COMMENTARY: When it comes to trade, Trump is the problem
It was a disappointing contrast on display in recent days as the G7 descended into a G6 + 1, as U.S. President Donald Trump decided to suddenly make a push for adding Russia and expanding it back to a G8.
Of course, any U.S. president is going to put his or her own country’s interests first, but American global leadership still matters. Having allies still matters.
For whatever reason, Trump has been abandoning both. The rest of us need to accept this fact, and figure out how to deal with it.
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The question of re-admitting Russia illustrates this stark divide. Trump’s sudden enthusiasm for having Vladimir Putin at the table is a dramatic departure from the statement released just two months ago by the G7 foreign affairs ministers (including the U.S. Secretary of State) which decried “the degraded human rights situation in the peninsula, and the violations and abuses committed against its population by Russia in Crimea.”
Fortunately, Canada and other European leaders were quick to reject the idea of allowing Russia back in.
Clearly, nothing has changed in Russia’s behaviour since 2014 when it was dropped from the G7 (an effort led by then-prime minister Stephen Harper). Moreover, if we really want eight countries at the table, then India would be a much stronger candidate, both in terms of economy size and shared values.
So it’s rather unfortunate that Trump would feel as though he needs Russia’s inclusion to find a sympathetic face at the table. It’s also rather unfortunate that Trump seems to view his G7 allies as a bigger economic menace than China — as it stands now the tariffs imposed on Canada and Europe dwarf those imposed on China.
The G7 ought to be the ideal setting for the forging of a solid, American-led united front to confront Russian aggression and Chinese trade shenanigans.
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Instead, it’s devolving into a united front of the other six countries against the division and mayhem being sown by an erratic president who inexplicably seems to crave a trade war with some of his country’s closest trading allies.
Hopefully, that new united front can hold. We need all six banded together in standing up to Trump’s trade antagonism while still making the case for why the U.S. can and should still count on us as allies — in every sense of the word.
Here at home, a united front among political leaders is no easy achievement, but at this moment in time, it would be most useful. Whatever the leaders of the main federal parties may think of each other, Canada’s interests need to be defended.
That’s not to say Canada’s always in the right. The U.S. has some legitimate concerns with certain Canadian trade practices (although the U.S. is guilty of many of the same things themselves). Trump made several references this week to the high tariffs we have on dairy and poultry products as part of our supply management regime.
It was awkward timing, then, for the Conservatives to criticize Prime Minister Trudeau for expressing a willingness to compromise on supply management while simultaneously criticizing him for not getting a NAFTA deal over the finish line.
Frankly, Canadian consumers should be demanding that we reduce these tariffs, just as Americans should worry about the tax increase that the Trump tariffs represent.
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On the whole, though, our tariff burden is lower than the Americans’. Canada has benefited from free trade and we’ve largely had a political consensus on that between the Conservatives and Liberals for the past two decades.
The previous Conservative government advanced both the Trans Pacific Partnership (TPP) and the free trade deal with the EU. The Liberals completed the latter and appear to have helped resurrect the former after the U.S. withdrew.
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Of course, if Trump was interested in seeing trade barriers reduced among key U.S. trading partners — and in reducing agriculture trade barriers, in particular — then he ought to have remained in the TPP. Trump’s bizarre fixation with securing bilateral trade deals is not only proving rather unsuccessful, but it’s causing all sorts of harm to existing deals and the entire concept of liberalized global trade.
There are still numerous principled free traders within Trump’s own party who can hopefully convince him of the futility of tariffs and trade wars, and the madness of driving away allies.
We can’t bank on that happening any time soon, however. We’re stuck with this problem and we have to figure out how to deal with it.
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