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Obama, Clinton spook Canada’s hardcore free-traders at SPP ministerial meeting

February 28, 2008
Posted by Stuart Trew

The threat of renegotiating or dropping NAFTA altogether as proposed by Democratic presidential hopefuls Barack Obama and Hillary Clinton made its way to Los Cabos, Mexico this week where Security and Prosperity Partnership ministers were cajoling with the CEOs of the North American Competitiveness Council at their annual pre-SPP summit meeting.

Somewhat defensively, SPP ministers, including Industry Minister Jim Prentice, emphasized in their joint statement that 2008 marks the 15th anniversary of the conclusion of NAFTA negotiations, which has apparently “been a tremendous success” to all three countries.

“Trade and commerce among our countries have grown exponentially,” said the statement. “Trilateral merchandise trade is approximately $900 billion in 2007, significantly contributing to economic growth and increased standards of living in all three countries.”

It’s true that corporate profits are at an all-time high but real wages for most people have been stagnant for about 30 years. Given those stats it’s not surprising that Obama and Clinton feel they have to address the failings of NAFTA and the SPP in their election campaigns. They have been given a mandate to discuss it by the electorate.

After propping up NAFTA, SPP ministers highlighted what they will be working on through the SPP, including:

• "We also instructed officials to consider innovative ways to advance these five priorities (competitiveness, safe food & products, energy and environment, smart & secure borders, emergency preparedness and management), to enhance our dialogue and further our cooperation."

• "We will also explore new avenues of cooperation and convergence to address issues such as arms trafficking, terrorism, money laundering, counterfeiting, trafficking of people and smuggling, and border violence."

• "We also met with representatives of the North American Competitiveness Council (NACC), whose contributions and advice in building a more prosperous and dynamic North America have been invaluable...Accordingly, we reiterate our interest in maintaining an open dialogue with business leaders and other stakeholders."

• "We reaffirm our commitment to the objectives of the SPP."

The next full SPP leaders summit will take place in New Orleans from April 21 to 22.

Also spooked by Obama and Clinton’s suggestions about NAFTA this were the following hardcore free-traders:

• David Emerson (International Trade Minister): "The biggest risk is that there will be periodic outbursts of protectionist sentiment. It may be softwood lumber one day, it may be beef another day. The real risk is that you lose the ability to resolve these disputes in a relatively neutral and objective way." (Sure, like the Softwood Lumber agreement, signed despite three NAFTA panels ruling in Canada’s favour, was handled in a “neutral and objective way.”)

• Thomas d’Aquino (President, Canadian Council of Chief Executives): “I have observed many American elections and realize that in the run-up to a national vote, candidates sometimes appeal to the more extreme voices in their constituencies.  But I detect more than rhetoric at work here.  Protectionists in many cases are attacking the fundamentals of liberal economics, which have long been proven to offer the greatest benefits in terms of growth, job creation and improvements in quality of life. In the face of this onslaught, some of it based on fear-mongering and disinformation, the beneficiaries of open commerce -- in particular, consumers, business people and political leaders -- have remained complacent and mute… With this in mind, the Canadian Council of Chief Executives will build on its already extensive activities aimed at advancing North American cooperation.  This will include new initiatives aimed at marshalling support among consumer, business, academic and government leaders in both Canada and the United States.” (Of course they will – they were the only group allowed into the February 27 and 28 SPP ministerial meeting in Los Cabos this week.)

• Jim Flaherty (Finance Minister): “I realize they are in the middle of a presidential nomination race, so they have many things on their mind. But I would think that it's very important that whoever the nominee is enters into a discussion with those who are very knowledgeable about NAFTA… NAFTA is of tremendous benefit to Americans. And perhaps the nominees have not had the opportunity to familiarize themselves with the benefit to Americans and the American economy of NAFTA.” (Yes, NAFTA’s been great for some Americans. What about Canadians? You are the Canadian Finance Minister, right?)

• John McCallum (Liberal finance critic): “You have to remember that while it would be disastrous for Canada, it would also be disastrous for many millions of Americans who trade with Canada… One cannot dismiss it altogether. But I am strongly of the view that it's likely to be political rhetoric, and at the end of the day, if only because there are just as many Americans who would lose from this as there are Canadians, no American government in reality would do this.” (Why do we even need a Liberal critic if he isn’t criticizing the Conservative position?)

• John McCain (Republican candidate for the 2008 U.S. presidency): "I want to tell our Canadian friends… that I will negotiate and conclude free trade agreements and I will not, after entering into solemn agreements, go and say that I will abrogate those agreements." (Sure, but McCain’s got to get elected first, which is, thankfully, not likely.)

• Prime Minister Stephen Harper: "If any American government ever chose to make the mistake of opening [NAFTA], we would have some things we would want to talk about as well… I would caution about jumping to a conclusion about what a future president may do… I have learned to take with a grain of salt what opposition politicians say about trade agreements during election campaigns.” (Exactly what Harper would talk about is a mystery because no journalist seems to want to ask the Prime Minister what he would put on the table if NAFTA were reopened.)