Trudeau, Trump and Trade: The New Deal

From the Editor / L. Ian MacDonald


Welcome to our special issue on the new North American trade deal, NAFTA 2.0, or as Donald Trump has insisted on styling it, the U.S.-Mexico-Canada Agreement (USMCA), easy to recognize but difficult to pronounce.

It has been more than three decades since Canada and the U.S. negotiated the first FTA in 1987, and more than a quarter century since the NAFTA was negotiated to include Mexico in 1991-92.

Derek Burney was present at the creation of both, first as chief of staff to Prime Minister Brian Mulroney in the Canada-U.S. round, then as Canadian ambassador to the United States during the NAFTA talks.

There is a huge difference between then and now, in that Mulroney was dealing with rational political actors in Ronald Reagan and the first George Bush, both of whom had a closer who could deliver for them—James A. Baker, first as secretary of the treasury to Reagan, and then as secretary of state to Bush.

From the Canadian side, Burney played a somewhat similar role in both negotiations, and he offers his uniquely informed institutional memory, as well as his insights on the new USMCA, which he sees as “more as a source of relief than of celebration.” Burney acknowledges the unusually difficult circumstances of dealing with Donald Trump. 

From BMO Financial Group, the bank’s chief economist Douglas Porter asks: “How do you spell relief?” And his answer is that while the deal “disperses clouds of uncertainty over the Canadian economy, it doesn’t change the fundamental factors driving the longer-term outlook.” Porter walks us through the details of the deal and the markets’ view of it.

Sarah Goldfeder, a former adviser to U.S. ambassadors in Ottawa who also served for the State Department in Mexico, asks whether the deal “truly constitutes a win-win-win?”

The Munk School’s Drew Fagan looks at the bilateral relationship in a time of tension and concludes Canada is walking on the razor’s edge. From Washington, the Canadian American Business Council’s Scotty Greenwood offers a retrospective of the Canadian-American relationship, a view from inside the Beltway.

Meredith Lilly, who was foreign policy and trade adviser to Stephen Harper, shares her assessment of the new deal. And John Weekes, who was Canada chief negotiator of the first NAFTA agreement, offers his perspective on NAFTA 2.0. 

And columnist Don Newman offers his take on the deal and its political implications for Canada in 2019.

In our Canada and the World section, we lead with Ed Greenspon and Kevin Lynch’s timely appraisal of opportunities and challenges in trade between Canada and China, which they call “the 21st century’s new great power.” Representing only four per cent of the world’s economy in 2000, they note that today “China accounts for 15 per cent and the U.S. 24 per cent. Those numbers are forecast to converge in a decade or so, after which China will surpass the U.S. as the world’s largest economy.” The Public Policy Forum has recommendations for Canada’s engagement with China, which have been widely discussed since the October release of an 18-month study. Not to be overlooked—the issue of human rights
in China.

Looking back at the Quebec election on October 1, Graham Fraser makes the case that what started out as a boring campaign became a fascinating one—the first since 1970 in which sovereignty was not on the ballot, which allowed François Legault to make the case for change from the dominance of the Quebec Liberals and the Parti Québécois. Legault’s Coalition Avenir Québec won 74 ridings in the 125-seat legislature, a thumping majority, while the Liberals had their worst showing since Confederation and the PQ lost recognized party standing in the National Assembly.

Dalhousie University’s Lori Turnbull looks at the New Brunswick election, which resulted in a minority government leading to a hung parliament that convened on October 23. She looks at the constitutional and political implications of the situation.

Robin Sears looks at the confirmation of Brett Kavanaugh as U.S. Supreme Court justice and compares the process to Canada’s.

Looking at the energy, environmental and economic implications of Ottawa’s Bill C-69, Enbridge EVP Bob Rooney offers an industry perspective on taking the time to get it right for stakeholders on all sides, including Indigenous peoples.

Finally, we offer two reviews of important books for the holiday season. Anthony Wilson-Smith looks at Power, Prime Ministers and the Press, a history of the “historic love-loathe relationship between the Parliamentary Press Gallery and the government of the day” from 1867 to the present. No one brings stronger credentials than author Bob Lewis, who spent 35 years working in the Gallery and working with his parliamentary writers as editor of Maclean’s.

In a time of dysfunction in Washington, Policy Associate Editor Lisa Van Dusen finds perspective in Doris Kearns Goodwin’s portrait of four great American presidents, Leadership in Turbulent Times.