Lawrence Solomon: Trudeau’s escape from Trump’s trade trap is calling a snap election
Prime Minister Justin Trudeau is in a fix over NAFTA, particularly with a federal election scheduled for October next year. With Mexico and the United States having struck a bilateral deal, and U.S. President Donald Trump likely to tax our auto exports if Trudeau doesn’t capitulate by betraying Canada’s dairy farmers, Trudeau faces political disaster. But he does have a way out of the damned-if-you-do, damned-if-you-don’t options his political advisers are now considering. Rather than immediately capitulating to Trump, or vainly trying to negotiate a deal over the next year with a Trump who holds all the cards, Trudeau should call a snap election. An electoral pause in the NAFTA negotiations is his best hope for retaining power.
The alternatives aren’t pretty. If Trudeau quickly capitulates to Trump, he will need voters to forget by next October. That would be a risky strategy. In the long run-up to the federal election, the Conservatives will hammer Trudeau relentlessly for abandoning our dairy supply management system, and the charge could stick.
Reportedly Trudeau as much as had a deal in June at the G7 meeting after Trump is said to have agreed to concessions, but the prime minister threw it all away by grandstanding against Trump in order to score political points. Trudeau’s grandstanding paid off initially — Canadians cheered him and the Liberals for standing up to Trump — but those cheers will turn to jeers once Canadians realize the Canadian economy could tank if we lose our auto industry in the bargain.
Refusing to capitulate now, and dragging out the negotiations over the next year in the hope that Congress will block the bilateral U.S.-Mexico trade deal, would be riskier still. For one thing, Trump has been successful in getting legislation passed — as Senate leader Mitch McConnell boasts, the current Congress has been unusually productive. It would be foolhardy for Trudeau to bet the farm against Trump’s ability to pass a bilateral trade deal with Mexico that also has overwhelming support in the new Mexican government.
An electoral pause in the NAFTA negotiations is his best hope for retaining power
For another, Canada’s opposition parties, not wanting to appear treasonous, are now allied with the Liberals against Trump. But that alliance won’t hold over the next year — it has already begun to crumble — meaning that Trudeau will be in the impossible position of simultaneously taking fire from our opposition parties and from a Trump who knows that he’s in the driver’s seat. Worse, because Trump views Trudeau as having stabbed him in the back after the G7 meeting, Trump may decide to blow up the negotiations just before our federal elections in order to throw the election to the Conservatives. Trudeau can’t afford to put himself and his party in a position of utter dependence on Trump’s generosity and goodwill.
Calling a snap election on the grounds that the government needs a strong mandate to negotiate a new deal with Trump provides the Liberals with a way out. Trudeau can be at his rhetorical best, rallying the Canadian public by railing against Trump. The Conservatives, meanwhile, will be unable to mount a full-throated attack on Trudeau’s NAFTA negotiating failure, for fear of appearing to side with the U.S. against Canada. Trudeau stands to win a snap election called now, after which he would find himself in power for another four years. He can then safely capitulate to Trump on NAFTA, knowing that four years from now the public will have moved on. Besides, by then the public will have come to appreciate low prices for milk and other dairy products, plus the wide variety of cheeses that will be on offer. Political posturing aside, there’s no reason for Canada to balk at signing onto the U.S.-Mexico deal. It would benefit Canadian consumers as well as Canadian manufacturers while strengthening intellectual property rights.
Calling and winning a snap election is the best Liberal strategy, even should the U.S. Congress reject the bilateral deal struck between Mexico and the U.S. If Trump accepts the Congressional rejection and restarts NAFTA negotiations on a trilateral basis, Trudeau will have lost nothing. More likely, though, without Congressional approval Trump will simply give Congress an easy-to-pass trilateral deal by forcing Canada to join the existing bilateral deal, which he could do by imposing his long-threatened 25-per-cent tariff on our auto exports. Because of the auto sector’s importance — more than 100,000 Canadian jobs would be at risk — we will quickly cave.
In every plausible scenario, it would be in Trudeau’s interest for Canada to sign onto the trade deal Trump insists on, and to double-cross the electorate after vowing not to do so.