by Randolph Mank

November 15, 2016

Now that Donald Trump is set to be sworn in as the next president of the United States, the Canadian government needs to move rapidly to reassess its foreign policy. Five fundamental and deeply related challenges loom large.

Getting real

Canada benefits from lucky geography both in terms of trade and security. Time and again, however, we seem to be surprised by the basic tenet of international affairs: Nations don’t have friends — only interests. Whether it’s softwood lumber, energy and pipelines, border security, immigration, water resources, NAFTA or any other issue, the rule remains the same: If the U.S. shares our interests, we’ll reach favourable agreements — if not, we won’t.

And all of these issues are up for grabs with Mr. Trump. Some may break our way and some may not. We need a realistic reassessment of our global and continental positions. Foreign policy by slogan (“Canada is back”) may make us feel good at home, but it’s no substitute for a hard-nosed assessment of what we need from our international relations and how to get it.

It’s about trade

Since exports account for fully one third of our GDP, what we really do need from our foreign policy is free and open markets, with enforceable rules. Despite heated national debates over the details, good trade agreements are clearly in Canada’s interests.

But the future of our trade policy agenda really turns not on our own ongoing national debate, but on whether Mr. Trump actually tears up both NAFTA and the Trans Pacific Partnership, as he has vowed to do. In anticipation, we need to prepare for another protracted and fractious period of negotiations. Our CETA trade agreement with Europe is an important step forward. But nearly 80 per cent of our trade takes place with the U.S.; no market is more vital to our economic survival.

The energy and environment paradox

Our positions on energy and the environment are about to be revealed as highly paradoxical. Whether or not carbon pricing will actually reduce greenhouse gas emissions to the admirable levels required under the Paris Accord, the new Canadian tax will certainly add a cost for our industries.

Mr. Trump campaigned on pledges to rescind the U.S. commitment to the Paris Accord, to deregulate the U.S. energy industry and to look favourably upon the proposed Keystone XL pipeline project. North American energy production likely will flourish if he follows through — and CO2 emissions will increase as a result.

The just-announced National Energy Board review, aimed at putting environmental restrictions at the forefront of energy industry regulations in Canada, could put our companies at an even greater competitive disadvantage with U.S. counterparts. In short, we need to take a hard look at where we are headed.

A lack of muscle

A key problem is that we don’t currently have the resources to change our foreign and defence policy approaches in any significant way, as the Trudeau government’s 2016 budget clearly showed. Decades of pleas from diplomats and soldiers for more capacity-building have yielded only the conclusion that there isn’t more to give.

Yet Mr. Trump has said that he will be looking to allies for greater security commitments — including commitments to meet the NATO defence-spending target of 2 per cent of GDP. Canada currently spends just below one per cent. Not being willing — or able — to double our defence budget will again make our “Canada is back” rhetoric ring hollow — and solidify the view that Canada is not a first-rank security partner. As a G7 country with a $2 trillion economy, Washington will see us as punching well below our weight.

Brave new world

This is the macro challenge: The Great Power era is back — but it’s shifting. This time the Great Game includes a wholly different dimension: the rise of China as a regional and global power, and as a geopolitical rival to the U.S. India is also a nuclear-armed emergent power, while Japan, of course, is now closely aligned with western interests.

Our own security interests will remain firmly planted in the U.S. and NATO alliances. But given our immigration patterns, we certainly have a vital stake in trading freely with Asia and supporting careful management of east-west relations. Russian adventurism in Eastern Europe and the Middle East, and China’s maneuvers in the South China Sea, could be particular problems. If the Trump administration pursues a softer line on Russia — over Syria, for example — this could helpfully forestall closer Russia and China strategic alignment. But in return, Russia could gain more breathing room in Eastern Europe — perhaps even in the high Arctic. The strategic consequences could be tectonic.

In sum, with the imminent Trump reset in Washington, it’s time now for an urgent and realistic look in Ottawa at how Canadian foreign policy can best serve our interests in this brave new world.

Image: Financial Times

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