OTTAWA – Relations between Canada and the United States are once again at a critical turning point when a large Canadian political and commercial delegation left the Capitol on Friday with nothing in hand.

No withdrawal of a proposed tax break for electric vehicles that would deeply hurt Canada’s auto industry.

No movement on plans to double US tariffs on Canadian softwood lumber.

No synchronization of border measures against variants of COVID-19.

No change in a new dispute over whether Canadian potato exports are safe in the eyes of US regulators.

America under President Joe Biden plans to rebuild better. Just plan on doing it without any help or favors from Canada, thank you.

Biden’s newly appointed ambassador to Canada, David Cohen, arrived in Ottawa this week after nearly two years when the place was effectively vacant after Donald Trump’s envoy was chosen to go to the UN.

But in addition to courtesies issued by the embassy on Sussex Drive, Cohen declined interviews to discuss the state of the relationship between Canada and the United States.

It’s probably just as good. Do we really need to hear him say that things are tickety-boo, when they clearly are not?

Biden insists he is a friend from Canada, places great importance on his first wife’s Canadian origins, is grateful for Justin Trudeau’s courtesy dinner when the former vice president left office with Barack Obama in 2016. But now that He’s president of the USA, he can do it. Don’t let all those friendship things distract him.

Biden faces midterm legislative elections next year, economic uncertainty amid the ongoing COVID-19 pandemic, the same inflationary pressures challenging Canada, and the possibility that he will lose control of the political levers to pass. your schedule.

There are optimists in the Trudeau administration that the cross-border relationship remains strong.

The Minister of Public Security, Marco Mendicino, said in an interview that he left the trilateral summit in Washington two weeks ago convinced that “it is a long and lasting relationship that I believe is increasingly important given the various geopolitical dynamics that are in place. I play all over the world. “

“The problem is that Canada is an afterthought for an administration that focuses on huge challenges at home,” says University of Ottawa professor Roland Paris, Trudeau’s former foreign policy adviser.

Of all the current irritants, says Paris, the most alarming is the electric vehicle tax credit and the growing protectionist sentiment in America’s public and political opinion.

The softwood dispute is “a bush fire that started almost 40 years ago, flares periodically and has to be managed,” he said. But electric vehicle credits are something quite different. They have the potential to do more damage to the Canadian economy than anything Trump did while in office. “

Senior government officials agree.

When it comes to the risk to Canada’s auto industry and this country’s climate change aspirations, in the words of an official who spoke to the Star for background: “There is nothing bigger than that for us.”

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The official said: “The prime minister was quite clear when he was in Washington that ‘this is a big problem for Canada and me’ because it really threatens the future of our auto industry. If we cannot sell electric vehicles to the United States, we will not get any future investment, ”said the senior official.

Suddenly, Canada doesn’t have much time left to persuade US lawmakers to extend or abandon planned preferential treatment for US-made and union-built electric vehicles that could collapse Canada’s hopes of attracting investment. here for the nascent industry.

The tax credits are earned through two measures in the Democrats’ Build Back Better bill that would provide up to $ 12,500 in rebates for buyers of electric vehicles built on U.S. soil, at unionized plants, two small items in a legislative package. massive that Democrats want to include. to a possible vote on December 13 before everyone goes home for Christmas.

It’s all packed into a $ 1.75 trillion (US) bill that will spend a lot to boost climate action programs and expand the social safety net, with billions for home care, early preschool education, child care, health reform, housing initiatives and a host of other priorities for Biden’s Democrats.

Conservative MP Randy Hoback, part of the delegation of business leaders, opposition MPs and Canadian consuls general who bombed US lawmakers this week, said the challenge for Canada is “domestic politics” in the US.

It is as simple and as complicated as that.

Hoback said Democrats are determined to pass the bill as is.

“They’re saying … ‘yeah, we understand there’s a problem here with Canada. But we don’t want to stop the momentum we have in this bill to tackle that because it’s very important that we get it passed in its entirety. ‘

Republican senators say they will vote against the bill, Hoback says, but “not because they fundamentally see the idea that it is potentially a violation of NAFTA, or that it potentially goes against their kind of free trade legacy. What’s more, they simply won’t. It’s domestic politics. “

While he was overseas fighting the same fight alongside Ng, Hoback said he would not criticize the effort.

In an interview with The Star, Ng said: “They are listening to us, but there is certainly more work to be done. This is not going to happen overnight. “

Of hinted at a hardened approach.

So far, Canada has not openly threatened to challenge the EV measure under the renegotiated NAFTA (or CUSMA, the Canada-United States-Mexico Agreement) or to retaliate in any way, but Ng said he made it clear that the United States is breaking the trust and the government of Canada. It will “defend” Canadian interests.

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“What I told you was that this is a really important issue for Canada. It is a really important part of the Canadian economy. And that … we are going to … defend our national interests here, and that this goes against CUSMA’s obligations ”.

Behind closed doors, there are also other messages.

The senior government official said Canada has said “we prefer to cooperate with them on things like critical minerals, which will be extremely difficult to handle if they exclude us from the US auto market.”

Still, there was little progress to report at the end of the week. Ottawa hopes that “science” -based talks with US regulators will soon allay concerns about PEI potatoes, and negotiations or litigation may resolve the latest round of softwood, as in the past.

Meanwhile, Canada’s defense over the electric vehicle dispute will continue in earnest for the next several weeks.

Flavio Volpe, director of the Automotive Parts Manufacturers Association of Canada, said in an interview as he left Washington on Friday night that part of the challenge for Canada’s diplomatic defense is that Republicans did not have a final copy of the draft of law and Democrats “would not share details of a bill that they are currently contemplating in a high pressure environment.”

However, Volpe said Americans now have “zero doubts about how important this is to us … and how bad it is for the American auto industry as well.”

Volpe attended various meetings with Ng while Hoback and others met with different senators. They underscored not only how integrated Canada-US auto supply chains are. And how an incentive that stops investment in Canada will affect American producers selling in Canada, but also how it will do nothing to stop non-union production or cheap imports. .

If anything, automakers can migrate production to non-union states, pay cheaper labor costs, and eat 2.5 percent import duties on cheap steel and other parts from China to compete on price with powered vehicles. For EV tax credits. Made by unionized workforce in Michigan. That only gives China an “advantage”, Volpe said.

“What we made them understand is that we all compete against China,” he added.

For Paris, Trudeau’s former foreign policy adviser, none of this comes as a surprise.

“This is the world we are facing and Canada has to manage its relationship with a more protectionist United States.”

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Reference-www.thestar.com

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