. And they also know that he tends to go over the board with his language. Having said that, the government has to treat this seriously when he hammered us on dairy, there was reason for that. It was in Wisconsin. The Speaker of the House representative, that’s his state. And they’re upset about the fact that Canada stopped unfiltered milk from coming in. Prices are very low now in the United States for those dairy farmers and they’re getting really hit by us doing this. So that is a big political problem for him and he threw some red meat at the crowd. The soft wood lumber is a big dispute, but keep winning at the World Trade Organization (WTO) and they keep doing these countervail against us and that is a big problem. We need to solve that. In terms of energy, nobody knows what he’s talking about. They want our energy. They want our electricity. Is it mean that they’re going to put kind of a border tax on energy, which doesn’t make any sense because first of all, these are all American multi-national loan firms that loan a lot of this as well. So nobody knows what he’s talking about in terms of energy. But clearly what it all says to us, as I think we’ve realized a couple weeks ago, that this isn’t about tweaking. We’re going to have to deal very hard and hard negotiations when the Americans get down, but I don’t think we should play too much into Mr. Trump’s rhetoric, focus on the actual secretaries and the negotiators who are doing this stuff because he often doesn’t know what he’s talking about.
Vassy Kapelos: I guess is there any difficulty in the calculation for the Trudeau government though when they’re deciding what to do next? When you look at all the progress they felt they had made over the past six months and the assurances they had been given from officials in that administration and then all of a sudden, two days, you know, last week we hear those words from President Trump.
Bob Fife: Well actually, I think it shoes to how smart they’ve been in terms of the multi-pronged strategy that they put in place. On Buy America, for example, if they hadn’t gone down to New York and got it pulled out of a New York State Buy American policy, which protected Canada, that just shows you that they’re working every angle. And they know that Mr. Trump can’t deliver everything. He needs Congress. He needs the states in a lot of these things. They need to get business onside, and we’re working every angle to this, including cabinet secretaries. So I don’t think we should be overly alarmed by this. We have to be alarmed by his language. But the game plan that the government has in place is a smart one, keep working all the angles. And in the end of the game, it’s going to have to be give and take and the Americans are going to have to give up some stuff too because they also have areas where we are getting nailed. But I do think probably in the end, former Prime Minister Brian Mulroney said this, supply management is probably going to be one of the things that we’re going to give up in the NAFTA negotiations as we did in the TPP. And you know what? Canadian consumers in the end will benefit from it, and although farmers will be hit initially, I have a lot of faith in the Canadian farmers being able to compete globally and with American farmers.
Bob Fife: If we give on supply management, then let’s say this. They have to give on lumber. We can’t keep doing—we do these negotiate a deal and they last for 10 years. As soon as the deal ends, American lumber producers start saying oh, it’s unfair and the slap on tariffs. We go to the WTO and we win. But meanwhile, they’ve had an increase on their market share by denying Canadian lumber into the U.S. market.
Vassy Kapelos: We only have about a minute left. But I wanted to ask you a question that I kept asking myself this week. It looks—you know, when you look at what happened in Wisconsin, I know it was playing to a specific audience there, but it’s 75 farms essentially there that are affected and that drafted this letter and that President Trump ended up speaking about. On this side, you have Prime Minister Trudeau vehemently defending supply management at this point. What is it about the dairy industry that they seem to have this grip on politicians?
Bob Fife: Farmers vote.
Vassy Kapelos: That explains, yeah.
Bob Fife: They really vote and they’re smart business people. To run a farm you have to know what you’re doing. And they’re voters and they vote, so they have a lot of influence.
Vassy Kapelos: They seem to be a very important political constituency.
Bob Fife: They’ve always been. I mean not just dairy farmers, farmers across the country and politicians have to be very careful of that. But I do think Mr. Trudeau’s also being smart about this. He’s not going to throw our supply management system to the wolves simply because President Trump is on his hind legs barking. I mean this is going to be a part of the give and take of negotiations.
Vassy Kapelos: Lots of give and take ahead.
Bob Fife: That’s right.
Vassy Kapelos: Thanks for being here, Bob.
Bob Fife: Thank you.
Vassy Kapelos: And that’s our show for today. Thanks for joining us. I’m Vassy Kapelos. See you back here, next week.
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