Harper plays the oil card with skill

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The Gazette, Wednesday, April 23, 2008

At the three amigos' summit in New Orleans yesterday, the Canadian media's first question to Stephen Harper was about the Elections Canada-RCMP "visit to your party headquarters."

Well, there's nothing like washing Canadian laundry on the world stage. But the reporter was only doing his job, and asked the question in a circumspect manner, referring to a visit rather than a raid. And Harper's response was as dignified as the question permitted: "Elections Canada thinks that some of our local expenditures should be considered as national expenses and we do not agree with that, and that's why we went to court with this issue and in the interim we will respect the law and the interpretations of the law."

He didn't need to get into allegations of accounting irregularities from the perspective of elections officials, or from his own of the police carting off boxes containing the Conservative Party's entire legal case in its civil suit against Elections Canada. This raises a huge issue of attorney-client privilege, a sacrosanct principle of law.

But never mind all that. Harper and his two North American colleagues in the Big Easy - George W. Bush of the U.S. and Felipe Calderon of Mexico - made some other news with their comments on the North American Free Trade Agreement.

And this on a day when trade was very much an issue in the rust-belt state of Pennsylvania, where people were streaming to the polls in the Democratic primary in which both Hillary Clinton and Barack Obama have said they would reopen NAFTA to renegotiate environmental and labour standards, among other things.

Which, of course, is just campaign boilerplate from both sides. But it plays well to the galleries, and it plays well in a state where protectionist sentiment has always been strong. It is impossible not to mention Pennsylvania and steel tariffs in the same breath.

It isn't every day, then, that it's impossible to disagree with the second President Bush, especially when his arguments are backed up by the facts. "NAFTA," he said, "we analyze it in an objective way, (and) it is very beneficial to America. It also happens to be very beneficial to Mexico and Canada, which makes it a very good comprehensive agreement. That is what you want in your neighbourhood."

As Jeffrey Schott and Gary Hufbauer of the Washington-based Institute of International Economics have written: "Between 1993 and 2006, trilateral merchandise trade rose almost three-fold, now exceeding $800 billion annually." The U.S. economy added 34 million new jobs in that period, while Canada added 3 million. Trade would account for only one new job in 10 in the U.S., but a much higher percentage in Canada (80 per cent in the 1993-2000 period).

Pennsylvania? Its largest customer by far is Canada, which accounts for 34 per cent of all its exports, more than the next seven countries combined. Nearly 300,000 jobs in the Keystone state depend on trade with Canada. Think about that, Lou Dobbs. Not that Lou does a lot of thinking when he's ranting on CNN.

But look, said Harper, if a new American administration wants to renegotiate the NAFTA, we're there. And here was his point: We've got oil. And gas.

He played Canada's high card yesterday, and he played it extremely well, without in any way interfering in the U.S. presidential election.

"If our partners want to negotiate, that we'll do," he said. "We'll negotiate. That's not the position that we prefer (in) the government of Canada. We have an agreement that has worked well, and created jobs, lots of jobs in this continent, and I think that the business community is unanimous about the benefits of this agreement."

He added: 'The American people are going to make a decision. A future American administration may have a different view."

That was the setup pitch. Then came the high, hard one.

"We'll be prepared for any eventuality," Harper continued. "Canada is the United States' number one supplier of energy. We are a secure and stable supplier. That is of critical importance to the future of the United States, and if we had to look at this kind of option, I think quite frankly we would be in an even stronger position now than we were 20 years ago and we'll be in a stronger position in the future. But my preference is not to negotiate what we talked about in the past. It's to talk about the future."

As he spoke yesterday, the price of oil reached a new all-time high of $118 a barrel. Uh-huh.

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