Saturday, May 06, 2017

Going To War

As unpleasant as it may be to contemplate, David Olive believes that Canadians should prepare for a trade war with Donald Trump's America. He writes:

Donald Trump, going against his word and without warning, has already threatened the livelihoods of tens of thousands of Canadian dairy farmers and softwood lumber workers. And it came as a stunning revelation last week that Trump had been poised to scrap the North American Free Trade Agreement (NAFTA), a vital underpinning of Canada’s prosperity, on April 29.

It would be delusional to believe that Trump changed his mind due to last-minute phone conversations in which the Canadian and Mexican heads of government warned him of the massive short- and medium-term wreckage that killing NAFTA would cause. Whatever counsel Trump actually heeded in sparing the pact (for now) surely came from Trump confidantes.

Trump has signaled that it’s open season on all Canadian industries. Emboldened by the president’s cavalier regard for America’s purported best friend, powerful U.S. lobby groups have already set their sights on the Canadian aerospace, aluminum, mining and intellectual property sectors, among others.

So what should we do? Olive suggests that we adopt a three phase strategy:

Phase One: Ottawa would promptly abide by the request of B.C. Premier Christy Clark, who has the livelihoods of about 60,000 softwood-lumber workers to protect, in imposing a moratorium on U.S. coal headed for export markets via the federal Port of Vancouver. Trump is obsessed with reviving the U.S. coal industry.

Ottawa would also announce that Canada is embracing Japan’s enthusiasm in spearheading a revival of the TPP. That would strengthen Canadian trade ties and goodwill with the TPP’s 11 Pacific Rim and South American members. An isolated U.S. would have no role in shaping, via the TPP, a Pacific Rim economy that is America’s top foreign-policy concern.

TPP membership would complement Canada’s agreed-upon free trade deal with the European Union. That would accelerate progress in reducing Canada’s over-reliance on the U.S. market.

Phase Two: Trump has demanded that NATO members pay more for their membership. Ottawa would announce that, actually, Canada is re-considering its NATO membership altogether.
It’s not proper to say this out loud, but NATO is chiefly an instrument of U.S. foreign policy. It’s time to rethink helping America fight its wars.

Canada made its first substantive claim to sovereignty during World War I in demanding and obtaining Canadian command of Canadian troops. Yet in Afghanistan, in Syria and in joining NATO’s deployment of troops on Russia’s western frontier, our forces have continued to be directly or indirectly under U.S. command.

Freed of NATO obligations, Canada would retain its ability to use its armed forces unilaterally or in coalitions, as our interests alone dictate. And we could more fully deploy our military resources on peacekeeping, which we pioneered but have sadly neglected in recent decades.

Phase Three: In constructing a long-overdue national energy strategy by the end of this year, Canada would reconsider its energy export practices.

America’s largest source of imported oil is the Athabasca tar sands. And much of the power that lights up the U.S. northeast is generated by Hydro-Queb├ęc.

The rates we charge for those energy exports bear examination, since much of them are underpriced. Also, Athabasca, in particular, wreaks enormous environmental damage in Canada and is a significant contributor to global warming. That undermines Canadian goodwill, and makes tougher the challenge of meeting our CO2-reduction commitments under the Paris Accords.

The R&D into continual technological improvement needed to reduce that damage should be borne at least partly by U.S. energy consumers.

A carbon surtax on fossil-fuel exports would achieve that goal. Trump is adamantly opposed to putting a price on carbon emissions — the only certain way of reducing them. But then, Trump regards global warming as a “hoax” perpetrated by China to disadvantage U.S. industry.

Some of Olive's proposals -- like the threat to withdraw from NATO -- are highly controversial. And things could get very nasty. But having seen how Trump deals with American health care, no one should be surprised. 

Image: ING Wholesale Banking


Toby said...

First and foremost, Canadian governments, at all levels, have to represent Canadians and Canadian territory. That includes our military. It is simply traitorous to march in lock step with the US or with trans-national corporations. NATO should have been folded up when the Wall came down. Corporations should be held responsible for their messes and their taxes.

Having said that, humanity needs world wide agreements. Topping the list should be protection of the environment, again at all levels.

Owen Gray said...

Trump may back out of the Paris Agreement, Toby. We should be doing everything in our power to defend it.

Anonymous said...

This guy is a fraud. During the last two softwood lumber disputes, the dollar was exceptionally low. The dollar has dropped 25% since 2013. That means softwood lumber is at a 25% discount to American house builders, etc. It makes sense to put a 20% tariff on the industry to level the playing field.

These market fundamentalists said let the chips fall where they may and they will fall the best. But they fell the worst. The upper-crust establishment simply implemented self-serving economic reforms that looted, leeched and gouged so much wealth out of the Western economy it collapsed in a "financial innovation" web of fraud. Economic theologians now talk of "secular stagnation." Ugh, what a mess. These people are beyond incompetent.

Free trade is an outsourcing scam. There is no truth in it. No truth a "trade war" will disrupt the economy. It's a false narrative designed to manipulate to protect corrupt and unsustainable establishment-class financial interests.


Owen Gray said...

Your analysis has merit, CC. But there is considerable doubt about whether Donald Trump would understand it. He sees trade as a zero sum game, not a situation which affords both sides mutual advantage. We need a strategy which recognizes that fact.

The Mound of Sound said...

Perhaps an alternative would be for Ottawa to declare the United States an unreliable partner and shape policy accordingly. Rehabilitate direct trade ties with Asia and Europe. Consider China's new trade bloc which doesn't require members to align themselves with China's domestic or foreign policy.

Part company with America's Foreign Legion. Canada's growing security concerns lie in the north. Russia is militarizing the Arctic. We need to catch up and one way is by greatly increasing our military cooperation ties with the Scandinavians. Turn our backs on the Middle East. There's no shortage of soldiers and weapons in that region and they're not generating much return.

We need new fighters. Eliminate Lockheed and Boeing options. Choose from the European aircraft - SAAB, Dassault, Eurofighter - dare I say Sukhoi. That would make the Americans sit up and take notice.

The Russia-US nuclear weapons deals are falling apart on both sides. That has been Russia's excuse to produce some very long range cruise missiles. The US is going to become much more dependent on Canada as their northern buffer, their extended frontier. The major threat to American security won't be from their southern border.

NATO? The Europeans are working on an EU military alliance. There might be an alternative there but it's too early to know especially given the current instability besetting the Union.

Olive seems to suggest blocking bitumen deliveries to the U.S. That one would only increase pressure from Alberta and the oil barons to ramp up exports via British Columbia which would do nothing to help meet Canada's emissions commitments. Trudeau hasn't got the guts to shut it down so leave the U.S. route unimpeded. Besides, there's a glut of oil today. Still, a carbon export tax, in its own right, including exports through B.C. or the Maritimes is long overdue. $50 per tonne of carbon should be about fair. Not just on Athabasca bitumen either. On all coal, LNG and oil exports. That'll have Christy, Rachel and Brad howling which would be worth the price of a ticket.

Owen Gray said...

Trump seems intent on upending the post World War II order, Mound. We would be wise to make our own alliances and stay clear of the ones he favours -- because they won't last long.

The Mound of Sound said...

I would like to imagine Trump as an aberration, Owen, a spectacle that will pass. However I thought the same about Harper at the outset and yet look at how successful he was in shifting Canada's political centre well to the right with the Liberals becoming Conservative-Lites and the NDP transforming into Latter Day Liberals. Trudeau hasn't sought to even Canada's political keel and the New Dems are consumed in muttering about their place in the political spectrum.

And so we must treat Trump as a genuine danger to the historic balance and accommodation between his country and ours. We're sort of like the Finns and the Russians only without the gunplay.

Owen Gray said...

We've always been in the middle, Mound. But our neighbours no longer believe in Mutually Assured Destruction.