Post-pandemic world presents real opportunity to change U.S.-Canada relationship, experts say

By AIDAN CHAMANDY MAY 27, 2020

As the COVID-19 pandemic rages and the American election gets closer, Canadian foreign policy experts weigh in on how the pandemic has affected bilateral relations, and where we go from here.

As the November U.S. presidential election approaches, with the prospect of a second-Trump term a real possibility, and the COVID-19 pandemic upending life on both sides of the border, some Canadian foreign policy experts say they expect the fallout from the pandemic will have a lasting effect on the bilateral relationship and the post-pandemic period presents a good opportunity for Canadian foreign policy practitioners to take novel approaches to the age-old problem of over reliance on trade with the United States, regardless of who sits behind the Resolute desk on Jan. 20, 2021.

One of the most high-profile issues currently facing the relationship is managing the nearly 6,500-kilometre border, especially as both countries begin to gradually reopen and COVID-19 cases continue to spike in certain locales.

Both countries have agreed to keep the border closed to non-essential travellers until at least June 21. Certain cross-border health-care workers are permitted entry to either country, and trade and commerce continue to flow. Refugee claimants who cross into Canada at official points of entry and meet certain eligibility criteria under the Safe Third Country Agreement are also allowed to enter.

The decision on when and how to open the border will likely become a much more difficult issue to manage as time passes, given the divergent political incentives of U.S. President Donald Trump and Prime Minister Justin Trudeau (Papineau, Que.), said Christopher Sands, director of the D.C.-based Wilson Center's Canada Institute.

The two leaders' differing political incentives are based “on the election cycle and the economy,” Mr. Sands said. “Trudeau was hit in the last election, but his election is behind him and he has a huge advantage because of the official opposition leader's weakness.”

On the economic front, however, Mr. Sands said, is where Mr. Trudeau's job gets trickier.

“Canada's economy was almost in recession in the fourth quarter of 2019. Canada is going into a recession and has been performing bad, economically, for some time. Mr. Trudeau is not in a strong position,” Mr. Sands said.

Canadian gross domestic product (GDP) growth was largely flat from the third quarter to the fourth quarter of 2019, and that trend continued into early 2020 with factors such as rail disruptions contributing to the slow growth, according to data from Statistics Canada. In March, GDP dropped nine per cent and the most recent Labour Force Survey data showed more than three million Canadians have lost their jobs due to the pandemic.

Because Canada's economy was already a poor performer prior to the pandemic, Mr. Sands said it behooves Mr. Trudeau to take an extremely cautious approach to reopening the border and to continue to emphasize the centrality of public health in the decision.

“It's in his interest to say ‘safety first,'” Mr. Sands said. “As long as COVID is on everyone's mind, he has a perfect thing to blame for hard economic times.”

The incentives for President Trump are almost exactly the opposite.

“The U.S. has an election in November and Trump was going into it with a much stronger economy. He was planning to run on good times, but then COVID throws everything into question. He's got a political and economic interest in moving forward, but Trudeau doesn't,” Mr. Sands said.

With the border closed until at least June 21, many would-be travellers on both sides have found their vacation plans interrupted. As the world adjusts to the new and yet-unforeseen norms of international travel post-pandemic, the U.S. will become an even more attractive target for Canadians looking to get away, said Sarah Goldfeder, principal at Earnscliffe Strategy Group and a fellow with the Canadian Global Affairs Institute.

“The reason a lot of people go from Canada to the U.S. isn't because they want to see things, it's because they want to see people,” Ms. Goldfeder said.

As the pandemic has and continues to prevent families with members on either side of the border from travelling to see each other, Ms. Goldfeder said she expects vacations to be “centred around seeing family, and the reality for many Canadians is their family is on the other side of the border.”

However, Ms. Goldfeder also said security will be tightened.

“It's going to be a long time before we take for granted crossing the border like we used to,” she said. “There will be more pressure to account for where and why you're going. There will be longer conversations about who you're going to see and how long you're staying.”

Time to diversify trade options, say experts

While the border and all the downstream implications are a more pressing problem, for some experts the pandemic and four years of the Trump administration—with four more potentially on the horizon—have highlighted the need for a renewed push for rethinking trade diversification and the broader relationship with the Americans.

Fear of over-reliance on the United States for economic prosperity and external security has long pervaded Canadian foreign policy thinking. In 1972, foreign minister Mitchell Sharp articulated the “Third Option” doctrine in an article published in International Perspectives. Mr. Sharp tried to answer the question of how to live “distinct from, but in harmony with” the United States, as rising nationalist tides hit the shores of both countries. He argued against increased integration with the U.S. in favour of a trade diversification and a national industrial strategy emphasizing Canadian ownership.

The proceeding years saw the creation of institutions such as the Foreign Investment Review Agency and Petro-Canada that addressed Canadian ownership issues. Trade diversification, however, did not bear the same fruit. The 1982 Macdonald Commission recommended taking a “leap of faith” and signing a free trade agreement with the U.S. In the late-1980s, the U.S.-Canada Free Trade Agreement, which later became NAFTA, made Canada and the U.S. two most of the most integrated economies, and countries, in the world.

Then came Mr. Trump's claim that NAFTA was “perhaps the worst trade deal ever made” and his administration's subsequent efforts to renegotiate the deal, ending with the Canada-United States-Mexico Agreement (CUSMA), which comes into effect on July 1.

“One of the fundamental damaging things Trump has done to the relationship is shaken Canadians' trust in the U.S. in ways that have been profound and radical. Threatening the destruction of the Canadian economy resonated deeply in Canada,” said Eric Miller, president of Rideau-Potomac Strategy Group and fellow at the Canadian Global Affairs Institute.

Canadians have mistrusted U.S. presidents before, Mr. Miller said, but where unpopular leaders like George W. Bush were perceived as “cowboys that would do bad things that harm the world,” Mr. Trump is entirely different.

“There was no sense under [Ronald] Reagan or George W. Bush that the U.S. was deliberately going to use its power to injure Canada. Canada might be excluded from certain things, but there was no sense that we [the U.S] are going to destroy your economy,” Mr. Miller said. “Canada now has to make choices about co-operation on bigger picture issues, on economic issues that it hasn't had to contemplate much in the past.”

The Liberals' 2018 fall economic statement announced the federal government's intention to increase non-U.S. exports by 50 per cent by 2025. Attached to the announcement was a $1.1-billion investment over six years to beef up trade resources and infrastructure for exporters.

Mr. Miller said that is a welcome investment, but new ideas in addition to new money will be required for diversification to be successful.

“When Canada looks for models it tends to look at the Anglosphere. Neither the U.S. or U.K. are good models because Canada needs a mid-sized country that trades a lot,” he said.

Mr. Miller said countries like Japan have successfully grown their respective trade volumes by reducing the risk of exporting, something Canada has not done well.

Japan deploys a model dubbed “Consortium for a New Export Nation,” wherein the Japanese government essentially approaches a partner country and fronts it money for an infrastructure project to be built by Japanese companies, ensuring future servicing of the infrastructure will also be done by Japanese companies. The model incorporates small, medium, and large companies, which Mr. Miller said would be essential to replicate in Canada's SME-driven economy.

Just as Mr. Miller said Canadian trade policy needs to take advantage of the geopolitical environment, James L. Anderson, an external fellow at the Centre for International and Defence Policy at Queen's University, said he believes Canadian foreign policy is in a similar position.

Mr. Anderson said the Trump administration's focus on the domestic challenges of the pandemic creates space for global leadership on infectious disease co-operation, especially as the World Health Organization comes under heavy criticism from multiple countries, which he said Canada is well-positioned to fill.

Whereas the WHO is made up of all 193 United Nations countries save for Liechtenstein, Mr. Anderson sees value in a smaller body tasked with handling infectious diseases, what he calls “an infectious disease analogue to the G7.” Pursuing such a policy could be a boon to Canada's campaign for a UN Security Council seat, too, Mr. Anderson said.

https://www.hilltimes.com/2020/05/27/post-pandemic-world-presents-real-opportunity-to-change-u-s-canada-relationship-experts-say/249721