Former Conservative Industry Minister James Moore is cautioning that Canada cannot stand idly by as the United States launches repeated trade volleys at key domestic industries.
Moore, now a senior business advisor at the law firm Dentons, said that while the rhetoric has cooled significantly since the election of U.S. President Joe Biden, there remains an imbalance between the two countries when it comes to the trade file.
“My view is that Canada is getting bullied a bit by the Americans, and this has been the case with the Trump Administration, and again now, frankly, with the Biden Administration,” he said.
“Since Joe Biden became president, yes, we don’t have the rhetorical belligerence of Donald Trump and the random tweets and the obscure references to national security being used as leverage against the Canadian steel and aluminum industries, for example. However, President Biden has been frankly not a great ally to Canada.”
The United States has initiated a dispute process against the Canadian dairy industry under the terms of the new NAFTA, representing the latest flare-up in a long-running dispute over Canada’s supply management system. The Americans have long argued the quota system favours Canadian producers at the expense of export opportunities for the U.S. dairy industry. The U.S. alleges that quota system is in violation to the terms of the revised trade deal.
The flare-up over dairy isn’t the only contentious trade issue the two countries are currently grappling with. The U.S. Department of Commerce is seeking to double tariffs on imports of Canadian softwood lumber, announcing in a preliminary decision it intends to raise the combined duties for more Canadian lumber producers to 18.32 per cent from 8.99 per cent.
The dispute over softwood lumber duties is centred on so-called “stumpage fees”, the method Canada uses to price timber rights on crown land. The battle stretches back decades, and Canada has repeatedly successfully argued its case in the dispute before the World Trade Organization (WTO).
Moore, who served in former Prime Minister Stephen Harper’s cabinet, said the Biden administration may be emboldened to act swiftly on these long-running, thorny trade issues due to the weakened status of the Republican Party and cautioned that Canada should be on guard to defend its economic interests.
“The battles that Canada has with the Biden Administration in the United States are not going to go away any time [soon], particularly now in this honeymoon period when the Republican Party is a hot mess, with (Republican Representative) Matt Gaetz and the sort of lack of a moral or ideological compass within that party,” he said.
“With President Biden, there seems to be an ideological land grab going on of people pushing and poking and going in different directions and people trying to get as much as they can done while they have continuity of all three houses.”
Moore said that Canada should stick to its guns and understand that it has been successful in defending its domestic economic policies before international bodies and rely on a similar playbook to weather the current storm.
“Canada has litigated on this front many times, we’ve been successful virtually every time that we’ve pursued these efforts to the WTO and elsewhere, and I think we will be successful in the fullness of time,” he said.
“Play the long game, but I think the government needs to have its guard up and recognize that within the Democratic Party the forces of isolationism and the sector-by-sector fights that we’re going to have as America goes into the mid-terms next year, I think is going to be incredibly challenging on the trade front for many sectors of the Canadian economy.”