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The Biden-Trudeau meeting & the road ahead for the US-Canada relationship
Today President Joe Biden held his first bilateral with Canada's prime minister, Justin Trudeau. To discuss the road ahead for the US-Canada relationship, and what it might foreshadow for the many bilaterals we're going to see in the coming weeks as Biden rolls out his foreign policy agenda, Jon Lieber, head of Eurasia Group's coverage of US political and policy developments, is joined by Eurasia Group Vice Chairman Gerald Butts, who was Trudeau's Principal Secretary until 2019, in a special edition of US Politics In (a little over) 60 Seconds.
Jon Lieber:
Could you give us a little color on the significance of this meeting for both Biden and Trudeau, and maybe take us behind the scenes of kind of how you prep for this, and what the first meeting with the president means?
Gerald Butts:
Well, it's obviously a more significant meeting from the Canadian perspective than it is from the United States perspective, which is not to diminish the value of the Canadian relationship to the United States. I think I'm constitutionally obliged to tell every American I know that it is your largest trading, second largest trading relationship overall, and Canada remains the largest market for US exports. So, having got that constitutional responsibility out of the way, it's a much bigger deal for the Canadians than it is for the Americans, obviously. By far the most important international relationship that any Canadian prime minister has, and one on which he or she is judged politically, is the relationship with the president of the United States, and how they're able to constructively manage that relationship, regardless of their political differences.
Jon Lieber:
It's pretty normal for the first meeting with the Canadian prime minister, right? Like it would kind of be a snub if the US president went in a different direction?
Gerald Butts:Yeah, there'll be a huge sigh of relief in the opinion leading circles here in Canada that the new president has chosen to have his first bilateral with Canada. Obviously, Joe Biden, as a Midwestern Democrat in origin, if a senator from Delaware, is very well skilled in Canada. He's called himself a friend of Canada, had very successful visits here as vice president with Prime Minister Trudeau. So, as we said to many people around the world, Jon, Joe Biden, looks, talks, sounds, feels a lot like more people outside of the United States want their US president to look.
Jon Lieber:
Sure. And I guess in Canada, much like a lot of other places around the globe, it's a bit of a sigh of relief that they're no longer dealing with President Trump, which is probably the most important thing about President Biden, at least for the very short term.
Gerald Butts:
Yeah, not being Donald Trump is a good thing for the United States's bilateral relationship with China. It's impossible to overstate how unpopular Donald Trump was in Canada. It would make him look popular in the bluest of blue states in the United States. All that said, there remain very difficult, nettlesome issues for Canada and the United States. While we've got the big piece, macro piece of the puzzle in place with bipartisan support for the new NAFTA agreement, there are still some significant issues. The new administration's rejection of the Keystone Pipeline on day one was of course a major irritant for the government here. But the bigger picture challenge is how does Canada reorient itself toward the new president's most significant change in policy direction, and that's of course on climate change and energy.
Jon Lieber:
Yeah, I was going to ask about that next. You know, you look at the relationship with the Europeans, for example, and obviously Biden's got a much more multilateral approach. And I think initially there was some thought that that would lead to a lot of reproachment with the Europeans, but it's become pretty clear that there's some deep divisions between the Americans and the Europeans over issues like Russia, China. And that's the case with Canada, as well. You've got Buy America, procurement issues. You've got the existing 232 tariffs. There's the perennial issues of lumber and dairy that I think have yet to be resolved between the US and Canada. So, which one of these things do you think is going to be a big irritant, and what kind of progress can be made that hasn't been made under other presidents?
Gerald Butts:
Well, without question... And it's funny you mentioned the traditional irritants. Those dairy policy and soft wood lumber have the status of an annuity within the bilateral trade relationship between Canada and the United States. No matter who's in the White House or who's in the prime minister's office here, they're always a challenge.
But by far the biggest short-term issue for Canada... And we probably got a little bit of clarity about this today. Both sides will reap positives in it... is the Buy America policy, no question, that every prime minster, going back to the prime minister's father when he was prime minister and President Nixon was president, has managed to come to some sort of mutually agreeable arrangement, where Canada is for all intents and purposes considered part of the United States for procurement and trade purposes. And the Biden team's domestic political objectives are a little sharper than they have been in the past on this front, given all of the big economic trends around reshoring and the context of the campaign, of course. So, they've got to be very careful on this. I'm one who believes that reasonable people usually arrive at mutually agreeable outcomes when there's one to be had, and they probably will in this case, as well.
Jon Lieber:
Yeah, the politics of this have shifted as well, because President Trump kind of shocked the system in terms of making protectionism of the US cool again for both sides, for Democrats and Republicans. And Biden kind of …
Gerald Butts:
I didn't see that on too many hats.
Jon Lieber:
Yeah, exactly. Everyone sees that. Yeah, it's a famous slogan. Yeah. And Biden's going to have to live with that legacy now, and it does affect... I mean, obviously it would affect Canada.
Gerald Butts:
Yeah, without a doubt. And I think relatedly, on the climate front, the big challenge for Canada here of course is that the supply chain... And it's been the big benefit for Canada over time economically, that our supply chains are just so integrated. Right? That the average automobile created by Detroit OEM crosses the border several times before it becomes an auto. It grows from parts into an automobile is the most obvious example. We have a very big, deep energy relationship.
And I think personally, as someone who's kind of been through these wars from the inside out, the biggest challenge that Canada is going to have in the Biden era... Say what you want about Donald Trump. At the end of the day, there was no way for him to renegotiate NAFTA without Canada agreeing to the final outcome. I think that that was a key piece of leverage that Canada maintained, and used pretty skillfully throughout the conversation, throughout the negotiations. But when it comes to climate change, Joe Biden doesn't really need Canada to implement his domestic climate policy.
Personally, as someone who spends a lot of time on the issue, I would argue that his objectives, in particular the 2035 decarbonization objective that was the main headline of the climate platform during the campaign, is a lot easier if you're doing it in concert with Canada, where there already is a lot of low and zero carbon electricity available, some of which of course already powers major American cities like New York. That's another constitutional obligation as the Canadian, Jon. But we're Canadians. We're cooperative. We like to think that we can help the United States achieve its objectives, especially when they're mutually held north of the border.
Jon Lieber:
And before I let you go, Gerry, there are two kind of new issues that have come up between the US and Canada. One is vaccines, where vaccine distribution... You know. The US has procured this large stockpile and isn't sharing it just yet. And Canada I believe is a little bit behind the US in terms of rates of vaccination, and could use some help here, and that's unlikely to be coming. And the second is China, where Canada for a while now has been caught in between the US and China, and kind of has to navigate a really delicate role. I know you work on that issue, so I'd love to hear your thoughts on those two issues.
Gerald Butts:Yeah. Well, the second one is obviously the longer-term issue that, knock on wood, will certainly be with us over the longer term. Look, you and I talk to people around the world about this issue all the time. Canadians, one of our endearing qualities, we tend to think we're unique in the world on a lot of the things. And there are a lot of Canadians who think we're uniquely caught between the US and China as they reexamine their strategic security and economic relationship. I always invite those people to call their closest Japanese friend or South Korean friend, and ask them the same question... Or Australian friend, for that matter, and ask them how they feel about it.
Look. At the end of the day, this is a big structural realignment, both from a security and an economic perspective. Canada's going to have to find its way through that transition, like every other country is in the world. There are probably not too many that I would trade places with.
And on the vaccines, obviously the United States has domestic manufacturing capacity, as does the U.K., and it's given it kind of a head start. There have definitely been some problems with the vaccine rollout here. In particular, like most federal estates, there have been, charitably call them "disputes" between orders of government about how the pandemic overall should be managed, the degree of the lockdown. We have, on the far east coast here where I grew up in Atlantic Canada, it's kind of the New Zealand North America, where the pandemic's been managed very, very well. Very few people have died, and very, very few people have caught the virus. And we have other provinces, like back in Ontario where I live, where the situation has looked a lot more like it has in sort of median of the United States. So, it's a challenge to federalist systems everywhere.
All that said, it's a big couple of months coming up for both the federal government here and the provincial government. The vaccine supplies are starting to flood into the country, and all orders of the government are going to be judged by how efficiently they deliver them and get those, as our British friends would say, jabs in arms.
Jon Lieber:
Great. Well Gerry, thanks for joining us. I hope next time we do this; we can do it in person once they've opened the border again. But good to talk to you.
The US and Canada’s complicated love story
US President Joe Biden has said he wants to patch up a US-Canada relationship that frayed under Trump. In fact, Biden's first phone call to a foreign leader after taking office was to Canada's Prime Minister Justin Trudeau. That makes sense, considering the two long-allied democracies share a continent and do some $700 billion in annual trade across the world's longest land border.
Biden and Trudeau — who was best buddies with Barack Obama, Biden's former boss — share views in many areas, from human rights and democracy promotion to, in principle, climate change. But a host of issues will make it hard to smooth things over completely. What are the main sticking points between Ottawa and Washington right now?
🛢Climate and energy🛢. One of Biden's first executive orders scrapped the Keystone XL pipeline project, which would have carried oil from Alberta, Canada, to the Texas Gulf — a boon for Canada's oil industry, the country's number one export and crucial to its post-pandemic recovery. While Biden's move was consistent with his commitment to prioritize investment in clean energy, some in Ottawa felt snubbed by a lack of consultation.
Nixing the deal was a massive blow for Canada, which was relying on Keystone's infrastructure to boost its transportation capacity from landlocked Alberta province to lucrative energy markets in the Gulf Coast. "The US won't bear much of a cost… that will fall almost entirely on Canada," read a recent scathing editorial in Canada's Globe and Mail publication. To be sure, the US stands to lose roughly 3,900 — mostly temporary — jobs over a two-year period because of the axed deal. Still, Canada was on the losing side this time.
💰Trade equation💰. Biden's "Buy American'' executive order obligates US federal agencies to prioritize American bidders for US-based contracts worth more than $10,000. Importantly, it also raises the amount of US material a venture must include in order to be certified as "American-made."
While this protectionist approach to procurement is not new, Ottawa is worried that it will disrupt supply chains as it tries to boost its pandemic-battered economy (Canada's GDP shrank by 5.1 percent in 2020).
The implications of "Buy American" are clear: more American-made products means less foreign made ones. That's a blow for Canadian exports, 75 percent of which are sent to the US. As COVID rages on and the US-Canada border has remained closed for almost a year, these challenges are now more pronounced.
The US-China continuum. Like many other US allies looking towards a future with China as an economic superpower, Canada wants to maintain a robust alliance with a politically volatile US while also seeking to diversify economic relations with a country that could soon be the world's largest economy.
Indeed, Ottawa recently experienced the blowback of having its eggs in (mostly) one basket when the Trump administration slapped tariffs on Canadian aluminium, and demanded the grueling renegotiation of NAFTA. For Canadians, the recent policy volatility from one US administration to the next reinforces the need to make more friends, not fewer.
Chinese telecommunications has also become entangled in the US-Canada-China triangle. Canada has unofficially sidelined Chinese tech giant Huawei's 5G networks to appease Washington. Additionally, the arrest in Canada of Huawei CFO Meng Wanzhou (at the behest of the US for helping Huawei evade US sanctions on Iran) prompted Beijing to arbitrarily imprison two Canadian citizens. Clearly, the combative approach the US has taken towards China in recent years has been inescapable for middle-power Canada.
But China also presents Canada with new opportunities to cooperate on areas of mutual importance like climate change. These dynamics require a carefully crafted balancing act from a liberal pragmatist like Trudeau.
Looking ahead: Canada's longtime problem in Washington — lack of attention — will be profound under Biden. Trudeau and Trump both needed each other to pass a new trade pact, but Biden can make progress on many of his policy priorities (climate change, Iran, immigration) without help from the northern neighbor — and the Canadians know that their help is not crucial for America's new leader.
Quick Take: President Biden's first week
Ian Bremmer's Quick Take (part 1):
Ian Bremmer here, happy Monday. And have your Quick Take to start off the week.
Maybe start off with Biden because now President Biden has had a week, almost a week, right? How was it? How's he doing? Well, for the first week, I would say pretty good. Not exceptional, but not bad, not bad. Normal. I know everyone's excited that there's normalcy. We will not be excited there's normalcy when crises start hitting and when life gets harder and we are still in the middle of a horrible pandemic and he has to respond to it. But for the first week, it was okay.
To start, thank God that the inauguration itself was smooth. And that indeed, the biggest takeaway from the inauguration is that we can all meme Bernie Sanders, the people's meme for months, apparently, maybe for years. That's something the United States probably needed after four years of just their head exploding with things that were only meme-able in ways that upset people. This is something that can bring people together, but it's not a serious issue. Serious issue is that that was not violence. The serious issue is that there were not violent protests, there were not massive demonstrations. It wasn't disruptive. It was horrible to see 26,000 members of the National Guard protecting the inauguration and all the ceremonies around it. But I was still very glad to see that in all of the state capitals and everywhere people were so worried. In fact, the only major violence that we had from a demonstration perspective was not on the far right, it was the far left and Antifa in Portland, largely broken up with arrest and some violence, but that was it for the whole week. And given the events of January 6th to have gotten that far in two weeks is a positive thing.
As far as Biden's actions, the initial executive orders were pretty consistent with what we had grown to expect coming into the Paris Climate Accord is as much of a layup as one can possibly have in foreign policy. Every other country in the world opposed the US leaving the Paris climate accord, very easy for Biden to rejoin and quite popular, actually a strong majority of Americans support it, including a decent number on the right. The willingness to recommit to the World Health Organization in the middle of a pandemic also should be a no brainer and indeed, that's what they've done. The fact that they will find a few billion dollars to get the Americans involved in COVAX to provide vaccines for low and middle income countries. Certainly, a positive from my perspective, the kind of leadership you'd want to see from the US. You don't want to only see the Chinese taking the lead, the Indians taking the lead and providing vaccines internationally. You want the Americans doing more.
I liked the idea of going to the Russians offering a five-year extension of the START nuclear arms deal. No, we don't trust each other. No, we don't like each other, but there's still areas we need to work together. And avoiding mutually assured destruction strikes me as pretty much the top of that list. And the Russians initially, at least the response has been reasonably positive. Won't stop there from being additional sanctions from the US because of the Navalny arrest and the thousands of arrests and I'll talk about that in a second. Beyond that, in terms of the initial phone calls, Biden foreign leaders starts with Canada, Mexico, and the UK, the three countries that truly have no choice, but the United States. The closest, most interdependent relations with the United States among major economies in the appropriate order, Canada, Mexico, and the United Kingdom. They all went extremely well and there was nothing particularly surprising or uncertain around it.
Then French President Emmanuel Macron. And I am sure if I have missed it in the last couple of hours of call it, the German Chancellor and the Japanese Prime Minister should be following in very short order. That's again, as close to normalcy in terms of foreign policy as one can get. There's really a message being sent that this is business as you remember it, it's business as usual, it's business as we saw under Obama and Biden. That's again, given the level of volatility and the indifference to foreign actors. When you put forward America first as your brand, that's not hard to do, but let's keep in mind that under Obama and Biden, the United States was criticized as leading from behind, was losing influence internationally. And so, the honeymoon, I think with this Biden approach, if it is meant to be consistent with Obama, Biden is probably going to be pretty short and won't get them as far as they would like it to get.
Didn't get himself in trouble on Iran. I thought that was positive. Certainly, there are a lot of potential critics saying he just wants to get back into the Iranian nuclear deal with no changes, and they're not going there and they're not biting. Despite the fact the Iranian foreign minister said, "Let's meet now." And the fact that the Iranians are also starting to enrich at higher percentage, their uranium, which means moving closer to a nuclear breakout capabilities on weapons. That's a big deal, but they have to be cautious. It shouldn't be seen as the top priority. And it's not so far, I give them pretty good marks on that. The 1.9 trillion, this is the big issue, of course, domestic issue is how do you respond to the further relief, which is required so many small and medium businesses, for so many members of the working class, for so many unemployed in the United States?
I do believe that they will get close to that number. It will be over 1.5 trillion, it'll happen by April, even though it probably will have very bipartisanship in the House and Senate, that's okay. It's better than governing in every way by executive order, but it just shows how divided the United States is in this period of maximum crisis. A place where I'd be much more critical was on the 100 million vaccines, the rollout in the first 100 days. The criticism that there was no Trump plan, but the fact is that by the end of the Trump administration, you had 940,000 vaccines being delivered on average every day. You're saying over three months, you can't get any better than that? That implies that you're not coming in with a plan. And they've had months to put a plan together. I suspect this is under promise and try to over-deliver.
And it's also, they don't necessarily have a great plan together yet. And that's a place that we're going to watch very carefully, but the Americans should do better over the coming months, and the Americans should be careful about over criticizing operation Warp Speed and vaccine rollout under the Trump administration. Lots of places where the Trump administration failed, vaccines, in my view, not one of them, certainly in terms of initial production and distribution at the federal level. At the state level is a different story. But the state level is going to be a problem for Biden going forward too. The US is a federal system.
And then finally the fact that Biden hasn't weighed in particularly on impeachment, probably smart, because impeachment is not going to lead to conviction in the Senate. That feels pretty clear at this point. I hate to say this, but as bad as January 6th was, it wasn't enough of a crisis to make people respond to it. It was normalized by certainly most Republicans and even some Democrats who were saying, "Look, we just want to move on and start governing again." And that means politics of obstruction. It means divisiveness. It means Trump's not president anymore. So, let's not deal with that. But it also means there were no consequences for the actions that were taken, and I think that's a really big problem. So anyway, that's kind of where we are.
Quick Take, Part 2: Pro-Navalny Russian protests & Putin; AMLO's COVID Diagnosis
Ian Bremmer: Pro-Navalny Russian Protests & Putin | AMLO COVID Diagnosis | Quick Take | GZERO Mediayoutu.be
Russian opposition leader Navalny in jail. Hundreds of thousands demonstrating across the country in Russia over well over 100 cities, well over 3000 arrested. And Putin responding by saying that this video that was put out that showed what Navalny said was Putin's palace that costs well over a billion dollars to create and Putin, I got to say, usually he doesn't respond to this stuff very quickly. Looked a little defensive, said didn't really watch it, saw some of it, but it definitely wasn't owned by him or owned by his relatives.
And in the investigation itself, it said it was actually in a holding company by people linked to the Kremlin as opposed to Putin himself. But the hundred million people that have watched it, don't find Putin very credible on this. The interesting thing is the Kremlin clearly sees Navalny as a threat. They're responding in a more defensive way than I've seen the Kremlin respond to really anything since Putin has been president on the domestic front. And I don't know if that means that they can't kill him while he's under detention or whether they feel like they have to. Certainly, it makes it much harder for them to let him go. I think it makes it more likely that he's detained for a longer period of time or he's convicted of some ginned-up crimes. But the influence that he has across the country is actually growing.
And that probably means a harder fist from the Russians in the kind of response to local opposition. Keep in mind the economy's not doing very well. Nobody's is, but Russia's in particular right now, and Putin's approval ratings are not what they were when he first annexed Crimea for example.
Final point Mexico, you may have seen the news, Andres Manuel Lopez Obrador, the president has contracted COVID. So many world leaders have come down with it. Even with the most extraordinary capacity to try to protect these people, coronavirus is incredibly transmissible. And a lot of these leaders in the governments aren't taking it as seriously as they should. That certainly is true of the Mexican president or the Brazilian president or the American president or the UK prime minister. All of whom have gotten coronavirus, though, I would say the French president's taken it quite seriously and he still got it.
But specifically in Mexico, this is important because Lopez Obrador himself controls so much of the decision-making in the country. There's no real functioning cabinet in Mexico, it's all the Mexican president. And the direction and the details of policy in Mexico are not about his ministers, it's about him. So, if Trump had been incapacitated for a few weeks, it wouldn't have much impact on American policy. He didn't do it.
In Brazil, same thing. All the economic policy was largely given to the key ministers Bolsonaro Doesn't really understand economic policy. In Mexico, whatever you think of Lopez Obrador, he's doing it. And so if he's laid up for a long time or in the worst case, if he dies, this is actually going to be a really significant problem for the Mexican government, where there is no obvious successor and very little capacity for governance outside of the Mexican president himself. Let's keep in mind, he's 67 years old. He had a heart attack in 2013 and supposedly suffers from hypertension. So, you put all that together, this is actually something to watch. He gets the best medical care of anybody in Mexico, but it's still something to be concerned about and I suspect we're going to see market reaction to that.
So that's a little bit from me, hope everyone is safe. Please avoid people. Be good and I will see you real soon.
Keystone XL halt is no threat to US-Canada ties under Biden; Brazil's vaccine shortage
Ian Bremmer discusses the World In (more than) 60 Seconds:
Biden's first scheduled call with a world leader will be with Canada's Justin Trudeau. What's going on with the Keystone Pipeline?
Well, Biden said that that's it. Executive order, one of the first is that he will stop any construction or development of the Keystone Pipeline. This is of course an oil pipeline that would allow further oil sands oil to come to the United States. The infrastructure is significantly overstretched, it's led to backlogs, inefficiency, accidents, all the rest, but it also facilitates more energy development and keeps prices comparatively down if you get it done. So, there are lots of reasons why the energy sector in Canada wants it. Having said all of that, Trudeau, even though he's been a supporter of Keystone XL, let's keep in mind that he did not win support in Alberta, which is where the big energy patch in Canada is located. This is a real problem for the government of Alberta, Canada is a very decentralized federal government, even more so than the United States. The premier of Alberta is immensely unhappy with Biden right now, they've taken a $1.5 billion equity stake in the project. I expect there will actually be litigation against the United States by the government of Alberta. But Trudeau is quite happy with Biden, his relationship was Trump was always walking on eggshells. The USMCA in negotiations ultimately successful but were very challenging for the Canadians, so too with the way Trump engaged in relations on China. All of this, the fact that Trump left the nuclear agreement with Iran, the Paris Climate Accords, WHO, all of that is stuff that Trudeau strongly opposed. He's going to be much more comfortable with this relationship. He's delighted that the first call from Biden is to him. And it certainly creates a level of normalcy in the US-Canada relationship that is very much appreciated by our neighbors to the North.
Biden has promised 100 million COVID vaccine doses in 100 days. Meanwhile, Brazil is experiencing a shortage. What is happening?
Well, the president of Brazil has not taken coronavirus seriously at all. At least in the United States even though Trump was downplaying coronavirus, Operation Warp Speed was really significant, a major effort to build up and invest and acquire vaccines, the administration did a very significant job around that. In Brazil, the entire Bolsonaro administration basically abdicated on coronavirus. So, they've got well over 200 million people, they've got 6 million vaccines they've acquired so far. That's really been the result primarily of the governor of Sao Paulo not the Bolsonaro administration. This is an enormous problem for Brazil, it's an enormous embarrassment for Bolsonaro. You see calls impeachment that are rising yet again, his approval ratings are now in the low 30s. If they start slipping towards the 20s, he could start peeling off a lot of congressional support and impeachment could become a real issue. Certainly, elections coming up in Brazil, presidential elections in a year are going to be very, very challenging. And I watch that space pretty closely, brazil is going to suffer on the back of this more than a lot of other countries.
A video of Navalny posted after his arrest is going viral. He calls for supporters to "take to the streets" on January 23rd. What is going on?
Well, Alexei Navalny is the most well-known and popular of opposition figures in Russia. The biggest mass demonstrations against Kremlin we've seen in years was the last time Navalny called for mass protests, was mostly Moscow, but you got cities across the country, urban intellectuals, primarily younger people, elites. But Navalny is still quite popular, he still has a significant social media following. Nothing close to a majority, this is not a threat to President Putin, it's nothing close to what you've seen experienced in Belarus for example in the past six months. But nonetheless, it is a significant aggravant for Putin, and that's why Navalny has been detained. I suspect that with the show trials that will go on, he'll probably be given a more significant sentence. I think given he's upped the ante by calling for these demonstrations and by releasing a bunch of videos that are embarrassing to Putin personally, and all of that, the Kremlin has the power. Even though Navalny has a strong international support base, the willingness of Americans or Europeans to significantly and meaningfully increase sanctions against Moscow in a way that would matter to Putin, just isn't there. There just really isn't a stick to hit the Russians that would matter enough. Navalny doesn't matter enough, human rights in Russia don't matter enough to move the needle, especially given the level of economic, trade, and energy dependence that many of the Europeans have with Russia, the East Europeans have with Russia. The ideological orientation of Hungary in the EU, for example, towards Russia, they've just announced that they're getting the Sputnik V vaccine for their people, even though only 11% of Hungarians say that they would take a Russian or Chinese vaccine, over 50% would take Pfizer or Moderna, but they're not that one, and the fact that the United States is focused mostly domestically. So, all of that makes it a lot harder to move the needle on Putin when it comes to Navalny. And very sad for Navalny as a consequence, an incredibly courageous man who has faced, is facing, and will face an extraordinary amount of personal peril.