CANADA ECONOMICS

CANADA - SWEDEN

Innovation, Science and Economic Development Canada. October 27, 2017. Canada strengthens economic ties and builds partnerships with Sweden. Innovation ministers of both countries discuss investment opportunities and potential collaboration on innovation and clean tech

Ottawa, ON - The Honourable Navdeep Bains, Canada’s Minister of Innovation, Science and Economic Development, and  Mikael Damberg, Sweden’s Minister for Enterprise and Innovation, today discussed opportunities for two-way cooperation on innovation and clean technology. During their meeting, they also laid the groundwork for an investment tour of Canada by representatives of prominent Nordic businesses in spring 2018 and discussed opportunities for greater trade and investment ties between Canada and Sweden.

Minister Bains highlighted the work the federal government is doing to improve the business environment in Canada through the Innovation and Skills Plan, including the Strategic Investment Fund and the Global Skills Strategy. He also underlined the Government of Canada’s promotion of clean technology.

The meeting also gave Minister Bains the opportunity to learn about best practices in Sweden. Sweden is a global leader in innovation investment and climate policy. In 2015, the country spent 3.3 percent of GDP on research and development, and Sweden’s clean technology sector was ranked fourth in the 2014 Global Cleantech Innovation Index.

During the meeting, the two ministers agreed to explore opportunities for partnership between the Canadian and Swedish innovation agencies, to increase collaboration between knowledge institutions, and to provide more opportunities for researchers and innovators. They also highlighted the benefits to Canadian and Swedish firms of the recently ratified Canada-EU Comprehensive Economic and Trade Agreement (CETA), which came into force last month. Canada and Sweden are champions of free and open trade, and the ministers emphasized the stronger economic linkages that will result from CETA, creating jobs in both countries.

Quotes

“Canada is increasingly becoming the place where the most creative and entrepreneurial people turn their big ideas into innovative solutions. Our government is deepening its global economic relationships to develop new markets and opportunities for Canadian businesses and to create high-paying jobs for middle-class Canadians.”

– The Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development

“Sweden and Canada are close partners in many areas. I am impressed by the Canadian government’s efforts to strengthen Canada’s innovation capacity.”

– Mikael Damberg, Sweden’s Minister for Enterprise and Innovation

Quick Facts

• Sweden, like Canada, is a highly industrialized and technologically advanced country. The economy is heavily export-oriented, characterized by a well-developed and highly successful industrial sector.
• Canada–Sweden bilateral merchandise trade amounted to nearly $2.6 billion in 2016. Many Swedish multinationals and SMEs invest in Canada directly, including IKEA, H&M, Securitas, Volvo Buses, Autoliv, Sandvik, SKF, Atlas Copco and AstraZeneca.

NAFTA

The Globe and Mail. 30 Oct 2017. Clucks, bucks and pickups: How NAFTA talks could revive little-known chicken tariff. NAFTA: Trade lawyer predicts collapse of negotiations
GREG KEENAN

A little-known tariff that has been in place for more than 50 years threatens a key segment of the auto industry if the United States abandons free-trade agreements with Canada and Mexico.
The end of free trade would mean the elimination of duty-free shipment of vehicles between Canada, the United States and Mexico and lead to the levy of a 25-per-cent duty on pickup trucks imported into the United States from the other two countries.
And it’s all because of long-forgotten trade war over poultry that broke out more than a half-century ago.
The large tariff on pickup trucks and full-sized vans was imposed in late 1963 by the United States in retaliation for limits Europe placed on imports of U.S. chickens. It was, in fact, one of the earliest acts of president Lyndon Johnson and was signed into law less than two weeks after the assassination of John F. Kennedy.
The so-called “chicken tariff” disappeared on Canadian pickups when the Canada-U.S. Auto Pact came into force in 1965. The North American free-trade agreement exempted Mexico from the levy.
But the risk that the Americans will abrogate NAFTA and the Canada-U.S. free-trade agreement is growing, as President Donald Trump pursues a protectionist agenda that he hopes will reverse what he believes is a flow of manufacturing jobs out of the United States.
If Mr. Trump tears up both deals, the chicken tariff would come back into play.
There are no pickup trucks assembled in Canada now, but General Motors Co. is planning to assemble such vehicles at its Oshawa, Ont., plant beginning in January.
A 25-per-cent tariff would disrupt those plans. U.S.-made pickups shipped into Canada would be slapped with a 6.1 per cent levy if both trade deals are terminated.
The tariff would be a bigger issue in Mexico, where GM and Fiat Chrysler Automobiles NV cranked out almost 700,000 pickups last year, most of them destined for the U.S. market.
The potential threat of such a tariff on some of the most popular vehicles in the United States underlines the harm and disruption the Trump administration could inflict on the U.S. economy if it sticks to demands it has made in NAFTA talks – which have been labelled extreme by analysts – and the negotiations collapse as a result.
“Supply chains will be quite seriously disrupted and there will be negative commercial consequences if we go down the NAFTA-withdrawal route,” veteran Canadian trade lawyer Lawrence Herman said. “There’s no doubt about that.”
Mr. Herman and other trade experts pointed out that it is not clear yet whether the United States intends to pull out of NAFTA.
One source who is being briefed regularly on the talks said Canadian negotiators thought it was possible the United States would notify Canada and Mexico during the fourth round of negotiations earlier this month that it was withdrawing. Instead, the talks were extended and the length of time between negotiating rounds was increased.
Mr. Herman said he believes, however, that the negotiations will collapse and the administration will try to withdraw from NAFTA, followed by a withdrawal from the Canada-U.S. agreement.
GM’s plan for Oshawa is to invest $400-million in its plant there, where final assembly such as installation of seats, engines, transmissions and other components will be done on pickup truck frames transported from Fort Wayne, Ind.
General Motors of Canada Co. president Stephen Carlisle has confirmed that pickups will be assembled in Oshawa. The market for many of the approximately 100,000 vehicles that will be assembled when production goes full tilt next year will be the United States.
Unifor president Jerry Dias said he believes GM could supply the Canadian market out of Oshawa and not export any vehicles to the U.S. market if the 25-per-cent tariff is put in place.
Auto-consulting firm Auto-Forecast Solutions LLC said, however, that GM’s Oshawa pickup plan is to assemble just extended-cab models, not the full range of models Canadians buy, which include regular and crew-cab versions.
Canadians bought about 96,000 Chevrolet Silverado and GMC Sierra trucks in 2016.
The disruption that could be caused by the chicken tax is evident from the production numbers for Fiat Chrysler and GM in Mexico.
GM cranked out 398,661 Silverado and Sierra models in 2016. Fiat Chrysler produced 282,535 Ram fullsized pickups in Mexico.
Fiat Chrysler appears to be preparing for the worst. It’s in the midst of a massive overhaul of its U.S. truck plants.
Sergio Marchionne, the company’s chief executive officer, was asked during a conference call last week if those moves will enable the company to transfer production out of Mexico if changes are necessary because of the outcome of NAFTA negotiations.
“When we did the industrial realignment, it was designed to allow for the buffer in the event that happened,” Mr. Marchionne replied.
GM Canada vice-president of corporate affairs David Paterson said: “We continue to encourage all the negotiating parties to remain focused on a positive modernization of NAFTA but don’t find it useful to speculate on any number of potential outcomes including disruptions to deeply integrated North American automotive supply chains.”
Ford Motor Co. assembles all its full-sized pickup trucks in the United States.
A U.S. appeals court ruled in 1993 that the chicken tariff did not apply to sport-utility vehicles built on truck frames.

THE GLOBE AND MAIL. OCTOBER 27, 2017. TRADE. Meet America's prophet of protectionism
ADRIAN MORROW

On the first day of talks to overhaul the North American free-trade agreement, Robert Lighthizer swiftly dispensed with pleasantries.

At a Washington hotel ballroom on Aug. 16 – in front of hundreds of negotiators, business leaders and reporters – the United States Trade Representative declared the deal had "fundamentally failed many, many Americans," accused Canada and Mexico of profiting at the expense of the United States and served notice that he would demand tough, new protectionist measures.

Canadian officials were blindsided.

They had believed President Donald Trump's campaign trail bluster would be kept out of the negotiating room. And many had assumed the U.S. could be satisfied with a few small changes that fundamentally did not hurt the open market between the three countries. Publicly, the Canadians would play down the episode – "trade negotiations often have moments of heated rhetoric," was a much-repeated talking-point – but insiders confide they were taken aback by the broadside.

Those who know Mr. Lighthizer say they should not have been surprised.

The lanky, 70-year-old lawyer with a shock of wavy red hair has spent his entire adult life fighting for the cause of economic nationalism.

As a top trade official in the Reagan administration, he cut deals to keep foreign steel out of the United States. In 30 years of private practice, he battled for American companies seeking punitive duties on imports. And even as unabashed embrace of open markets became an article of faith in his Republican Party, Mr. Lighthizer proudly held himself apart. In his view, free-trade boosters are naive idealists and he is the clear-eyed pragmatist who sees the country's trading partners as the cheats they really are, and is willing to deal with them harshly.

His speech that August morning set the tone for what was to come. Over the past two months, he has demanded a 50 per cent U.S. content requirement in all vehicles made in Canada and Mexico, severe restrictions on the amount of American government procurement Canadian and Mexican firms can bid on and a gutting of NAFTA's dispute settlement mechanisms.

When the other two countries refused to acquiesce, Mr. Lighthizer publicly berated them at the end of the fourth round of negotiations in Washington last week.

"Frankly, I am surprised and disappointed by the resistance to change from our negotiating partners," he said as he stood on stage just a metre away from Canadian Foreign Minister Chrystia Freeland and Mexican Economy Minister Ildefonso Guajardo. "Countries are reluctant to give up unfair advantage."

In a subsequent press conference, he unloaded on American companies worried about his plan to scrap NAFTA provisions meant to protect cross-border investors.

"Why is it a good policy for the United States government to encourage investment in Mexico?" Mr. Lighthizer said. "Buy your own political risk insurance."

The talks are deadlocked, with a vast gulf separating the Trump administration from Canada, Mexico and the U.S. business community. And at the centre is Mr. Lighthizer who, more than anyone other than the President himself, will decide if one of the world's most lucrative free-trade zones lives or dies.

Canadian officials who have dealt with him over the past two months describe a man every bit as tough behind the scenes as he has been in public. In negotiations, Mr. Lighthizer's team has made clear that he expects Canada and Mexico to make all the concessions, while the U.S. will not give anything up, said sources with knowledge of the talks.

But, despite his flinty approach to negotiations, the people, who on condition of anonymity agreed to discuss confidential closed-door meetings, say he is genial and funny even as he takes a hard line at the bargaining table. They also express a certain begrudging admiration for his intense focus and wonk-like command of detail on trade policy.

And while he and Ms. Freeland have sparred in public, the sources say the two have built a good working relationship in private. They shared a one-on-one dinner in early August in Washington ahead of the start of talks, said one source.

They have also dined, along with members of their staffs, with Mexican counterpart Mr. Guajardo at every negotiating round. The trio has even started an informal book club, swapping tomes on Winston Churchill, the American Civil War and the unravelling of the international order before the First World War.

Sure of his convictions, with a mischievous side

This picture of Mr. Lighthizer certainly matches his reputation around Washington, where friends, former colleagues and adversaries describe him as a tough negotiator sure of his convictions, but with a mischievous side and a penchant for cracking dirty jokes.

In one oft-recounted anecdote from his steel negotiations with Japan during the Reagan years, Mr. Lighthizer expressed disapproval with one of the other side's proposals by folding the document into a paper airplane and throwing it at a Japanese negotiator. He also has a healthy self-regard. People who have visited his home over the years recall being greeted by an oil painting of their host hanging in a place of prominence.

And those who have crossed paths with him – both as colleagues and opponents – say Mr. Lighthizer evinces a black-and-white view of trading relations. To him, other countries are the U.S.'s adversaries. And while he is pragmatic enough to make deals, they say, this is purely transactional – he will never back down because he is convinced of the other side's correctness. He faced down the dominant orthodoxy of the Washington trade establishment with the zeal of a true believer; he is not about to roll over because another country tells him he's wrong.

"His view of trade, he's had his whole adult life. Most of the time, he was a voice in the wilderness among the free traders," his older brother, James Lighthizer, says in an interview. "But he's always steadfastly, if not stubbornly, stuck to what I would call 'fair trade.'"

Now, near the end of his career, Robert Lighthizer finds himself in an improbable situation: A Republican won the presidency by running on the same principles Mr. Lighthizer has long fought for, and he suddenly has the chance to reshape American trade policy.

"He's highly nationalistic. He's well-matched with the President. They're kindred spirits," says Charles Blum, a former diplomat who worked with Mr. Lighthizer in the Reagan administration. "He tells people he has a mandate to turn trade upside-down."

Mr. Lighthizer also finds himself in a crucible. People with knowledge of the negotiations say he appears to sincerely want a deal – as evidenced by his decision last week to scrap an end-of-year deadline and give negotiators until late March to keep talking – but it is far from clear he can reach one. A new pact would have to be agreed to by Canada and Mexico, but still be sufficiently tough to pass muster with Mr. Trump.

"Lighthizer's in a two-way negotiation," says William Krist, a former trade negotiator. "He's got to get something he can take back to Trump and say 'You can take this to your base.'"

By the time NAFTA talks are through, Mr. Lighthizer could succeed in changing the course of international commerce for the world's wealthiest country. Or, he could be the man who blew up America's most important trade deal.

Born Oct. 11, 1947, the younger son of physician Orville James Lighthizer and Michaelene (Micki) Bogan, a stay-at-home mother, Robert Emmet Lighthizer grew up at 3830 Edgewater Dr., a red brick and white clapboard house across the street from Lake Erie in the industrial town of Ashtabula, Ohio.

His brother, Jim, remembers theirs as a "typical Midwestern upbringing" in postwar America: They built tree forts, fished, swam and played at being Daniel Boone. Bob was strong-willed from the start, frequently barking orders at the other children.

One boyhood friend, David Lucas, told the local newspaper of a time he and the Lighthizers were flying paper airplanes from the roof of a garage. Bob, he said, convinced him to jump down to retrieve the planes, spraining his ankle in the process. "He was known to be a good communicator even then," the Star Beacon quoted him as saying.

In his teens, Mr. Lighthizer attended preparatory school in suburban Cleveland, took out a GQ subscription and became fastidious about his appearance. Both Lighthizer brothers ultimately decamped Ohio for Washington and took law degrees at Georgetown University.

One of Mr. Lighthizer's defining characteristics – both as a kid in Ashtabula and later in university – was his refusal to concede an argument.

"We were two boys, so we fought all the time," Jim says. "He was always a very good debater, could carry an argument, but he didn't back down from his position. He's pretty aggressive and he's tough. He is fearless. So if anybody thinks they can push over and intimidate him, they're just crazy as hell."

While Jim pursued a political career in Maryland, culminating with a stint as the state's secretary of transportation, Bob first worked in private practice at Covington & Burling LLP before landing a job on Capitol Hill as an aide to Bob Dole in 1978.

As chair of the powerful Senate finance committee at the time, Mr. Dole played a leading role steering Ronald Reagan's first tax cut package through Congress in 1981. Mr. Lighthizer caught the White House's attention.

In 1983, Mr. Reagan tapped Mr. Lighthizer as deputy United States trade representative. On one of his early assignments, former colleagues recalled, he used a hardball style to land a deal to export more U.S. grain to the Soviet Union: After several rounds of talks, he calculated what it was costing the Treasury to send his delegation to Moscow and told the Soviets he would not be wasting so much money on another session without an agreement. It worked.

His central achievement was on steel. The United States blamed a flood of imports for hurting the domestic industry, and Mr. Reagan faced pressure from the Democrats in an election year to clamp down. So, the president dispatched Mr. Lighthizer to cut deals with steel-producing countries: Washington would not impose tariffs if other countries would agree to strict quotas on the amount of steel they exported to the U.S.



Colleagues remember the psychological techniques he used – both on his negotiating partners and his own staff.

Mr. Lighthizer, for instance, told his subordinates that the target quotas for steel were half what they really were, in order to ensure his negotiating team took a suitably hard line in talks, recalls Mr. Krist, who worked with him at the time.

"He's a very good negotiator, he's a good strategic thinker."

Mr. Blum, another former colleague, remembers how after Mr. Reagan cruised to re-election in 1984, Mr. Lighthizer feared other countries would assume the administration had lost its resolve to drive a hard bargain now that it no longer faced any ballot box pressure.

So Mr. Lighthizer arranged to have himself photographed personally briefing the president, leaning in close to one another over a narrow coffee table.

Then, he made sure the image ran in a steel industry trade publication – a subtle but unmistakeable signal that Mr. Reagan fully intended to keep pressing.

"At 9.30 a.m. the day the photo ran, the Japanese called up and said 'When can we come in and make a deal?'" Mr. Blum says. "It was a stark visual message to the world and it worked within a matter of hours."

Deal-making at an exhausting pace

Not all of Mr. Lighthizer's tactics were quite so effective. One person who witnessed his attempts at bargaining table humour – including his paper airplane stunt with Japan – recalls that those on the other side were generally unimpressed.

"That didn't help. I think he was trying to be funny, but it was offensive to the Japanese," says the source, who added that Mr. Lighthizer's subordinates often had to smooth things over with their negotiating partners after he left the room.

"He doesn't make deals because he sees merit in the other guy's position. He never felt they were legitimate. He was contemptuous of the Japanese. Bob was really contemptuous of them. He was inflexible and demanding."

Still, Mr. Lighthizer managed to land deals with eight countries, including heavyweights Japan and South Korea, to restrict steel exports. It was deal-making at an exhausting pace: In the seven-month process, Mr. Blum recalls, Mr. Lighthizer's team took just two days off.

With these victories under his belt, Mr. Lighthizer left the government in 1985 for private practice at Skadden, Arps, Slate, Meagher & Flom. His top client was United States Steel Corp. and he effectively did for them what he had done for Mr. Reagan: Fighting foreign imports.

He brought a string of trade cases accusing other countries of unfairly subsidizing their industries and persuaded the U.S. government to slap tariffs on them.

In 1992 alone, Mr. Lighthizer and another lawyer filed cases against no fewer than 47 companies in 21 countries as some of the previous deals he had negotiated in the Reagan administration expired. The fight was so huge that he joked about all the work he had created for other lobbyists battling him: "This is a fat pig, and they all want a slice of it," he told The New York Times then.

Lewis Leibowitz, an auto industry lawyer who often crossed swords with Mr. Lighthizer in those days, says his erstwhile courtroom opponent had no trouble portraying other nations as bad guys. "Instead of being negotiating partners, these countries were the enemy. He never hesitated to paint his adversaries as people who needed to be stopped. He used some harsh language," he says.

In private, however, he recalls Mr. Lighthizer as unfailingly cordial: "When the spotlight was turned off, he was always candid and friendly."

Not that Mr. Lighthizer's nationalism precluded him from helping other countries' interests. He represented Brazil's Sugar and Alcohol Institute in an ethanol dispute and China's Chamber of Commerce for Machinery and Electronics in a case on the manufacture of fans. Mr. Lighthizer's work for Brazil would later be used by the Democrats to delay his confirmation as U.S. trade representative to extract concessions from the Republicans on unrelated legislation.

Mr. Lighthizer remained loyal to Mr. Dole, serving as policy adviser and treasurer of his 1996 presidential campaign, during which the media touted him as a possible future White House chief of staff.

And he cultivated the figure of a lone prophet for protectionism even as the world, and his own political party, moved determinately in the opposite direction.

In 2008, Mr. Lighthizer took aim at GOP presidential nominee John McCain in a New York Times op-ed, criticizing the Arizona senator's support for free trade. In 2011, when Mr. Trump mused about making a presidential run – and saw himself attacked by fellow Republicans as a dangerous protectionist – Mr. Lighthizer defended him in The Washington Times. On both occasions, he argued that economic nationalism was fully compatible with conservatism, from Alexander Hamilton to Abraham Lincoln to Ronald Reagan. If the Gipper had supported limiting foreign steel imports, didn't that make protectionism consistent with GOP orthodoxy?

Not that Mr. Lighthizer characterized such views as protectionism. Rather, he presented them as "pragmatism" that understood "the realities of everyday life."

"Modern free traders, on the other hand, embrace their ideal with a passion that makes Robespierre seem prudent," he wrote in the 2008 op-ed. "They embrace unbridled free trade, even as it helps China become a superpower."

After Mr. Trump won last year, one of his economic advisers, former steel executive Dan DiMicco, brought Mr. Lighthizer on to the transition team. Mr. DiMicco knew Mr. Lighthizer from their days fighting steel imports and saw in him someone who combined economic nationalism with the deep experience necessary to implement an agenda.

"Bob Lighthizer is a free-trader. The problem is, there is no such thing as free trade in the world. It's a nice phrase to use, kind of like 'world peace': We all strive for it, but we know that the reality is that the world is not at peace," he says. "There's no such thing as free trade, it's all managed trade, and we have done a lousy job of managing it."

Unlikely to compromise

One day last winter, Mr. Trump summoned Mr. Lighthizer to Mar-a-Lago, a 10-minute drive south of Mr. Lighthizer's Palm Beach condo. Over the course of a 40-minute meeting, Mr. Trump never actually asked Mr. Lighthizer if he wanted to be his trade czar. The President simply assumed Mr. Lighthizer was in.

"He was clearly the guy: I mean, there's nobody else in the country who, because of his views and his experience, that's even close to him," Jim Lighthizer says of his brother.

It's certainly true that, within the world of Washington trade policy, Mr. Lighthizer and his fellow protectionists in the White House stand apart.

Dan Ikenson, a trade expert at the libertarian Cato Institute, contends Mr. Lighthizer's concept of the world is somewhere between impractical and entitled.

"Their view is: 'The U.S. is good and benevolent and we've done so much for people since the Second World War, the world owes us,'" he says. "It's like, 'All animals are equal but some are more equal than others.'"

And Mr. Ikenson argues there is a stark difference between the Reagan era and today: Before the age of the World Trade Organization, which came into being in 1995, there was no recourse for handling trade cheating other than slapping duties on imports. Now, however, there are ways to deal with disputes that don't involve risking a trade war. In Mr. Ikenson's view, the U.S. economy survived "in spite of" the protectionist policies of the 1980s, not because of them.

As Trumpian economics have alienated capitalist purists, however, they have attracted allies in unusual quarters.

Leo Gerard, international president of the United Steelworkers, sings Mr. Lighthizer's praises when asked about working with him during the steel wars of years past.

"I've known him to be smart, strategic … a fighter for industrial jobs," he says. "He wants to do the right thing here. He understands that if Canada and the United States can't do a deal that is good for workers in Canada, the United States and Mexico, the deal won't fly."

Outside work, Mr. Lighthizer's life revolves around reading – he prefers biographies and tomes on U.S. history – playing golf and exercising. He divides his time between homes in Washington and Palm Beach. He's close with his two grown children, Claire and Robert, three grandchildren and his brother. Mr. Lighthizer's wife, Cathy, died in 2014.

And Mr. Lighthizer has long been passionate about basketball, rooting for his alma mater's Georgetown Hoyas. During the steel negotiations of the 1980s, recalls one of his then subordinates, he was so loath to miss a game that he would often knock off for the evening to go watch while his team kept working.

Nearly everyone who knows Mr. Lighthizer cites his wisecracking – though few are willing to repeat an example of a specific joke. "Most of them, you couldn't print in a family newspaper," his brother says. "They are, shall we say, bawdy."

A sanitized version of Mr. Lighthizer's quipster persona has shown up for his sessions with journalists during NAFTA talks. At the third round in Ottawa, when a reporter asked about "red lines" in negotiations, he replied that the only such line he cared about was the subway route that connects suburban Maryland to downtown D.C.: "Red lines to me are what runs to Rockville from Farragut Square." During the fourth round in Washington, describing what would happen if he concluded a trade agreement Mr. Trump was unhappy with, Mr. Lighthizer said it would be "a quicker way to lose your job than chartering an airplane" – a pointed reference to former health secretary Tom Price, who had to resign after he was caught billing taxpayers for private flights.

So far, Mr. Lighthizer has lived up to his hardline reputation at the bargaining table. And if past is prologue, he is unlikely to compromise without extracting significant concessions from the other two countries.

Or, perhaps, shredding NAFTA altogether.

"He's got a strong personality and he's pretty intense and he's fearless," Jim Lighthizer says. "Getting him to back down takes a whole lot."

THE GLOBE AND MAIL. OCTOBER 27, 2017. OPINION. Trump lives in a ‘SHAFTA’ fantasy land where U.S. is a trade victim
BARRIE MCKENNA

OTTAWA - It's what trade negotiators call the landing zone. That's the spot where opposing sides can see the outlines of an eventual deal.

Given the U.S. mindset in overhauling the North American free-trade agreement, Canada could alert air-traffic control, turn on the runway lights and mobilize the ground crew. But Donald Trump, unfortunately, is up in Air Force One looking for a completely different airport, in some fantasy land where the United States is a victim of trade.

For years now, a poisonous narrative has become rooted in the U.S. psyche – namely, that the world is ripping off Americans on trade. It is the narrative that helped get Mr. Trump elected, and it is the mantra now guiding U.S. Trade Representative Robert Lighthizer at the NAFTA negotiating table.

Trade has become a winner-take-all sport in which the balance of trade is like the scoreboard at a football game. Post a trade deficit with the rest of the world – as the United States has consistently done since the early 1990s – and you are automatically the loser. No trip to the Trade Bowl for you.

A lot of people are complicit in letting this wacky view of the world become dogma. For years, U.S. politicians, corporate leaders, labour bosses and the media have all failed to effectively challenge the underlying premise.

And now the myth is proving tough to bury. This week, a coalition of U.S. and foreign-owned auto makers launched a PR blitz to try to salvage the agreement. The group's slogan: "We're winning with NAFTA."

Unfortunately, it's a bit late in the game for big U.S. employers to be singing the praises of trade.

The Trump administration looks at NAFTA and sees SHAFTA, as White House trade adviser Peter Navarro mockingly calls the deal. Asked if he'll walk away from the agreement, Mr. Trump told the Fox Business Network last Sunday: "We can't allow the world to look at us as a whipping post. Not going to happen any more."

Commerce Secretary Wilbur Ross put it more bluntly: He said the United States is demanding that Canada and Mexico "give up some privileges that they have enjoyed for 22 years" and get nothing in return.

Given the Trump administration's stand, no one should be surprised that U.S. negotiators have put poison-pill-type demands on the table, including a five-year sunset clause, a minimum 50 per cent U.S.-content requirement in North American-made vehicles and an end to the dispute-settlement system that allows countries to challenge countervailing and anti-dumping duties. For the United States, the objective is to tilt the playing field to favour its own companies and workers.

And yet no objective analyst would look at the economic landscape of the past few decades and come to the conclusion that the United States is losing the global trade race. With the exception of a few resource-rich city-states and smaller nations, the United States is the wealthiest major country in the world – well ahead of the rest of the Group of Seven, Europe and most of Asia. Its endless purchasing power has made it a magnet for goods from around the world. Its companies dominate the global marketplace.

The trade deficit is not a football score. Few economists buy the premise that a trade deficit means a country is losing. Rather, it reflects an imbalance between what a country saves and what it invests. The more protectionist pain the United States inflicts on us, the lower the Canadian dollar will fall and the less goods and services we'll be able to buy.

The notion that Canada is shafting the Americans is ridiculous, even by Mr. Trump's dubious scorecard. Canada runs a relatively small goods trade surplus with the United States, largely driven by exports of oil and other natural resources that Americans need to run their economy. The broader goods and services trade balance has been tilting increasingly in the United States's favour for more than a decade. In 2016, the United States ran a nearly $8-billion (U.S.) surplus with Canada. In manufacturing alone, the surplus was even more pronounced.

It's hard to imagine a more accommodating neighbour than Canada. We are far and away the largest market for U.S. goods and services, buying $321.4-billion worth last year alone. That is nearly twice as much as China, three times more than Japan and more than Britain, France, Germany and Italy combined. Meanwhile, Canada has been losing export market share to other countries in the U.S. market for nearly decade.

If anyone is getting shafted, it's us.

REUTERS. OCTOBER 30, 2017. Canada foreign minister says NAFTA talks feature 'troubling proposals'

TORONTO (Reuters) - Negotiations over a deal to update the North American Free Trade Agreement (NAFTA) have included some “troubling proposals” from the United States, Canada’s Foreign Minister Chrystia Freeland said on Monday.

“The NAFTA negotiations have included, particularly in the last couple of rounds, some troubling proposals from our perspective coming from the United States,” she said.

Reporting by Matt Scuffham

INFRASTRUCTURE

The Globe and Mail. 30 Oct 2017. Why Canada should reinvent its infrastructure-development model
DOMINIQUE GAUTIER, Senior partner at Roland Berger Canada and a global lead in the public sector practice

Canada ranks 23rd in the world in terms of the quality of its infrastructure network with nearly 20 per cent of its buildings and transportation infrastructure in critical condition, according to the World Economic Forum.
This situation not only reduces the growth potential for the Canadian economy but also increases maintenance spending which, in our experience, can be more than 20 per cent higher for older assets. In this context, there is an urgent need to reinvent the Canadian infrastructure-development model.
In response to this challenge, the Canadian government has launched a comprehensive plan to invest in infrastructure leveraging it to foster competitiveness and growth. The federal government has announced investments totalling about $185billion by 2028, the lion’s share of which will be dedicated to urban transportation ($29-billion) and renewable energy ($27-billion). Other measures proposed by the federal government include the creation of an infrastructure bank, with $35-billion in investment capital from the federal government, and the possibility of launching privatization programs. In line with federal plans, provinces are also expected to increase their infrastructure spending over the next five years. Quebec and Ontario have announced plans for yearly increases of 5 per cent and 12 per cent, respectively.
In our view, however, the most critical component of this plan is the federal government’s ambition to involve major Canadian institutional investors in the roll-out. In the context of today’s intervention model (pure investment), it is unclear what would prompt longterm investors to want to focus on Canadian infrastructure.
The 10 largest Canadian pension funds hold 8 per cent ($102-billion) of their assets in infrastructure investments – one percentage point higher than the world average. While this is a positive indicator, it is important to notice that their portfolios are primarily composed of brownfield assets (projects that are already in operation) outside of Canada.
This investment approach is not surprising and is consistent with the risk-return profile required of pension funds and other institutional investors. Risk levels for brownfield projects are lower than for greenfield (new) projects while yields in developing countries are higher, on average.
For example, in the transportation sector, internal rates of return are sometimes twice as high in developing countries with returns of 18 per cent to 20 per cent, compared with 10 per cent to 12 per cent.
There is a need in Canada to create new intervention models to encourage institutional investors to be more prone to invest in Canadian infrastructure. These new intervention models can take on three different directions.
Secure the risk/return profile early on by becoming involved in the strategic choices of the infrastructure solutions to be developed:
The Caisse de dépôt et placement du Québec (CDPQ) has initiated this movement by creating CDPQ Infra, a subsidiary that can act as owner-operator of certain infrastructure projects. This new division will support the growth of its infrastructure portfolio, today at 5 per cent of total assets ($15-billion), by increasing the number of projects in collaboration with the Quebec government and by assuming responsibility along the entire process of infrastructure development, from planning and financing to execution and maintenance. The Réseau electrique métropolitain (REM) rapid transit project in the Montreal region is an ambitious example that still needs to be proved successful.
Take positions in assets that have good long-term potential in breakthrough technologies:
Most large infrastructure projects, whether in renewable energy, inter-/ intra-city transportation or electric mobility, are expected to create fundamental disruptions. These projects are in line with the ambitions of certain pension funds aiming to identify long-term challenges and to create tomorrow’s industry leaders. Such an approach would enable generation of interesting returns in segments of the economy where there will be a strong first-mover advantage.
Invest in projects with a strong social responsibility component:
Responsible investing has become a strong differentiation factor for some large pension funds, such as APG in the Netherlands ($455-billion [U.S.] in assets). Investing in infrastructure projects having a strong social responsibility (ESG) component should become a strong strategic lever for Canadian institutional investors. Companies implementing good governance have historically performed progressively better than others. Those who will integrate these factors are expected to ultimately create additional value, in line with the return requirements and the sustainable development needs of their stakeholders.
We believe that, if given the opportunity to co-create new intervention models, institutional investors will be more prone to invest in Canadian infrastructure.

Canada Infrastructure Bank. 2017-07-06. Chairperson, Janice Fukakusa, FCPA, CPA


Janice Fukakusa, Chairperson, Canada Infrastructure Bank

Ms. Fukakusa is a corporate director and former Chief Administrative Officer and Chief Financial Officer of Royal Bank of Canada, from which she retired in January 2017 following a distinguished 31-year career.

Ms. Fukakusa currently serves on the boards of a number of corporate and not-for-profit organizations, including Cineplex, General Growth Properties, The Princess Margaret Cancer Foundation, and Wellspring Cancer Foundation. She serves as the Chair of the Board of Governors of Ryerson University.

In 2007, she was inducted into Canada's Most Powerful Women Hall of Fame and, in 2016 she was named one of the 25 Most Powerful Women in Banking by American Banker magazine for the fourth consecutive year. She was also selected as Canada's CFO of the Year by Financial Executives Canada, PwC and Robert Half in 2014.

Prior to joining RBC, Ms. Fukakusa worked at PricewaterhouseCoopers LLP where she obtained the professional designations of Chartered Professional Accountant and Chartered Business Valuator. She obtained a Bachelor of Arts from University of Toronto and holds a Master of Business Administration from Schulich School of Business.

FULL INFORMATION ABOUT CIB: http://www.infrastructure.gc.ca/CIB-BIC/index-eng.html

Government of Canada announces inaugural Chairperson of the Board for the Canada Infrastructure Bank

EDMONTON, July 6, 2017 /CNW/ - The Government of Canada is making investments that will help create well-paying jobs and grow the middle class now, while building a strong foundation for a sustainable economic future. As part of the Government's historic Investing in Canada plan to invest over $180 billion in infrastructure, the Canada Infrastructure Bank is a new tool for provincial, territorial, and municipal partners to finance the infrastructure that Canadians need to bring upgrades to communities across the country.

To this end, the Honourable Amarjeet Sohi, Minister of Infrastructure and Communities, today announced that Janice Fukakusa has been selected as the inaugural Chairperson of the Board for the Canada Infrastructure Bank. The appointment was made following an open, transparent, and merit-based selection process that attracted a range of highly qualified professionals.

Ms. Fukakusa is a corporate director and former Chief Administrative Officer and Chief Financial Officer of Royal Bank of Canada, from which she retired in January 2017 following a distinguished 31-year career. Ms. Fukakusa currently serves on the boards of a number of corporate and not-for-profit organizations, including Cineplex, General Growth Properties, The Princess Margaret Cancer Foundation, and Wellspring Cancer Foundation. She serves as the Chair of the Board of Governors of Ryerson University.  In 2007, she was inducted into Canada's Most Powerful Women Hall of Fame and, in 2016 she was named one of the 25 Most Powerful Women in Banking by American Banker magazine for the fourth consecutive year. Ms. Fukakusa holds a Master's degree in Business Administration and a Chartered Professional Accountant designation.

In the coming months, the Government of Canada will finalize the selection for the Bank's Board of Directors and Chief Executive Officer. Ms. Fukakusa will play a key role in these selection processes and the continued development of the Canada Infrastructure Bank, including establishing the governance and oversight that will enable the Canada Infrastructure Bank to successfully deliver on its mandate.

Quotes

"Today's announcement is another step forward in fulfilling our commitment to have the Canada Infrastructure Bank operational by the end of 2017. Janice Fukakusa has extensive experience and an established reputation within the financial services sector, and I am confident that her leadership will ensure that the Bank delivers on its ambitious mandate."

The Honourable Amarjeet Sohi, Minister of Infrastructure and Communities

"The Canada Infrastructure Bank is an innovative new tool to improve the delivery of infrastructure projects, reduce risk for taxpayers, and attract new capital to build more infrastructure. Janice Fukakusa is a highly qualified and well-respected professional who will be able to guide the Bank in delivering the transformational infrastructure projects that Canadians need."

The Honourable Bill Morneau, Minister of Finance

Quick facts

• As part of the Government's historic Investing in Canada plan of over $180 billion, the Canada Infrastructure Bank is a new tool for provincial, territorial, and municipal partners to finance new infrastructure projects.
• The Canada Infrastructure Bank will invest at least $35 billion from the federal government into new transformative infrastructure projects.
• As a Crown corporation, the Bank will operate at arms-length from the government and will work with provincial, territorial, municipal, Indigenous, and private sector investment partners to attract private investors to new revenue-generating infrastructure projects that are in the public interest.
• Following the Government of Canada's new approach to appointments, these selection processes were designed to attract highly qualified individuals, while taking into consideration the desire to achieve gender parity and to reflect Canada's linguistic, cultural, and regional diversity. 
• The application process for the CEO will remain open until July 21. Interested and qualified candidates can submit their application via the online Governor in Council Appointment portal.

ENERGY

REUTERS. OCTOBER 30, 2017. U.S. oil exports boom, putting infrastructure to the test
Catherine Ngai, Bryan Sims

NEW YORK/HOUSTON (Reuters) - Tankers carrying record levels of crude are leaving in droves from Texas and Louisiana ports, and more growth in the fledgling U.S. oil export market may before long test the limits of infrastructure like pipelines, dock space and ship traffic.

U.S. crude exports have boomed since the decades-old ban was lifted less than two years ago, with shipments recently hitting a record of 2 million barrels a day. But shippers and traders fear the rising trend is not sustainable, and if limits are hit, it could pressure the price of U.S. oil.

How much crude the United States can export is a mystery. Most terminal operators and companies will not disclose capacity, and federal agencies like the U.S. Energy Department do not track it. Still, oil export infrastructure will probably need further investment in coming years. Bottlenecks would hit not only storage and loading capacity, but also factors such as pipeline connectivity and shipping traffic.

Analysts believe operators will start to run into bottlenecks if exports rise to 3.5 million to 4 million barrels a day. RBC Capital analysts put the figure lower, around 3.2 million bpd.

The United States has not come close to that yet. A total of the highest loading days across Houston, Port Arthur, Corpus Christi and St. James/New Orleans - the primary places where crude can be exported - comes to about 3.2 million bpd, according to Kpler, a cargo tracking service.

But with total U.S. crude production currently at 9.5 million barrels a day and expected to add 800,000 to 1 million bpd annually, export capacity could be tested before long. Over the past four weeks, exports averaged 1.7 million bpd, more than triple a year earlier.

“Right now, there seems to be a little more wiggle room for export levels,” said Michael Cohen, head of energy markets research at Barclays.

“Two to three years down the road, if U.S. production continues to grow like current levels, the market will eventually signal that more infrastructure is needed. But I don’t think a lot of those plans are in place right now.”

If exports do hit a bottleneck, it would put a ceiling on how much oil shippers get out of the country. Growing domestic oil production and limited export avenues could sink U.S. crude prices.

Shippers have booked vessels to go overseas in recent weeks because the premium for global benchmark Brent crude widened to as much as $7 a barrel over U.S. crude, making exports more profitable for domestic producers.

EXPORT PLANS

Exports could hit 4 million bpd by 2022, an Enterprise Products Partners LP executive told an industry event in Singapore recently.

Though some operators are already eyeing expansion plans, there are limitations, said Carlin Conner, chief executive at SemGroup Corp, which owns the Houston Fuel Oil Terminal. SemGroup has three docks for exporting crude and is building additional ones.

“There aren’t very many terminals with the needed pipeline capabilities, tank farm capacity and proper docks to load the ships ... Adding this is expensive and not done easily. So there are limitations to unfettered export access,” he said.

For instance, exports are expected to start from the Louisiana Offshore Oil Port (LOOP) in early 2018 at around one supertanker a month, according to two sources. The LOOP is potentially a key locale for exports. Its location 18 miles (29 km) offshore means it can handle larger vessels than other, shallower ship channels.

While LOOP can load around 40,000 barrels per hour, operating at that capacity is not likely because that same pipe is used to offload imports, the sources added. LOOP did not respond to a request for comment.

In Houston, when looking at the top 30 loading days, crude exports averaged 700,000 bpd, Kpler added. That includes Enterprise’s Houston terminal, among the largest of the export facilities, that had 615,000 bpd.

Other terminal operators are also developing additional facilities. NuStar Energy LP currently can load between 500,000 to 600,000 bpd at its two docks in Corpus Christi, which has about 1 million in capacity, according to a port spokesman. NuStar is developing a third dock, which should come online either late first quarter or early second quarter.

In Houston, Magellan Midstream Partners LP is planning a new 45-foot draft Aframax dock for mid-2018. Aframax vessels can carry about 500,000 to 700,000 barrels of crude.

Reporting by Catherine Ngai in New York and Bryan Sims in Houston; additional reporting by Jessica Resnick-Ault in New York; editing by David Gregorio

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LGCJ.: