Canada and the U.S.: Trade tremours

| December 18, 2017 | 0 Comments
In his ongoing efforts to ”make America great again,” U.S. President Donald Trump will continue to attack particular sections of NAFTA. (Photo: Gage Skidmore)

In his ongoing efforts to ”make America great again,” U.S. President Donald Trump will continue to attack particular sections of NAFTA. (Photo: Gage Skidmore)

Looking ahead at what to expect from the U.S. and Canada in 2018 means thinking about the concepts of “disconnect” and attempts to make connections. For the U.S., a disconnect is likely to continue between political institutions and constituents. That disconnect will also continue with Canada bilaterally and with many countries — thanks to American isolationism — multilaterally. Canada will likely offer a counterpoint to the disconnect theme through the federal government’s attempts to connect the political dots domestically, bilaterally and multilaterally.
1. Status quo for U.S. House
The U.S. House of Representatives will stay majority Republican after the November 2018 mid-term elections. The current House is made up of 241 Republicans and 194 Democrats. It would be a super-human feat for Democrats to capture 47 more seats in the mid-terms. Such large-scale changes in the House membership rarely happen, though they’re not unheard of. The mid-term 1974 elections after Watergate saw the Democrats pick up 49 seats and, in 1994, the Republicans picked up 54 seats. What makes the 1994 results relevant and portend difficulty for “flipping” the House to Democratic control in 2018 is that the Republican success in 1994 was based on converting 19 “Solid South” (read Democratic) seats to their column. They have held those seats ever since.
2. Senate changes coming
Democrats will pick up seats in the Senate. In 2018, the Democrats will be defending 23 Senate seats (plus the two independent seats held by Bernie Sanders of Vermont and Angus King of Maine, who caucus with the Democrats) versus eight for the Republicans. Two of the eight seats are now “open seat” contests due to retirements by senators Robert Corker of Tennessee and Jeff Flake of Arizona. It is also likely that if Roy Moore wins the Alabama seat, the Senate will expel him, as it has already promised to do. Current Arizona House member Kyrsten Sinema is running for Flake’s seat. Another vulnerable Republican is Dean Heller from Nevada, so the Democrats could potentially make the Senate a 50-50 match after the 2018 elections.
3. Gerrymandering won’t go away
Gerrymandering has a storied history in the U.S., with early contentious examples coming from the efforts of constitutional founding father Elbridge Gerry to retain his position as governor of Massachusetts after he was first elected in 1810.
When former Massachusetts congressman and U.S. House speaker Thomas “Tip” O’Neill stated that “all politics are local,” he was confirming constitutional reality. Strangely, in the world of longstanding democracies, the U.S. gives the state legislatures the power to decide the “times, places and manner of holding elections for (national) senators and representatives.”
The unbreakable tie between state- and regional-level politicians and their national counterparts in Congress is furthered by the fact that U.S. House representation is counted in the electoral college formula relating to presidential elections. Senate representation is also included, but U.S. Senate “districts” are simply the states. Since the party system is integrated in the U.S. (state parties are part of the national party and attend the presidential conventions every four years) another rigid tie between the politics of the local, regional and national is formed. Finally, the U.S. House has been fixed at 435 elected representatives. This makes the redistricting process a zero-sum game, in which certain regions/states lose House members (and thus clout in the electoral college) and others gain. All of these factors combine to institutionalize the hyper-partisan and local nature of U.S. politics.
The fundamental questions around gerrymandering continue to preoccupy state and federal court justices and legislators. They include the question of “one man one vote” (brought to the Supreme Court’s attention in the 1946 Colegrove v. Green case), based on the issue of whether legislative districts are drawn to be as equal in population as possible. In this case, the Supreme Court held that questions of legislative district size were not open to court review, but rather belonged in the political branch, the state legislature. A progeny of Supreme Court cases, mainly from the South, followed in the 1960s to show that districts were drawn with the specific intent of disenfranchising the African-American population. In the 1962 landmark case, Baker v. Carr, the Supreme Court agreed that the Tennessee legislature’s electoral map was discriminatory, violating the 14th Amendment’s promise that “no State shall… deny to any person within its jurisdiction the equal protection of the laws.” The current four liberal justices on the Supreme Court continue to view voting rights in the mode of equal protection.
The gerrymandering issue will be of political interest and will have staying power through the 2022 U.S. elections — the first House elections after the next redistricting. Unfortunately, questions about race-based districts have not gone away. They have become more complex, given their intertwined nature with partisan politics, whereby Democratic-leaning districts are often viewed as more minority-friendly, while suburban and rural districts are more often those favouring Republicans.
The case of Whitford v. Gill, in which Wisconsin Democrats argue the Republican legislature has unfairly drawn the districts to reward incumbents such as U.S. House Speaker Paul Ryan, is currently before the Supreme Court. Unlike the liberal justices, the four conservative justices typically deny that the courts should be involved in the “politics” of redrawing electoral districts. The swing vote, as usual, is that of Anthony Kennedy. He usually views cases through the lens of First Amendment protections of free speech. Knowing this, the Whitford challengers have resurrected an argument from an earlier case about partisan gerrymandering — the 2004 case Vieth v. Jubelirer — in which Kennedy supported a “limited and precise rationale to correct an established violation of the Constitution in some redistricting cases.” The Vieth case was brought by Pennsylvania Democrats against the Republican Party, but the Supreme Court did not find that example of gerrymandering so “egregious” that it needed to tell Pennsylvania to come up with a different solution.
Thus, on partisan gerrymandering, nobody currently knows what the limits are. If challengers in Whitford are successful, they will have to do so by convincing Kennedy that the Wisconsin example is egregious enough for the Supreme Court to rule on it. Since Kennedy does not tend to favour equal protection reasoning to the same extent as the liberal justices, he would have to be persuaded on the grounds that Democrats do not have the same degree of “free speech” in their electoral processes in Wisconsin as Republicans. Lest we think that is a completely irrelevant point, we need to remember that all cases on campaign finance in the U.S. since the 1970s have turned on the allowable degree of curtailment of “free speech” by limits on spending money. The Supreme Court, most recently in Citizens’ United (2010), has viewed most limits as unconstitutional abridgements of free speech.
4. Where Whitford v. Gill will end up
It is unlikely that Kennedy will be persuaded that the Wisconsin scheme is any worse at favouring Republicans than the Pennsylvania one was. One piece of evidence to suggest this is that he was the fifth vote (joining the conservative bloc) to strike down part of the most comprehensive equal protection for minority voters, the 1965 Voting Rights Act, in the 2013 Shelby County v. Holder case reaching the Supreme Court from Alabama. The act required nine states included in its “coverage” formula, which had historically excessively low minority registration rates, to submit any potential changes in its voting procedures to the federal government (either the Department of Justice or a federal court) before it implemented them. The pre-clearance requirement applied to any such changes, ranging from moving a polling place to redrawing electoral districts. The preclearance language of Section 4 (b) of the Voting Rights Act applied to Alabama, Alaska, Arizona, Georgia, Louisiana, Mississippi, South Carolina, Texas, Virginia and municipal and county elections in other states, including New York. In the Shelby County case, the five-member majority agreed with the state of Alabama that the state by state requirement of pre-clearing all voting administration changes was too onerous and relied on “outdated data.” Thus, given Kennedy’s agreement that equal protection in voting rights imposed too high a burden on states, it seems unlikely that he will favour the Democratic challenge to the Wisconsin voting laws in the Whitford case.
5. No favours for Democrats
In related fashion, the partisan composition of state legislatures and governorships will not change in enough time to make gerrymandering favour the Democrats in 2022. Republicans currently control both legislatures in 26 states, while Democrats control both legislatures in six states. Based on the 2016 election, all Southern state legislatures are Republican-controlled for the first time in U.S. history. Thirty-three governorships are held by Republicans, while 16 states have Democratic governors. There simply is not enough time for Democrats to undo the Republican trajectory of decades past to change the state legislative (and thus U.S. House) map for 2022.
6. Anti-trade rhetoric continues
President Donald Trump will continue his anti-free-trade rhetoric with Canada and Mexico when it comes to NAFTA and with several multilateral players, many of them in Asia, on the TPP. Voters in Michigan, Ohio, Pennsylvania and Wisconsin, who voted overwhelmingly for Trump in 2016, were engaging in an extraordinary denial of the facts. As a recent Statistics Canada report noted, “if Michigan were a country, it would be Canada’s second-largest trading partner (ahead of China).” Similarly, Michigan has been Canada’s top trading partner in the U.S. since 1990.
Illinois is the second-top trading state with Canada. While auto trade (based on the Auto Pact of 1965) was strong pre-NAFTA, the auto industries of the U.S. (including Michigan and Ohio) were further integrated with that of Canada and Mexico under NAFTA. The Statistics Canada report also stated that Canadian imports from the U.S. increased 56 per cent between 1992 and 1995.
While candidate Trump talked about job losses “under NAFTA,” most informed accounts point to the fact that manufacturing in the bulk of OECD countries had been surpassed by service sector jobs by the 1980s. The OECD data show that more than 60 per cent of economic activity is accounted for by the service sector in the majority of its countries. It has also been pointed out that some auto jobs have been lost to off-shoring and automation, neither of which is related to NAFTA.
7. NAFTA sections remain under threat
In 2018, Trump will continue his NAFTA-bashing with respect to particular sections. He does not like the NAFTA Chapter 19 “extraordinary challenges” procedure, since, under this framework, decisions in softwood lumber cases have come down along national lines, with the Canadian majority on the committee finding that the U.S. Commerce Department had discriminated against the softwood industry by imposing countervailing duties on Canadian softwood lumber imports.
Similarly, Trump, consistent with prior history, has hoped to get Canada to dismantle the supply management system of its dairy industry and its high tariffs against U.S.-produced milk. However, as Scott Gordon notes in a WisCONTEXT article, nearly one third of Wisconsin’s exports are to Canada, its single-highest market abroad. While dairy is a large component of Wisconsin’s exports to Canada, it is complemented by items such as paper products and chemicals, according to Gordon. Like other states, the Wisconsin vote for Trump seems to have been a counter-factual exercise.


Under NAFTA's Chapter 19 "extraordinary challenges" procedures, decisions on softwood lumber cases have favoured Canada, whose legal team argued that the U.S. Commerce Department has discriminated against Canada's softwood lumber industry by imposing countervailing duties. (Photo: Jaksmata)

Under NAFTA’s Chapter 19 “extraordinary challenges” procedures, decisions on softwood lumber cases have favoured Canada, whose legal team argued that the U.S. Commerce Department has discriminated against Canada’s softwood lumber industry by imposing countervailing duties. (Photo: Jaksmata)

8. Canada-U.S. trade spats
In 2018, Canada is likely to win the Bombardier-Boeing dispute at the U.S.-based International Trade Commission. Related to the Trump administration’s aggressive launching of an unprecedented number of anti-dumping and countervailing duty Commerce Department investigations (65 in total between January and September — a 48-per-cent increase) were the Commerce Department’s October actions against Bombardier. These included 80-per-cent anti-dumping duties and 220-per-cent countervailing duties. Under WTO rules, Boeing has strangely claimed “material injury” from the planned sale of C Series Bombardier jets to Delta Airlines, despite the fact that Boeing has no direct competitor to this plane. As Delta stated, Boeing stopped making the 717 jet — the C Series’ closest competitor — more than a decade ago, and “could only offer Delta used Embraer jets from Brazil,” according to Bloomberg. In the meantime, Brazil has filed a WTO claim against Bombardier on behalf of Embraer, likely hoping to make the Bombardier option more expensive than the used Embraer jets, which could be sold to Delta Airlines.
9. Canada: A trade leader
The Canadian government will continue to exert pressure against bullying trade practices by the U.S. Foreign Minister Chrystia Freeland and Prime Minister Justin Trudeau have tied Canada’s potential purchase of F-18 fighter jets from Boeing to a removal of the high tariffs against Bombardier’s C Series sale to Delta. Similarly, since Trump has withdrawn the U.S. from TPP negotiations and gave a highly selective view of its future participation in APEC at the November 2017 summit, it seems that Canada is poised to become the North American leader in the TPP and at APEC. It is also anticipated that the U.S. will try to trade dairy concessions for softwood ones with Canada.
10. The great wall of Trump
As with most campaign pledges, current and historical realities are more complicated and more wall-building seems unlikely in 2018. The truth is the U.S. has been beefing up this border wall since 1994. Early efforts, supported by Bill Clinton and his Republican-dominated Congress, called for increasing border patrol units and border fencing. This continued, most notably through the 2006 Secure Fence Act, passed by a Republican Congress, but supported by several Democratic senators, including Hillary Clinton and Barack Obama. The act directed Homeland Security to build two-layered fencing along 1,370 kilometres. The 1,125 fenced kilometres, built before cost-savings edicts kicked in, mean that one third of the border is already fenced. Congress authorized no new money in its most recent budget and the vast majority of Americans, when asked, favour increased human border patrols, not walls.

Melissa Haussman is a professor of political science at Carleton University. She is the author of Reproductive Rights and the State (2013) and is co-editor of the
International Journal of Canadian Studies.

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Category: Dispatches

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Melissa Haussman is a professor of political science at Carleton University. She is the author of Reproductive Rights and the State (2013) and is co-editor of the International Journal of Canadian Studies.

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