Opening Statement: The North American Neighbourhood

feat. Colin Robertson

Standing Senate Committee on Foreign Affairs and International Trade
November 24, 2016

The USA is the primordial relationship for both Canada and Mexico. The election of Donald Trump is proving, at least in the short term, as disruptive to Canada-US relations and Canada-Mexico relations as 9-11. While we have our own interests and agendas, there is much on which Canada and Mexico can and should cooperate and collaborate in managing our shared neighbour.

Mr. Trump’s announcements - threatening to ‘tear up’ the North American Free Trade Agreement, threatening to withdraw from the Paris Climate Accord, threatening to abandon the Trans Pacific Partnership; telling allies to pay their share for defence and security – are disruptive for both of us.

The Canadian response needs to be smart. A reversion to anti-Americanism, often our default attitude, would be a mistake.

Instead we need to plan, initiate and, most of all, engage.

We need to identify our interests. We need to assemble the data that underlines the mutual benefits we all draw from trade and investment. We need to be able to do this for every state, every congressional district and every legislative district: the jobs generated by trade with Canada and the jobs generated by Canadian investment. And we need to be specific about the companies involved.

We need to engage with the Trump transition team. We need to reach out to Congress and state legislatures. We should use, for example, the Canadian Embassy’s Inauguration Party to effect, paying careful attention to the invitation list.

In the aftermath of 9-11, we devised the ‘Smart Border’ Accord with the USA. Subsequent initiatives - the Security and Prosperity Partnership, Beyond the Border and Regulatory Cooperation Council and now the Trudeau-Obama reset - have had the same objective: keep the border open to the legitimate flow of goods, services and people. Most of it is bilateral in administration but often with trilateral application.

The Trump election raises many policy challenges as we redefine the parameters around the Canada-US and North American relationships.

With the election of the Trudeau government, we developed a common North American approach to climate. If the Trump administration is unwilling to collaborate there is still much we can do with Mexico. There is also much we can achieve at the state level in the USA where there is already strong collaboration and innovative work on climate mitigation, including various schemes around carbon pricing.

The states are key players in trade relationships. The biggest export market for 25 of the 30 states that voted for Trump is Canada. We are the second main market for almost all of the remaining states.That means jobs. But do they know it? We need to deliver this message. Mexico should do the same.

Let’s encourage the Trump administration to continue the trilateral ministers’ meetings around trade, energy and defence. The energy ministers’ meetings are a catalyst for practical initiatives like the mapping of North American energy. By obliging officials to report regularly, things get done, and North American energy interdependence becomes our competitive advantage.
These meetings are the clearing house for the important issues that can’t or won’t get resolved at the level of officials or ambassadors because of their political implications. They used to get bounced up to the leaders’ meetings where they cluttered the agenda.

There is debate today about how close we should collaborate with Mexico: Some think we should go it alone given that Mexico is a primary target with Mr. Trump’s promise to build a Wall and increase deportations. I think this is the wrong approach.

Instead, we should collaborate with Mexico on those issues where we share common cause especially on energy, climate and trade, and the future of the NAFTA and TPP. On the rest – border and security - we need to keep closely in touch.

Some core facts about Canada and Mexico:

• We have become each others’ third largest trading partner.

• Canada has major investments in banking and in the resource industries, especially mining and now energy, in Mexico. Together we manufacture planes, trains and automobiles.

• Over two million Canadians spend over 22 million nights in Mexico, making it our second most popular destination after the USA.

• With a middle class of 44 million, Mexico is a market that will only increase. By 2050 it is expected to rank fifth in global economic weight. That’s right - G-5.

Here’s some other strategic facts bearing directly on our long-term relationship with the USA:

• The U.S. Hispanic population now stands at 57 million, making Hispanics the nation’s second-fastest-growing racial or ethnic group after Asians. Over two-thirds of that number have roots in Mexico. Today Hispanics make up 18% of the U.S. population, up from 5% in 1970.

• A record 27.3 million Hispanics were eligible to vote in 2016 and politicians with Latino roots – the Castro brothers, Ted Cruz, Marco Rubio - are players in American political life.

The USA now has salsa deep in its DNA and we need to appreciate the social, economic and political consequences for Canada-US relations. It’s why strengthening the partnership with Mexico makes strategic sense for Canada.

The June visit of Mexican President Enrique Pena Nieto to Quebec, Toronto and Ottawa set a plan for closer collaboration and there is no shortage of collaborative instruments.

The Canada-Mexico Partnership, with its private-public membership, has been in place since 2004. Its agenda focuses on the right issues: energy; agri-food; labour mobility; human capital; trade, investment and innovation; environment; mining; forestry. We also now have annual security discussions.

We work closely with Mexico on trade. After collaborating at the World Trade Organization, last December we persuaded Congress to roll back the protectionist US country-of-origin labeling requirement that threatened our meat exports into the USA. Mr. Trump wants to revisit COOL. The arguments that persuaded the Republican Congress to rescind COOL still apply. We will have to make them to the new Administration.

Despite the declared ambition and collaborative framework, the relationship with Mexico is still less than the sum of its parts.

The arbitrary imposition of a visa in July 2009 stuck in Mexicans’ craw and especially damaged the vital people-to-people ties that underwrite lasting relationships.

The visa will be replaced in early December with the much-delayed Canadian Electronic Travel Authorization (eTA) system.

There are are only 5,000 Mexican students amongst the 200,000 foreign students in Canada. Canadian governments – federal and provincial - should aggressively market study by Mexicans in Canada.

To give the initiative momentum why not have Governor General David Johnston lead a group of Canadian university presidents to Mexico to promote joint study opportunities and cooperation in innovation?

High-level visits are catalysts for action. Justin Trudeau should put Mexico on his travel agenda for 2017. Why not a trade and investment mission with the premiers?

We should also task our consuls general in the United States (the Mexicans have 51 to our 13) to find opportunities where they can jointly remind Americans that continental trade works to all our advantage.

The Trans Pacific Partnership agreement, that effectively updates the NAFTA, is now problematic. We should be discussing with Mexico what provisions we can jointly salvage and make bilateral, with docking provisions for the USA and others.

As the Trudeau government contemplates a renewal of Canadian involvement in peace operations, it should look first to the challenges in our own hemisphere. Can we jointly help the Colombia peace process? Can we also help Mexico with its southern frontier problems that result from the continuing turmoil in Guatemala, Honduras and El Salvador?

There are going to be bumps ahead We need to work in tandem with Mexico. We need to plan, engage and take the initiative with the Trump Administration. We need better networks within Trump America and a thousand points of contact in Congress and the states.

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