In The Media

Outcome of U.S. vote inconsequential for Canada as trade relations on a downturn

Canadians have a fondness for Obama, even as trade focus shifts away from U.S. to other regions and export rates are down 14 per cent in the last 10 years

by Barbara Yaffe (feat.  Colin Roberston)

The Vancouver Sun
October 31, 2012

Canadians won't see much change in Canada-U.S. relations no matter who squeaks by the presidential finish line first in next Tuesday's vote.

Few cross-border irritants are at play these days in the crucial bilateral relationship.

And Prime Minister Stephen Harper would probably get along with Republican contender Mitt Romney as well as he does with Barack Obama.

"Ideologically, Romney and Harper would be more likely to have much in common," observes Colin Robertson, a former Canadian diplomat in Washington, D.C., "although Harper deep down may be more libertarian, and Romney more country-club old-school Republican."

Polls consistently show Canadians have a special fondness for Obama. Even in the province most ready to embrace Romney - Alberta - the Republican trails Obama in support by a 50 per cent to 19 per cent margin, according to a recent Harris-Dec-ima poll. Whether it's President Romney or Obama, the reality is Canada's trade relationship with the U.S. is set to continue declining.

A February 2012 report by TD Economics projected that by 2020, shipments to the U.S. would account for two thirds of total Canadian exports - down from 85 per cent in 2002.

A more robust Canadian currency, a thickened border, the recession's impact on American spending - all have taken a toll. But, the TD report noted, Canada has been turning its trade focus to emerging markets.

While exports to the U.S. are down 14 per cent in the last 10 years, Canadian exports to China have doubled and exports to Europe have risen 83 per cent.

The Harper government has signed or is negotiating for some 20 trade agreements with non-U.S. players.

Where once Canada-U.S. relations were fraught due to trade disputes over salmon and lumber, the two sides have lowered their swords.

The 2006 softwood lumber agreement has been extended to 2015 and the Pacific Salmon Treaty has been renewed until 2018.

Canada and the U.S. these days are working on a Beyond the Border Initiative, signed in February of 2011 by Harper and Obama, aimed at easing border flows and making North American products more competitive.

If Romney becomes president, the border efforts probably would get re-jigged and rebranded, says Robertson.

"With Obama we get some continuity."

But it's likely that, even with Obama and certainly under Romney, Canadian cabinet ministers would have to adapt to a raft of new U.S. secretaries.

A shame, perhaps, after Public Safety Minister Vic Toews and Foreign Minister John Baird have developed such positive dealings with Janet Napolitano and Hillary Clinton.

As for TransCanada's XL pipeline to carry Alberta oil to Texas refineries, Romney says he'd approve it on "Day 1."

Obama, of course, nixed the project last year - for fear of upsetting Democrat-leaning environmentalists - but he's widely expected to give it the go-ahead if re-elected. Interestingly, the issue of greatest potential import to most Canadians relates to a particular U.S. domestic challenge: prospects for a so-called fiscal cliff of automatic tax and spending cuts by year-end unless politicians quickly agree on a deficit fix.

"This is really serious," says Robertson, with obvious implications for the stability of the American economy and its consumers' buying power.

"It would be easier for a Republican president to deal with the Tea Party," in the quest for an orderly deficit fix.

"Can an Obama with a very weak re-endorsement persuade a recalcitrant ... House with a large majority of [anti-taxers]?"

But then - after Romney pledged up and down nothing but tax cuts - would he fare much better?


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