Canadian Government Executive - Volume 25 - Issue 02

30 / Canadian Government Executive // April/May 2019 Trade retaliation that’s coming, and our work- ers need certainty in their supply chain, and so we’re going to vote in favour of a modernized trade agreement because the alternative isn’t status quo, the alternative isn’t NAFTA in “Donald Trump World”: the alternative is no NAFTA and no USMCA. Before a whole lot of people in here were born, Canada didn’t have preferential ac- cess to the United States marketplace. For many of you, your whole lives you’ve had preferential access, so you don’t re- ally know or remember what it’s like not to. But from an economic point of view, it would be devastating – not just to Canada and Mexico, but also to the United States – if we were to try to return to a pre-NAFTA world from 30-plus years ago. Hopefully the Democrats in Congress will see that, will agree that there’s a lot at stake, and will hold their nose and not allow Trump to blame too much vic- tory. And if he does, they’ll just be cool about it. Being cool in the face of rhetoric from the President of the United States is an art form, you know; not taking the bait is a massive skill, and I watched it unfold during the 13 months of NAFTA negotiations. Remember when Donald Trump announced that he was running for office, when there were 17 Republi- cans and Trump was a joke? Nobody took Donald Trump seriously including Don- ald Trump. Anyway, he was coming down the escalator at the Trump Tower for his big announcement, and he was making an “Apprentice”-like entrance, and the whole “Much of the context for trade policy now revolves around words that weren’t even part of our lexicon just a few years ago: Brexit, Twitter, Huawei. But the reality is that these are all very important to the Atlantic Canadian economy and Nova Scotia.” — Darrell Dexter Darrell Dexter Much of the context for trade policy now revolves around words that weren’t even part of our lexicon just a few years ago: Brexit, Twitter, Huawei. But the reality is that these are all very important to the At- lantic Canadian economy and Nova Scotia. The U.S. is our largest export partner, the European Union is our largest import part- ner, and China is our fastest growing trade partner. I’m going to ask Scotty Green- wood to talk a little bit about the state of trade relations between Canada and the United States and the USMCA. Maryscott Greenwood In Washington right now, the government shutdown –– is a bizarre historic happen- ing. The length of it is historic; we’ve shut the government down before. But when it’s re-opened, it will deal with issues like this new NAFTA Trade Agree- ment, which probably everybody here has some familiarity with. It was signed at the end of November right before the new government of Mexico took office, so it was negotiated by a previous government and signed by previous government, and then inherited by a new government in Mexico. It was also negotiated before the last U.S. midterm election, and so the situation in Washington now is – besides being shut – the Democrats now control the House of Representatives. And in a system like ours – a Congressional division of power sys- tem, totally different than a parliamentary democracy that you are used to here – the House of Representatives in Congress is equal in power to the White House. What does it mean for USMCA? The deal was signed at the end of November. It needs to be ratified in all three countries. The United States, the Congress, and now Democrats are thinking, well, we’re not sure that we want to give Donald Trump this signature legislative accomplishment. We’re not sure we want him to wave that in front of us. We want to think about it. We want to make sure that the deal is good enough from our point of view. The chal- lenge there is that the state of the economy hit hangs in the balance, right? And one of the things that the President of the United States did during the negotiations in order to try to exert more leverage over Canada and Mexico was levy some fairly draconi- an tariffs on steel and aluminum. Just look around this room and see if you can figure out how many things might have steel or aluminum in them. It’s a lot, you know. Everything from your iPhone to this camera pole to the bus you took to get here. So, the steel and aluminum tariffs were levied by the United States against Canada, Mexico and other countries. Canada and Mexico retaliated, and other countries did too because the U.S. wanted to get its way in the NAFTA negotiations. We concluded the agreement, so the tar- iffs need to be lifted, and yet they remain. Congress will have a lot to say about that, and hopefully they will get over their par- tisan angst at not wanting to give Donald Trump a legislative victory and say, you know what, our farmers can’t stand the