Canada is often seen as a close relative of the United States. It’s always been so, and Canadian leaders have rarely strayed far from that relationship.
Justin Trudeau and Donald Trump both attended the 42nd meeting of the Group of Seven on May 26 and 27; Trudeau for his second time and Trump for his first. What emerged was a sense of rivalry, as Trudeau arrived in favour of the same progressive policy points Trump opposed.
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While Canada and the United States don’t always see eye to eye, they very rarely go head to head. On issues of climate change and trade however, not only are these two leaders far apart, they both also have a lot to lose.
“The issue with the G7 is we’re going into that with disagreements with the United States on some fundamental issues; how open our border should be on immigration, how open our border should be on trade,” explains Peter Loewen, the director of the School of Public Policy and Governance at the University of Toronto. “And those are issues that are pretty key to our prosperity, they’re pretty key to our continued thriving as a country, and they matter politically in both countries to varying degrees. That makes everything a little bit different.”
The two most-talked-about subjects at this year’s G7 Summit were climate change and trade, accompanied by discussions about terrorism and the migrant crisis. On climate change and trade, Trudeau embodies the views held in high regard by the Group of Seven; free trade is paramount and climate change is imminent.
Trump on the other hand, took a controversial stance on many of the issues discussed this year, including threatening to pull the United States from the Paris climate change accord, and being historically critical of existing free trade agreements. As one of his first moves as president, Trump wasted no time repealing the Trans-Pacific Partnership by wielding a now-infamous executive order.
The president of the United States left the G7 Summit having agreed to language in the final G7 communique that pledged “to fight all forms of protectionism,” and committed to a rules-based international trade system. He would tweet later about how the agreement called “for the removal of all trade-distorting practices,” making no mention of protectionism.
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While this represents a fickle win for free trade, Trump refused to renew the United States’ commitment to the 2015 Paris accord, while Reuters reports he has informed “confidants” of his intention to back out.
According to Loewen, this sudden break from Washington puts Canada in an interesting position. The majority of the northern neighbour’s economic benefit and international trade comes from the U.S., in addition to Canadians enjoying fairly relaxed border-crossing policies. Loewen describes this relationship as ideal as a bond between two countries can be, but there’s a catch.
Over the past few years, Canada has been working — along with other industrialized nations around the world — to create a rules-based international system where trade is not regulated by “the whims of an agreement between two countries,” but by broad international principles.
This may put Trudeau in the difficult position of choosing between maintaining Canada’s presence on the globalization-driven world stage, or maintaining Canada’s single-most important international relationship.
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Given the mutually-beneficial trade relationship between Canada and the United States, Loewen explains the possibility of Trump attempting to secure this relationship outside the confines of the trade agreements he’s expressed such disdain for, such as NAFTA. In such a scenario, Trudeau may be forced to make a difficult choice.
“What happens if Trump comes along and says, ‘You know what Canada, let’s just make a side deal. Let’s keep stuff going well between us, but let’s cut Mexico loose.’ That might be really tempting to Canada,” Loewen explained.
Should Trudeau choose to change the current course of Canada’s economic development to follow the U.S., he could prevent some immediate hardships for the Canadian economy. Loewen gives the examples of tariffs on softwoods, difficulty in the auto sector, and the competitive edge lost by eco-friendly Canadian businesses trying to compete against their fossil-fueled American counterparts.
“We can limit short-term pain, but is that worth it?” Loewen asked. No one can know for sure.
Should Trudeau determine that it’s not, another option does exist that could serve to propel Canada further into the international landscape, and one step closer to shedding the protective cloak of our longtime southern ally. It may take a little longer, says Loewen. However, he continues, it just might be worth it.
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“We can invite some short-term pain, for example, harsher tariffs on softwoods, some difficulty around the auto sector. It could actually have a pretty measurable effect on our country, but maybe it will be good for the global order in the long-term.”
Being so intertwined with the most powerful country in the world — economically, culturally and otherwise — Canada has long struggled to carve out a place for itself on the world stage. While historically considered a fair trade-off, has the time finally come when Canada’s own identity is too much to lose?
— With a file from Reuters