Our economy is small and very open. Our collective enrichment depends a lot on our foreign trade. Added to this is the fact that the United States buys about 70% of our exports.
We were therefore very exposed to the mood swings of President Orange. We are branded with a hot iron by the tariffs on steel, the renegotiation of NAFTA and its constant threats.
No wonder the arrival of Joe Biden is greeted so warmly. However, we must keep in mind that elected officials and democratic administrations have not always been, in the past, the champions of free trade.
The “Buy American”
Let us first remember the Obama administration’s stimulus plan, which contained a “Buy American” provision. This legislation had considerably reduced the access of foreign firms to projects financed by the US government. It even extended to large private infrastructure projects funded by the government.
Canada had to negotiate for almost a year for us, as trading partners, to obtain flexibility. Some will say it’s fair game, but note that the Americans, too, are eyeing our public markets!
The United States has been making life difficult for our lumber producers for forty years. The Americans claim that our forestry regime is too generous to producers and that this constitutes a disguised subsidy.
Since the early 1980s, we have lived on one temporary arrangement with Uncle Sam. We have gone so far as to impose punitive tariffs on ourselves to penalize our own exporters.
Joe Biden served in the US Senate from 1972 to 2009. He and his Democratic friends have never lifted a finger to resolve this conflict. This is surprising, since several international arbitration tribunals have ruled in favor of Canada over the years, whether in NAFTA or at the WTO.
In the era of the fight against climate change, our hydroelectricity is popular. However, this has not always been the case. In the early 1990s, Hydro-Québec was unloved by its American competitors because of its efficiency. They therefore set out to convince lawmakers that our energy was … dirty!
It is for this reason that the Crown corporation undertook to calculate its GHG emissions. It turns out that critics of our energy weren’t entirely wrong. But it nevertheless shows how the Americans stop at nothing to block competitors at the borders.
The national security argument is frequently used to justify American protectionism. The United States dedicates 3.4% of its GDP to defense. We are talking about $ 730 billion in 2019 … To this are added all kinds of industries and resources considered strategic.
Both Republicans and Democrats have used the national security argument to favor American companies or to prevent foreign takeovers. Yet it is such a big piece of the cake!
Let’s say it: there is a little something unnatural about free trade. While it is popular with political elites, the masses and workers are suspicious of it, sometimes with good reason. In the past, the losers of free trade have not always been compensated by the winners.
South of the border, the very idea of free trade is regularly challenged in industrial states in the north, such as Wisconsin, Michigan and Pennsylvania. The very people who brought Biden to power. Will we pay for his victory?
♦ Jean-Denis Garon is a professor at ESG UQAM