So much of the Canada-US relationship plays out in trade issues that our dynamic can often seem predominantly transactional. But the network of constant human contact that manages our commercial relations is a crucial element of the larger bilateral bond across a range of files. Former longtime diplomat Colin Robertson outlines how that network can help restore our most important relationship.

Colin Robertson

There are many reasons why, as Canadians, we would not want to change global geography. Our location is a huge part of our identity, our worldview and our climate. In terms of trade, geography has put us in what is arguably the most enviable position on Earth – right next door to the world’s biggest consumer market. For Canadian business, big and small, when it comes to ease of trade it’s the US. Period. 

Yes, Canada’s main market is the United States. The US buys three-quarters of our exports and provides 60 percent of our imports. The US is also by far our biggest source of foreign investment.

But we forget, at our peril, the asymmetries in our relative dependencies. For the Americans, Canada represents 18 percent of their export market, important but not critical. While trade generates almost two thirds of our GDP, it only accounts for a quarter of US GDP.  By comparison, the US takes three quarters of our exports, and trade with the US generates about a third of our national income.

The US security umbrella, provided through NORAD, our bi-national air defence command, and NATO, our trans-Atlantic collective security alliance, has also given us a break on defence spending. Where Canada spends 1.27 percent of GDP on defence, the US spends 3.47 percent. The return of great power competition will oblige more Canadian spending because, at its most basic, our preferred access to the US market depends on the American belief that we “have their back”.

Since Mackenzie King and Franklin Roosevelt set the parameters of the original Canada-US trade and security partnership with the Canadian-American Trade Agreement of 1935 and the Ogdensburg Agreement of 1940, the benefits of continued access to the US market have depended on a shrewd calculation of our shared strategic and geopolitical goals. Canadian leaders – in the various levels of government, business and labour – who understand this can lift our relationship out of the trough of the transactional and into a partnership that is strategic, mutually beneficial and self-reinforcing. Because in a relationship that is vast in size and scope there will always be problems and irritants. 

For the foreseeable future, Canadians are going to have to contend with American protectionism. American protectionism is not going away and it now has a geopolitical imperative. The return of great power competition has politicized trade in protectionist “Buy American” and “Made in America” policies embraced by both Democrats and Republicans. 

To deal with protectionism, we need to redouble our outreach and advocacy efforts in the United States. Preserving our access requires a continuous, coordinated Canadian campaign to remind Americans that our trade reciprocity is fair to our workers and mutually beneficial to our citizens. 

As the US trade representative has acknowledged, our immense bilateral trade is virtually in balance, with the US enjoying a slight surplus on the services side and Canada on the goods side. Importantly, Canadian oil provides half of American oil imports and 99 percent of gas imports, helping keep prices down at the pumps. 

The key actors on trade development and keeping American protectionism at bay will be the business community and the provincial governments, and to the extent possible, the manufacturing and trade unions, working closely with our embassy in Washington and consulates across the US. 

If the premiers and provinces (all but Quebec led by Robert Bourassa and Alberta led by Don Getty) voted against free trade in the 1988 election, within a decade all of the premiers, regardless of political stripe, embraced freer trade. They saw how it benefitted their economies and they led successful trade missions into the United States and abroad. 

As prime minister, Jean Chrétien instituted the successful series of Team Canada trade missions that took him and the premiers to Asia, Europe and into the Americas. The testimonials from participants in those delegations – from agri-food representatives to the Royal Winnipeg Ballet – make the case of how the plan served our commercial interests. 

That the premiers kept coming, including in variations like Team Atlantic and Team West, underlined another benefit that Canadians appreciated – watching their principal levels of government working together for the common good. As Canadian Consul General in California at the time, I can personally attest to their success. In the wake of 9/11, the Team Canada West mission to Los Angeles in November 2001 included a dinner and concert with Paul Anka, David Foster and Chantal Kreviazuk at the Hollywood hilltop Getty Museum. It not only opened doors that led to commercial deals on everything from beer to tech servicing, it also visibly demonstrated to Americans that Canadians stood with them in the battle against terrorism. 

Our network of 13 consulates general and honorary consuls in the US should be expanded, as they are best placed to identify local protectionist measures which, once introduced at the state, county or city level, have a tendency to mutate into congressional legislation. 

It’s much easier to make the case for a Canadian exemption or reciprocal treatment at the local level, especially when we can now identify the jobs Canadian trade and investment create. When it reaches the national level, it is like firefighting on various fronts. 

Time and again I have witnessed instances where action by our consulates, working in tandem with Canadian interests and American allies, has snuffed out protectionist threats. A good example is the ongoing effort by the Canadian Cattlemen’s Association who make regular trips to the American Farm Bureau Federation meetings in the US to push back on country-of-origin labelling (COOL) requirements. 

Working with our trade unions, especially those such as the Steelworkers – the largest industrial union in North America – that are affiliates of the US labour unions, must also be a key piece in our ongoing advocacy to shield us from “Buy American” policies. Ambassador Gary Doer, himself a former union rep, was especially effective in making these connections and backing them with facts and figures on American jobs. 

Canadian business plays a key role but governments need to do a better job in making them a partner when developing and implementing our trade strategy. 

Beginning with the original Canada-US FTA, what is now the Business Council of Canada has galvanized business leadership to work with their US counterparts and American clients to bring US business support for closer trade and investment ties. To help with the NAFTA renegotiations, the Business Council created and has kept up-to-date a very useful trade map detailing Canadian business operations state-by-state. Partnering with the North American Competitiveness Network (NASCO), the Business Council of Canada developed a border action plan that would begin by harmonizing cross-border programs and practices, leveraging infrastructure, technology and resources, and eliminating redundancy then move to stronger regulatory cooperation and the creation of an infrastructure bank for cross-border projects.

The Business Council is also godparent to the Coalition for a Better Future, whose third mission piece, after Growing Sustainably and Living Better, is Winning Globally, with the emphasis on scaling through innovation to create global champions. 

The Canadian Chamber of Commerce has focused on the US relationship with co-chairs Enbridge and Johnson & Johnson. The Chamber’s initiatives cover Border, Regulatory Cooperation, Buy American, Critical Minerals, Energy and the Environment, and Defence and Security. 

The trans-border associations, always problem-solvers, continue to focus on the practical. The Canadian American Business Council has partnered with Quebec in its North American Rebound campaign with its focus on supply chain resiliency. 

The Pacific Northwest Economic Region, long a driving force for creative border solutions, is now collaborating with the Vancouver Airport Authority in the Future Borders Coalition. It has produced timely practical advice on COVID recovery and its white paper, Beyond Preclearance (2018), and its recommendations continues to be a starting point for border reform. 

Threat assessment must be part of any updated US trade strategy. The Trudeau government waged a forceful advocacy campaign over the Biden administration’s proposed electric vehicle tax credit – part of its stillborn Build Back Better legislation. But was it necessary? It perplexed the Americans, who consistently said that the likelihood of the legislation passing was slim and pointed to our own incentives for electric vehicles. Would our energies have been better spent on joint development of the innovation necessary to create ‘clean’ electric vehicles? 

The detailed “Roadmap for a Renewed Canada-US Partnership” (February, 2021) announced with much fanfare by President Joe Biden and Prime Minister Justin Trudeau was followed up with a series of meetings by key cabinet officers. The vision is right. But this year’s first anniversary statement by the leaders was long on title and aspiration but short in actual achievements. There has been some progress on, for example, NORAD Renewal. Now we need to see progress in improving the dependability, redundancy and resiliency of our shared supply chains. 

Our relationship with the US risks descending into transactionalism around irritants. Canadians will always lose in this game, as we saw when the Harper government made Keystone the litmus test of the relationship. We made no progress in other critical areas. 

Looking forward, it is time to lift our relations with the US from the current trough of the tactical and transactional. Planning needs to be strategic as well as tactical. It must be a Team Canada approach involving the provinces, business, and labour. 

It starts with identifying American interests that match Canadian interests and then coming up with two or three priorities. The temptation will always be to add more items to satisfy this or that interest, but experience has taught us that our systems can only manage two or three priorities. Again, the Americans are managing a world. They like us, but we’re not their priority. 

We are most successful when we come to the table with creative solutions. This is how Brian Mulroney got the FTA and the Acid Rain Accord while parting with Ronald Reagan on Star Wars and South Africa. It is how Jean Chrétien got the Smart Border Accord while parting with George W. Bush on Iraq. Both understood we could disagree with our American neighbours without being disagreeable.  

Mulroney and Chrétien also understood the importance of looking at problems through a geopolitical lens and then coming to the table with solutions. This is how we can restore our most important relationship. We have done it before. We can do it again.  

Contributing Writer Colin Robertson, a Fellow and Senior Adviser to the Canadian Global Affairs Institute in Ottawa, is a former career diplomat who was posted to Washington, New York and served as Consul-General in Los Angeles.