NAFTA: Canada’s Priorities
Free trade with the Americans has been a central part of Canada’s history. The National Policy of Sir John A. Macdonald used high tariffs to protect fledgling Canadian industry in Ontario and Quebec in the early years of Confederation. This policy helped certain parts of Canada, but hurt others. Atlantic provinces were particularly hit by the National Policy, as the Maritime had already established successful north-south trade and it was effectively blocked by this policy. Borden and Laurier sparred over free trade with the United States and it seemed to come up once per political generation.
Canadians of a certain age will remember how the Progressive Conservative government of Brian Mulroney once again brought up free trade with the U.S. and ended up fighting a national election on the subject in 1988. The Liberal party at that time strongly opposed free trade and went so far as to suggest that the conservatives were selling out of Canada. Their infamous election ad that year showed the Canadian border being erased in an attempt to stoke fear in the hearts of Canadians with respect to free trade.
Mulroney won the election and free trade with the United States came to pass. After some adjustment to the economy in the early years of adoption, no serious observer could suggest that the deal has been anything but a big success for the Canadian economy. A generation after the 1988 election, this success is demonstrated by the almost $2 Billion in cross border trade between Canada and the United States that takes place every single day. The North American Free Trade Agreement (NAFTA) added Mexico to the relationship a few years later and the integration of the North American economy now serves as the foundation of our modern economy. Almost a quarter of all jobs in Canada depend on this trade relationship as the export of goods and services has allowed Canadian businesses to grow by expanding their market to include almost half a billion more consumers.
President Donald Trump has pushed for a renegotiation of the NAFTA relationship and last week Ottawa hosted the third round of negotiations. Unlike the Liberals of the late 1980s and early 1990s, the opposition Conservative Party supports free trade and want the government to succeed in the renegotiation of NAFTA. As the Foreign Affairs critic tasked with overseeing the NAFTA file, I have publicly supported the government and said we stand prepared to work with Minister Freeland on her efforts. Since the NAFTA relationship is so critical to the Canadian economy, the loyal opposition must also fulfill our duty to push the government to get a good outcome for Canada.
I have some serious concerns about the way the Trudeau government is handling the NAFTA renegotiation. Since I am not at the negotiating table with the government, I must follow their public statements to assess whether they are executing a smart strategy. While the U.S. government issued an extensive document outlining their objectives in the negotiation, the Trudeau government has relied on one public speech by the Minister to outline Canadian priorities.
Canadians have been justifiably concerned by what was missing from that speech. No mention of the importance of the auto industry and the 140,000 jobs directly tied to that industry. The Durham region is a critical part of the auto and auto parts network in southern Ontario that is critical to our economic success. In many ways, the auto industry drove the free trade agenda between Canada and the U.S. because the Auto Pact of the 1960s created an integrated north-south industry where some vehicles cross the border several times before final assembly. The fact that the Minister did not even mention this industry points to an alarming absence of priorities. Softwood lumber, resources and other trade dependent industries were also not mentioned in this speech.
What was mentioned in the speech? The government outlined their so-called “Progressive Agenda” as their top priority in NAFTA. The elements of this agenda – indigenous issues, environmental issues, gender issues – are all important issues. The critical question to ask, however, is whether a trade agreement is the best place to discuss issues that are not central to market access, rules of origin and other elements of a commercial trade agreement. The other issue to consider is whether the Trudeau government is putting forward priorities that will make reaching agreement with the Americans more difficult.
I remain ready and willing to work with the Trudeau government if it means securing good outcomes for Canadian workers. I see that my interventions in recent weeks has led to the government being more vocal about these sectors and refuting some of the information put out by others in the negotiation. I firmly believe that key industries – like auto, forestry and others – need to be the focus for Canada. Trade is about securing and growing jobs in Canada and this will remain my priority.