It has been five years since North American leaders held their once annual summit and you have to wonder if the whole idea is passé. Not the idea of summits, but of North America.
There was once a notion that the United States, Canada and Mexico would form a bloc – with trade agreements and border accords bringing them closer in economic alliance. That was repeatedly tested by flareups of Buy American policies and border-security buildups, but even in the U.S. there was usually some support from political leaders for the idea.
Now when former U.S. ambassador to Canada Bruce Heyman says that he wants Thursday’s North American leaders summit to bring a reaffirmation of the “North American idea,” it sounds almost like a hopeful return to another time. You don’t hear a lot of that coming from the U.S. political scene these days.
It’s not only that former U.S. president Donald Trump campaigned against NAFTA. The idea of a regional trading bloc has been politically discredited by a broad swath of trade-skeptic Americans. President Joe Biden has centred his agenda on multitrillion-dollar “Build Back Better” programs, including a green-industry program that is designed to boost U.S. jobs. And he’s not pausing to fret about whether that might affect Canada or Mexico’s economy.
So Prime Minister Justin Trudeau heads to Washington intending to lobby against a Biden administration plan to provide a $12,500-per-car rebate on American-made electric vehicles – a protectionist incentive so large that it has sparked fears that it would lead car makers to build all their EV plants in the U.S., rather than Canada or Mexico.
Of course, the whole point of such an incentive is to encourage the EV industry to set up inside U.S. borders. Mr. Biden is promising it will lead to green jobs, and you can hardly expect a U.S. President to offer steep rebates to create green jobs in Canada and Mexico.
But it amounts to waving a dismissive hand over the USMCA trade agreement, the revamp of NAFTA signed just three years ago, and telling Canada and Mexico their auto sectors might be gutted. Mr. Trudeau plans to talk about the importance of integrated cross-border supply chains.
There are other more run-of-the-mill Buy American policies, meanwhile. Michigan wants to shut down the Line 5 pipeline that brings Canadian oil from the West, through a U.S. shortcut, to supply oil to Ontario and Quebec. There hasn’t been much sign Mr. Biden is thinking in North American terms – or perhaps more importantly, that there is much of a public constituency in the U.S. for that.
Mr. Heyman, a Democrat who was ambassador to Canada under former president Barack Obama, says that Mr. Biden took power in a divisive time, in a pandemic, and had to focus on a domestic agenda.
“There hasn’t been this kind of North American engagement,” he said in an interview. “This will be an important North American leaders summit.”
Carleton University political science professor Laura MacDonald notes that North American trade blocs and leaders summits have often drawn more protest than public enthusiasm. But she thinks global pressures will still push the region together. The U.S. probably can’t build electric vehicles efficiently using only American parts, she says. Rivalries with China and the COVID-19 pandemic have some companies looking to bring their supply chains closer to North America. The U.S. will want regional co-operation on climate change and migration.
Canadian business leaders don’t seem so sanguine. Goldy Hyder, the president and chief executive of the Business Council of Canada, argues North America will need integrated supply chains to compete with rising competition from other regions – but it has to get its act together quickly. “We have to respond to that new global challenge,” he says.
The thing is, while Canadian business thinks there’s a compelling argument for more North American co-operation and integration, the U.S. can think of itself as bloc enough to compete with the rest of the world. So far, there isn’t much sign that Mr. Biden has given much thought to regional co-operation, or that there is still room in U.S. politics for a North American idea.
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