The North American Free Trade Agreement might be bigger than Donald Trump, but that’s no guarantee it will survive his presidency intact.
Speaking to producers at CropConnect in Winnipeg last week, noted conservative thinker David Frum gave his thoughts on the fate of the trade deal, which most consider to be essential to agriculture.
A senior editor at The Atlantic, Frum said that what is “ominous and alarming for people who have to do business with the United States is that while a lot of the basic architecture is staying the same, the meaning and content of that architecture is changing.”
While generations of past presidents have pushed for freer trade and more open markets, Frum said President Trump is a consistent protectionist who came to office with little understanding of how the NAFTA actually functioned.
“He understood that it involved Mexico somehow, but he didn’t realize that the N.A. stood for North America and that Canada was also a part of it, and what he also didn’t realize of course, is how integral to the architecture of the economy the continent NAFTA has become,” said Frum, who once worked as a speech writer for President George W. Bush. “What Trump has bumped into since being elected is that his NAFTA views are not shared within the American political system or by his party.”
Former prime minister Brian Mulroney appeared before the U.S. congress last month to defend the trade deal, which was negotiated by his government and signed in 1992. It came into effect two years later in 1994. He told Manitoba producers that “success in this renegotiation is not preordained” and described the current situation in U.S. politics as a “different kettle of fish” than when he sat down to begin work on NAFTA a quarter-century ago.
“We will need to be extremely vigilant in safeguarding access to our most vital market and in resisting unilateral demands,” he said. “When fear and anger fuel public debate, history teaches us that protectionist impulses can easily become a convenient handmaid. History also demonstrates, in Europe, North America and throughout Asia, that the best antidote to protectionism is more liberalized trade, not less.”
Ideally, all sides of a trade negotiation leave the table feeling they have given a little to gain a lot, but both Frum and Mulroney said the current White House attitude towards trade is that there must be a winner and loser in each deal — a mindset that is hampering negotiations.
Trump has insisted that NAFTA has been a bad deal for the United States, but Mulroney noted that the U.S. enjoyed a US$7.7-billion trade surplus with Canada in 2017. Frum added that more Americans depend on NAFTA for employment in the three U.S. states key to electing Trump than represented by his margin of victory.
For Manitoba farmers and commodity groups, the situation is an unsettling one, but not entirely unfamiliar.
“Certainly farmers are keeping an eye on the talks,” said Mark McDonald, who farms near Virden. “But I think as farmers you’re a bit immune to day-to-day fluctuations and events. We’ve all been through trade negotiations and NAFTA talks before, if we have any grey hairs, and it’s just part of the things we have to deal with as farmers every day.”
With 90 per cent of Manitoba’s oat crop heading south of the border, the Prairie Oat Growers Association said its members definitely have the trilateral trade deal on their minds.
“NAFTA is key,” said executive director Shawna Mathieson, adding that with the trade deal once again on the table, discussions among producers this year have a different tenor.
“In the past it’s always been, maybe I shouldn’t say a given, but basically a given that the U.S. has always been our biggest export market… and that’s always been the expectation, but we are looking at other markets.”
Francois Labelle, executive director of the Manitoba Pulse and Soybean Growers, said that ongoing negotiations have caused a genuine concern among some of the organization’s members.
“Remembering when NAFTA first came in, probably the biggest thing it did for the Canadian pulse industry at that time was allow beans to go to Mexico at a reduced, and eventually zero, duty,” he said. “The dynamic of that market has changed now, with beans coming from China and other locations… but it still is a factor.”
While many producers have lived through past trade talks, the wild card aspects of current U.S. politics is a stressor not seen before.
“It would be nice to get this one over with, but I’ve got a funny feeling that this will be a long, slow, protracted process,” he said.
But there are some positive points to be made about the negotiation process.
Frum noted that while political chaos and scandal south of the border is alarming in many ways, it also makes it unlikely that the Trump administration will be able to effectively implement the platform it was elected on.
“There is a kind of chaos and that is reassuring, in that chaos isn’t very productive. So when Donald Trump says, ‘I’m going to make things happen in the world of trade,’ he has trouble making things happen because he doesn’t have the instruments and tools of power,” Frum said, adding that Canada’s biggest advantage in renegotiating NAFTA is the deep relationship it has with America, its politicians and its industry.
The current Liberal government’s strategy of currying favour and buying more time, is a prudent one, said Frum.
Mulroney agreed. He noted that while the introduction of NAFTA so many years ago was a politically fraught battle fought in ridings across the country, the current renegotiation is a non-partisan issue, adding that Prime Minister Justin Trudeau invited him to work with his government as soon as renegotiation was on the table.
“It’s not a role that I sought, but I was asked by the prime minister if I would do it and of course,” he said. “I’ve learned there is no Conservative way to negotiate a free trade agreement and there is no Liberal way, there is only a Canadian way.”