No ‘truck or trade’ with Trump’s America

Opinion

Hey there, time traveller!
This article was published 04/10/2023 (734 days ago), so information in it may no longer be current.

WHEN you think about it, comprehensive free trade negotiations between Canada and the United States have always been controversial — demonstrably accentuating the mouse-and-elephant power disparity.

Recall Sir Wilfrid Laurier’s 1911 “Reciprocity Agreement” with Washington or Mackenzie King’s abrupt change of heart on liberalized bilateral trade in 1948. And who could forget all the ups and downs of the negotiating process preceding the 1988 Canada-U.S. Free Trade Agreement (FTA) — to say nothing of the staged walkout by Simon Reisman, Canada’s chief trade negotiator.

But assigning the word ‘controversial’ to the renegotiation of the 1994 North American Free Trade Agreement (NAFTA) with the Donald Trump administration hardly fits the bill. Indeed, there were more twists and turns in the NAFTA 2.0 trilateral deliberations than the famous Cabot Trail in Cape Breton.

Many of those unnerving and difficult challenges have been chronicled in Robert Lighthizer’s new tome, No Trade Is Free. As Trump’s U.S. Trade Representative (USTR), Lighthizer was front and centre during the tough bargaining sessions of what is commonly referred to today as the 2018 U.S.-Mexico-Canada Agreement (USMCA).

It is instructive to note that Lighthizer, by and large, espoused a decidedly restrictive or protectionist mindset and penchant for trade wars. As he states in the book’s introduction: “My philosophy of international trade — and the philosophy that undergirds this book — is starkly at odds with the radical free trade theology that got us here.” He also makes it very clear that liberalized trade has not been good to the U.S. and that more attention needs to be placed on supporting (and protecting) American manufacturing.

In addition, he makes the case that Canada talks a good game about internationalism and global free trade, but it is in reality “at times quite protectionist.” He singles out, of course, Canada’s supply management system and especially points a stern finger at the dairy sector. “For years Canada has operated a dairy supply chain management program that would make a Soviet commissar blush,” he writes wryly.

Accordingly, negotiating with Canada and Mexico on revamping the NAFTA was, in Lighthizer’s view, “a harrowing ordeal” and “hard-fought.” While discussions with Canada’s top trade minister, Chrystia Freeland (whom he says could be a future Canadian prime minister) were always professional and friendly, he says that he pushed back against Canada’s and Mexico’s favourable view of the original trilateral pact and insisted that it was “an extremely flawed agreement.”

Lighthizer was also not amused with what appeared to be the chief Canadian negotiation strategy — namely, to rag the puck and run-out the trade negotiating clock (thus leaving the old NAFTA largely in place). He argues that the Canadians were intent on lobbying the U.S. Congress to convince U.S. negotiators to back away from pressing Canada to make significant concessions.

He posits that it was obvious to him that both Mexico and Canada were carefully coordinating their every negotiating move. He even writes disapprovingly: “I can’t recall a single meaningful concession that Canada or Mexico made during the first nine months of the negotiations.”

In one new piece of the NAFTA 2.0 puzzle, Lighthizer asserts that Prime Minister Justin Trudeau, during the highly unsuccessful 2018 G7 summit in Charlevoix, Que., offered President Trump what he dubbed the “cars for cows deal.” In other words, the U.S. would drop its key trade demands in exchange for Mexican movement on automobiles (rules of origin) and, more important, Canada’s willingness to open up some of its dairy sector. But in the cutting words of Lighthizer: “It was the sort of anemic offer you make when you’re taking a positive answer for granted. Canada and Mexico still hadn’t realized those days were over.”

At this point in the negotiations, the former USTR stresses that neither country was actually speaking to one another. Unbeknownst to the Canadian side, though, the Mexicans were not only talking to the Americans, but they had cobbled together the main elements of a bilateral deal behind Ottawa’s back. According to Lighthizer, “we said that Canada was welcome to join if it wanted but made clear that we were prepared to move forward bilaterally if it did not.”

So with the clock ticking, Lighthizer claims that Trudeau’s chief of staff, Katie Telford, contacted Trump’s son-in-law Jared Kushner with a more substantive offer on dairy access. But with tension in the air, the Canadian side then appeared to change course and dig in its heels. At the 11th hour, Lighthizer maintains that he was able to hammer out a deal with Canada after telling Trudeau’s closest advisers and Freeland in rather blunt language: “No more sneaky sh-t.”

Of course, it is never easy for Canada when it is sitting at the bargaining table across from the U.S. But the former USTR is right about one thing: that is, the success to any trade negotiations is leverage, which Canada often lacks. I still believe, though, that Ottawa — notwithstanding Lighthizer’s boasting — more than held in its own during the NAFTA 2.0 re-negotiations.

Peter McKenna is professor of political science at the University of Prince Edward Island in Charlottetown.