Trudeau will benefit on NAFTA regardless of outcome

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Executive Chairman
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This article first appeared in the Toronto Star on September 30, 2018.

The more things change, the more they stay the same. In spite of the acute attention paid to the ongoing negotiations week after week, the NAFTA narrative remains fundamentally the same: meetings take place, another “all-nighter” makes headlines, and so-called deadlines evaporate into thin air.

Foreign Affairs Minister Chrystia Freeland’s talking points haven’t changed much either. We possibly will make the end of week deadline. We are in intensive negotiations. We are not negotiating in public. No NAFTA deal is better than a bad NAFTA deal.

Everyone knows the issues on the table: concessions on dairy, cultural exemptions, softwood lumber and, most critically, the dispute resolution mechanism.

It’s not possible to overstate the importance of NAFTA to our country’s future economic prosperity. It’s a vital agreement that has fuelled growth, created jobs and generated opportunities that wouldn’t otherwise exist.

The American market being open to Canadian firms has benefited us to a degree that is hard to grasp — and for it to close would be deeply damaging. For all those reasons, the long-term political cost of failing to reach a deal would be devastating for any political party.

But with an election less than 400 days away, the short-term political landscape is quite another matter.

The Liberals stand in an envious position: no matter the result of the negotiations, they stand to benefit with voters.

If Canada signs a deal before the 2019 election, Trudeau will be able to campaign across the country celebrating the virtues of his agreement — secured economic prosperity through a wider selection of goods, increased trade, new jobs and the freer movement of professionals and investors across the border.

No matter what the specifics of a negotiated trade pact are, the prime minister can — and will — proudly boast about his accomplishment in successfully negotiating a “Canada-friendly” deal against the erratic, America-first, deal master himself. It will be a feather in his government’s cap — one that has few tangible results to point to three years into its term.

Without a deal, the narrative changes, but it can still easily be spun to the benefit of the Trudeau and the Liberal party.

A failure to get a NAFTA deal opens the door for a federal election fought on how to contend with the current American administration. President Donald Trump’s fans in Canada are few and far between. The president is widely disliked, and when the Liberals have been positioned as counter to the president, their poll numbers have increased.

Should there be no deal, suddenly, the next federal election will become a referendum on Trudeau’s handling of Trump, an issue that Trudeau can own. It will be challenging for Scheer and the Conservatives to campaign against the Liberals when they position themselves as standing up to a bully that many Canadians scorn.

It is important to recall that Trump is using the trade talks as an election tool, too.

An election campaign focused on NAFTA and the unpredictable U.S. president will shield Trudeau and his party from domestic questions that don’t have easy answers — from pipelines to Indigenous issues to spiralling deficits.

Practically, this means it is unlikely that Canada will get a bad deal on NAFTA.

There is little incentive for this government to sign a bad deal — one that simply exposes the government heading into the next election.

Why sign a deal that angers the dairy industry in Quebec? The Liberals know they are vulnerable to Andrew Scheer in rural Quebec.

Why sign a deal that dismantles the dispute mechanism that has benefited Canadian interest time after time?

Why sign a deal that weakens Canada’s cultural industries at a time when our culture is under threat?

The prime minister is in a politically enviable position — regardless of whether he gets a deal or not. Ironically, that means that he is better positioned in negotiations with the United States, too.

Jaime Watt is the executive chairman of Navigator Ltd. and a Conservative strategist.

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