Biden the internationalist is good news, but for Biden the protectionist Democrat, Ottawa will need to argue well for a strong, united North America.
Canada faces a major dilemma with Joe Biden’s ascension to the U.S. presidency. It will be dealing with two Joe Bidens: Biden the internationalist, committed to multilateral institutions, alliances and global security, and Biden the old-fashioned Democrat intent on protecting the American worker and America’s economic interests.
Biden the internationalist will be a welcome pick-me-up for Ottawa after the tumultuous years of Donald Trump’s presidency, when bashing allies and dissing Western leaders, including our own prime minister, on Twitter was a blood sport. Biden’s promise to re-engage with the global machinery of multilateral governance including salvaging — not scuttling — the World Trade Organization, rejoining the Paris climate accord and reversing Trump’s decision to withdraw from the World Health Organization will also be welcomed. Fears that a withering NATO alliance might die — Trump threatened to pull the U.S. out of NATO and clearly preferred Russian President Vladimir Putin’s company to that of his NATO counterparts — will also diminish. Biden has said he wants a stronger Western alliance that can stand up to the world’s dictators and despots.
Canada can be an important player in the equation when it comes to U.S. multilateral and allied priority setting by asserting its own views and contributing to alliance renewal, and other issues such as NATO’s stance in Eastern Europe and the Baltic states, Russian sanctions, Iran, Turkey, cybersecurity, climate and health.
At the same time, there is also no going “back to the future” in transatlantic relations. Europeans clearly have different views from Americans about how to manage relations with China (they want to be able to do business with China and avoid another Cold War) and other issues such as big tech. Europe also wants a more equal partnership with the United States that tempers the U.S. proclivity to call the shots and see itself as primus inter pares (first among equals). Europe has already set out an ambitious agenda for recalibrating transatlantic relations with the Biden administration in its recent vision statement, “A new EU-US agenda for global change.” Canada thus also has a special role to play as “balancer” by helping both sides deal with its differences.
Of course, Biden will have to match his multilateralist rhetoric with action. A good place to start would be to throw his support either behind Nigeria’s Ngozi Okonjo-Iweala, who appears to have the most backing to be the next director-general of the WTO, though Trump vetoed her candidacy, or the other finalist, South Korean trade minister Yoo Myung Hee. The WTO wisely postponed a formal vote on the appointment until this year so there is still time to reverse course and undo Trump’s damage to an organization that normally operates by consensus.
The White House will now be a friendlier and more welcoming place. No more need for fake bonhomie and grimaced smiles in Oval Office photo-ops. Even better for Canada is our prime minister’s close friendship with Biden (he was the first Western leader to congratulate him on his electoral success). As former prime minister Brian Mulroney often remarked, you want to be first in line among the 190 or so world leaders who are vying to gain entry to the Oval Office and have their calls answered.
We have a better chance now, but we’re going to need to deal with the other Joe Biden, the old-fashioned Democrat.
Canadian companies could find themselves shut out of the action if American companies are shielded from their foreign competitors as Biden seems to want to do.
In his first speech on U.S. economic recovery as president-elect, Biden sounded the alarm when he said that his plan “will create millions of good-paying union jobs in manufacturing, building the vehicles, products, technologies that we’re going to need for the future to compete with the rest of the world. From autos to our stockpiles, we’re going to buy American (my emphasis). No government contract will be given to companies that don’t make their products here in America.”
The two pillars of Biden’s recovery plan are his recently announced US$1.9 trillion aid package, which will put cheques in the hands of Americans, accelerate vaccine production and distribution, and provide aid to cities and states. Biden has also a proposed US$2 trillion “green energy” infrastructure plan to promote long-term economic recovery and growth, which will likely gain some form of Congressional approval because of Democratic electoral victories that have been given them control of both Houses in the new Congress. But what is good for America may not be so good for Canada. Canadian companies could find themselves shut out of the action if American companies are shielded from their foreign competitors as Biden seems to want to do.
“Buy American” has been a longstanding bugbear in Canada-U.S. relations. Former president Obama had “Buy American” provisions in his 2009 economic stimulus package and subsequent 2011 “Jobs Act.” Expect more of the same as Biden and his fellow Democrats grab the protectionist shovel to dig America out of a COVID-induced recession. As the OECD has recently modelled, more protectionism and restrictions on trade in goods and services will be disastrous for Canada and could take a cumulative 13 per cent bite out of our GDP over the next five years, by far the worst of OECD countries.
Biden’s promise to rejoin the Paris climate accord and his Clean Energy Revolution plan will put Canada and the U.S. on the same path on energy and climate change. However, Biden’s proposed “carbon adjustment tax,” which is intended to force countries exporting goods to the United States to meet their climate and environmental obligations, could penalize our energy and resource-exporting sectors unless we can persuade him to adopt a common North American as opposed to U.S.-centred approach.
Ottawa should also disabuse itself of the notion that it can persuade Biden to reverse his election pledge to kill the Keystone XL pipeline, which he has indicated he will do his first day in office, according to a purported briefing note circulated the weekend before his inauguration.
Canada is going to have to position itself carefully when it comes to dealing with Biden the protectionist Democrat, especially since he is going to be more than a little preoccupied with domestic challenges to heal and unify his own country. Rather than going to the new president with a long laundry list of concerns and complaints, Canada should position its demands in a way that addresses Biden’s own primary concern, battling the pandemic and promoting U.S. post-COVID economic recovery. We need to make convincing arguments backed by hard facts that the best and fastest path to recovery for the United States is to work with its neighbours — not against them — and to develop a comprehensive, broad-based North American approach. That also means rallying to our cause American interests that understand that “Buy American” and protectionist measures only increase the costs of doing business and hurt incomes and job growth.
It may also be helpful to remind Biden that a strong and united North America is America’s best defence against China, especially when it comes to energy security, cybersecurity, technological innovation, promoting productivity gains, and health (so when the next pandemic comes along, we are all better prepared).
Accordingly, Canada should take the lead and set the agenda by proposing to the new Biden administration a North American COVID recovery summit. Such a summit would likely be “virtual” and take place online, and it should not limit itself to the usual heads-of-state variety (the so-called “three amigos”) but also include business leaders, provincial leaders, state governors, and key non-state actors who have cross-border ties and interests. Mobilizing a supportive cross-border coalition would strengthen the case for co-operative solutions in health (combatting COVID and averting the next pandemic), economic recovery and other key issues such as climate change and energy, refugees and migration, transportation and cross-border management, for example. A big-tent summit would also underscore the highly integrated nature of the North American economy and the concrete benefits of working together.
Ottawa may like Biden the internationalist, but there may be less to like in Biden the old-fashioned Democrat. It will require imagination and bold leadership to engage his new administration at a time of major crisis. Simply put, we need to be bold and think big with Biden on an ambitious post-pandemic economic recovery and prosperity plan, one that the United States works on together with its North American partners.