With the swearing in of President Joe Biden last month, the impact of the new administration on Canadian business quickly became a key area of interest and focus. When President Biden cancelled the Keystone XL pipeline, the general enthusiasm by Canadians for a change of administration was quickly tempered, with questions abounding about what this will mean for bi-lateral trade. More recent conversations about “Buy American” provisions are coming into the spotlight, as Canadian political actors and businesses position themselves for success in a new political era.
But while President Biden’s climate change commitments seem to have motivated his decision around Keystone XL, it remains unclear what his broader political ethos will mean for Canada-US relations and trade. In a three-part series, we spoke to Ontario’s three US-based Agents Generals to get their perspective and analysis.
Ontario’s appointment of Agents Generals in 2018 and 2019 was a return to a model the province had previously used to drum up business in the province, develop leads and work with companies in the United States to support the bilateral commercial relationship. Although these three Agents General are in three states, each has responsibility for a larger cross-section of the American market.
In the first of our series, we will speak with Ian Todd, Ontario’s Agent General in Washington, with responsibility for Colorado, Georgia, Idaho, Kansas, Montana, Nebraska, North Carolina, North Dakota, South Carolina, South Dakota, Utah, Virginia, West Virginia, and Wyoming.
Ian Todd was appointed to the role shortly after the Progressive Conservative government took office in 2018. He has had an esteemed career as Chief of Staff to ministers in former prime minister Stephen Harper’s government and also public affairs consulting. In addition, he led tour for Premier Doug Ford in the 2018 election campaign.
In his comments, Mr. Todd places special focus on the impact of the pandemic on our trade relationship, and the efforts made by the province to pursue a coordinated approach to a safe reopening of the border.
With the transition of power to the Biden administration, what do you think this will mean for trade between Ontario and the United States
With the transition to the Biden administration, one of the things Ontario will be looking for with respect to trade between Canada and the United States, is increasing certainty in rules-based established trading systems, such as the USMCA (CUSMA) or the Government Procurement Agreement of the WTO. During the four years of the Trump administration, various aspects of Canadian trade came under significant criticism and the Trump administration used a number of unique statutes and mechanisms to raise tariffs on certain goods and raise uncertainty across the board for Canada-U.S. trade sectors.
While it is difficult to predict, the Biden administration is not expected to continue these unique tariff practices – however – Ontario should expect a continuation of the more general broad policy of American protectionism that we have seen over the past decade. Biden ran on a campaign called “Build Back Better” and championed the expansion of U.S. domestic content provisions. The Ontario Washington Office expects President Biden to sign a number of Buy American executive orders in the coming days, many akin to the executive orders carried out under President Trump. While Biden campaigned on building better relations with allies such as Canada, an executive order canceling Keystone XL permits on the first day in office gives us an indication that Biden could act quickly on things he’s campaigned on without consulting allies on how it will affect them.
Katherine Tai, Biden’s nominee for U.S. Trade Representative has called for trade policy to be “worker centered” and has also indicated the Biden administration will focus on the effects of climate change in aspects of international trade. Her confirmation hearing [is set for February 25, and] I will look closely at it to get a better sense of the administration’s priorities. Another confirmation hearing to watch [was] that of Governor Gina Raimondo, the president’s nominee to head up the Commerce Department. Before becoming governor of Rhode Island, Raimondo was a venture capitalist. [She was confirmed February 3, 2021.]
How can Ontario businesses better position themselves for increased trade with our neighbours to the south? Which industries or sectors stand to benefit the most in the years ahead?
President Biden has said his number one priority is to gain control of the widespread COVID-19 outbreak currently affecting the United States. The administration believes that without control of the virus, economic recovery will be extremely slow and fears of a prolonged recession would rise. Health care and medical equipment sectors could see a benefit in the near term. Through the use of increased masking and an ambitious vaccine rollout, the Biden administration is hoping to open up more sectors of the economy by year’s end. If this were to occur, consumer services industries and sectors could see a boost.
The Biden administration will focus on climate change more than the previous administration, sectors that deal in clean energy and environmental concerns would seem to benefit. Democratic administrations in the past have pushed for large transportation and infrastructure packages and have focused heavily on the auto, industrial and manufacturing sectors around the Great Lakes, Midwest and south. It remains to be seen how the new domestic content regulations of the USMCA will work out and whether the Biden administration and Democratic controlled Congress enact more punitive protectionist policies, but with a revived economy and governmental support, these sectors could also possibly benefit.
How significantly does the pandemic/closed land border continue to weigh on the trade relationship?
The pandemic continues unabated in the United States and has severely depressed the economy, which has subsequently weighed on the trading relationship. While the border closures do not seem to have significantly impacted the physical passage of commerce, our supply chains remain strong however the border restrictions have severely impacted cross border business travel, tourism and border communities on both sides. Ontario is concerned that a hardened border will only aid in growing protectionism, which is one of the reasons why we have joined the North American Rebound Initiative. The province believes Canada and the United States must combat the pandemic with a coordinated and integrated approach, so that we can safely reopen the border and ease cross border business and commerce.
What kind of signals will you be watching for in the early days of the Biden administration? Are you concerned with a “Buy America” culture continuing or even expanding under this administration?
I will be watching the administration’s executive actions and nominee confirmation hearings for signals. We will be monitoring legislation on Capitol Hill. Democratic administrations and congressional majorities in the past have supported expanded trade protectionism, there is no sign these sentiments will change. Historically, Republicans on Capitol Hill have combatted protectionist policies and supported free trade, however, the Trump administration and the Republican party have shifted their positions on these issues over the last four years. It would behoove everyone in Canada to be vigilant for protectionist measures, not just at the federal level in Washington, but at state capitals across the United States.
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