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Wednesday, October 21, 2020

Canada readies to rumble with a President Biden


OTTAWA — After four years of trade clashes with the Trump administration, Canada would seem more than ready to lower its guard should Joe Biden win. Instead, it's preparing for a transition — and for the new risks a Biden White House could bring.

Canadian federal and provincial officials are quietly laying the groundwork for working with a Biden administration, far away from the floodlights of the U.S. election.

Business and labor leaders tell POLITICO that Biden's proposals around trade, procurement and climate have potential to create friction with Canada.

“We need to know where we stand and we need to prepare for what’s going to happen after the election,” a senior provincial government official told POLITICO. “We need to understand which battles we will absolutely lose and why, and which we think we can win and who to connect with immediately.”

A glimpse of the Canadian outreach: Provinces, with support from Canada’s embassy in Washington, are sharing notes on who to know around Biden in case he wins, the official said. The individual spoke on condition of anonymity because they were not authorized to discuss the matter in public.

A key strategy, the person said, is to target anyone they think might end up having an audience in a Biden White House — scholars, think-tank experts, human-rights advocates and government relations point people. The person declined to share specific names.

“As foreign governments cannot be in contact with [election] war rooms, we enlarge that to other influencers, people we think will be nominated in a future Biden government or operatives that we know out there who weigh in, who have a connection,” the official said. “And we seek intelligence and information.”

The person said the federal and provincial governments are helping some industries connect with these individuals to find out what might be around the corner — and to flag concerns, if necessary.

An objective is to develop plans on how best to inform these contacts why a U.S. decision — such as steel and aluminum tariffs, for example — could hurt both countries.

The potential trouble spots for Canada: After winning power, President Donald Trump threatened to rip up the North American Free Trade Agreement — a deal critical for the Canadian economy — unless Canada and Mexico agreed to its renegotiation.

Trump also slapped tariffs on Canadian steel and aluminum in a move that drew retaliatory duties from Ottawa. His administration threatened to impose tariffs once again this year, but later backed away.

To counter this new level of intensity to American trade clashes, Ottawa and the provinces dispatched Canadian business and political figures to Washington and state capitals to sell American decision-makers on the importance of the countries' economic relationship.



Many Canadian stakeholders expect a Biden White House would generally have a friendlier tone towards Canada than the often bare-knuckle approach of the Trump administration.

But the combination of Biden’s “Buy American” campaign pledges and the Democrats’ tradition of being more protectionist is creating Canadian concerns, particularly around the integrated North American supply chains.

“If we think it’s going to be a revolution with Biden, I don’t think so,” said the official. “There are going to be some bad measures and bad policies out there — and we’ll need to be all over this.”

What business and labor experts say: Mark Agnew of the Canadian Chamber of Commerce said he expects a big advantage with a Biden presidency is that he’ll work more with Canada on shared problems, rather than trying to go it alone. But he said Biden’s made-in-America promises are worrisome.

Canada, which bought 17.9 percent of all U.S. exports last year, is America's number one trading partner. More than 30 states rank Canada as their top export destination. The automotive industry, with its deeply integrated North American supply chain, is a major component of the cross-border relationship.

“The headline, from our view, is this is not going back to some kind of free and open trade environment,” Agnew, the Chamber’s senior director of policy, said in an interview. “He still has quite a hard edge in what he said in the campaign platform.”

Specifically, Agnew said Biden’s pledge to spend more American tax dollars on U.S. content for investments like procurement is a concern for Canadian businesses.

Another measure that caught Agnew’s attention is tied to Biden’s carbon plan, which he said could create the risk of a “carbon adjustment” price being placed on Canadian goods going into the U.S.

Trevor Kennedy, director of policy for the Business Council of Canada, said it’s important for Canadian governments to emphasize with Americans the importance of the continental supply chain and how it supports both economies.

“There are a lot of competitive regions around the world manufacturing products like steel and aluminum and others; Canada and the United States are best positioned when they work together,” Kennedy said in an interview.

Hassan Yussuff, head of the influential Canadian Labour Congress, said in an interview that there’s always the fear Canada wouldn’t be exempt when it comes to Buy American provisions.

He said he would hope the issue gets resolved quickly, arguing Canada is not a low-wage country and doesn't take advantage of the American market.

“I don't think that it's going to be all roses — I think that there are challenges even with a Biden presidency with regard to how we’ll conduct our trading relationship,” Yussuff said. “I'm hoping a new administration would bring some stability. But I think as Canadians we are going to have to be prepared.”

He added that Canada needs to be ready to engage very quickly once the U.S. election is decided.

Flashback to Canada’s high-level outreach in 2016: Yussuff credited Prime Minister Justin Trudeau for inviting Biden, then vice-president, as a special guest for a two-day visit to Ottawa in December 2016, shortly after Trump’s election win.

The trip included a state dinner in Biden’s honor attended by former prime ministers and provincial premiers at the impressive, newly refurbished Sir John A. Macdonald Building facing Parliament Hill. In a speech that evening, Biden spoke of his family’s “deep ties” to Canada and his many visits to the country over the years as well as the fact his late wife’s family hails from Toronto.


“My boys grew up wanting to be — it was hard when I was a United States senator from Delaware — they wanted to be Mounties,” Biden said. “I kept saying, ‘You want to be state police.’ “

Yussuff, who attended the gala dinner, said the warm relationship that Biden had with Trudeau “certainly was very visible that evening.”

“I thought that showed smarts and recognition that this guy could become president in the future,” Yussuff said of Trudeau’s invitation.

Not just about Biden — prep needed for a Trump victory: The provincial official said some people in the Trump White House have tended to side more frequently with Canada's policy views during the past four years.

It’s important, they said, to understand who would stay and who would leave following a Trump re-election win. They added that Canada would then have to move quickly to engage with White House allies in case the administration is tempted to use protectionist measures for quick political gains that could hurt both countries.

Trudeau’s take on possible U.S. election results: Trudeau has been asked a few times to speculate on the U.S. election, including what might happen if the outcome is not immediately clear.

“I think we’re all watching the U.S. election with close attention because of its potential impact on the Canadian economy and on Canadians,” Trudeau told reporters on Oct. 8. “As we watch the American election unfold, we are of course going to be prepared for various eventualities, but we are certainly hopeful that all will proceed smoothly.”

Trudeau added that his government’s job is to be ready for all outcomes and stressed he won't “comment or weigh in on American political processes.”

A senior Trudeau government official declined to say much when asked about pre-election preparations underway.

The insider said the Canadian government obviously plans ahead for any potential outcomes, whether it’s issue-by-issue or on an overall basis.

“But there’s an election underway in the U.S. and the people of the U.S. are going to decide who’s going to be the next president,” they said. “And whoever that is, Canadians would expect their prime minister and their government to have a good, functional relationship with that administration and to be able to advance Canada’s interests.”



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