This past weekend, our prime minister headed south of the border to talk directly with U.S. state governors along with Vice-President Mike Pence about trade. For the most part, the reception appeared warm and welcoming.
Prime Minister Justin Trudeau repeatedly stressed our position as the largest economic ally of the United States.
There was $544 billion in merchandise and $80 billion in services traded between the two countries in 2016, according to the CIA World Factbook. Further, the two-way investment in stocks between the two countries reached nearly $700 billion. Our economies are intimately linked at so many levels that it is hard to discern where one ends and the other begins.
The prime minister pointed out the nine million American jobs relying on trade with Canada, with many of those jobs in the border states. Even the governor of Wisconsin, who has been making noise about dairy and cheese regulations, seemed to think the relationship is important and we do not have anything to fear during the upcoming re-negotiations for NAFTA - they are only about achieving fairness.
There is no question our trading relationship with the United States is critically important to our economy. Over three quarters (76.7 per cent) of Canada exports end up in the U.S. (our next largest trading partner is China at 4.1 per cent) while 52 per cent of our imports come from there (12 per cent from China and six per cent from Mexico). On the other side of the ledger, we take in 18.2 per cent of American exports (China imports only 7.7 per cent) while we provide 13.2 per cent of American imports (China is the only country ahead of Canada at 21.5 per cent). Canada is America's most important market.
We are also the United States' major source of oil, natural gas and electricity.
Indeed, one could make the argument - and I have - the 1989 Canada-US Free Trade Agreement and the subsequent 1994 North American Free Trade Agreement were all about ensuring U.S. access to vast Canadian energy supplies. Canada is ranked number three in the world in proven oil reserves (behind Venezuela and Saudi Arabia) and sixth in terms of oil production.
So it is not surprising our prime minster took a strong stance on protectionist "Buy American" policies, saying: "Such policies kill growth. And that hurts the very workers these measures are nominally intended to protect.
"And once we travel down that road, it can quickly become a cycle of tit for tat, a race to the bottom, where all sides lose. My friends, Canada doesn't want to go there. If anything, we'd like a thinner border for trade, not a thicker one."
It sounds good and certainly was a sound bite on newsfeeds across our country. But the question is how did it play south of the border? The answer is likely his pleas fell on deaf ears for the most part.
Congress is too busy dealing with a faulty replacement plan for Obamacare to spend much time thinking about bigger issues. The president is too busy throwing out rhetorical hand grenades and tweets, while accusing the media of a witch hunt over his collusion with Russia to spend time worrying about Canadian relations.
However, United States Trade Representative Robert Lighthizer released the United States' negotiating position with respect to NAFTA on Monday, giving Congress 30 days to review it prior to the start of talks on
Aug. 17.
There will likely be changes in favour of specific industries in certain states.
Some industries appear to be off-the-table. Trudeau was assured this weekend by Trump that our steel and aluminum industries will not be under attack through the renegotiated agreement. Certainly, despite an increase in America's self-sufficiency with respect to oil production, it is unlikely the United States will take anything less in the energy sector than they are already receiving.
After all, U.S. President Donald Trump touted the Keystone XL pipeline as securing domestic oils supplies and eliminating the need for foreign oil. Last time I checked, Alberta was still part of Canada and the oil going into the Keystone XL pipeline will still be Canadian but it is telling the president views Canadian oil as a "domestic supply" and not "foreign oil."
As we head into these NAFTA talks with our largest partner, this is perhaps the most important thing to remember: we are not the United States.
We are a foreign country with our own aspirations and our own views.
Despite decades of American television, film, music and culture crossing the border, we are still Canadians with a Canadian identity. It is sometimes hard to find, but when it comes to trade, we need to ensure we stand up for the people on this side of the border.
Unfortunately, when 76.7 per cent of your exports go to one customer, it is hard to do. After all, as we are often told by business gurus, the customer is always right - even if they are Trump.
