Perrin Beatty

The world is much smaller than it was a quarter-century ago, when NAFTA was first negotiated. While American politicians, stakeholders and negotiators still don’t always know Canada as well as well as we, being the smaller market, know the U.S., they’ve been catching up. As veteran policy maker and Canadian Chamber of Commerce CEO Perrin Beatty writes, the most interesting part of the NAFTA negotiations has yet to come.

A few years ago, Canadian comic Rick Mercer had a segment on his show called “Talking to Americans,” in which he’d do interviews on U.S. streets with ordinary folk to reveal the lack of knowledge about Canada south of the border.

Invariably, his gullible guests would go along with his whopping lies—one lady strongly condemned Canada’s plan to pummel caribou to death with Timbits.

But even when they were inadvertently patronizing us, like the woman who congratulated us for finally getting running tap water, the Americans were well-meaning, concerned and kind. The segment was hilarious and lovely at the same time.

It also encapsulates the situation the Canadians are facing as the NAFTA talks are beginning. Canadians going south of the border to promote the trade relationship between our two countries and defend business interests are often met with sympathetic but unaware partners.

NAFTA has allowed the Canada-U.S. trade relationship to coast along, growing steadily since implementation in 1994, but not really being at the forefront of anyone’s concerns. Now that this relationship is in the process of being altered, there’s some catching up to be done.

Since the election of Donald Trump, the Canadian government and Canada’s business community have launched a massive effort to engage with and influence Americans in the halls of Congress and the streets of small towns across the U.S.

The first step is to inform and engage our American counterparts on just how lucrative and thoroughly integrated our economies have become thanks to this successful trade agreement.

And as Canada’s political and business leaders branch out in Washington to meet with virtually every representative in Congress, every senator and every cabinet secretary, we are speaking with one voice, and one simple message: “We are your customers and your partners. Things that hurt our economy will bounce back into your cities and towns immediately.”

The most famous delivery of this message occurred when Canada’s foreign affairs minister, Chrystia Freeland, reminded the powerful speaker of the House, Wisconsin’s Paul Ryan, that his district exported a billion dollars of goods to Canada every year. A smiling Mr. Ryan reportedly shook his head and commented ruefully, “Somebody’s done some good research!”

This energetic campaign that has been taking shape—essentially a crash course on continental economics—has worked well in Washington. But the reality of America today is that a huge gulf exists between Washington and small town Main Street. Time and again our American colleagues have pointed out that political and business elites are not popular or trusted. Mr. Trump used that fact to great advantage: In his inaugural address he said: “Washington flourished—but the people did not share in its wealth.”

So, Canada needs more than its political leaders and its need to carry its message far beyond the Capitol. The most credible voices in America today are ordinary people, workers and business owners, discussing their own businesses and their own relationships.

For instance, the Canadian Chamber of Commerce has been arranging meetings with elected officials in South Carolina, Virginia, Tennessee and Texas, with plans to go to Georgia and Florida. There, the elected officials are put in touch with Canadian businesses and investors, showcasing investments and collaboration between our economies.

These range from a tour of the CN Railroad Intermodal Hub outside of Memphis to a visit to a Bombardier Flight training centre in Dallas and many, many more. All of them have in common that they represent Canadian investments in the U.S. and contribute to creating jobs south of the border. And when elected officials or their representatives are shown the extent to which the Canadian and American economies are linked, their response is generally the same: “I had no idea.”

The trick, then, is to get these messages to circle back to Washington, and most importantly, to the U.S. Trade Representative and his team. Because over there, the conversation is quite different.

Now that the NAFTA negotiations have begun, we are faced with a different kind of American. This is no longer a sympathetic but ill-informed partner at the table, but rather a well-prepared, tough and collected negotiator. The conversation can still be a positive one, however, as long as it’s about joint progress and mutual benefit.

In the negotiations that have taken place so far, rumours are that some common ground has been found. Refreshing some sections to incorporate the new realities of electronic commerce and reducing the administrative burden on manufacturers are positive and useful changes that all three countries agree on—in principle—and which will be supported by the business communities. American demands that we help interdict the flow of counterfeit goods is another area where Canada should respond positively.

As always, the devil is in the details, and the key issue will be not only to obtain changes on these elements, but to ensure that the changes benefit all three countries.

Similarly, negotiators have started to draw battle lines on the issues where Canada will be on defence because the Americans have signaled their demands many times. For instance, the original Canada-U.S. Free Trade Agreement emerged from frustration with endless legal wrangling, so the dispute settlement provisions in Chapter 19 are vital to the success of the agreement.

On other issues, the lines are blurred. The Canadian government could find itself at odds with some business interests, for instance, when the U.S. or Mexico starts requesting changes to Canada’s Patent Act which is a source of repeated complaint from the U.S.

By all accounts, the first round of negotiations was a table-setting exercise: the metaphorical equivalent of dogs sizing each other up. Much of the barking, and likely a few first bites, will come with the second and third rounds of negotiations, when each country starts to reveal its real motivations and objectives.

Canada will have some hurdles to overcome. Between the White House senior staff changes and Congress dipping its fingers in the negotiation process, there will likely be a diverse group of stakeholders to contend with. And that means a number of concerns to address.

A successful negotiation involves each party making concessions as well as making progress on elements of its own wish list. We can only hope this will be an example of such a give-and-take process.

Meanwhile, Canadians roll on across America, talking with friends, planning with allies and working towards a future that is at least as prosperous as the past.

Perrin Beatty is President and CEO of the Canadian Chamber of Commerce and a former cabinet minister in the Mulroney government at the time of the negotiation of the FTA and NAFTA.
pbeatty@chamber.ca