What the United States wants and needs from Canada

At PPF’s Fall Lecture on Canada-U.S. relations, Ambassador Kelly Craft, a Republican, and Ambassador Gordon Giffin, a Democrat, sat down with moderator Luiza Savage, an executive editor at POLITICO, to talk about the cross-border relationship, including what’s working and what will need to change, and what’s at stake in the upcoming presidential election.

The following conversation has been edited for length and clarity.

Q: I want to ask each of you, just very briefly, if you were a Canadian policy maker who wanted to make Canada matter more to Washington where would you start? What’s the first thing you would focus on?

Giffin: There are two overarching words that I think of when I think about the Canada-U.S. relationship, both of which relate to Canada. One is confidence, and two is relevance. In the 80s and 90s, (Brian) Mulroney and (Jean) Chretien, I think those two Prime Ministers felt that being relevant for the United States gave them leverage in everything Canada cared about. And there are multiple ways to be relevant to the United States, but one of them is not telling us how much Kleenex you sell to us. It’s not a transactional relationship.

The basis of what so much Canadian diplomacy is is going around to the states and telling each governor, hey, here’s what I’m selling you. I don’t believe that that’s the right [approach].

Q: How would you do it differently?

Giffin: I’d be a global partner with the United States on the principles and values that we agree on. We don’t agree on everything, right? I remember when Mr. Chretien said he wasn’t going to go with President Bush to Iraq, but Prime Minister Chretien told Bill Clinton he would go to the Balkans with us. The dialog between Canada and the United States needs to be a geopolitical dialog, not a transactional one.

That commercial relationship is extraordinarily important to our lives. I don’t mean to diminish it, but the secret sauce in the relationship historically has been — I can’t tell you how many times Bill Clinton and Jean Chretien privately conspired about how to achieve things on a global scale.

Q: What’s the one that comes to mind?

Giffin: Well, there were several things in NATO where the then leader of France couldn’t stand Bill Clinton. And if Bill Clinton brought something up, he was against it. Well, one of his closest friends happened to be Jean Peltier. They had both been mayors, Paris and Quebec City. Peltier was Mr. Chretien’s chief of staff, and there were multiple times where Mr. Chretien and Mr. Peltier intervened in advance of some of the meetings, so that when an idea was advanced, the then leader of France wasn’t an immediate ‘no’.

And I can’t tell you how many times there were a conversation between Clinton and Chretien where President Clinton would say, ‘Jean, I need your help on this.’ And if Mr. Chretien agreed, he’d say, ‘Fine.’ And then before the conversation was over, ‘Bill, I need your help on this.’ And that’s just the way it worked. And I think we’ve lost sight of the fact that we’re supposed to be partners, not just trading partners.

Q: It reminds me of something that Condoleezza Rice famously said that when she came to Canada, she wants to talk about big global geopolitical issues, and Canada wants to talk about softwood lumber. Ambassador Craft, was that your experience?

Craft: First of all, the world is on fire. Thank goodness we have a neighborhood, right? Your neighborhood matters. And I think everyone needs to take a step back and think about this neighborhood. You look at Russia, Ukraine, how about that neighborhood? So it is a sense of urgency, and the way that Canada can have relevance, and I’m going to say this, as I said this years ago, is to pay their 2 percent for NATO, to step up, be part of NATO. Canada needs to show that they’re very serious about their defence and their defence spending, because that’s also going to be a reflection on where we are in the Arctic.

Q: What do you make of the proposal in PPF’s Matter More report that that money should be focused on Arctic security?

Craft: The Arctic is vitally important. We have one icebreaker that is fully functioning. How many icebreakers do you think that Russia has: And China? Yes, that’s very serious. But what is at hand at this very moment is a situation we have with Russia, Ukraine, and for that matter, Canada needs to also step up their contributions to Ukraine.

You all have seen in our in our Congress and our Senate, just the negotiation table of how we’re going to have foreign aid to Ukraine. Most of that foreign aid, that loan that we give to Ukraine, goes back into the United States, into our manufacturing, our defence manufacturing base. Can you imagine what that would do with Canada? Your monies that are given to Ukraine would come back into your country in order to upstart your manufacturing for defence. So I think that’s a way to be relevant at the moment.

I was in Helsinki, looking at their ice breakers, and then just coming out of Riga, they are also focused on the Arctic, and they understand the importance. They understand the importance that that is a vast amount of oil and gas, and Russia knows it. Russia is also developing icebreakers that are going to be able to transport the oil. China is there, and they have spread themselves very wide and very deep in the Arctic.

Giffin: If I could just add to that, and I may disagree a little bit on the approach with Kelly, in that I don’t think if you look back historically, Canada doesn’t have to try and be U.S.-lite. I actually don’t feel it’s critical that you do more in Ukraine. You don’t have to duplicate what we’re doing necessarily, but you could take stuff off our back.

I actually think the Arctic is a brilliant idea, because I think it’s a two for one. It’s something the United States would like to see handled better than it is right now, but we’ve got a lot going on and, you know, there’s nobody coming over the ice cap at the moment, so our attention is somewhere else. But if some of the policy thinkers in Washington could go to bed at night and say, ‘the Canadians have that,’ you wouldn’t have to then also be doing a 10th of what the United States does in Ukraine.

I’ll never forget one time Paul Martin said to me, ‘Gordon, stop.’ He said, ‘If you lived next to the United States, you wouldn’t spend any money on defence either.’ And I said, ‘Well, you know, I sort of get the logic of that, sure, but you shouldn’t have said that to me.’”

Q: I do want to ask a Ambassador Craft, a lot has been made of former president Trump’s comments that he would not defend a NATO member that didn’t pay its fair share — the 2 percent of GDP — and some people criticize that as treating the Alliance like a golf club membership. But I think you and others have made the case that he actually strengthened the Alliance. So was this basically a negotiating tactic? How should Canadians interpret Trump’s attitude toward NATO?

Craft: Well, I think a lot of people ask me this because they’re listening to the rhetoric. They’re listening to his conversations on the campaign trail. He has a four-year record of being president, so we know from the past what is going to be done in the future. And what if he hadn’t nsisted that the NATO countries pay their 2 percent? I cannot tell you how many countries, how many foreign ministers, presidents, prime ministers, will say thank you, because our country is stronger because of it.

Don’t you think that China is watching how the U.S. is responding with Russia in Ukraine? Now not only is it Russia, but they have a very rogue quad, right? They’ve got North Korea. They have Iran. They have China. So if you look at the threat that China faces, that Taiwan faces from China, don’t you think one day China’s going to call in their favours, know that they’ve been helping these other countries? So I find strengthening NATO has been vital.

Giffin: We’re going to end up in a partisan debate here. The comments that I have heard numerous times post president Trump’s experiences is that no one felt comfortable relying on the United States in a coherent, thoughtful way, in normal leadership within NATO. And with respect Joe Biden brought back that confidence where there was a more stable, thoughtful, consistent approach, and that the likelihood of a unified NATO response to the Ukraine problem was heightened by the Biden experience, as opposed to the episodic experience in the Trump administration.

I think (Trump) weakened NATO, made it a very uncertain organization, and there are a lot of leaders in Europe today that are concerned that if he’s elected, that NATO may be in deep trouble.

Q: Do you think that’s true Ambassador Craft?

Craft: It is not true, not at all. By strengthening NATO, we have strengthened the entire Alliance.

Q: I just want to go back to because I think this is really important, because you have insight into the former president. You wrote in an op-ed in June that Canada is the sixth wealthiest country in the NATO alliance, but sixth from the bottom in terms of defence spending. And you wrote that’s not going to fly under a second Trump administration. What does ‘not going to fly’ look like for Canada?

Craft: Well it’s going to be another conversation, a very firm conversation, that Canada needs to pay their fair share. The United States does not need to have most of the weight on their shoulders. That is not fair to the American taxpayers.

Q: Many allies are quietly concerned about what Mr. Trump would do in Ukraine. What is your assessment of what he would do? Would he make a deal with Putin that would see Ukraine give up territory?

Craft: I think there is a healthy fear from the our European allies. It’s a very healthy fear because (Trump) is unpredictable, and that’s what works. No one can plan ahead, because he’s unpredictable. I’ve been there, done that and I have to say, it works. Why would you think that Putin would be reaching out to China, to North Korea, to Iran? Because he doesn’t know what’s going to happen, and you know President Trump will be elected, people need to buckle up and get ready, because we’re going to demand that all of the democracies work together to make this world a safer place, and Canada being one of them. And I can’t stress how important this neighborhood is.

Q: Turning to trade and tariffs. Ambassador Giffin, Michael Beeman, who’s a former assistant U.S. Trade Representative, has a new book out that says a Donald Trump presidency risks accelerating a shift away from the U.S. decades-old free trade consensus. He also added that with the Harris administration, it’s the same trajectory. Do you think the Harris administration will continue and move away from free trade and towards subsidies, tax breaks, industrial policy that we’ve been kind of seeing the last couple of years under Biden?

Giffin: I think we have to look at free trade in a different matrix. I do think that there’s a real future in a Democratic administration for defining a new model for the North American experience. I think we’ve got to change the model. I don’t mean brick by brick. I think we have to change the model at a high level and then start filling in the bricks. I do think it’s going to be some sharing of new industrial policy, if new industrial policy means ‘made in North America’ and if that means that we work together in a way that we are sharing our ingenuity, our resources, our capital, for the advancement of our interests here, our mutual interests here. I think there’s a real opportunity for that.

There’s been a reticence in Canada to really join in a full-fledged collaborative experience within the United States, for feel of somehow ceding sovereignty. And I’m not talking about a political union, but I really do think we’ve got to take it to another level and quit talking about the review of CUSMA or USMCA, but do a new model.

Q: Are you saying to do away with USMCA?

Giffin: No, I didn’t say ‘do away.’ What I said is to take it much further.

Q: What does further look like to you?

Giffin: Well, we’re doing some trial projects, if you will, now where there’s real collaboration going on with respect to critical minerals or US investment in the development of Canadian assets. We’re talking about uranium. Cameco is the largest non-state owned producer of uranium in the world and there’s no question there’s a renaissance of domestic nuclear power throughout the world, but it’s going to have to be in North America as well.

And we need to do a better job of collaborating with each other on the use of LNG for the rest of the world. Canada’s got a lot of gas, but you don’t yet have much in the way of LNG projects, and you can’t get it to the East Coast. We can get it to the East Coast.

We just need to have this new model in which we say, ‘we’re breaking out of the constraints of just arguing about the Kleenex that we sell.’”

Craft: What’s going to be really important is, how are we going to integrate all that has happened since we first signed USMCA, because it’s a new world.

Q: Will the mandated review in 2026  necessarily become a renegotiation?

Craft: Well it will be renegotiated. Let’s not use that term in a negative way. It will be renegotiated. If there are still disputes, you will renegotiate if those disputes have not been settled. But I think it’s going to be a review.

We have to remember USMCA, being the largest trade deal in the world, is only there to protect North America. We do not need Chinese parts coming through Mexico, coming into the United States or Canada.

Q: Ambassador Giffin, I want to quote something you’ve said to POLITICO that Trump tariffs are a part of his bluster of the campaign to attempt to demonstrate that he’s some hard-nosed defend America leader. You mentioned 100 percent, 500 percent tariffs, but what I’ve read is a 10% across the board tariff. Even if it’s just 10% do you think it is just bluster. Do you take that seriously?

Giffin: I do think the 100 percent, 500 percent — which, by the way, he has talked about, but not on Canada — numbers like that are bluster. Sometimes he gets on a roll. I don’t think details bother him. I think there is a lot of bluster in there.

Q: Well to be fair he introduced tariffs and President Biden kept a lot of those tariffs on China. They have played a purpose.

Giffin: We’re talking about across-the-board tariffs, right? That’s that’s something that’s not just on China. But you’re right. I think, in fairness, some of the actions that were taken with respect to China were good steps. So I think you got to give the devil is due.

There are a lot of things that we took for granted. There was an arrogance in the Democratic Party leadership, elected leadership, thought leadership, for a long period of time that has brought about a disgruntled, disaffected portion of our society in the United States, and that’s what’s bringing about all of the disruption and the dissatisfaction. We have to acknowledge that to some degree. You know, our attitude at the top of the Democratic Party was we’re smarter than you. Just take it easy. We’re going to fix this. And people got tired of that, and in fairness we’ve learned our lesson. I think Mr. Trump has done a good job of appealing to that disaffection, but then to a point where, I would say is counterproductive on trade and economic matters.

Q: Ambassador Craft, should Canada expect to be hit by tariffs under a Trump administration? What could Canada do to avoid that scenario?

Craft: I think it’s going to be dependent upon 2026 to see where we are and where we agree and disagree and where we can do better and where we can do less. But you know, I think right now the American people, they want to talk about gasoline being $2 more a gallon. They want to talk about going to the grocery store and their grocery cart costing $125 when it’s really worth $100 — that’s what they want to talk about. They want to know that when they come home at night, that their family is going to be safe and secure. They want to know that this country is going to be safe and secure, and that’s why he’s resonating.

Q: Do you think the personal relationship makes a difference, and in the case of a potential Trump presidency, would Canada have a better relationship with Washington by electing a Conservative Prime Minister?

Craft: I don’t know what’s going to happen in your upcoming your elections, but President Trump is going to look after America first. He means that when he says it. I’ll say it one more time: If Canada is showing that they are serious about their defence budget and the two percent of their GDP to NATO, and that they are serious about the different chapters on trade that we may have disagreements with, then will you’ll have the best friend you’ve ever had. But President Trump feels very strongly that American taxpayers should not be carrying the majority of the burden. All we ask is for people to pay their fair share, to strengthen their military, because when you have a strong military, that is the best deterrence you can possibly have.

Q: Ambassador Giffin, I’m going to give you the last word, but the same question: Do you think if Vice President Kamala Harris is elected, would that relationship be stronger with a Liberal Prime Minister?

Giffin: I don’t think it matters which party is in power in the two countries. I really don’t. You could have a Conservative or a Liberal prime minister. We could have a Democrat or a Republican. The relationship does matter, and it’s not predicated on what your party label is.

Where Kelly and I diverge on what she just said, again, this is not a transactional relationship. The United States and Canada, our history together, our successes together, are based on shared values, shared principles, shared aspirations for our people. We’re democracies. We see things differently. We have different systems. But at the core of it, I hate to use all those platitudes, but that’s what makes it out of the ordinary and that’s the thing that we have to continue to value.

Yes, there needs to be a sharing of burdens generally, but I don’t think the United States should have a tabulation as to whether you’re at 1.6 or 1.8 as long as we are partners, as long as you’re taking a role in advancing our common goals with us.