COMMENTARY: On NAFTA, Canada risks dying on the wrong hills
Without being privy to what’s actually being discussed at the NAFTA negotiating table in Washington, D.C., I would have to concede the possibility that the U.S. is being so intransigent on so many important issues that Canada may end up with no choice but to walk away.
It’s also possible that under such circumstances, Canadians would view Trump and his administration as the enemy and applaud the Liberals for refusing to cave.
However, based on what we’re hearing — notably from the prime minister himself — it’s more likely that Canada is choosing some odd hills to die on in these talks, and that it may end up being our own foolish intransigence that precludes us from reaching a deal that should otherwise be there for the taking. If so, it’s far more likely that Justin Trudeau and not Donald Trump would bear the brunt of Canadians’ anger and frustration.
Negotiating a trade deal with the administration of a president who comes with a built-in animosity to trade deals is no easy task. Obviously, Canadians expect the government to get a deal done but not cave on every important issue in the process which can amount to having to walk a very fine line. But if we feel we need to go to the mat over certain issues, then there had better be a good reason.
On three key issues — supply management, cultural exemptions, and the Chapter 19 dispute resolution mechanism — we probably don’t need to go the mat at all, and the sooner we realize that, the better off we’ll most likely be.
Certainly, when it comes to supply management, the Americans are doing us a favour by demanding compromise. This may be a case of us holding this card in hopes of winning some concessions from the Americans on other issues, but it would be a real tragedy if we were to lose out on a NAFTA deal and remain stuck with this antiquated and regressive policy.
Prime Minister Trudeau has repeatedly insisted that his position has not changed and that his government will “defend” supply management. The word “defend” can mean a lot of things, and it didn’t preclude Trudeau from agreeing to supply management concessions in the Canada-EU trade agreement and the TPP. There’s plenty of room to maneuver here, too.
Mind you, this time around we’re in the midst of an election campaign in Quebec, and the various political leaders in that province have vowed to raise holy hell if we give even an inch on this issue. The combined political pressure of the dairy lobby and the Quebec government might be enough to scare the Liberals away from some sensible compromises on supply management.
WATCH: No confirmation if deal without continuation of dairy supply management system will be considered
The cultural protection exemptions in NAFTA have loomed large at both the negotiating table and on the Quebec election trail. As it stands now, so-called “cultural institutions” do not fall under the trade agreement and that allows Canada to ban foreign ownership of newspapers, magazines, radio stations, and television stations.
Trudeau has insisted that there is no NAFTA deal if these exemptions are not preserved. But why? What is so essential to Canadian culture about the ownership of media outlets? Would it be preferable to let a media company go out of business and forsake those Canadian jobs and Canadian content than to have an American owner step in and save it?
Moreover, protecting Canadian culture is the entire justification for regulations around the Canadian content requirement. Any American company that dares to venture into this realm would be subject to the same regulations. So if the content regulations are what’s preserving Canadian culture, then the ownership restrictions are both superfluous and an unnecessary obstacle to a new NAFTA.
Issues around the Chapter 19 dispute resolution mechanism, which deals with anti-dumping and countervailing duty decisions, are far more technical and far less politically volatile. Canada has reportedly fought hard to preserve Chapter 19, and the prime minister openly suggested this week that Donald Trump himself is one of the reasons why it’s needed.
Certainly, we want a trade deal where disputes can be resolved swiftly and fairly. However, as evidenced by the seemingly endless tiff between Canada and the U.S. over softwood lumber, it’s not clear that Chapter 19 has lived up to its billing.
Moreover, as several trade experts have noted, it’s not at all clear that U.S. courts have been unfair to Canada — quite the opposite in many cases. There’s likely a compromise to be reached on this issue, which could include strengthening other protections.
WATCH: Trump continues attack on Canada over NAFTA, threatens car tariffs
It would be bad for Canada, and bad politically for the Liberals, were we to get steamrolled and be forced to settle for a deal that’s unfair to us. However, the lines in the sand we’ve chosen to draw are not protecting us from a bad deal.
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