Canada warily awaits President Trump’s debut

Donald Trump was elected the next U.S. President in the November election, defying all predictions and wishes against him. In Canada, which had opposed his presidency long before the election, more vehemently than any country, probably except Mexico, politicians and citizens are equally shocked by Trump’s victory.

Three weeks before the Jan. 20 inauguration, the Trump administration is taking shape as names of people for major White House and Cabinet posts are being announced. While the world is watching anxiously what the Trump presidency would bring to them, Canadian people still seem to be having difficulty to accept Trump’s “surprise” victory – now already two months earlier.

There seemed to be no end of stories in Canadian news media until recently on how President Trump would affect Canada. Some of them are still talking about how unfit Donald Trump is as a (U.S.) president in terms of policies and personal quality. (Back in the U.S., Democrats’ last-ditch efforts to topple the Trump presidency by demanding recounting of votes in some states and attempt to make some of presidential electors’ revolt to Hillary Clinton from the Trump camp all failed.)

Meanwhile, articles are now appearing in media, telling Canadians to play nice with Trump and get along with President Trump’s America as Trump is the president of the neighboring country but not the president of Canada, and it was American people that elected Trump their president and there are nothing Canadians do about this.

David MacNaughton, Trudeau’s ambassador to Washington, tells the Globe and Mail (Dec. 2) “there are plenty of mutually beneficial interests for Mr. Trump and Mr. Trudeau to pursue, despite wildly divergent world views.”

A foreign policy for any country is something like that, and Canadian governments have worked for so long to make relations with the most important, big country south of the border – the United States – as much as predictable with many agreements and arrangements and rules they made. But Donald Trump won the election with the promise to dismantle all those things to restart from the beginning. Trump has vowed not only to withdraw from the yet-to-become-effective 12-country Trans-Pacific Partnership (TPP) treaty but also “repeal or renegotiate” the 22-year-old North American Free Trade Agreement (NAFTA) on the very first day of his presidency to “Make America Great Again.” What would actually happen to these campaign promises is probably the greatest concern for Canada.

Barrie McKenna in his Globe and Mail column (Nov.9) called Trump’s stunning upset over Clinton “a worst-case scenario for Canada’s trade-dependent economy.” Canada is the most trade-dependent among G7 countries.

President Trump is going to promote the most protective agenda since President Nixon. He has threatened to repeal NAFTA and impose 45% and 35% of tariffs, respectively, on China and Mexico. In his “Contract with the American Voter” he proposed during campaign he has vowed to “renegotiate or repeal” NAFTA on the very first day. Repealing the North American free-trade agreement could also result in significantly higher tariffs on Canadian exports entering the United States – the destination for nearly three-quarters of Canada’s merchandise exports.

NAFTA’s demise would be the equivalent of a 10% across the board tariff on U.S.-bound goods and services, according to recent analysis by the EDC. That would send Canadian exports plunging 4.5%, trigger a nearly 4% drop in GDP and cost this country 737,000 jobs, the EDC report says. (Globe and Mail, Nov. 9)

Of course, Canada is not the target of President Trump’s NAFTA and other trade policies, but Mexico is. Whether Canada is Trump’s target or not, Canada would equally suffer as Mexico would if NAFTA is allowed to be dismantled or shaken up to meet the U.S. interests. That’s why Primer Minister Trudeau said immediately after Trump won the election that the Canadian government is ready to renegotiate to make sure Canada will be a party of a new NAFTA. How the Trump administration and the Republican-controlled Congress would like to do with NAFTA is yet to be seen, however.

It is feared that the election of President Trump will also seriously jeopardize the effectiveness of the efforts to slow the global climate change. Candidate Trump had said he would pull the U.S. out of the Paris agreement of the December 2015 United Nations Climate Change Conference (COP21), which President Obama had used his leadership with Prime Minister Trudeau to be concluded.

Prime Minister Trudeau has carefully worked on measures to cut greenhouse gas emissions to meet the Paris agreement, while paying attention to avoiding as much damages as possible to industries. But, should the Trump administration pull out of the Paris agreement, it would become very difficult for the Canadian government to sell its policies to reduce carbon emissions with carbon taxes to greenhouse gas emitters at home. Carbon-intensive industries may find an incentive to move to a jurisdiction with lower environmental controls, if the Trump administration rolls back moves to put a price on carbon in the U.S.

f the largest CO2 emitter does not believe in the climate change, then measures to reduce carbon emissions would become meaningless.

President Trump, however, is not always bad news. The Obama administration delayed and delayed its decision on the approval of the north-south pipeline project, Keystone XL, for six years – and then, for reasons of Democratic Party politics, declined soon after the Liberal Party’s Trudeau took office. But President Trump as candidate made building the Keystone XL pipeline one of 18 points in his “Contract with the American Voter,” vowing to approve it on the first day in the White House.

For the Trudeau government and the Canadian oil industry, the building of Keystone XL – which would send more than 1 million barrels of oil sand crude from Alberta to Gulf area in Texas – would unblock an economic and political logjam. It would mean more Canadian oil flowing to market by the most cost-effective and least politically controversial means possible. That would be a large and unexpected gift for Mr. Trudeau. (Globe and Mail editorial, Nov. 9)

While all other major pipelines under consideration in Canada cross provincial boundaries and native-land claims and all involve troublesome negotiations with the provinces, and with the First Nations, the route of Keystone XL is almost entirely in the U.S. – which means the environmental and political risks are all south of the border. Encouraged or not by Trump’s victory, Prime Minister Trudeau, who had been cautious about the pipeline issue, announced in December his government’s approval of the building of some of controversial pipelines in Canada.

Very wisely, liberal and outspoken Trudeau did not criticize Candidate Trump during the campaign, in sharp contrast with Ontario Premier Kathleen Wynne and other politicians, who denounced Trump for his misogyny and discriminatory remarks against minorities, and in some cases, overtly racist messages. Trudeau, who says he may be able to get along with President Trump, may be able to build a new “special relationship” with Trump’s America. Some Canadian media are talking about such optimistic expectations.

Once upon a time, Pierre Elliott Trudeau, Justin Trudeau’s father and one of the greatest Canadian prime ministers, said that living next to the United States was like sleeping with an elephant: Even if the beast is friendly and even-tempered, his enormous bulk means that Canada is affected by every twitch and grunt. (Globe and Mail editorial, Nov. 11) Canada has not many choices but play nicely with the new elephant, whether it is friendly, even-tempered and predictable, or not.


Yoshikazu Ishizuka, Senior Consultant, TOCS

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