If Canada’s negotiators want to do what’s best for the country, they should stop posturing before they do more damage to our industries

Canadians who think Prime Minister Justin Trudeau is standing up for Canadians against U.S. President Donald Trump over dairy tariffs have it wrong. Trudeau is standing up for Quebec against the Rest of Canada. It is Trump who is standing up for Canadians.

Canadians are also wrong to think the U.S. has been unreasonable in the NAFTA negotiations, as would be evident if not for our sense of entitlement. Americans don’t owe us a living and they do owe it to themselves to look after their own.

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If Canada’s negotiators want to do what’s best for Canada, they should stop posturing before they do more damage to our industries. For starters, they should stop misrepresenting the U.S. position on steel and aluminum tariffs. The U.S. never claimed that Canada represents a national security threat, as Trudeau keeps repeating. To the contrary, the U.S. has specifically said these tariffs are not aimed at any one country: without tariffs to protect American steel and aluminum from foreign suppliers, these industries, which America needs for national defence, would go bankrupt.

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The U.S. was delaying steel and aluminum tariffs on our industries pending the NAFTA negotiations but, instead of making our case straight-up at the negotiating table, Canada decided to lobby the U.S. Congress and U.S. media and to try to run out the clock on the Trump administration. For good measure, Trudeau called the U.S. request for a sunset clause that would require NAFTA to be renewed every five years “totally unacceptable” and in late May, Trudeau high-handedly scrapped a plan to meet with Trump because of it. The strategy backfired, damaging our steel and aluminum industries. Seeing the stalling, the U.S. imposed the tariffs.

But what is so unreasonable about building into trade deals set renewals that require the parties to renegotiate provisions that may have become outdated, particularly since we’ve seen game-changing industries such as social media and shale oil emerge from nowhere? Countries in Europe, Asia and Africa employ sunset clauses of various kinds in their trade deals, often with protections that grandfather investments should an agreement not be renewed (the Netherlands-Poland Bilateral Investment Treaty is just one example). Instead of employing “my way or the highway” tactics, Trudeau could have accepted a sunset clause that grandfathered the protections Canadian industry would need in the event a future U.S. administration decided to walk away from NAFTA.

There is also nothing unreasonable about Trump’s desire to let U.S. dairy farmers sell their goods into Canada — what is unreasonable, even outrageous, is the 270-per-cent tariff Canada imposes.

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Trump is a deregulator who wants to deregulate agriculture in the same way he is deregulating energy, mining and other natural resource sectors. By lowering our dairy tariffs and accepting Trump’s doctrine of reciprocal trade, our dairy industry — which has been stagnant for decades — would have access to the vast American market and return to being an export industry, as it was before Canada adopted supply management. Canadian consumers would win from a market-based dairy industry, too. As detailed this week in a Washington Post column showing the absurdity of Canada’s supply management system, B.C. residents in border towns make milk runs into Washington State to obtain dairy products at half the cost of those in B.C. supermarkets, which under supply management obtain dairy products from Quebec, 5,000 kilometres away.

By playing to the Canadian public at Trump’s expense, Trudeau’s popularity has soared

In truth, Trudeau is the protectionist, not Trump, and the way things are going, it will be Trudeau, not Trump, who worries about trade deficits. Protectionism and the stagnation it brings haven’t served Canada well.

A decade ago, Canada had a US$78 billion trade surplus with the U.S. That surplus was more than halved to US$32 billion five years ago and it was halved again to US$17 billion last year. Five years from now, our ever-shrinking surplus with the U.S. may start to become an ever-growing deficit, particularly since the U.S. has blown past us as a producer of energy — our main exports to the U.S. We are not only at risk of losing this financial mainstay, with the U.S. no longer needing us for energy security, we are also at risk of becoming strategically unimportant.

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None of that matters much to Trudeau, who faces a tough re-election next year. NAFTA necessarily thus becomes not an economic exercise but a political one. How to retain the dairy quotas needed for the Quebec vote in the face of U.S. pressure? How to reverse his sagging popularity among Canadians on the whole as the economy fades? The answer is a no-brainer: Declare war on Canada’s Public Enemy Number One — Donald J. Trump. For maximum effect, start right after genial discussions at the G7 meetings during which an unsuspecting Trump had even reportedly agreed to drop his request for that five-year sunset clause.

“Canadians are polite, we’re reasonable, but we also will not be pushed around,” Trudeau grandstanded as soon as Trump turned his back. It’s a brilliant political strategy. By playing to the Canadian public at Trump’s expense, Trudeau’s popularity has soared. But although Trudeau may be winning in the polls, Canadians are wrong to think Trudeau is winning for them. For Canadians to win, Trump must prevail and the Canadian market must open up.

Lawrence Solomon is policy director for Toronto-based Probe International. LawrenceSolomon@nextcity.com