Ottawa works to counter protectionist mood of U.S. campaign

Canadian diplomats are fanningout across the United States to talk up the benefits of tradewith state and local leaders and counter what senior officialssee as a worrying mood of protectionism swirling through theU.S. election campaign.

Amid voter anger about the supposed harm done byinternational trade deals, both Republican presidential nomineeDonald Trump and Democratic rival Hillary Clinton have talkedabout altering the three-nation North American Free TradeAgreement. That could have calamitous results for Canada, whichsends 75 per cent of all its exports to the United States.

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From trade forumsin Kentucky, California and Illinoisaddressing state legislators and small-business owners tomeetings with mayors, labor unions and interest groups, a teamof diplomats has gone coast to coast to explain how importantCanada is as a trading partner.

The diplomatic offensive comes amid concerns in Ottawa aboutboth candidates, who opinion pollsshow are in a tight race ahead ofthe Nov. 8 election.

Trump has talked about renegotiating the NAFTA treaty withCanada and Mexico to secure more favourable terms for the U.S. But he has also said he would revive TransCanada Corp's cross-border Keystone XL pipeline project, whichDemocratic President Barack Obama's administration blocked overenvironmental concerns. Clinton has said she opposes Keystone XL.

Clinton tough on trade

Current and former government officials in Ottawa said aClinton presidency posed its own challenges for Canada.

We maybe heading into some protectionist headwinds. AmbassadorDavidMacNaughton

They see the Democrat as tough on trade and more hawkishthan Obama, who quickly struck up awarm relationship with Prime Minister Justin Trudeau.

While tough talk on trade has occurred in previous U.S.election campaigns, "there is an undercurrent and a mood herewhich is concerning me," said David MacNaughton, Canada'sambassador to Washington.

A Clinton campaign representative declined to comment whenasked about her approach to Canada if she were elected. Trump'scampaign could not immediately be reached for comment.

MacNaughton, who took up the job in March, has alreadyvisited Denverand Boston and plans further trips toMassachusetts, Michigan and California next month.

An embassy spokeswoman said diplomats were intensifyingtheir outreach effort and doing more events than usual. At everymeeting, they hand out tip sheets showing Canada is the topexport destination for 35 U.S. states and that ninemillion U.S.jobs depend on trade with Canada.

Trump, Clinton oppose TTP

Trudeau will not say which candidate he favours, stressing heis happy to work with whomever U.S. voters elect. But hiscentre-left Liberals have more policies in common with U.S.Democrats. He and Obama have become close,exchanging visits to each other's countries.

"Some of the issues that we are going to be facing will bevery much the same regardless of who winsI think we haveto prepare to deal with some pretty difficult situations on thetrade front," said MacNaughton, adding that some Americans hadlittle idea about the size of the U.S. trading relationship withCanada.

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Roland Paris, who served as Trudeau's foreign policy adviseruntil late June, said Trump had tapped into some very stronganti-trade sentiment.

"Those feelings aren't going away any time soonwe maybe heading into some protectionist headwinds, even with aHillary Clinton presidency," he said.

Trump and Clinton also oppose theproposed Trans-PacificTrade Partnership, which could benefit Canada. One person with day-to-day knowledgeof the U.S.-Canada trade file also predicted strains overCanadian exports of softwood lumber, as well as Canada's systemof protection for its dairy industry, which U.S. producersstrongly dislike.

Defence spending

Another potential area for concern is Canada's defencespending, which is 0.98 percent of gross domestic product, farbelow the twoper cent commitment agreed on by NATO members.

MacNaughton said that in his talks with Republicans andDemocrats, both had raised the issue of "U.S. allies stepping upto the plate" in military terms.

Trump stirred concerns among allies and even someRepublicans earlier this year by saying he would decide whetherto come to the aid of Baltic NATO allies in the event of Russianaggression only after reviewing if they "have fulfilled theirobligations to us."

Former Canadian diplomat Colin Robertson, who had severalpostings in the United States, also predicted hard discussionswith Clinton administration officials over defence.

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"We will be circled because we are at 0.98 percent," saidRobertson, vice president of the Canadian Global AffairsInstitute.

That may not sit well with Trudeau's government, which ispledging to run large budget deficits for at least the next fiveyears to fund investment in infrastructure and social programs.

A government source said Canada had taken part in a numberof high-profile NATO missions and was ready to push back ondemands to increase spending in the military.

"We're quite prepared and proud to stand up on our recordand explain why there might be a discrepancy between numbersand our actual contribution," said the source, who asked not tobe identified given the sensitivity of the topic.

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