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Bullying the neighbor

carlson

This past week’s clash between Canadian Prime Minister Justin Trudeau and President Donald Trump at the G7 Conference in Quebec has an historical context.

For some reason more than one American president has felt he could conduct himself boorishly towards a Canadian Prime Minister. Donald Trump is not the first nor will he be the last.

Lyndon Baines Johnson (1963-1969, the 36th president) still holds the prize for unpardonable behavior that went far beyond some insulting tweets.

During the mid-60s LBJ invited the then Prime Minister, Lester Pearson (1963-1968, the 19th Prime Minister), to be his weekend guest at Camp David. Just prior to their gathering Pearson had made some comments critical of an escalation in the Vietnam war effort undertaken by Johnson.

Pearson had barely left his helicopter to head to his assigned cabin when there came this loud voice alledgely yelling “Where is that little s.o.b.?” Johnson, who was literally a foot taller than Pearson, then walked up to Pearson and as a stunned staff and aides looked on¸ literally picked up Pearson by the lapel of his jacket, stuck his face into Pearson’s and yelled “How dare you ____ in my nest?

That has to be the nadir of the president/prime minister relationship.

Fast forward to today and Canada is America’s number one trading partner and over the years the two countries have enjoyed mutual prosperity brought on by items like the North American Free Trade Agreement. Despite this economic linkage few Americans can tell you one single fact about Canada except that it produces excellent hockey players.

Idaho shares a border with British Columbia of about 75 miles. You may think that we really don’t have a dog in any trade disputes with our neighbors to the north, but you would be wrong.

When the exchange rate is favorable many Canadians do their shopping in the Sandpoint-Coeur d’Alene-Spokane corridor. Those that grow impatient with waiting for needed surgeries under Canada’s “single-payer” health care sysem, and can afford it, come to the states for needed and timely medical procedures.

Right now there are two processes underway that all Idahoans should be following. One has to do with trade and the other with the renegotiation of the 1964 Columbia River treaty between Canada and the U.S.

After years of watching softwood timber from a subsidized forest industry in British Columbia undercut U.S.companies, the American industry sought a ruling from the Commerce Deparment that slapped a variable import duty of as much as 15% on some Canadian firms.

The Canadians immediately “challenged” the math and so the dispute is in the courts. Should the duty stay in place this willl level the playing field and should benefit firms like Idaho’s Idaho Forest Group.

Of even more importance to Idahoans is the start of renegotiations on the 1964 Coordination Agreement that has BPA working with BC Hydro to coordinate river flows and dam operations in both countries that result in maximized power sales. Of importance here are three reservoirs in Canada that all BPA customers and even private power interests bill their customers in order to pay Canada $250 to $350 million a year for access to the stored water when needed.

Americans think they are paying too much and Canadians think they are not paying enough for the access. Negotiators have many other issues to iron out, such as flow levels that would enhance salmon migration. They have until the current treaty’s expiration date of 2024.

My money is on Canada emerging with an even stronger hand simply because they control the upstream.

My money is also on Justin Trudeau’s cool and smarts prevailing over Trump’s bluster and ignorance. Trudeau will take a multifaceted team approach commensurate with the complexities of trade tariffs whereas Trump will remain a one man band.

Trudeau and company easily grasp the salient fact that both America’s and Canada’s economies are so closely integrated, and will grow ever more so, that attempts to levy tariffs by either side is tantamount to shooting yourself in your foot.

One other thing for sure: you won’t see Trump trying to pick up Trudeau by the lapel of his jacket. Trump and his boorish conduct probably guaranteed Trudeau’s re-election next year also.
 

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