Canada Is Trapped

Along with the EU and China, Canada falls right into Mr. Trump’s bilateral trade-negotiation trap. R.I.P. WTO. Score: Trump 1; Canada 0.
Along with the EU and China, Canada falls right into Mr. Trump’s bilateral trade-negotiation trap. R.I.P. WTO. Score: Trump 1; Canada 0.

Christian Leuprecht is a class of 1965 professor in leadership at the Royal Military College of Canada and a Munk Senior Fellow at the Macdonald-Laurier Institute, currently on leave at the Flinders University of South Australia. Roger Bradbury is a professor of complex-systems science at the National Security College at the Australian National University.

“We will continue to make arguments based on logic and common sense and hope that eventually they will prevail against an administration that doesn’t always align itself around those principles,” Prime Minister Justin Trudeau said in response to recent tariffs imposed by the United States.

Canadians are left with the impression that President Donald Trump is an irrational buffoon who is shooting himself in the foot with his trade policies. In fact, contrary to common (and, apparently, Canadian political executive) sense, the U.S. administration’s tariffs are actually perfectly rational – from Mr. Trump’s perspective.

The extent of the punitive tariffs Mr. Trump is imposing is unprecedented. They threaten to bring down the system of global trade – by design. The United States has been the guarantor of the free global economy, which dates from July, 1944, when 44 states laid its foundations in the New Hampshire town of Bretton Woods. The United States was the driving force behind a series of long-winded world trade negotiations – beginning in 1947 and continuing through the current Doha round initiated in 2001, but never concluded – that lowered tariffs and barriers to trade. Spreading the free-market gospel across the world would secure the United States’ political and economic hegemony. Today, this meticulously calibrated, multilateral system of rules has 164 member-states and comprises tens of thousands of products.

World Trade Organization (WTO) tribunals – which are about to grind to a halt because the United States has not named a judge to the seven-member Appellate Body – were meant to ensure that everyone sticks to the rules. But instead of being bound by WTO rulings, Mr. Trump’s trade czar Robert Lighthizer would prefer to default to the pre-WTO practice of directly negotiating the outcome of trade disputes.

The President is now intent on destroying co-operation within the WTO by driving wedges between the world’s trading blocs and countries. The United States would be in a much stronger position if it could negotiate with each trade bloc directly. The painful NAFTA negotiations are but one example, and Mr. Trump’s recent musings about replacing NAFTA with two separate trade agreements with Canada and Mexico are further evidence to that effect. Canada risks selling out the WTO by making concessions to the United States.

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See Also:

(1) Trump’s tariffs a death knell to NAFTA

(2) Trudeau questioned in House of Commons about bonuses for pipeline executives

(3) Canadian companies could face millions in fines for violating EU-enforced data privacy regulations

(4) Canada scrambled to figure out Trump ‘Muslim ban,’ U.S. documents show

(5) EDITORIAL: As we embark on a trade war, let’s talk competitiveness

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BTDT
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BTDT

O/T Please take a short 15 minutes today to remember and give thanks. As the landing craft ramps dropped onto Juno Beach did a single one of these heroes wondered for second about what they were fighting for? Of did they believe that the Canada they were likely about to die for had no core identity? Would their Company Commanders or Platoon Leaders be shouting…. forward men….diversity is our strength? For what we are allowing our politicians to do to our country today is a betrayal of those who sacrificed so much yesterday. As for tomorrow, our grand children will… Read more »

Joe
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Joe

I think you are right Jack. That being said I am somewhat uncomfortable with Canada’s elite and many of the commentators’ opinion that Trump is somehow stupid or unfit to be president. The fact of the matter would seem to indicate exactly the opposite. With what Trump has accomplished in his first 500 days he is on track to be the greatest president in the history of the US. Trudope and his cabinet are being taken out to the woodshed for appropriate treatment by Trump and they are too stupid or oblivious to know what the trip to the woodshed… Read more »