Posted at Americas Quarterly on July 15, 2010
In the 1992 presidential election, then candidate Bill Clinton had a slogan that his campaign posted on the wall of his electoral headquarters: “it’s the economy, stupid!” Clinton went on to win the election with his “economy first” message beating then President George H. W. Bush who had an over 80 percent approval rating just the year before.
As Americans prepare to go to the polls this November, operatives and pundits from both parties agree that the economy will again be the major issue this fall. Call it anti-incumbency fever or just plain anger; it is all too obvious that Americans are primarily concerned about economic prospects.
About 18 months ago, the U.S. economy teetered on the brink of the worst economic recession since the Great Depression of 1929. By now the narrative is familiar: a federal bailout program of the financial sector (TARP), the collapse of General Motors and Chrysler forcing another bailout effort, and a $787 billion stimulus—the biggest spending program in U.S. history. All this government aid was needed, the experts told us, or we would suffer another Great Depression. Today, economic growth has returned, but with a more modest job picture.
North of the border, the picture appears brighter. Last week, the Canadian government boasted that all jobs lost during the Great Recession had been recovered (statistically, that is) with Quebec being the major job creator with over 117,000 jobs from July 2009 to June 2010. No financial sector bailout, no bank failure, growth in the first quarter at a 6 percent clip, and the federal budget on the sure path to balancing the books by 2014-2015. Yet, despite Canada’s rosier picture, no one can take comfort in the slow recovery of its number one trading partner and one half of the biggest trading relationship in the world.
Traditionally, Quebec, along with Alberta, has been the strongest proponent of free trade among the Canadian provinces. It was a primary backer of the original free trade agreement (FTA) with the U.S. and later, actively supported the Canadian government’s initiative to conclude NAFTA and include Mexico. In the last three years, Quebec has promoted the idea of free trade with the European Union, which is today being negotiated by Canada and the EU.
Fortunately, the conventional debate between protectionism and free trade has given way to achieving greater trade liberalization in world markets. This is why Canada and its 10 provinces were united in objecting to the Buy American provision of the stimulus plan. While the agreement in February 2010 provided a Canadian waiver to the Buy American provisions, the consensus came too late in the game as much of the stimulus money had been allocated. Most encouraging, however, is the commitment by both governments to engage in a formal negotiation to expand access on both sides of the border to the public procurements. This is welcome and good news. The bad news is that trade numbers between the U.S. and Quebec (and Canada) in the last decade have shown a steady decline from $63 billion in 2000 to $40 billion in 2009.
Since January 2010, the Quebec government has launched a specific U.S. strategy to respond to this situation. It focuses on increasing commercial exchanges and promotes freer trade practices, exerting our capacity to meet the energy and environmental goals of the U.S., making a specific commitment to add to North American security because trade is enhanced by safer and more secure borders, and pushing for a high speed rail connection with Montreal.
Our economies are increasingly interrelated and integrated. It is fair to say that we are part of each other’s supply chain. This is healthy as it creates opportunities and jobs. When I look at the political landscape in the U.S., at the federal level in Canada, and in the Canadian provinces with Quebec an unequivocal leader, I am heartened by the fact that the key political actors believe in greater trade possibilities to strengthen our respective economies within North America. It seems that after these many years since the 1992 presidential election, “it’s STILL the economy, stupid.”