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With new Congress, Canada can expect trade, border flare-ups Add to ...

Gary Doer, Canada's ambassador to the United States, will have to make a lot of new friends. The U.S. midterm elections have delivered a mix of protectionist Democrats and isolationist Republican Tea Partiers that could make Washington a chilly place for Canadian interests - unless they're selling oil.

It used to be that a Republican wave in the House of Representatives, like the one that came Tuesday, meant a rise in free-trading sentiment in the United States.

But the class of 2010 is spearheaded by a Tea Party movement that won election on a wave of anger, mainly over the loss of U.S. jobs. Many Tea Party candidates promised incentives to keep jobs from going overseas, and a poll of the movement's supporters found 69 per cent are against free-trade agreements such as NAFTA.

This midterm election squeezed out some pro-trade middle ground of moderate Democrats and Republicans. Canada can expect to beat back flare-ups of protectionism, and - with Republicans arriving with renewed calls to shut illegal immigration and increase border security - border build-ups.

For Alberta's oil sands, the midterms are a victory. Democratic environmentalist opponents will be replaced by oil-friendly Republicans. But for other trade and border issues, it means Canada must build new allies in tough terrain.

U.S. President Barack Obama, whose administration mitigated damage to Canada from Congress's Buy American provisions, will now have less leeway. He must please a caucus of Democrats pledged to fend off foreign job-stealers, while facing a new class in a Republican-controlled Congress that is competing to prove that it will preserve U.S. jobs.

It's still not clear what the impact of the elections will be on broader U.S. foreign policy, still largely the President's purview. The Tea Party movement doesn't have a consistent foreign policy and its edge could be softened by the Republican mainstream.

But the election that brought the biggest party shift in the House of Representatives since 1948 leaves little doubt about the mood: Both parties fought over who was selling out U.S. jobs.

"It was not the Republican Party we've known in the past. I think that's Tea Party influence," said Colin Robertson, a fellow with the Canadian Defence and Foreign Affairs Institute, and a former Canadian diplomat in Washington. "And the Democrats who are left are now very much beholden to the unions."

He expects to see cross-border trade disputes over issues such as lumber and agriculture, fuelled perhaps by industries that will soon lose stimulus-bill subsidies and seek trade protection instead.

For decades, the Canadian strategy to counter U.S. protectionism and post-9/11 border blockages was to pull Americans closer with new deals to increase co-operation on trade or at the border.

But the new Tea Party politicians include a strain of isolationists wary of integration. New Kentucky Senator Rand Paul once expressed the fear that U.S. sovereignty will be sapped by a shadowy plan to create a common currency with Canada and Mexico.

The Republicans called for tougher border controls, and though they're primarily aimed at Mexican illegal immigration, there was also a revival of complaints that Canada's border allows terrorists in.

With so many new members of Congress, Mr. Doer and other Canadian diplomats will again have to lobby the new class with a familiar pitch about the difference between the borders.

"There's always a huge education process. That's always a challenge - security as it relates to the border, and the difference of the northern border versus the southern border," said David Wilkins, the former U.S. ambassador to Canada under George W. Bush.

He notes that the change in Congress will be good for Canada's oil industry, as the Republican leadership is unlikely to impose special environmental restrictions. "I think you'll have a more receptive audience in the House," he said.

Democrats' efforts to pass a bill to cap and trade greenhouse-gas emissions are dead. Now the Obama administration will try to craft climate-change policy through regulations to be imposed by the Environmental Protection Agency, over Republican objections in the House.

That means Mr. Doer has an easier job selling oil, for now. But more broadly, he faces a new round of lobbying to prevent Canadian interests from being run over in a divided Washington where neither side is really attached to the orthodoxy of free trade.

Reciprocity will be the buzzword, Mr. Robertson argues, and Canada will have to come up with a broad strategy to sell its interests in the United States, or see them chipped away one by one.

 

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