AMBASSADORS' AND MINISTERS' ROUNDTABLE: THE CANADA-US RELATIONSHIP AT LARGE.

• Position: Proceedings of the 42nd Canada-United States Law Institute Annual Conference: Back to the Future: The Canada-United States Relationship at a Crossroads - Discussion

Moderator: Consul General Douglas George

Speaker: The Honorable James J. Blanchard

Speaker: The Honorable James S. Peterson

Speaker: The Honorable David Jacobson

Speaker: The Honorable Peter MacKay

CONSUL GENERAL GEORGE: I wonder if I could get the panelists to come up. While they are making their way forward, I will just start with a few remarks. I am Doug George, the Consul General of Canada in Detroit.

(Greeting in French.)

CONSUL GENERAL GEORGE: For the sake of the court reporter, we will do it in English. First, I really do want to thank Ted Parran and Steve Petras for inviting us here and, once again, including this session in the conference. I personally think this is the most interesting session and the most fun for all of us, especially my panelists.

It is really a great opportunity to get together with these distinguished leaders, distinguished policymakers, and people that can bring an awful lot of experience to what we are doing today.

I know most of us in the room follow NAFTA on a day-to-day basis, but for those few of you who don't, I will just give you a quick summary. As was stated last night by our keynote speaker, NAFTA is basically the premier regional trading relationship.

It is the largest one in the world, annual trade of over a trillion dollars, three times what it was when we started NAFTA. It supports nearly 14 million jobs in the U.S., serves 480 million customers in a combined GDP of $21 trillion dollars.

What that represents is just under seven percent of the world's population but 25 percent--over 25 percent of the world's GDP. And over the course of NAFTA, we really developed highly integrated supply chains and a highly integrated economy. And NAFTA has got a few wobbles here and there, but its track record is one of growth and prosperity.

Now we are in the middle of negotiations or renegotiations, and without going into nauseating detail, we have had seven rounds of negotiations, which have finalized six chapters, two annexes, and great progress is being made.

We just entered a very intensive phase, and among some of us, the perception that we are dealing with is NAFTA isn't working. That's wrong. NAFTA is working, but it needs to be modernized and brought up to date.

So what we are doing in NAFTA and in negotiations is to try and bring it into the 21st century. It is 24 years old. Twenty four is a great age if you just graduated university; young if you are a Brandy, and I do have an Olympic athlete joke, which never seems to go over because I talk about snow boarders, so if you don't get your Gold Medal by 17, you are over the hill.

(Laughter.)

HON. JAMES BLANCHARD: I thought it would be about curling.

CONSUL GENERAL GEORGE: We are all friends up here.

(Laughter.)

CONSUL GENERAL GEORGE: Let me just say Vice President Pence said it best: "What we are looking for in NAFTA is a win-win."

Now, my panelists don't need introduction, so I will make them very short. First is Jim Blanchard, former governor of Michigan, former U.S. ambassador to Canada, and now with DLA Piper in Washington. Next is Jim Peterson, former Canadian Minister of International Trade and now with Fasken's in Toronto.

Next is the Honorable David Jacobson, former U.S. ambassador to Canada, now Vice Chair for BMO Financial Group of Chicago where BMO's U.S. operations are headquartered.

And finally, the Honorable Peter MacKay, served as Canada's Attorney General and Minister of Justice, Minister of National Defense, and Minister of Foreign Affairs. And he is currently partner at Baker McKenzie in Toronto.

Now, a whole lot of honorable stuff. But it does show the depth of this panel, and none of them are currently serving government, so they are more than willing to share their unvarnished views.

As moderator, I am going to ask the first question or two, but I encourage you all to ask questions. I see there might be a few students here in the audience. I will give priority to questions from students so the students in the audience start thinking. Okay. We will start with a really easy question.

What do you think are the prospects for the NAFTA renegotiation? First, will we have a successful negotiation, and second, if we get a deal, will all three countries be in a position to approve it? I thought we would start off easy. So I will start with Governor Blanchard.

HON. JAMES BLANCHARD: The answer is yes and yes.

(Laughter.)

HON. JAMES PETERSON: I agree.

(Laughter.)

HON. JAMES BLANCHARD: I agree with--most of you heard Peter MacKay's fabulous speech last night, but Peter, again, thank you for being with us.

HON. JAMES PETERSON: Here here.

HON. JAMES BLANCHARD: It was fabulous, and I agree with your analysis. I think in the end there will be--NAFTA will be renewed. It will not be as easy in terms of getting a vote from Congress as people realize.

I see Trade Representative Lighthizer of the U.S. said that he would like a two-thirds vote in Congress. I don't think that's realistic at all because I think the Democrats are going to believe they have a free ride on this one, force the Republicans to support it, even though most of the businesses, including most agribusiness in the United States, strongly--they strongly support the renewal of NAFTA or the continuation of NAFTA.

I think what we are hearing is, there will probably be some announcement of an agreement in principle, probably by the end of this month or early in May, and then kind of a deferral on all the details until after the different elections, the Mexican election, the U.S. election in November, to finalize it at the end of the year.

Looking back, I happen to have been present at the creation really in terms of the adoption of NAFTA. I was a new ambassador in Canada. The agreement had been negotiated, but Bill Clinton, pursuant to his campaign, said he needed to tweak the environmental and labor standards provisions, and that's true, he needed to do that, or it never would have gotten through Congress, never, never got through the U.S. Congress. So my job when I went up to Ottawa, my job was to figure out how to make sure that Prime Minister Jean Chretien and the Liberals supported NAFTA and didn't try to renegotiate it, which their platform, their Red Book, said they were going to do.

And my job was to convince the Chretien people who hadn't been elected yet. But we really were expecting that the Liberal Party would win, to not use the words "renegotiate" in his speeches or in his victory speech.

And we thought up very quickly privately--I wrote about this in the book, so I am not telling tales out of school--through his pal, Jean Pelletier, who turned out to be chief of staff, that Jean Chretien basically was a free trader as well as Pelletier, as well were a lot of people from Quebec.

So the good news is it all worked out with President Clinton. The bill approving NAFTA only passed by 16 votes in the United States Congress, very close. The issue then and the issue still today is low wages in Mexico; it had nothing to do with Canada or dairy or supply management or otherwise; low wages in Mexico. That is still an issue.

When members of unions and average people read that BMW is paying a dollar ten an hour in Mexico to auto workers, it really upsets everybody. So that's why a lot of Democrats who know we need to renew NAFTA will vote no. I believe it will be approved and extended. I know our negotiator, John Melle, he is very good. We had him as a guest speaker here two years ago.

He actually--I talked to him about this. I said we would love to have you come next year and talk about what really went on in all the negotiations. He couldn't be here now to tell you, but it will be interesting to see what happens.

But I think it will get approved. I think that's a good thing. Maybe they will have some language encouraging Mexico to allow workers to organize, but it is hard to tell another country what their laws ought to be. That's a very difficult thing, and that's the issue.

Otherwise, I don't see any road blocks. All this--a little editorializing here --look, we have a President who doesn't believe that anyone ever negotiated any agreement that was any good; that only the things he negotiates are good, and that's a classic narcissist. Only the stuff he does is good. So what's no good?

Well, NAFTA is no good. TPP is no good. The Paris climate agreement is no good. The South Korea trade agreement is no good. He spends all his time attacking Obama or Clinton or somebody else.

He all of a sudden decided that, after he was elected, that somehow there is a problem with lumber. My God, I discovered this new thing. We are going to crack down. No one told him we have been arguing about lumber for--what?--a hundred years or more.

He had a great first meeting with Justin Trudeau. That was really good, and they did have a wonderful statement, including supporting the Gordie Howe Bridge. Thank you. There will be work on it.

But we will be dealing with somebody--you know, Lighthizer says I have one client, and that's the guy in the White House, and he changes his mind every other day. You read now he might even want to do TPP.

So we will see, but ultimately, because I think he cracked down on steel tariffs, although let up on everybody but China and Russia, I think he feels he has been tough enough on trade in terms of rhetoric.

If things like NAFTA can move along and get finalized, and meanwhile, all this drama is totally needless, totally needless, and I spend my time on CTV and CBC apologizing for the behavior of our leader because I don't want Canadians to take it personally.

Every governor, almost every member of Congress thinks of Canada as one of our most valuable, if not the most, valuable partner and ally. We feel very lucky to live next to you. We are sorry you have to get put through this drama, but we think it will work out. Do I have strong feelings? Yes.

(Laughter.)

CONSUL GENERAL GEORGE: Do any of the other panelists have strong feelings?

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