Canada's Misguided Pursuit of a Comprehensive Trade Agreement

Canada's Prime Minister Mark Carney has sparked confusion by axing the digital services tax in response to US President Donald Trump's threat to scuttle trade and security negotiations. This move has been met with skepticism, as it appears that Canada has given up significant sovereignty for little in return. The prime minister's pursuit of a comprehensive trade and security agreement has been criticized for being unrealistic, given the current state of US politics and its impact on North American governance.

Key Takeaways:

• The US's descent into authoritarianism and fascism has fundamentally changed the nature of North American governance, making traditional trade agreements impossible.
• The Canadian government's focus on economic interests and the competitiveness of North America is no longer relevant, as the US has shown it is willing to prioritize its own interests over cooperation.
• The concept of a single North American economy is outdated, and the idea of a win-win agreement with the US is a fantasy.
• The US's goal is domination, not cooperation, and any agreement would come with restrictions on Canadian economic and social policies.
• Negotiating an agreement in the absence of political foundations is little more than cargo-cult policymaking.
• Canada needs to rethink its approach to the US threat, including ensuring its military is not dependent on US influence and protecting its communication networks from US software vulnerabilities.
• Domestically, Canada needs to increase its government capacity to counter the US's evisceration of regulatory agencies.
• The Canadian government has been criticized for being silent on issues such as Canadians being harassed at the border and detained by ICE, and has not taken seriously the vulnerability of its reliance on US tech giants.

Statistics:

• 40 years: The time period during which the dominant orthodoxy of rational economic interest as the driver of politics and an understanding of North America as a single economic space has been the guiding framework for Canadian economic development policy, which is now outdated.
• 10 years: The time period in which appealing to "North America" as a shared economic space was still entirely appropriate.
• Years to decades: The estimated time it will take to overcome the US's descent into authoritarianism and fascism.

Sources:

• Blayne Haggart, "The New Knowledge: Information, Data and the Remaking of Global Power" (Routledge, 2023)
• Jörg Broschek, professor of political science, Wilfrid Laurier University
• CNN, "USMCA: A better trade deal for Canada and the United States?"