Although, generally, Justin Trudeau has done a superb job managing the NAFTA negotiations with a madman, he made one slip. He went from chummy to “we won't be pushed around.” You just don't say that to a Grade 5 bully in the schoolyard, unless you're in Grade 8. It would have been sufficient to say, “We don't agree to the terms and conditions on offer.” The minute it was personalized, the discussion with Donald Trump was over.
Extraordinary to think such a tiny miscue can change the course of history, but that appears to be the case. On the other hand, if not that, it would've been something else. Donald Trump is a man-child and subject to the emotions of a little boy, which he exhibits every day of his presidency on Twitter.
Of course we are going to be pushed around. We have asked for it by putting our life in America's hands.
The problem, as I used to explain to my board of directors, many years ago when they would rail on about the annoying differences between how banks lend money to goodwill businesses and asset-based businesses (I'm the former), is it doesn't matter what we think. It's their money. If you don't want to be undermined by a bank don't ask for their money.
It's America's market and they can do whatever they like, even if they have agreed by international treaty to abide by approved rules of engagement. They break rules all the time when they aren't happy. They always have. Sometimes they invade countries and sometimes they help them. Depends on their national interests at the time or the moods of their presidents. That's what superpowers do.
I used to watch these proclivities every four years for 20 years in New Hampshire where I was partner in a state-wide business magazine. At primary time, we were important for five or 10 minutes. Canada was always in some kind of conflict with America (usually softwood lumber) and I would listen to potential presidential candidates grumble about Canada and how wimpy or unfair we were. They were quite candid with us in briefings, as I did not volunteer my citizenship. Fortunately, my business partner never outed me. She thought it was quite funny as I questioned the hopeful’s acolytes on their fear of such a small peaceable country.
What is different today is that America has done very well by free trade and Canada. They get lots of oil at good prices, they have an agreement in the case of a catastrophe where we are not allowed to cut those oil supplies off even if we need it for our own national interest, they get well-priced aluminum and steel to utilize in their factories where the real jobs are, they have a massive surplus in selling services to us, they have far more aggressive buy-American policies than we do with buy-Canadian strategies, and proportionately, we have lost many more manufacturing jobs than they have.
America has it good. They seem unwilling or unable to look at the facts. Of course, this has nothing to do with facts. It's politics. Trump is still running for office.
We forget free trade was not that popular when brought in by Brian Mulroney. There was a bitter election about it in 1988 and we have been accommodating the result ever since.
Sooner or later the American political establishment will do the math and realize they can take much better advantage of Canada with free trade than without it. It's an old refrain, but we need to work hard to be much, much less dependent on the United States. I hold this view less because of the economic imperatives than a growing feeling that America has lost its way. It's not just Trump. Remember, it was George Bush who incomprehensively invaded Iraq and screwed up Afghanistan.
The United States continues to be one of the most innovative economies and peoples in the world. The problem is the culture wars, the open purchase of lawmakers by special interests, the continued demise of health care, the gerrymandering, the lack of leadership on climate change, festering racism, bizarre gun laws, the disparity between rich and poor exacerbated by recent tax changes and stratospheric debt.
America is on its way from most powerful country in the world to a failed state. It is at war with itself.
How close do you want to tie your future to this trajectory? Although America will always loom large in our world, let's learn how to grow our own food.
