TORONTO: The Keystone XL pipeline proposal has been the issued that famously sent a chill through Canada-US relations. But several others now threaten to deepen the frost.
Beef and pork labelling laws could lead to a little trade war. The United States could force Canada to the sidelines over differences on Trans-Pacific Partnership trade talks. That classic cross-border trade irritant, softwood lumber, could even return. And politics, on both sides of the border, might make it all harder to avoid.
Public Safety Minister Steven Blaney was in Washington to sign a customs pre-clearance agreement with the U.S. The agreement allows customs agents to screen passengers away from the border to ease choke points.
Those things are on the horizon at a time when reserves of goodwill appear depleted. There’s the hissing over Keystone, the disappointment over the lack of any U.S. funds for even the customs post at a new bridge to Detroit and the cool political mood. US Ambassador Bruce Heyman, as The Globe and Mail reported on Wednesday, had a troubled first year in Canada, for months unable to meet with senior cabinet ministers amid the Canada-US chill.
Of course, cross-border relations have been littered with trade irritants, from softwood to mad cow disease to Pacific salmon to split-run editions of magazines at times, one piled on another.
Sometimes it’s just that: a pile-up of irritants. Sometimes they colour the relationship, as Ottawa feels Washington neglects Canada, and the United States feels beset by a laundry list of little things. “Here come the Canadians with their condominium issues,” Condoleezza Rice, then president George W. Bush’s national security adviser, reportedly said once. At least now, Stephen Harper’s government can say it has worked with Washington on big global security issues – except it probably feels some resentment the effort did not pay benefits closer to home.
Start with COOL, the country-of-origin-labelling regulation in the United States that requires meat from other countries, including Canada, to be packed separately from U.S. products. Canadian producers say it has meant $1-billion in lost business. And World Trade Organization panels have repeatedly found that the U.S. regulations violate trade rules.
So Canada is threatening to retaliate against U.S. products once a U.S. appeal is completed this spring. U.S. industry is pushing Washington, and politicians there worry backing off could hurt their re-election campaigns. But if the U.S. government doesn’t back away, Mr. Harper will be in a similar position. In an election year, can he afford to do less than go to the wall for beef and pork farmers?
Then there’s softwood lumber. The Canada-U.S. deal that has since 2006 given Canadian producers assured, but limited, access to the U.S. market runs out in October. It’s not clear the United States will renew it.
Toronto trade lawyer Lawrence Herman figures if that happens, the U.S. industry will immediately file trade petitions against Canadian producers – even the destabilizing effect of a losing trade suit might reduce Canadian market share enough to make it worthwhile.
