04-02 Today

If you love show business, you will just love politics. And in the beautifully staged photo, you can see President Trump and his daughter Ivanka with Prime Minister Trudeau. And meeting the President is what you do before engaging in serious talks with a new US Administration. This is early 2017, but during the 2016 election, candidate Trump railed against the North American Free Trade Agreement, something that is important to Canada.
I have a humorous memory of a meeting with Premier Lougheed of Alberta in 1981 and having to sign a document that I would not have a picture taken with the Premier unless we were sitting down. He was rather short. That was the show business before meeting as many as eight other key people in the government, opposition and public service.
Here is another great photo of the meeting with President Trump which shows Trudeau reluctant to shake hands, a freak photo and part of the show business risk of being caught off guard. It may be the most famous photo ever taken if President Trump faces impeachment.
One of the things I learned over the years, and it applies today to renegotiating the NAFTA, is trade agreements are very, very complex and put together to meet the needs of a lot of vested interests. It is easy for politicians to talk about changing or cancelling trade agreements, but it is not easy to do.
It is more than the politics that is a problem. After an agreement is in effect over time, economies become integrated and major corporations have huge investments at stake. In fact, we could accurately say that modern trade agreements are more about investment, harmonizing regulations, patents, subsidies and that sort of thing, rather than tariffs.
Fortunately, in dealing with the US, we work with Congress and Governors as much as the Administration. Everything is upfront. Easier than paying bribes or dealing with “clown” princes in other parts of the world.
Yes, the auto part of the NAFTA will be improved to give the US a bit of a victory and modifications will be made to what we call “supply management” as it impacts dairy, eggs and chicken. An agreement will be reached after the 2018 November mid-term elections in the US, when it is anticipated that the Democrats will retain control of the House of Representatives. Trump's bluster is just show business.
Efforts to diversify the export markets make sense and the Comprehensive Economic and Trade Agreement or CETA reached with the EU was a significant political initiative. The photo shows Prime Minister Trudeau with two senior EU officials during the signing of CETA on October 30, 2016. It will be helpful but not a big deal regarding our overall trade.
And it is about 1600 pages in length. Mostly about trying to harmonize all the crazy rules that have been passed by EU countries. When attending an OECD conference in the early 1990's, I heard talk about one EU regulation designed to ensure that imported bananas were not too “curvy”.
And another big initiative started by President Obama, is called the Trans-Pacific Partnership or TPP, which now excludes the US but includes Canada and ten other nations. Again, it was a big political deal and important, but not really something that will make Canada less dependent on the US market.
It would be my judgement call that Canada is going to be even more dependent on the US market in the future than it has been in the past. There is just so much uncertainty out there: a shrinking of global trade, skilled and unskilled labour shortages, climate change, massive migrations, artificial intelligence and the growing economic power of Asia.
President Trump’s histrionics are just histrionics. Enterprising and adaptable Americans are our best partners today and most importantly, our best partners tomorrow. It’s the values we share that count. Politicians come and go.