Posted on January 1, 2017
On November 9, the world woke up to a reality that many had deemed impossible: a President-elect Donald Trump. Ambassador David Jacobson takes a look at what the unlikely triumph of Trump means for Canada.
In what was probably the biggest upset in American political history, Donald Trump proved virtually every pollster and pundit wrong, including me. He will be the next president of the United States.
I leave it to others to explain how this happened.
I want to focus on what it might mean for the relationship between the United States and Canada.
It is important to keep the enduring nature of that relationship top of mind. Every other pair of neighbours in the world would be delighted to trade their problems for ours. So no matter how things play out with the new administration, the North American relationship will remain strong.
The place to start is the personal relationship between the president and the prime minister. It is no secret that Prime Minister Justin Trudeau and President Barack Obama get along famously. And the personal relationship between leaders is important in getting things done. (Canadians and Americans no doubt remember President Reagan and Prime Minister Mulroney signing “When Irish Eyes are Smiling” on St. Patrick’s Day in Quebec City while they negotiated the Canada-U.S. Free Trade Agreement.) While I have no reason to believe the personal relationship between the Prime Minister and President-elect Trump will be troubled, the chances of drawing to an inside straight twice in a row are not great.
On a policy level there are four areas of focus: trade, the border, energy and the environment, and foreign and defence policy.
With respect to trade, the big question is whether Trump will actually “tear up” NAFTA. Even assuming he has the authority to do so, which is by no means certain, the likelihood he would do so is remote. The new president’s highest priority is jobs. Tearing up NAFTA would have serious consequences in all kinds of U.S. industries that depend on cross-border sales or integrated supply chains. So while NAFTA won’t go away, after 25 years it’s probably time to do some freshening. Several of NAFTA’s problems were to be remedied by the Trans-Pacific Partnership. Now that TPP is dead (or at least on life support), fixing things like labour mobility and environmental issues through amendments to NAFTA probably makes sense.
On the border, Canada and the United States have had two significant initiatives during the Obama administration: Beyond the Border to facilitate the cross-border movement of people and goods, and regulatory co-operation to make it easier for companies on both sides of the border to make and sell their goods throughout North America by minimizing small regulatory differences. (I used to talk about the differences between the Cheerios I ate in the United States and those I ate in Canada!) While there will probably be a pause as the Trump administration gets up to speed, the benefits to people and business on both sides of the border from these two initiatives will probably compel their continuation.
Perhaps the biggest change is likely to come in the areas of energy and the environment. Ironically, the Harper government was friendlier to energy production and transportation than was the Obama administration. Now the situation is reversed. The Trudeau government is very serious about the environment and climate change. The Trump administration is likely to be far friendlier to all forms of fossil fuel.
Another area of potential difference is in how the United States and Canada co-operate around the world. It is no secret that Trump is likely to endorse more muscular defence and foreign policies. As the enormity of his new job sinks in, Trump will probably be more moderate in his foreign policy than he sounded at times in the campaign. But there are likely to be some serious disagreements about how to deal with global troubles in Europe, Asia and the Middle East. One related point is that Trump will probably try to pressure Canada to meet its NATO commitment to spend two per cent of GDP on defence. Canada currently spends about one per cent as compared to more than four per cent in the United States.
What happened on November 8 was a shock. Under a Hillary Clinton presidency, Canadians could probably have expected a continuation of the policies of the last eight years. Not so now. But whatever the day-to-day differences, the relationship between Canada and the United States will remain the strongest in the world.