Rona Ambrose, former Conservative Party interim leader, is a global fellow at the Wilson Center's Canada Institute based in Washington D.C. Laura Dawson is the director of the Wilson Center's Canada Institute
Lately, it seems like there are more Canadians visiting Capitol Hill than there are Starbucks in downtown Washington. Ever since the election of Donald Trump, Ottawa has skillfully deployed an army of political and business leaders across the border in an effort to remind Americans about the $1.7-trillion two-way trade and investment relationship, and the millions of jobs that depend on it.
But now that the renegotiation of the North American free-trade agreement is about to become a reality, it's time to come up with a plan.
Although Canada and Mexico may not have asked for this, they've both shown a willingness to participate. The challenge is figuring out how to make the most of the negotiations.
For Canada, this means avoiding a drawn-out wrangling over long-standing bilateral irritants, such as softwood lumber and dairy, that have been dominating the headlines.
Instead, we need to focus the negotiations on our common interest in ensuring that North America retains its dominant position in global supply chains.
It's an approach that has worked before.
NAFTA's predecessor, the Canada-U.S. free-trade agreement, was an idea hatched in response to a previous wave of U.S. protectionism. The "Worthwhile Canadian Initiative," as it was blandly dubbed in the headline of an infamous New York Times article, had a positive reception because it was sensible and appealed to both countries' economic interests. The treaty pioneered a number of rules that were incorporated into subsequent trade agreements, including those of the World Trade Organization.
Today, Canada has another opportunity to show such leadership, searching for consensus among the NAFTA countries and bringing new ideas to the table.
Notwithstanding some trade frictions with Canada, it's Mexico that has been the main source of concern for the new administration. Tensions between the two countries are leading to inflexible negotiating mandates that will only harden on the campaign trail. Presidential elections in Mexico next year and Congressional elections in the United States will make it difficult for either side to back down or acquiesce to the other's demands. It will fall to Canada to create understanding and find areas of convergence and mutual interest between its two major partners.
It won't be easy. Canada will need thick skin and be ready to defend its own interests, including through a credible threat of retaliation. But as much as possible, we should seek to be patient and persuasive, never losing sight of the vision of a North American trading bloc that we seeded more than a quarter-century ago.
Focusing the negotiations on new trade issues is another way to make sure that we're building on what we have instead of backsliding. Governments and businesses need to re-engage on a trade agenda that matches the needs and practices of modern industries, not one tied to 1960s assumptions about assembly-line manufacturing.
We should start with the industries that have benefited most from NAFTA, such as autos, agri-food and aerospace – these are areas where traditional manufacturing has been enhanced by technology and efficiencies that are products of three economies working as one. Even these businesses have outgrown much of NAFTA's current framework. Their next wave of growth depends on better customs services and deeper regulatory alignment.
But it's high-growth service and technology industries – many of which didn't exist in their current form at the time of NAFTA's founding – that need the most attention. What do construction companies, software engineers, animators, clean tech and cybersecurity experts need from governments to allow them to do cross-border business better? Let's find out and incorporate them into a new NAFTA. We can look to examples in more recent agreements like the Trans-Pacific Partnership and Canada's deal with the European Union.
From our vantage point at the Canada Institute in Washington, we will be working to identify new ideas and areas of convergence and strength among businesses in Canada, the United States and Mexico. We urge others to do the same. As a country comfortable with global trade and that knows how to prosper from it, Canada's leadership can help set the tone and ensure that the second edition of NAFTA is as worthwhile as the first.