Bracing for Trump, some in Canada see 'nothing good'

2016-11-10 12:28
(Jewel Samad, AFP)

(Jewel Samad, AFP)

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Ottawa - Canada is one of America's closest allies and its largest trading partner but observers there worried on Wednesday that a Donald Trump presidency might change that.

The real estate mogul, reality TV star and now US president-elect campaigned on isolationist and protectionist policies that horrified many Canadians.

But a lack of detail in his plans has made it hard to pin down the nature of the monster under the bed.

There is "nothing good" for Canada in any of it, according to Louis Belanger, a political science professor at Laval University in Quebec.

"The overall impact is likely to be negative," agreed Charles St-Arnaud, an analyst with Nomura Global Economics. "But it depends on the policies that will be put in place."

Drop in trade

Canada sends about 75% of everything it produces south, amounting to a huge US$1.8 billion in daily trade with the US.

So Trump's call to renegotiate, or if that fails, to nix the 1994 North American Free Trade Agreement (NAFTA) that binds 530 million consumers in Canada, the US and Mexico, has caused alarm among many Canadians.

The unfettered flow of goods and people across the 49th parallel that separates the two nations "is vital for bilateral trade" and "critical to our economic health," said Perrin Beatty, president of the Canadian Chamber of Commerce.

Canada's exports to the US account for 20% of its gross domestic product.

Most analysts predict a drop in trade if Trump follows through with protectionist measures, with Desjardins Bank in Montreal last week predicting a recession in Canada if the US withdraws from NAFTA.

St-Arnaud, however, noted that the trade agreement is also important for the US, which sends 12.5% of its exports to Canada.

A drop in overall trade may also be mitigated by increased oil exports to the US.

Canada's oil sector, which accounts for about 10% of its GDP, has been hit hard in the last year by plunging prices and a temporary halt in operations due to wildfires in May.

Millions of jobs on the line

A transcontinental pipeline had been proposed in 2008 to move oil from the Alberta oil sands to US Gulf Coast refineries and greatly expand Canada's oil output, but US President Barack Obama, under pressure from environmentalists, has blocked the Keystone XL project.

Trump has vowed to relaunch it.

"People (in Canada) are appalled that the United States would elect a man who is a misogynist and a racist, but there is new hope for the Keystone XL pipeline," said Stephen Randall, a history professor at the University of Calgary and co-author of the book "Canada and the United States: Ambivalent Allies."

Others insisted the US would never seek to curb trade with Canada since their economies are so heavily intertwined.

Auto parts built in Detroit, Michigan, for example, may be sent to a plant in Windsor, Ontario, for assembly before the finished cars are sent back to the US for sale to consumers.

Thirty-four US states rely on trade with Canada, which supports nine million American jobs.

"On a day-to-day basis, billions of dollars in trade cross the border back and forth and that isn't going to change," said Randall.

Either way, Conservative MP Garnett Genuis, who traveled to the US to observe the election, told AFP: "Canada will need to engage actively (with the US), including with the general public, and be prepared to explain the benefit of both our countries that flow from security and economic cooperation."

Good relations between leaders have in the past helped smooth over differences.

"I can't see Trump and (Canadian Prime Minister Justin) Trudeau being particularly amiable with each other on a whole range of issues," Randall said. "Trump's social agenda runs completely counter to everything Canada's Liberal government stands for, including same-sex marriage, legal marijuana, abortion."

But, he added, "There's always been some disparity" between US and Canadian leaders, both in policy and personal terms.

And the two nations have remained close partners throughout the years.


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