When the Montreal round of the North American Free Trade Agreement (NAFTA) talks wraps up later this month, don’t expect any clarity on the trade agreement’s future.
Even if U.S. President Donald Trump does wind up pulling the pin on NAFTA and gives the required six months notice of leaving, that won’t matter much. NAFTA will not be easy to kill. Which is why Ottawa has become very bold, submitting a 33-page complaint to the World Trade Organization about U.S. protectionist trade practices.
As Trump found out during his two ill-fated attempts to kill “Obamacare,” declaring that something will be torn up is one thing. Finding enough sustainable support in Congress to eliminate a program that has benefited significant numbers of Americans is next to impossible.
Withdrawing from NAFTA will require Congress to pass legislation. And this would not be the first time someone has tried. In 2010, after NAFTA had been in effect for 16 years, a bill in the House of Representatives that was sponsored by Mississippi Democrat Gene Taylor gathered bilateral support to force the Obama administration to give Canada and Mexico their six months’ notice.
“You’ll see the American people rally behind this,” declared North Carolina Republican Walter Jones, one of about 28 co-sponsors of the bill.
Except they didn’t rally behind it. Taylor’s bill flopped, in an era when the U.S. unemployment rate was in double digits (compared with 4.1% today).
Most economists agree NAFTA leads to the creation of 200,000 jobs a year in the U.S., which more than offsets the 15,000 jobs lost because of the trade agreement. On top of that, about half of the 50 U.S. states depend on exports to Canada.
A bill to end NAFTA would be a tougher sell in Congress today than it was in 2010. That’s why Canada appears to be more interested in winning over Congress than in successful negotiation at the bargaining table. Canadian cabinet ministers have been fanning out across the U.S., urging people to tell Congress to keep NAFTA.
The Canadian embassy in Washington, D.C., has been largely invisible in the Canadian media. But in Washington, the embassy is attracting attention because it’s using artificial intelligence and algorithms to analyze how members of Congress – all 538 of them – are likely to vote.
Politico.com, the U.S. news website for political junkies, states the system the Canadian embassy is using can hash through years of data and come up with a percentage of probability within a decimal point in just a few clicks.
The Canadian embassy may have a better read on what Congress would do with NAFTA than the White House does.
This is probably why the Trudeau government did not react much to the criticism dished out by the pundits when the prime minister came home from Asia in November without a signed, revised Trans-Pacific Partnership agreement or a commitment to begin free trade talks with China. The government thinks the strategy it has been using on NAFTA is working. And there are signs it is – no matter how many poison pills U.S. Trade Representative Robert Lighthizer throws down on the bargaining table.
Beyond the D.C. Beltway, there isn’t much support for ripping up NAFTA in the U.S. Both the U.S. Chamber of Commerce and the National Association of Manufacturers support retaining NAFTA, as do most U.S. agricultural organizations, even though farmers voted overwhelmingly for Trump. As well, the U.S. automobile industry has been very vocal in telling the Trump administration to keep its hands off NAFTA.
Six months ago, the Trump administration was adamant it wanted a renegotiated agreement by yearend. That deadline has been quietly extended to March, when it is likely to be extended again.
There isn’t much point trying to negotiate a free-trade agreement with a protectionist administration, particularly one run by a leader whose mental fitness is subject to speculation. Using the U.S. political system’s checks and balances to advantage makes more sense. Which is what Ottawa is doing.
When Ottawa begins talking loudly, we will know the Trudeau government is satisfied it has rock-solid congressional support – and that the Trump administration no longer has the political capital to back up its threats.