The Morning Brief – 04.07.20

By Bruce Carson


Economy—The Fight for Medical Personal Protective Equipment

The Continually Changing International Role of the United States

China Ascending and the need to rethink Canada’s Foreign Policy

Perhaps it is best to start this saga with how it ended late yesterday. There seems to be at least two venues for the fight against COVID-19. The international war to fight COVID-19 occurs in the hospitals and their Intensive Care Units staffed by incredibly brave women and men from all parts of the medical profession and support staff. The other part of the war, which is a necessary part of supporting the medical profession, is being fought by political leaders as they attempt to ensure that sufficient Personal Protective Equipment (PPE) is available.

This is the part of the war that Deputy Prime Minister Freeland has described as the “wild west,” being a global scramble to acquire PPE.

Yesterday at his daily media availability Prime Minister Trudeau dealt with this “scramble” when he said “this continues to be an ongoing problem-specifically with the United States. We are working with them to ensure the order Canada has placed gets delivered. We expect the shipment to come.”

The happy ending here, if what occurred late yesterday holds, is that 3M, the company at the center of the PPE controversy occasioned when President Trump invoked the Defence Production Act announced that a deal has now been reached that would protect the sending of respirator masks to Canada and elsewhere, particularly Latin America.

3M said “the Administration is committed to working to address and remove export and regulatory restrictions to enable this plan.”

The plan will enable 3M to continue sending United States produced respirators to Canada and Latin America where 3M is the primary source of supply.

The 500,000 masks which Premier Ford revealed had been held up at the border are now apparently on their way, although the premier said he wouldn’t believe it until he saw them safe on Ontario soil.

The saga started in the middle of last week when the Trump Administration invoked the Defence Production Act, a Korean War piece of legislation, and stopped the export of PPE from the U.S., primarily manufactured by 3M and destined to Canada and Latin America.

This action by President Trump was reminiscent of his mercurial actions during the NAFTA 2.0 negotiations. There we witnessed name calling, the U.S. working with Mexico to the exclusion of Canada and the placement of tariffs on aluminum and steel imported from Canada. There was also the threat to impose tariffs on the import of autos and auto parts from Canada. Trump mastered the art of tariff weaponization so it was not a stretch to see him working once again against the interests of Canada, supposedly, America’s closest ally.

Throughout the past few days Trudeau has adopted the same negotiating stance as he did during the NAFTA negotiations and work at numerous levels to protect Canada’s interests.

This seemed to be working when on Sunday during an interview on Fox News, Peter Navarro, Trump’s Director of Trade and Manufacturing said “there will be some exports from United States factories to our friends in Mexico and Canada.”

But as noted above, it wasn’t until 3M and the Trump Administration made peace late yesterday and Trump’s new positive view of 3M was announced during his afternoon press conference that there was a hint that Canada would be obtaining the PPEs it had ordered.

Even now, it would be realistic to adopt Premier Ford’s attitude and not celebrate until the PPEs arrive.

While the Trudeau approach to dealing with Trump may be frustrating for those who advocate confrontation and retaliation Trudeau has maintained that “I don’t think it’s a good thing to harm your neighbour to succeed. That’s why we will work together to resolve this difference between friends.”

In the end it may be Premier Ford who has the most appropriate solution which is never again to be dependent on sources outside Canada for the supply of necessary medical equipment.

In addition to Ford’s view of future procurement of much needed health care equipment there is another factor that Canada should take into consideration as it moves forward beyond COVID-19 and that is the fact that the United States has abandoned its position of leadership in times of crisis.

John Ivison writes in his latest column “Trump’s abdication of responsibility means when this is all over, 100 countries will think better of China and worse of the U.S. including, maybe Canada. The U.S. approach to PPEs drove Canada into the waiting arms of China as it was announced by Trudeau on Saturday that in the next 48 hours Canada will be getting millions of masks from China and Canada has rented a warehouse in China to house PPEs before delivery to Canada.

In addition to abdicating leadership, Ivison writes “Trump’s inward looking approach is antithetical to the values that made the United States successful.”

The U.S. played a leadership role in the G20 during the recession/depression of 2008-09. It now plays a minor role in the G20 and G7 response to COVID-19. And where there is a power vacuum or abdication of leadership, China is there to insert itself.

More than at any time since the 2016 election Trump seems intent on making the U.S. smaller in its world view instead of reaching out to help, taking charge in a leadership role in a time of world-wide crisis.

This small view, at this time, presents Canada with an interesting dilemma as policy makers look beyond COVID-19 and what that world will look like.

Should Trump be successful in November, as it now seems likely he may be, Canada, because of its strategic location just north of the U.S. will be the closest witness to the changing role of the United States in the world. And because of the deep connections between the two countries from integrated supply chains as well as workers flowing north-south, defence agreements from NORAD  to NATO, Canada is really not in a position today, to strike out looking for a new best friend, especially if the choice is China.

What Canada may do as it re-evaluates foreign policy in the post COVID-19 world is look for a number of friends with whom Canada shares trading and other interests.

There are numerous decisions to be made regarding foreign policy and at the top of that list could be defining a path forward that gets Canada out of diplomatic squeeze it is presently in between the United States and China. Canada needs to develop a new realistic approach to China, but also towards the United States. Neither country can be counted upon to have Canada’s back in times of crisis.

A necessary new approach to Canadian foreign policy may be one of the positives that emerge from battling COVID-19.

Prime Minister Boris Johnson

The last 36 hours have shown how indiscriminate COVID-19 is as it picks its victims. No one is immune. If a wakeup call to the insidious nature of this disease was needed, now we have it.

Prayers and thoughts are with the prime minister and his family as he fights his way back home to family and then to the cabinet table.

To Come

April 8
  • Building permit numbers for February to be released
April 9
  • Job numbers for March to be released
  • Possible OPEC + meeting to deal with oil output
April 10
  • Bloomberg reporting that G20 energy ministers meeting is to take place
April 15
  • Bank of Canada deals with interest rates and releases its Monetary Policy Report