2018-09-29

The United States And Canada: Big Brother, Little Brother Relationship

***Please forgive any grammatical errors or poor sentence structure as I didn't edit this post. Thank you.***

The biggest issue for Canadian leaders since, like, forever, has always been how to balance sovereignty without looking like being a puppet of the United States.

The cold, hard reality is Canada depends on the United States much more than the other way around. Canada has little to offer that the U.S. can't do itself. The same can't be said of Canada. We're a semi-diversified, resource-dependent economy. Yes, we're a developed, first-class, tertiary economy, but at the base we rely on America to ensure our prosperity.

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Canadian leaders have always generally been conscious and pragmatic about this reality. There's only so-much nationalist rhetoric you can sprout before it begins to impact the economy in a negative manner.

My perception over Canada-USA relations has shifted over the years. From the idealistic 'we're two equal partners' - and everything in between not necessary to discuss here - to my position of today.

That is, Canada takes for granted how fortunate it is to be neighbours with a country like the United States.

We sit next to the most powerful cultural and economic entity in world history. Right there this fact should be discounted in Canadian discourse regarding the United States.

Yet, for some, we still act and speak as if this is not the case.

Trump flushed this out once and for all and it's plain to see. Uncomfortable - even maddening - to Canadians as it is to be spoken to this way but it's closer to reality than not.

Where past Canadian leaders relied on American understanding and generosity to hammer out bi-lateral deals, the current Liberal party is finding out this is no longer the case and in my estimation are completely mishandling this new direction.

The proper and intelligent thing would have been to quietly negotiate and accept the new trade system the United States is pushing. I happen to agree most international deals between America and the world favoured the latter more than it did the Americans. America's share of world GDP went from roughly 50% in the 1950s to 25% today. While this is not exclusively because of trade because it would ignore other factors, the fact America did a lot of the lifting (particularly militarily and through aid) lends some credence to this theory.

While countries benefitted from the benevolence of American economic hegemony where tariffs against American goods and services tended to be higher than those imposed coming in the USA, the United States was essentially subsiding nations particularly those in the West. Added to this, is the fact the United States was the sole military protector of Western civilization during the Cold War.

It doesn't help that two major international organizations: The UN and NATO, are net benefactors of American aid and capital have also raised the ire of this administration.

The former increasingly anti-American in its posture and the latter refusing to pay the minimum requirements agreed by all countries - and this unfortunately includes Canada.

This set up was increasingly rattling Americans. The UN laughing at Trump was possibly one of the most inappropriate thing seen yet in my view.

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We give them money
But are they grateful
No, they're spiteful
And they're hateful
They don't respect us
So let's surprise them
We'll drop the big one
And pulverize them


-Randy Newman

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As neighbours who have greatly been net beneficiaries from the productivity and innovation of our friend to the south, one would think we'd be mature and intelligent enough to at least see this through an American perspective.

Instead, Canada has taken the ill-advised route of looking at it from a myopic lens; one in which aligns itself with countries that have done precious little for us.

This is why the Americans are not happy with our 'negotiating style'. We're probably making demands and refusing to make concessions thinking this is still 1995. We're not seeing the big picture. Trump is telling them you already lost. You have no leverage.

Now the rattling about we'll 'expand trade' with other countries is fine and all but we're just paying the price of past decision stretching back decades where Canadian politicians basically took the safe and stable decision of keeping Canada neatly tied to the American market. It's not a good or bad thing. Just a reality. We have access to the biggest market in world history and we exploited it to our advantage while, the way I see it anyway, the Americans weren't hostile traders or neighbours.

It was as good as things could get. We're the luckiest bastards in the world quite frankly. And we still 'hate those Yankee bastards'.

The Liberals are needlessly sabre-rattling. They're picking a fight when there need not be one. Trump has been an open book on trade going back to the campaign. He flat out said all along he didn't like NAFTA. And if the Americans don't like NAFTA, then we don't like NAFTA if you get my drift.

It was at that point a 'high IQ' leadership would have prepared for this the second Trump was elected. Instead, as we saw at the G7 meeting (where I feel here too Canada is part of a group of economic powers in spite of itself and largely thanks to its relationship with the United States) the Canadians were just going to push forward with their mostly ideological demands and incoherent positions on pipelines. It was tone deaf as it comes. Gender issues at this junction is the last thing countries like Italy and Japan want to hear, while the Americans, as one example, were set to pay for the pipelines and administer it (as they've always done throughout history. American and British capital mostly built Canada) but Trudeau seemed ill-prepared to hammer out a mature deal that really was in the best interests of Canada as a whole.

So he nationalized the pipelines. The results will speak for themselves but this is neither here or there.

Now, he's in a pickle because Trump decided to pinch him with the dairy cartel tariffs. I'm increasingly of the opinion this was a bit of business genius by Trump because he had to have known this was a thorny question for Canada and this party in particular. He put Trudeau in a corner and I have no idea how they'll wiggle their way out of it.

Leaving aside the utter unfairness of supply-side management to which the Conservatives - including Ontario premier Doug Ford - have bafflingly decided to support, it also should be understood our economy is very much a monopolistic one with limited completion by design.

Banking and telecommunications, for example, are carefully crafted fiefdoms leaving Canadians with little by way of choice. Contrast this to the United States, though not without its own absurdities and imperfections, is far more open an economy. For instance, our banks can freely go into America and buy assets. The favor is not returned. Worse, Canadians seem to think this is an example of Canadian 'enterprise'. Kinda easy when we don't play fair, right?

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A while ago I read a comment by someone who was 'standing by Trudeau' assert 'we won't be bullied. What concessions will Trump give?'

To which someone else answered, presumably American, 'you have unfettered access to the greatest market in world history. Good enough?'

Touche.

As for the bullying, I don't see it as such. We made it into bigger than it was. He wants a different deal and was willing to use American leveraging power to get one. I see nothing inherently wrong in that. We've taken for granted over the years the Americans rarely flexed their muscles. We're just not used to seeing a President who exerts American might. Even then, they're willing to negotiate a deal that's mutually beneficial. The deal with Mexico is actually a good indication this is in fact the case. By all accounts, both sides are happy with the deal struck.

Canada saw this as Mexico 'backstabbing' them. I saw how could you have thought this was a solution in the first place? Bypassing the Americans with political theatre and to try and 'stick it to Trump' was foolish and naive and bound to unravel the second the Americans knocked on Mexico's door.

And they did. Mexico aren't fools. They did what was right for Mexico. Just like Canada, they need America. The other factor to consider is Mexico has two things going for it Canada doesn't. One, it's a much bigger country population wise so that in of itself is a leverage card. Second, it has a much larger army than Canada and can actually defend its national borders. They're not as dependent for their security as we are in Canada.

There is though something Canada shares wit Mexico.

Which brings me to the elephant in the room: The Auto industry.

And this is where the ultimate irony lies.

The thing that always, to me, should have always been nestled in the back of the minds of Canadian nationalists is the irony of fighting for companies that are at their root American.

We fight as though we're defending 'what's ours' but in effect fighting for something that we're lucky to have in the first place.

General Motors, Chrysler and Ford are American corporations. Not Canadian.

They can close up shop anytime and leave with their ball.

The notion we're owed some sort of favor from Americans from their own companies is typically, well, Canadian.

The same for Mexico. Mexican and Canadian auto workers - splendid and productive as they are I'm sure - work for American companies. It's American capital and engineering originating in the United States is what gives us the jobs.

So when they come to the table asking for something, I'd think a little harder and keep this in mind.

Ah! Fine then. No deal is better than a bad deal they cry!

Really?

And then what?

One person said, 'they can't get our water'. Newsflash Canada: If the USA finds itself in desperate need of water, it will get it. Had we maintained somewhat of a respectable army capable of defending our borders, maybe we would have a chance. Natural resources need to be defended and America indirectly protects Canada.

Oh, we can expand trade with Europe! Perhaps. But that won't replace the United States.

Not by a long shot.

Never mind the issue of geography but it betrays the geo-political international game to which the Americans exert major influence and power. Even the Europeans know this. And the Chinese. And the Russians. So, Canada would abandon its incredibly beneficial position so immeasurable in its positives to go and....trade in a shark tank where the Chinese and Russians play?

Are the Trudeau Liberals that irresponsible if not naive and dat?

Moreover, you think the Europeans would be as generous, patient and gracious as the Americans?

You think they'd stand by any of our 'bi-lateral' deals when and if push comes to shove?

Bif.

Whenever I press a fellow Canadian about what happens after, they sound like George Costanza. You know the scene where he's talking with Jerry about unrealistic jobs he can take including being a baseball General Manager or sports broadcaster after he quit his job? Yeh, that's how Canadians sound when I ask for a rational and workable alternative to the United States.

Quite the pickle. Quite the bind.

No matter how you cut it. Our economics and cultures are so intertwined, it's like veins in the human body where you can't really cut through it without damage.

My advice? Put on your big boy pants - if we have any - and get the damn deal done.

Because if we don't, it won't be good for Canada.



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