Canada can offer the U.S. TPP support for a new softwood lumber deal

May 2, 2016

By: The Globe and Mail

Canadians shouldn’t be naive. Our country rarely matters much at all to the United States when it comes to their political decision-making process. If we did, the Keystone XL pipeline would have been built, Country of Origin Labelling for livestock never would have happened and Americans would be paying for their own customs plaza in Detroit.

There was broad agreement that the Canadian position on each of these issues made economic sense for the United States, but they were fought on a political battleground south of the border, where short-term domestic political gains won the day over long-term economic goals. Also, the ideological divide between U.S. President Barack Obama and former Canadian prime minister Stephen Harper didn’t give either side much cross-border political capital to spend.

Now that it appears that the ideological barrier has been overcome (at least until January, when a new president is sworn in), I wonder if Mr. Obama and Prime Minister Justin Trudeau can’t offer more to our two countries than warm platitudes and camera fodder. The United States and Canada are in a sweet spot to get two big things done and score significant wins for both leaders: a new softwood-lumber agreement and the ratification of the Trans-Pacific Partnership.

The official record will tell you that our two governments have opened a dialogue on softwood lumber, but I can guarantee you that this issue will not be solved by bureaucrats. Softwood lumber is a political issue that demands a political solution. ’Twas ever thus due to the immense political influence (fundraising dollars) that the U.S. Lumber Coalition is able to wield in Congress. Getting a new softwood-lumber agreement now means a whole lot more to the Canadian government than it does south of the border, with the United States being the largest market for softwood for each of our provinces.

What Canada needs is to give Mr. Obama an incentive to work in our favour. The sell on softwood could conceivably be much easier this time around, because Canada is in a position to offer something that the President actually needs: progressive backing for the TPP.

For Mr. Obama, the TPP has become an important legacy item that is tantalizingly within reach. If completed before he leaves, the TPP will allow him to say he was able to accomplish something that truly helped the American middle class of farmers and business owners. It would be a legacy of free and open trade in which American businesses could thrive – and a new softwood lumber agreement would support this, too.

The problem is that the TPP has been hijacked by left-of-centre, special-interest groups in a particularly volatile election cycle. Some positive support from an internationally popular and progressive Prime Minister could be just the ticket for dampening some of the heated rhetoric surrounding the deal.

Moving to ratify the TPP, or at least speaking in its favour, wouldn’t cost Mr. Trudeau a lot. The TPP has already been widely consulted on within Canada and his government’s current “consultation tour” is quietly considered a redundant exercise. The reality is that the agreement, with its access to the Japanese market and 800-million consumers overall, is too important for Canada’s agriculture and other exporting sectors for the government not to follow through and ratify it.

So why not give Mr. Obama a little help to get the TPP moving? A grateful outgoing President with a legacy secured could be just the ticket Canada needs to reach a new agreement on softwood lumber in time to save Canada hundreds of millions in lawyers’ fees and years of uncertainty for one of our founding industries. It’s a win-win scenario that’s within their grasp if they’re willing to spend a bit of political capital to get it done.

By: The Globe and Mail

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