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editorial

So far, Prime Minister Justin Trudeau and the rest of the Liberal government have been putting on a pretty good show in their touring production of "Saving NAFTA." They've literally recruited a cast of a thousand stars – from ministers to diplomats to business leaders – to make Canada's case in Washington, in the states and in America's boardrooms. They've reached across the aisle to the other parties. They've reached across the border to corporate America, which stands to lose, big time, if the North American free-trade agreement is ripped up. They've reminded American governors, mayors and union leaders that Canada is the United States' biggest customer, and that millions of American jobs depend on exports to Canada. Liberal cabinet ministers have tried to become friends with their American counterparts; the Prime Minister has repeatedly met with the President and his influential daughter.

Ottawa is working all of the levers of influence, and yet it may not get what it wants and what Canada needs, namely the survival of NAFTA. That's because the protagonist of this show is not Mr. Trudeau, or the U.S. Congress, or even U.S. big business. This is a play with a lot of supporting actors, but only one lead.

The guy driving the plot is President Donald Trump. On NAFTA, everyone else is reacting to his narrative.

Absent the election of Mr. Trump, there would be no NAFTA renegotiation. And if anyone other than Mr. Trump were president, this whole business would be less of a cliffhanger. It's still not clear what the American government wants to get out of the process it has set in motion; more precisely, it's unclear what Mr. Trump wants. Sometimes he has sounded almost conciliatory, saying the deal needs mere "tweaks." At other times, he's called for the end of NAFTA.

But there are growing signs that what Mr. Trump wants is likely closer to the latter than the former.

The fact that the Americans have suggested to Ottawa that maybe the two countries should be talking about a bilateral deal to replace the trilateral NAFTA is one indication. That Mr. Trump, after his meeting with Mr. Trudeau, mused about how Canada and the U.S. would both be fine if NAFTA expired, is another. And after triggering NAFTA talks, the U.S. side has put little of substance on the table in the early rounds of negotiations, while proposing a few deal-breakers, such as minimum 50-per-cent American content in vehicles manufactured in North America. It suggests that the White House may see the failure of negotiations as the point of the exercise.

There are, of course, other powerful actors in U.S. politics who do not want NAFTA to fail. Mr. Trump leads a Republican Party that was, until recently, overwhelmingly in favour of free trade. When former president Barack Obama was pushing for Congressional approval of the Trans Pacific Trade Partnership, he relied on Republican backing, in the face of opposition from his own Democratic Party. Mr. Trump's officials are largely drawn from those pre-Trump Republicans.

And the GOP's traditional donors, American big business, similarly like free trade and benefit from it. This week, the U.S. Chamber of Commerce accused the President of trying to sabotage the deal with what it called "poison pill proposals." These include a recently floated American idea of sticking a sunset clause into NAFTA, which would force its renegotiation or termination every five years – effectively putting the deal into a permanent state of limbo, and long-term investment decisions with it.

If you were doing a Marxist analysis of the situation, you'd expect NAFTA to be just fine. The business of America is business; and business largely supports NAFTA. Why would businessman-President Donald Trump go against that?

Because this President got elected on a promise to shred the political and economic status quo. The old GOP may have liked free trade, but Mr. Trump engineered a hostile takeover of the party and captured its voters by pushing protectionism. He also got elected on a platform whose most prominent commitment was the building of a wall along the border with one of the NAFTA partners, Mexico. His campaign rhetoric referred to the Mexican relationship as nothing but a negative, with Mexico importing U.S. jobs and sending back illegal immigrants and crime.

Ripping up NAFTA will not benefit the American economy. It will not increase American employment or raise American incomes. Nevertheless, Mr. Trump has a compelling political incentive to stick it to Mexico and to the trade agreement with Mexico – because that's what a lot of his voters want, and that's why he promised it to them.

The fact that some of America's biggest multilateral businesses, with long cross-border supply lines, will scream at the evisceration of NAFTA is not necessarily a problem for Mr. Trump. On the contrary, given the revolutionary mindset of many of his constituents, a fight with business may benefit him. And if a large part of the Congressional Republican delegation comes out against him, he might get a lot of political mileage out of that, too.

Donald Trump badly needs something that looks like a political victory. Terminating NAFTA, while claiming to be doing it in order to negotiate a better deal for American workers, could be the ticket.

It's not clear whether the President can unilaterally end a treaty like NAFTA, which likely means months or years of fighting in the courts and with Congress. That, too, might suit Mr. Trump just fine.

The bottom line is that continental free trade is under threat, and the Trudeau government has to rally the large number of American politicians and businesses that support NAFTA to take up its defence. But no matter how well Ottawa plays its hand, there's a chance it will lose. NAFTA may not survive the Trump presidency.

Keeping NAFTA is still Plan A. But Ottawa had better have a Plan B.