A push to ratify the renegotiated continental trade deal is building in Washington, with a vote in Congress likely to come within the next month, said David MacNaughton, Canada’s former ambassador to the United States.
With fewer than 15 days in the Congressional calendar before the end of the year, the Democratic leadership in the House of Representatives has the votes it needs to push the trade deal through, Mr. MacNaughton said.
“I think there’s a 75-per-cent chance it gets done before the recess,” he said. “If it weren’t for the impeachment stuff, it would be a slam dunk. But I still think it’s going to happen.”
Back on the home front, the former diplomat also foresees a resolution to another politically fraught element of the Canadian trade file – the Trans Mountain pipeline expansion. “It’s really important that we do it. If we don’t, it would cause a split in this country that would be really difficult to repair.”
At a national conference of the Portfolio Management Association of Canada on Wednesday, Mr. MacNaughton spoke of his experience as a key member of the team tasked with hammering out a new trade deal after the election of U.S. President Donald Trump, who was hostile to the North American free-trade agreement (NAFTA).
“It was the most difficult thing I’ve ever done,” Mr. MacNaughton said.
Initially, Canada’s trade representatives thought of Mr. Trump’s threats to “rip up NAFTA” as campaign rhetoric and that the relationship between the two countries would fall within the status quo. They quickly realized that the new president had little interest in the established rules of diplomacy.
And with Canada far more dependent on its largest trading partner than vice-versa, the U.S. had leverage.
Canadian negotiators sought to find areas of mutual interest, particularly with U.S. border states, where the commercial links between the two countries were strongest.
Building support with representatives in states such as Michigan, Wisconsin and New York became crucial when the U.S. struck a deal with Mexico in August, 2018, and threatened to cut Canada out of the continental pact.
Some members of Congress told the administration they would not support an agreement that excluded Canada, Mr. MacNaughton said.
The final deal was ultimately signed after a few days of marathon negotiations conducted over the phone. And what is known as the United States-Mexico-Canada Agreement is an improvement on NAFTA in the terms of trade for Canada, Mr. MacNaughton said.
The dispute resolution mechanism under NAFTA was preserved. New rules of origin for vehicles and parts will help the Canadian auto sector. And the team gave up less than it anticipated it might have to in terms of access to the protected Canadian dairy industry, Mr. MacNaughton said.
The last step in the process is ratification. So far, only Mexico has approved the deal.
And despite all the resources and attention being drawn into the impeachment hearings, which began on Wednesday, the impetus is there to bring a vote on the trade deal to the floor of Congress in the dwindling number of legislative days that remain. From there, it would move to the Senate, which is largely expected to vote in favour.
In Canada, meanwhile, where the deal is not as contentious, ratification is expected to move in tandem with the U.S.
For Prime Minister Justin Trudeau, a ratified deal would mark a big win, concluding a process that could have gone far worse, Mr. MacNaughton said.
“There are two things a prime minister has to get right in this country. One of them is the relationship with the U.S., and the other is national unity.” At the moment, the latter is bigger problem, he added.
In particular, rhetoric over the energy sector is overheated on both sides, he said. The oil patch has been unfairly demonized, and while Alberta has some “legitimate grievances,” some of the anger in the province is misplaced.
The country needs to strike the right balance with its energy production: reducing emissions related to climate change, while also making sure Canadian oil and gas can get to market.
“Oil and gas are going to be around for a long time to come, and I’d rather people use our oil and gas.”
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.