Canada Rejects 'America First': Will It Provide 'World First' Leadership?
In the aftermath of G7 and NATO conferences that saw the United States increasingly isolated and isolationist, Canada’s foreign minister now says Canadians can no longer rely on the United States for global leadership. If Canada wants to help fill that gap, it might want to cast its eyes west and make it a priority to revive the Trans-Pacific Partnership (TPP).
Speaking for the Canadian government, Foreign Affairs Minister Chrystia Freeland this week rejected President Donald Trump’s “America First” foreign policy and its dismissal of free trade and the value of Western alliances. Trade seems to be a big priority for the Canadian government, in a country where exports and imports generally constitute about 40 percent of GDP. “We will intensify our efforts to diversify Canadian trade worldwide,” she told the House of Commons. “We will actively seek new trade agreements that further Canadian economic interests and that reflect our values…”
Whether she intends it or not, it sounds like Canada might want to make it a priority to revive TPP. When Trump pulled out of TPP a couple of days after taking office, the trade deal among 12 Pacific Rim countries seemed to be dead. But it may be springing back to life. The trade ministers of the 11 remaining TPP signatories agreed in Hanoi late last month to complete by November, in time for the Asia-Pacific Economic Cooperation summit in Vietnam, an assessment of options for bringing the deal into force.
Bringing forward a TPP 2.0 is not going to be easy. Every trade agreement is a collection of compromises. Will the remaining TPP countries be prepared to make the necessary compromises without the big lure of a U.S. market that constituted 60 percent of the projected TPP GDP? Would countries like Vietnam and Mexico, that were reluctant to agree to new standards on environmental and labor protection, still make those concessions without the magnet of the U.S. market? For that matter, will Canada agree to the concessions it made in TPP toward opening up its protected dairy market?
Nonetheless, TPP-minus-one is a real possibility, even if the ‘one’ absentee is the United States. Japan – concerned about containing China’s influence – has shown renewed interest, after initially greeting Trump’s decision to pull out as the death-knell for the deal. And many countries want improved access to the Japanese market. New Zealanders have been committed to open markets for years. Will Canada – in its commitment to diversify its trade base – join them in providing leadership?
TPP 2.0 has potential, and the White House may yet regret pulling out of it. There was considerable opposition to TPP, but the U.S. economy is not made up of 330 million people with identical economic conditions and goals. In fact, a national economy is a series of concentric circles of overlapping economic interests, and many Americans have reason to want improved two-way trade access with the Pacific Rim.
Consider some of the concessions American negotiators were able to obtain in the original TPP: Rules governing new areas like the digital economy, areas of growing importance like intellectual property, sectors where the United States has a leading edge like accounting, and strengthened labor and environmental standards where many U.S. competitors are free to cut costs.
And without a role in an agreement, Washington could find itself cut out in terms of influence in the world’s fastest-growing region. TPP represented the key aspect of President Obama’s pivot to Asia, intended to provide a counterweight to China. Without the U.S. presence, it would provide a much weaker ballast.
The Trump Administration may see the U.S. market as indispensable to a successful TPP. But as the saying goes, the graveyards are full of indispensable men. The same may be true of countries. If the United States is unwilling to continue to fill the role of global leader, others may have to share that responsibility amongst themselves.
