The West Block, Season 8, Episode 1

THE WEST BLOCK

Episode 1, Season 8

Sunday, September 9, 2018

Host: Mercedes Stephenson

Guest Interviews: Minister Chrystia Freeland, Congressman Tom Reed, Charlie Black

Location: Washington, D.C.

On the farm, a way of life may be coming to an end for more dairy farmers in the United States. Will a renegotiated NAFTA deal change that?

It’s Sunday, September 9^th and I’m Mercedes Stephenson. Welcome to The West Block, from Washington, D.C.

Canadian NAFTA negotiators have been in town for two weeks trying to hammer out a deal that needs to reach this place—Congress—by the end of the month. We’ll have an update on those negotiations for you in just a few moments.

But first, one of the outstanding issues for the Americans has been Canada’s system of dairy supply management. So we stopped by some American dairy farms to find out first-hand what do farmers think?

Welcome to the Myers family farm, set in the idyllic rolling hills of the Catskills in New York State. Seven generations of the family have worked this land with their blood, sweat and tears, making a living as dairy farmers. But, that may all be over.

Mercedes Stephenson: Sullivan County was once one of the largest dairy producing counties in the United States, but now dairy farms are vanishing.

Peter Erlwein, dairy farmer: It’s a major crisis. They might have a contract, but they’re not getting paid for their milk. So we’re all in a big crisis of trying to survive.

Dawn Erlwein, dairy farmer: And when you don’t have the cows, you do not have a rural America.

Mercedes Stephenson: For the fourth year in a row, the price of milk is below the cost of producing it so it’s hard to make ends meet. Between plummeting prices and large commercial producers expanding, family farms are struggling. Sixty farms have vanished in the last 40 years here, and six more could go under in the next month alone.

The Myers’ family farm is surviving day-to-day right now, but it may not make it until October.

Dairy has been a key sticking point in the NAFTA negotiations with President Trump demanding Canada’s supply management system, be dismantled to alleviate American farmers woes. President Trump has threatened tariffs on autos if Canada doesn’t cave on dairy, which could affect hundreds of thousands of Canadian jobs.

Tom Bose, dairy farmer: It would produce a significant increase in the price of automobiles because most of them—it will contain content from two or all three of the countries in question. If you’re going to put on tariffs, particularly on parts, you’re raising prices.

Mercedes Stephenson: But is NAFTA, or the Canadian cartel, really the problem for U.S. farmers?

Bill Reinsch, trade expert: The owner supply of milk and possibly some sort of supply management system.

Mercedes Stephenson: New York farmers The West Block spoke to said they’d like more access to the Canadian market. But rather than tell Canada to get rid of supply management, they’d like a made in America version for themselves.

Sawyer, dairy farmer:  When we were younger, we said that we weren’t going to be the generation to let it end either.

Rianne, dairy farmer: And we hope that we’re not.

Mercedes Stephenson: For the latest on the NAFTA negotiations, Foreign Affairs Minister Chrystia Freeland joins me now. Thank you so much for being here today.

Minister Chrystia Freeland: It is great to be with you, Mercedes, and congratulations on the launch of your show.

Mercedes Stephenson: Thank you so much.

So we’ve been staking out the United States trade representative’s office.

Minister Chrystia Freeland: I noticed.

Mercedes Stephenson: You might have seen us out there a few times. And today, one of Trump’s senior trade advisors, Larry Kudlow, came out and said there’s one thing standing in the way of the NAFTA deal and it’s M-I-L-K. Is there any flexibility here on dairy?

Minister Chrystia Freeland: At the beginning of last week, when this very intensive round of negotiations began, Ambassador Lighthizer and I, the U.S. TR, agreed that we would not be negotiating in public. We would keep the negotiations to the negotiating table. And that agreement has really helped us to maintain a professional atmosphere around the negotiating table, an atmosphere of real good will and a real effort to work together, to achieve a landing zone. So I’m going to stick to that. And what I will say about Larry, whom I know well from my days as a journalist, is he’s not at the negotiating table.

Mercedes Stephenson: In previous trade agreements like CETA or the TPP, the previous Canadian government said okay, we’ll crack the dairy market a little bit and supply management is still intact. Could something like that be an option, where you wouldn’t get rid of supply management but you might give Donald Trump the win he’s looking for?

Minister Chrystia Freeland: So Canada, absolutely—we have now been doing this for more than a year and Ambassador Lighthizer and I sometimes joke that we could trade seats and sit in each other’s chairs. We know each other’s position so well that we know each other’s lines. We understand very well what the U.S. needs to get a deal and I hope the U.S. understands very clearly what Canada needs. And I do think that a good deal for both countries, for all three countries is absolutely possible. It’s going to take flexibility on all sides.

Mercedes Stephenson: If it comes down to it and you don’t have a deal, and Donald Trump follows through on his threat, which he was making again today on the tariffs saying it will be the economic ruination of Canada. Is that a chance you’re willing to take?

Minister Chrystia Freeland: So, as we have said, from the outset, as the prime minister has repeated this week, Canada wants a good deal, not just any deal. And I feel extremely confident in that position and I know that that is the position of Canadians. We’re going to get a deal which is a good deal for Canada and we’re serious when we say no deal is better than a bad deal. And it’s very important for us to be firm and clear in that position.

Mercedes Stephenson: Part of that national interest has been when you talk to people behind the scenes that they say look, the Americans are testing us. They’re probing. At the end of the day, they do want a deal. So I found it fascinating when last week we found out from Bob Woodward’s book that one of the documents on Donald Trump’s desk was apparently to announce the withdrawal from NAFTA and he was prepared to sign it. Seems like he may not be completely bluffing that he consider pulling out, did that revelation concern you?

Minister Chrystia Freeland: So I have always taken the president at his word. He is the president of the United States and we need to respect his office. And I certainly do. Having said that, I very much believe that the U.S. would like a deal, so would Canada. We are negotiating in good faith. The mood, the atmosphere at the negotiating table is absolutely positive.

Mercedes Stephenson: Well Canadians and Americans both like jobs, of course, like having them. But at the end of the day, it’s not just the president who’s going to decide on NAFTA. It’s also Congress. How much has been going on behind the scenes in terms of quiet diplomacy, they’re trying to recruit people onto your side who might be able to balance out the president?

Minister Chrystia Freeland: You know, Mercedes, I wouldn’t put it in those terms at all. Canada understands that in the U.S. political system that Congress has an essential voice when it comes to trade and so it’s our job to talk to Congress, to listen to Congress when senators, congressmen and women want to hear what the Canadian story is, want to learn more about their states or their districts relationship with Canada. It’s important for us to be there and to talk to them about that.

Mercedes Stephenson: Journalists are sensitive to deadlines. You were a journalist. There have been, it seems, an endless series of deadlines in the NAFTA negotiations, the most recent one blown past. How real is this upcoming deadline to get text to Congress by the end of the month? Is it really a drop dead date?

Minister Chrystia Freeland: You know, I think that’s really a question for the U.S. That’s about the U.S. legislative process. When it comes to Canada, our focus, from the outset, and our focus today, is getting a deal that works for Canada—getting that deal mindful of the need to have flexibility on both sides, mindful of the need to look for compromises that both sides can live with, and at the end of the day, always really mindful of our national interest. So that’s what we’re focused on.

Mercedes Stephenson: At the end of the day, if you have to choose between dairy and auto, how do you make that decision?

Minister Chrystia Freeland: When it comes to the shape of the deal, what I can say is we are looking for a deal which is balanced and we’re looking for a deal which is good for Canadians, which is good for Canadian workers, which is good for Canadian families, good for Canadian farmers.

Mercedes Stephenson: Minister Freeland, thank you so much for your time today, we really appreciate it.

Mercedes Stephenson: Thank you.

Up next, we’ll talk to a powerful American congressman from the House Ways and Means Committee about what he and his colleagues want to see in a NAFTA agreement.

Mercedes Stephenson: Welcome back. A final deal on NAFTA will need congressional approval, but given the November U.S. midterm elections, negotiators need to get a deal to Congress by the end of the month.

We sat down with Tom Reed, an influential member of the House Ways and Means Committee and a congressman who will have a say in what NAFTA deal goes ahead.

Here’s that interview:

Congressman, thank you so much for joining us.

Congressman Tom Reed: Thank you for having me on, Mercedes.

Mercedes Stephenson: The president says there needs to be a new NAFTA deal and it needs to be a good deal. What does a good deal look like for the United States?

Congressman Tom Reed: You know what we’re looking for is a fair deal at its core and an opportunity to trade with our partners not only in Canada but also in Mexico under the NAFTA negotiations, but this new trade policy that the president’s pushing forward is about disrupting trade and getting into a position where it’s equal trade, and that’s essentially the position we’re moving forward with.

Mercedes Stephenson: Does that mean that Canada has to get rid of supply management in your view?

Congressman Tom Reed: You know, it’s not necessarily it has to get rid of it, but it has to recognize that it has to open its markets more to our dairy farmers and our folks in America. And many have seen this market over the last few decades from an American point of view as just being off the table and you know, you see things with ultra filtered milk and other issues that have cropped up, and I will tell you we’re just interested in breaking those barriers and having a solid relationship with our partners to the north.

Mercedes Stephenson: Do you think that if the Canadian government agreed to crack that market open a little bit that might be enough?

Congressman Tom Reed: I think that’s a great start and maybe it is. I’ll leave that to the negotiators to fine tune those details, but I think that’s exactly what we’re trying to do.

Mercedes Stephenson: We had an opportunity to go and visit some of the dairy farms near your district, absolutely beautiful.

Congressman Tom Reed: Thank you.

Mercedes Stephenson: One of the things that those farmers were telling us is it’s not so much NAFTA that they see is the problem, but the price of milk here in the U.S. and they’d actually like a similar system to the one that Canada has.

Congressman Tom Reed: You know, I’ve heard some folks, you know, they’re worried and I travel our district and we have a lot of dairy farmers and I understand their concern. At the price of milk today, they’re struggling. They’re struggling to keep these family farms together and that’s where we have to look at the big picture, we have to look at the long term. And I don’t think price fixing from an American’s point of view, price control, setting prices by government fiat is good sound policy long term. What we need to do is stabilize the market both on the demand side, which trade negotiations are all about but also on the supply side.

Mercedes Stephenson: What happens if Canada and the United States can’t come to an agreement and this proceeds as Mexico-U.S. only? Is that something you’d vote for?

Congressman Tom Reed: Well, you know, obviously we’ll take whatever agreement comes before us and have to vote yes or no. That’s my job as elected representative. My hope is that we can get this done with Mexico and Canada at the same time, but it’s clear we need to move forward. A marketplace that’s very important to our dairy farmers is Mexico. They’re one of our largest exporters and receivers of our exported milk and so for example, having the opportunity to settle that question is critical to many of us as members of Congress and we’re ready to proceed to go forward. But my hope, and my guess looking at this, is we have a long term relationship with Canada, long term relationship with Mexico. We’re essentially a family. We’re having an internal squabble right now and I understand the anxiety that that brings, but what we can do is get this done and my hope is that is what will occur and I’m confident it will.

Mercedes Stephenson: The president has been at the forefront of negotiating this, sometimes on Twitter. Do you think he’s done a good job so far?

Congressman Tom Reed: What the president has done—this is what I appreciate about the president is he’s a disruptor. He’s bringing a new style, clearly, to the White House and to the administration. And I know that comes with anxiety and fear with a lot of folks, especially here in D.C. inside the beltway that are not used to type of style, but being a New Yorker and a fellow New Yorker, somewhat maybe I get it a little bit more than others. But you know, what he’s bringing is that disruption and he’s also very clear as to what he’s trying to achieve. He said it on the campaign trail; it’s time to re-establish trade policy in America with American interest being treated equally on the same playing field as others.

Mercedes Stephenson: Do you think some of the chaos that we’ve seen in the White House or at least the discord has had an impact on negotiations for NAFTA?

Congressman Tom Reed: Well obviously, I think any time you have a disruptor and somebody’s who’s not following the status quo, folks that are used to that for decades. I know many of our negotiators that they’re used to a certain style. They’re used to an expectation of how this is done and that causes folks maybe to look at this in a way that causes anxiety. What I tell folks is just recognize the field you’re on and recognize that at its core, we have common interests. We have a common interest as Canadians, as Americans and as Mexicans to get this resolved. And I think at the end of the day, that’s where we end up and that’s good for all of us in this hemisphere because we’ve got a pivot from this point to the real issue of trade that’s that elephant in the room of China. I think we have a common interest in taking on the Chinese market and say to them, enough is enough as Canadians, Americans and Mexicans, as well as members of the European Union. It’s time for us to settle these differences and unfair practices once and for all.

Mercedes Stephenson: What advice would you give to Prime Minister Justin Trudeau, or our foreign affairs minister, who are trying to negotiate this deal?

Congressman Tom Reed: Stay at the table. Stay at the table. I know it may be difficult. I know that, you know, I’ve heard from many folks. I met with many of your members of Parliament and people in Canada that we know and I spent time talking with folks, and I understand how sensitive the dairy industry is in Canada. Some described it as the third rail of politics. Us, it’s social security and Medicare. In Canada, I heard dairy is one of those types of issues politically. Take on these political concerns head on, stay at the table and recognize we have a shared common interest of settling this together.

Mercedes Stephenson: As the clock ticks down and we’re looking at a NAFTA deal that will end up in front of Congress, in front of you, what kind of deal do you need to see to vote for it?

Congressman Tom Reed: You know, fundamentally at its core, I need to see access that is fair and no preference essentially. Just that we recognize that it’s a fair deal, that it provides us an opportunity to compete equally and if we achieve that, I’m very confident that we can work out these details.

Mercedes Stephenson: Congressman, thank you so much for taking the time to speak with us, today.

Congressman Tom Reed: Great to be with you.

Mercedes Stephenson: Coming up, chaos at the White House. Who’s in charge and what does it mean for Canada?

Mercedes Stephenson: Welcome back.  Chaos at the White House has some in Washington wondering if the wheels are coming off the Trump presidency after a book by Bob Woodward detailed senior aides removing documents from the president’s desk to prevent him from signing them. Also, an anonymous op-ed that shook the Capitol, alleging that there is an internal resistance to Donald Trump inside the administration. This is what the president had to say about that article:

Mercedes Stephenson: Welcome back to The West Block. Joining me now is Charlie Black. Charlie, you have worked on every presidential campaign since 1972, including George Bush’s and John McCain’s and more recently, Governor John Kasich.

Charlie, sitting here this past week with the news coming out of the White House, the allegations that are made in Bob Woodward’s book and that unsigned New York Times editorial, who is in charge in the White House?

Charlie Black: Well, you know what, Donald Trump is in charge and he’s a different president. He came in from a totally different perspective, never having run for office before. The American people selected him for that purpose, I believe, and so he doesn’t operate by our normal rules and traditions and expectations around here. But he’s done some good things. He’s got some good accomplishments, but there’s a lot of chaos that goes along with it.

Mercedes Stephenson: Are you concerned when you hear allegations from senior staff who are saying that Donald Trump is an idiot and that they don’t know what he might do?

Charlie Black: Well, I’m not too worried about it because I’ve known him for many years, and he has a temper and he’s erratic, but in the end, he takes advice. And for example, on national security matters, he listens to General Jim Mattis, the Secretary of Defense; Mike Pompeo, the Secretary of State; John Bolton, the National Security Advisor. In the end, he takes their advice, so on the most important things affecting our country, I think he’s going to be okay.

Mercedes Stephenson: What do you make of the unsigned New York Times editorial? And the president says the person who wrote it is a traitor.

Charlie Black: You know, we’ve had—every administration has had leaks from people who are disgruntled or who wanted to criticize the president, but, you know, an unsigned editorial is a little bit more than what we’ve seen before. But, you know, it’s not going to change things. That’ll blow over in a couple of days, but Trump will always be controversial, even among people whom he has hired.

Mercedes Stephenson: Charlie, what do establishment Republicans like yourself, make of Donald Trump who’s a very unconventional president?

Charlie Black: You know, the establishment, including the congressional leadership and a lot of Republican members of Congress and senators have learned that he’s not going to ever change and act in a more traditional fashion, so they try to influence him to do the right things from a policy standpoint. Now the big differences between Donald Trump and the Republican Party on policy are on trade and immigration. And on the rest of the things like the economy and tax cuts and strengthening national defence, he’s been good. So it’s a good news, bad news scenario. But even on things like trade and NAFTA, he’s going to come around and we’re going to get a deal.

Mercedes Stephenson: I’m actually curious about that because in Bob Woodward’s book, he says that there was a draft document on Trump’s desk about NAFTA. He was prepared to sign it and pull out. Do you think he actually would have done that?

Charlie Black: Well, he might have if he didn’t get good advice from somebody else. But listen, if you grew up doing real estate development deals, you take a very strong position, strongest position you can and then negotiate from there. And so he’s still taking that approach. So if you want to renegotiate a trade agreement, his idea is well let’s just cancel it and start over. Well, that’s not how things work. On trade agreements like NAFTA, they are treaties and other countries have a say in their renegotiation and then Congress has to approve it. So he’s got limits on what he can do. And yes, he does have the executive power to impose tariffs in a number of areas, not everywhere. But on renegotiation of the trade deals, Congress has a big say in it. That’s why I think eventually, not this week—not this weekend, but we’ll get a NAFTA new agreement completed which Congress will approve.

Mercedes Stephenson: At what point do you think the Republicans and Congress would be willing to intervene?

Charlie Black: Well, I think some of that’s going on in a low key way already. But that the good news is we’re close to a deal with Mexico and Canada’s back negotiating with us. And Minister Freeland is an excellent negotiator and an excellent spokesperson for Canada’s interests, so I think, I’m hopeful maybe not this week, maybe next week or even the week after that the U.S. and Canada will get together and that it will be an agreement that is a win-win for Canada and the U.S., as well as Mexico.

Mercedes Stephenson: What is the perception in Republican circles in Washington right now of the Canadian government and the state of Canada-U.S. relations?

Charlie Black: Well, among Republicans and Democrats, there’s a consensus in this country that Canada is our best friend and our biggest trading partner and our strong ally in international matters so that won’t change no matter who’s in charge of the different governments, but certainly we view Prime Minister Trudeau as more liberal and different policy wise than our government or our party here. But that said he’s been more than willing to work with President Trump and to work with us, Congress. So I think we still have a good relationship, and again, I expect the NAFTA agreement to get done.

Mercedes Stephenson: Are you concerned that President Trump’s actions and the things that he’s saying in public, could damage the Republicans who are running in the midterm elections?

Charlie Black: Oh yes, but, you know, historically, the party in power in the White House, that party loses seats in Congress, House and Senate in midterm elections so certainly he’s unpopular for some things that Democrats will use against the Republican candidates. And I don’t know how bad the results going to be, but we expect to lose seats one way or the other. Actually, we might pick up Senate seats and lose House seats is what it looks like to me.

Mercedes Stephenson: Charlie Black, thank you so much for joining us.

Charlie Black: Thank you, Mercedes. It’s a pleasure.

Mercedes Stephenson: That’s our show for this week. For extended interviews, go to our website: thewestblock.ca. I’m Mercedes Stephenson, and I’ll see you next Sunday.