In collaboration with Jim DeMint*
With Inauguration Day just around the corner, it is important to remember that every new administration brings changes.
The incoming U.S. president has expressed skepticism about several international trade deals, including NAFTA. That’s worrying to many Canadians. A poll conducted last November found that 57 per cent of Canadians think the pact has made their economy better off (versus just 20 per cent who say it is worse off).
There is also the open question of how well this new Republican administration and the Republican-controlled Congress will get along with Canada’s still-young Liberal government. At least on the surface, President-elect Donald Trump and Prime Minister Justin Trudeau seem to be very different from one another.
Yet there is cause to believe that the two countries on either side of the world’s longest border will remain close in the coming years. Whatever difficulties threaten to strain relations — and there are always some — should be weathered reasonably well.
Take the issue of NAFTA. While there are understandable fears regarding the prospect of reopening this trade deal, there is also the real possibility that doing so could lead to more free trade between our countries, not less. Contentious issues — like Canada’s supply management for dairy and poultry, or U.S. tariffs on Canadian softwood lumber — might actually get resolved to the benefit of consumers on both sides of the border.
Furthermore, Mr. Trump favours easier trade with Canada on at least one specific point: approval of the Keystone XL pipeline. Connecting Hardisty, Alta. to Steele City, Neb., the 1,897-kilometre pipeline could transport up to 830,000 barrels of Canadian oil daily to Gulf Coast refineries. Thus far, however, this important project has been blocked by President Obama.
Though many Americans do not realize it, Canadian oil still matters a great deal to the United States. It is true that technological advancements like horizontal drilling and fracking have allowed U.S. oil and natural gas producers to tap previously unreachable domestic resources, leading to a substantial drop in total oil imports. Nevertheless, Canada remains the top foreign oil supplier to the U.S. In fact, imports from Canada are up, thanks to the displacement of imports from other countries, the addition of new pipeline capacity, and more U.S. refinery space for heavy oils from Western Canada. In 2015, 40 per cent of all oil imported by the U.S. came from its peaceful northern neighbour.
Although Mexico is set to overtake Canada this year as the No. 2 exporter of goods to the U.S. (behind China), Canada remains the top export destination for 35 American states. It is also the No. 1 supplier to the U.S. not just of crude oil, but also of refined petroleum products, natural gas and electricity. And it’s a leading supplier of uranium, too.
The fact is that our two countries have a long history of co-operation, even when our leaders and governments have hailed from opposite sides of the political spectrum.
Through decade after decade of peaceful co-existence, the United States and Canada have been reliable allies in an uncertain world. They have fought side by side, too, to defend freedom around the world. Our nations’ closeness derives from proximity, to be sure, and from a shared history as well. But more profoundly, what binds the two allies are shared values. Whatever our differences in this regard, they have always been far outweighed by our commonalities.
Our two countries have long been beacons of freedom and progress in a world that still cannot take these for granted. Our two organizations, the Heritage Foundation and the Montreal Economic Institute, have always championed these core values. And we are confident, given all of the above, that the new administration in D.C. will work to uphold them as well, and to maintain the close relationship that persists between the land of the free to the south and the true north, strong and free.
Jim DeMint, formerly a U.S. senator and congressman, is president of The Heritage Foundation, Michel Kelly-Gagnon is President and CEO of the Montreal Economic Institute. The views reflected in this op-ed are their own.