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Canadian and American flags fly on Washington's Pennsylvania Avenue in front of a Trump International Hotel sign on Monday, March 7, 2016. (Alexander Panetta/THE CANADIAN PRESS)
Canadian and American flags fly on Washington's Pennsylvania Avenue in front of a Trump International Hotel sign on Monday, March 7, 2016. (Alexander Panetta/THE CANADIAN PRESS)

BLAYNE HAGGART

The Canada-U.S. economic playbook is on the verge of a rewrite Add to ...

Blayne Haggart is an associate professor of political science at Brock University. His dissertation focused on the politics of North American governance

The shock election of Donald Trump has thrust Canada into one of the most perilous periods of its existence. Our relationship with the United States, upon which so much of our security and prosperity depends, has never been more uncertain.

Canadian analysts and politicians seem to be taking some small comfort in the fact that while the protectionist, xenophobic and isolationist president-elect has threatened to renegotiate or exit the North American free-trade agreement (NAFTA), his focus has primarily been on Mexico. Also common is the expressed hope that because the Canadian and U.S. economies are so deeply intertwined, Mr. Trump will be forced to control his most economically destructive tendencies.

Now, maybe everything will be fine, at least for Canada. Mr. Trump may get bored and the adults (such as they are) in the Republican Party may run things. He might listen to Canada’s wise counsel on the folly of protectionism (although Tony Blair also thought he could moderate the previous Republican president on Iraq). Or he might be impeached … by a Republican Congress, no less.

Despite their reputation as liars, politicians generally mean what they say, say what they mean and keep most of their promises. As such, it would be much more prudent to take Mr. Trump at his word and plan for the worst.

Canada’s most immediate economic issue concerns NAFTA. If the United States rips it up, we’d still have preferential access to the U.S. market under the 1989 Canada-U.S. free-trade agreement. However, the United States would likely use this moment to realize specific objectives not covered in the 1989 agreement.

Already, as The Globe and Mail has reported, Mr. Trump’s transition team has expressed a desire to engage in an “aggressive, protectionist approach to trade both with Mexico and with Canada,” targeting, for example, softwood lumber and livestock producers.

In exchange for continued secure access to the U.S. market, Washington’s demands would also likely include Trans-Pacific Partnership-style intellectual property reforms that would not be in the interests of a small, developed country like Canada. As Jim Balsillie, Dan Breznitz and others have remarked in these pages, such reforms would impede Canada’s ability to innovate and place it in a feudal-like relationship with dominant players like the United States.

Much more fundamentally, Canada can no longer be sure about what type of country we’re dealing with. Unlike outgoing President Barack Obama, who also made anti-NAFTA comments in 2008, Mr. Trump was elected on an explicitly anti-free-trade, economically illiberal, isolationist platform that would hit at the foundations of the Canada-U.S. relationship and the entire post-Second World War economic order.

Since the end of that war, Canada and the United States have become increasingly integrated against a global backdrop of economic liberalism. Over this period, we developed an informal system that “limited opportunities for linkage among issues and emphasized the virtues of responsiveness and conciliation,” as political scientists Robert Keohane and Joseph Nye wrote in 1977.

While this informal system is driven in part by the reality of the deep connections between our two societies, at the end of the day, it’s only as strong as the weight given to it by Canadian and U.S. leaders. Mr. Trump’s persistent, long-standing demonstration of authoritarian tendencies and drive to dominate is not conducive to the restraint needed in situations of complex interdependence.

Furthermore, these norms developed in the context of a shared commitment to liberal democracy and economics, emphasizing openness and exchange. If we take Mr. Trump at his word and the United States is moving down an illiberal path, alongside Tea Party Republicans with little patience for liberal globalization, one wonders whether these norms can survive. Should an increasingly isolationist and protectionist United States abandon these norms, then relations with the United States would turn more rivalrous and less friendly than they have been in our lifetimes.

A lesson from recent history: After the United States shut its borders in the wake of the Sept. 11, 2001, terror attacks, Canadians were surprised to realize that there was no “we” in North America. Overnight, easy assumptions about the future of North American integration were proven false.

In thickening the border, the United States sacrificed prosperity for security. Paul Cellucci, the former U.S. ambassador to Canada, said this was because “security trumps trade” (pun not intended). Actually, it was because “domestic concerns trump regional issues.”

Or, stated plainly, politics trumps economics. As Mr. Trump’s white nationalist-driven election shows, economic prosperity and sound economic policy aren’t always politicians’ or voters’ top priorities. The attacks of 9/11 called North American economic integration into question; Mr. Trump’s election might be its death blow.

Deep integration didn’t prevent a thicker border after 9/11. Faced with rising U.S. isolationism, of which Mr. Trump is only a symptom, rational economic arguments might not carry the day. The decades-old Canada-U.S. playbook may be about to change in a way that few, if any, current policy makers in Ottawa have ever contemplated. We’d better be prepared.

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