Given the decentralized nature of power in the United States, Ottawa’s attack plan to protect NAFTA includes a significant lobbying effort with members of Congress. Armed with detailed numbers, Canadian representatives repeatedly emphasize what is probably their strongest argument: Canada is the number one export destination for 34 of America’s 50 states and the second
Given the decentralized nature of power in the United States, Ottawa’s attack plan to protect NAFTA includes a significant lobbying effort with members of Congress. Armed with detailed numbers, Canadian representatives repeatedly emphasize what is probably their strongest argument: Canada is the number one export destination for 34 of America’s 50 states and the second for an additional eight. Crucially, the map they always carry includes the number of jobs in each state that are dependent on trade with Canada.
Who knew, for example, that 112,000 jobs in Alabama result from exports to Canada? Canadian officials also have in hand data breaking down the nature of this trade, by district and by sector, allowing them to target their lobbying to specific legislators and business representatives. For example, in House Speaker Paul Ryan’s home state of Wisconsin, of $4.6 billion in exports to Canada, $500 million are paper and paperboard and $400 million are plastics; more than 200,000 Canadians visited Wisconsin last year, etc.
Canadian officials have also taken great care to include a public dimension to their efforts. Saskatchewan Premier Wall, for example, gave a talk at the conservative Heritage Foundation during which he hammered the point that measures such as a border-adjustment tax would seriously damage US business interests given the high level of cross-border integration of supply chains.
Canadian officials have not missed an opportunity to emphasize to their US counterparts that the United States does not have a large trade deficit with Canada as it does with Mexico and China. In 2015, the United States imported $325 billion from and exported $337 billion to Canada in goods and services, meaning that it actually had a small trade surplus of $12 billion. For economists, this is not a particularly relevant statistic, but given that President Trump is concerned with trade deficits, Canadian officials have seized on it.
The campaign to influence the Trump administration has also been notably bipartisan. Trudeau recruited former Conservative Prime Minister Brian Mulroney, who held office from 1984 to 1993, to advise his government. Extremely well connected in the United States and a neighbour to Trump and Commerce Secretary Wilbur Ross in Palm Beach, Florida, Mulroney is obviously self-interested: he wants to protect his legacy as the Canadian architect of NAFTA. But the political significance of what is at stake is evident among current politicians as well. The official opposition Conservatives have been very cautious in their criticism of the government’s handling of relations with the United States, all to their credit given the prominence of the issue. Canada’s usually fractious provincial premiers are also united in support of the federal government in protecting the country’s trade interests.
Lastly, another key but underappreciated element has underpinned the approach: to know when to stay quiet. Liberals have not forgotten the damage done to bilateral ties during the George W. Bush years, especially at the time of the 2003 invasion of Iraq, which Canada refused to join. Back then, a handful of senior officials lobbed insults at President Bush, including then Prime Minister Jean Chrétien’s director of communications who called Bush a “moron.” To his credit, Trudeau has imposed tight discipline on his party since Trump became the Republican nominee, even when Hillary Clinton appeared favoured to win. As a result, there has not been a single story of a Canadian official criticizing Trump publicly or anonymously, an impressive feat given negative feelings towards Trump in Canada. This matters, because such comments could easily have irritated the prickly President Trump. The government’s response to Trump’s April outburst on dairy and softwood trade was equally level-headed, with Trudeau coolly avoiding any inflammatory response.
It is extremely difficult to precisely measure success. How much of Canada’s performance in dealing with Trump so far is due to Ottawa’s own actions, and how much of it is because of Trump’s limited interest in his quiet northern neighbour? In practice, the latter quite possibly weighs more in the balance. It is still plausible to argue, though, that as long as Canada is spared tough protectionist measures, the government’s strategy deserves some credit and can be judged at least partly responsible for the situation not deteriorating. Of course, as the United States, Canada, and Mexico launch the renegotiation of NAFTA in the coming months, this strategy will be put to an even greater test.