Can NAFTA Survive Trump?

Column / Don Newman

It is both sad and terrifying to realize that much of Canada’s future economic prosperity could depend on a man who is, at best, clearly unprepared and unsuited for his job, and, at worst, mentally unstable and unable to conduct it in any predictable, coherent of efficient way.

That man, of course, is Donald Trump.

In mid-August, Canada and Mexico began renegotiating the North American Free Trade Agreement with the United States. President Trump forced the negotiations on the two countries after first campaigning for and then winning the presidency by slagging NAFTA as “the worst trade deal ever signed by the United States.”

Then in April, three months after becoming president, he threatened to tear up the 23-year-old agreement after meeting a few Wisconsin Dairy farmers who complained about Canada’s supply-managed milk marketing system.

Trump was talked out of exiting NAFTA then by Prime Minister Justin Trudeau and most of his own White House economic advisers. But now there is no guarantee that the NAFTA talks that began on August 16 in Washington won’t end up in the same place.

That’s because since Trump took office on January 20, his White House has been in chaos.

First, there was his attempt at banning immigrants or visitors from seven Muslim majority countries in the Middle East that has been tied up in the courts since the end of January. His attempts, along with Republicans on Capitol Hill to repeal the health insurance program known as Obamacare have been similarly unsuccessful.

He has made no progress on changing the tax structure in the United States, or getting started on a major public-private infrastructure program, both of which—along with health care and the NAFTA renegotiation—were major campaign promises.

There is also a federal budget due this fall, and negotiations with Congress to raise the federal debt ceiling before the U.S. government stops paying its bills.

Instead of tending to this business, Trump has instead been recently challenging the equally unstable leader of North Korea, Kim Jong-un, with a war or words that threatens to escalate into something much more serious. And beyond that, the president making August particularly memorable by publicly sympathizing with white supremacists, neo-Nazis and defenders of monuments to Confederate generals.

Underlying all of this is the ongoing special investigation into links between Trump’s presidential campaign and Russia. So far, Trump’s eldest son, son-in-law and former campaign chairman have all been revealed as having Russian connections. The investigation continues, and as long as it continues, Trump is going to be seriously distracted.

Much of the world has, for the past 70 years, relied on the United States for economic, political and military leadership. Now, that leadership is evaporating in the nihilistic fog of Trump’s “America First” rhetoric and policies.

No country is in more immediate peril than Canada. Along with Mexico over the past decades we have realigned our economy to fit the NAFTA framework. To some extent, the U.S. has, too. But with a much larger economy and so many other trading partners, America without NAFTA would fare much better than either Canada or Mexico.

Trump campaigned on either renegotiating NAFTA so it favoured the United States or leaving the pact. Despite earlier saying NAFTA would need only a few “tweaks” as far as Canada is concerned, American negotiators have tabled a long list of one-sided demands.

Included in those demands is a rejection of the current independent dispute settlement process. Canada has said no independent dispute settlement mechanism means no NAFTA.

Given that the trade negotiations are the only item on Trump’s agenda that seems to be moving, he may decide to pull the plug on the talks if he can’t get his way, as he threatened to do in a speech in Arizona on August 22. In a peculiar way that would make sense only to him and his base, he could then claim he honoured his commitment to either change NAFTA to benefit America or break the treaty.

The recklessness of such a course of action would be apparent to most people. But not to someone who attacks the media for presenting “fake news” when he doesn’t like the stories they run, claims accomplishments that are untrue and cozies up to people almost anyone else thinks of as dangerous and undesirable.

It is both sad and terrifying to realize that much of Canada’s future economic prosperity could depend on such a man.

Don Newman is Senior Counsel at Navigator Limited and Ensight Canada, Chairman of Canada 2020 and a lifetime member of the Canadian Parliamentary Press Gallery.