Don Newman

January 21, 2022

Let’s face it. We can’t count on Joe Biden. When he was sworn in just  a year ago as the United States 46th President, most Canadians offered a sigh of relief. Now there would be no more gratuitous insults. No more tariffs on steel and aluminium exports. No more threats to crush the dairy industry and cancel the trade deal which had become the centerpiece of much of central Canada’s economy. No more Donald Trump.

Now, exactly twelve months, later all of that is true. But instead of a benevolent older brother looking out for Canada’s interests south of the border, Canadians have come to realize that what we have is a crotchety uncle who doesn’t care much about us as he struggles to gain control of an agenda that many Americans who supported him are now worried  he is past his best-before date to deal with.

But if he can handle the job as president he is not handling it the way many Canadian would like. Just a few examples on the cross border scorecard. With Biden and the Democrats in charge, the US and Canada were supposed to work together on the environment.    Maybe on Climate Change they still will. But in North America – not so much.

The day Biden was sworn in Canada found itself on the wrong side of history. No sooner was Biden in office than he cancelled the Keystone pipeline. No one in Canada should have been surprised. President Barack Obama had cancelled it when he was president and Biden his vice-president. Donald Trump had re-instated it. But Keystone, a Canadian owned project to carry Alberta oil sands oil through the United States to the .S Gulf Coast, has been a target of Democratic party environmentalists for years.

Then there is the Line 5 pipeline that carries oil from western Canada to Ontario and Quebec. A good portion of the pipeline runs through the United States, particularly through Michigan and under the Straights of Mackinaw, the area in Michigan where Lake Michigan and Lake Huron meet. The governor of Michigan has ordered that part of the pipeline closed. American environmentalists  say a rupture in the pipeline – possibly caused by a passing ship – would be a disaster, contaminating the entire Great Lakes with oil. So far, the closing of Line 5 has been tied up in the US courts. Canada has appealed to Biden to intervene. So far he has refused.

Canada and the United States always have a satchel full of perennial cross border issues that are always simmering. The original NAFTA agreement, which included Mexico, was signed in 1992 to create a frame work to deal with these disputes. In 2019 Canada, the US and Mexico signed a revised trade treaty called CUSMA to modernize the original agreement.

That some of these issues would resurface after the signing of a new free trade agreement is not particularly surprising. Each country will probably try to test the limits or any new provisions in the agreement. The Americans are doing that with the part dealing with automobiles. The new agreement raises the amount of North American content in vehicles built in each of the three countries to 65 percent in order for them to pass borders duty free. But here’s the catch. The Americans are now saying that the 65 percent threshold must be made up of the major components in the car or truck. Small, less important components cannot be added together so that cumulatively they add up to 65 percent of the content.

And Washington is completely ignoring another part of the trade deal when it comes to cars and trucks. The Biden administration is promising tax write-offs of up to $1,250 to Americans who buy electric cars or trucks made in unionized auto plants located in the United States.

Dispute settlement panels will have to determine whether Canada is right to oppose both of these American provisions. The tax write offs seems like the easiest to have reversed. But don’t expect Joe Biden to give up easily. He won the presidency that the Democrats lost in 2016 to Donald Trump by reclaiming votes in the heavily industrial states where they build a lot of cars. Michigan and Wisconsin are particularly good examples of that. Trump won both of those in 2016 and he is likely to be the Republican candidate again. Biden won them in 2020 and he will have to win them again in 2024 if he has any chance of being re-elected.

Canada may very well win both of those cases when they are adjudicated by the dispute panels. Then the Americans will either drop the proposal or this country will be able to add tariffs and duties on American exports to Canada equal to the damages suffered from the US restrictions.

There are other issues as well that are perennials in Canada-US relations. Disputes over softwood lumber and potatoes from Prince Edward Island are two of them currently on the table again. President Biden hasn’t moved to get involved in either.  It is clear. Whether it is cars, pipelines, softwood or potatoes, we can’t count on Joe Biden.

Contributing Writer and columnist Don Newman, an officer of the Order of Canada and Lifetime Member of the Parliamentary Press Gallery, is Executive Vice President of Rubicon Strategy, based in Ottawa.