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There is no clear pathway for Canada on how best to manage its relationship with the United States, but there are some possible pathways that can avoid the worst in future situations, especially next year’s review or full renegotiation, even if not very early to avoid the Canadian-American Mexican Agreement (CUSMA).
The key question for Canada and others is how can a country provide potentially irreversible concessions on deep and important issues in exchange for a promise that is uncertain at best, as long as the ink is brought to the ink on the agreement, it will not last? All in exchange for a deal, it’s worse than not, and accompanied by public humiliation and the ensuing domestic political fightback.
There is no simple solution.
Nevertheless, the choice of trying and failing in Canada is a bad choice.
Fifty years ago, the last time the United States had blinded the entire country’s tariffs, Canada launched a continuous, well-funded and resource-rich effort to diversify it to other markets. We are in the same dilemma again, but trade is more dependent, which is for the lack of success of this strategy. Other strategies, such as the increase in Canadian internal trade, will provide edge help at best.
Signing a trade agreement with the United States is similar to signing in to a hotel in California: you can check out at any time, but you will never leave.
Canada must find a better way to survive the United States cannot leave. This requires a return on confidence, which in turn requires Ronald Reagan’s theory of dealing with distrust partners: “Trust, but validation.”
This is not impossible. It requires two changes in the United States, and there are early signs that both may be underway.
First, the U.S. public must fully absorb the subject courses on the costs of bad economic and trade policies. This began after Donald Trump was elected, when Google searches for “what is tariffs” soared 1,650%.
Since then, textbook definitions have been played in real time and are enhanced by media saturation and life experience. At some point, in TV and retail stores, it is impossible to spin as a win every day.
This has not arrived yet. Pain is not sharp enough, broadly or individually enough to change beliefs. Maga Partisans invested too easy or elegantly in both athletic and men. This is the “no retreat, no surrender” movement. It can accommodate two or three contradictory ideas at a time, but cannot admit that it is wrong.
It also takes time for the stock market to collapse or fall 401(k) to change the mind. Only half of the millennials in the United States and less than 10% of Gen-Zers can save on retirement. It’s hard to feel the sting of the money you never or wish to have. Watching the blow from the rich may even be the selling point of Schadenfreude.
Second, the pain of learning the subject courses of bad economic policies must go beyond election changes. Must be institutionalized. Congress must control the root cause of the problem, namely the almost blank mandate that it has ceded to executives, including the power to impose tariffs during a “national emergency.”
In 1976-1977, the U.S. Congress realized that the country had been in a state of emergency for more than 40 years and adopted two actions to reform the president’s use of emergency powers. The ineffectiveness of these reforms is fully demonstrated today, and in fact, the number and time of emergencies nationwide have been increasing since the passage of reforming the president’s emergency powers.
Proposals such as the Washington, D.C. Cato Institute, which requires Congress to confirm the president’s national emergency with a two-thirds majority within a short time of announcement, will prevent the current chaos.
If a two-thirds vote is not needed to revoke the emergency declaration, an emergency will be automatically ended if two-thirds confirmations from the two Capitols are not received, which would mean that the Senate vote last week to end Trump’s tariffs will be successful. There are no votes to revoke tariffs, but no votes prove this.
Changes in administration will not return the certainty needed to get the United States to participate in trade negotiations, nor will the current emergency end. Canada has tried to appease the Americans, and we are here.
Until the legal changes that put us all in a woeful situation, the only deal for Americans will be humiliating certainty in exchange for fantasy.
Carlo Dade is a senior fellow at the Western Canada Foundation
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