Home The Washington Diplomat July 2020 Canada’s Crisis Manager: New Envoy Confronts Pandemic, Protest and Protectionism

Canada’s Crisis Manager: New Envoy Confronts Pandemic, Protest and Protectionism

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Normally, to mark Canada Day on July 1, the embassy in D.C. would have hundreds of people over to celebrate with poutine (a decadent Canadian staple of french fries and cheese curds topped with brown gravy), activities, lots of maple leaf-themed party favors and the occasional outburst of “O Canada!”

The festivities this year would’ve been even grander because July 1 also coincides with the official rollout of the United States-Mexico-Canada Agreement (USMCA), the hard-fought successor to NAFTA.

But this year won’t look anything like past years. Instead, the embassy sits largely vacant — barely at 10% occupancy. A rainbow-colored Canadian flag — in honor of Pride Week — quietly blows outside the expansive but otherwise empty rotunda. A sign in front of the embassy art gallery on the ground level encourages visitors to go online to see the current exhibition, “A New Light: Canadian Women Artists.”

The only large crowds the embassy has seen are the various protests against racism taking place across the city.

And the only action on the embassy’s rooftop — a prime spot for receptions because of its views of the U.S. Capitol — is a small beekeeping box and a butterfly garden that staff recently set up in a sunlit corner.

Not exactly a hive of activity.

But at the other end of that rooftop sits a glass-enclosed office where Canada’s new ambassador, Kirsten Hillman, is as busy as ever carrying out her normal duties while also adjusting to the new normal of pandemic and protest.

Yet in many ways, unrest and uncertainty have been Hillman’s “normal” for the last three years.

Before formally becoming ambassador in March, she served as the embassy’s deputy chief of mission since 2017, playing a key role in shepherding the USMCA through contentious negotiations in an effort to preserve and modernize the 25-year-old North American Free Trade Agreement.

Passage of the USMCA was an absolute must for Canada, whose largest trading partner is by far the United States.

The USMCA was also a rare economic win for President Trump, whose trade agenda has yet to produce any tangible results outside of a controversial and inconclusive tariff war with China. But it wasn’t an easy victory, as Canada and Mexico haggled with the White House over issues such as rules of origin, sunset clauses and dispute mechanisms.

Hillman, who has spent much of her career as a top trade official for Ottawa, was intimately involved in those negotiations. In essence, her job since coming to Washington has been to convince an anti-trade president that trade is good.

Yet even after the USMCA was signed, Hillman didn’t get much of a respite. On the very day Prime Minister Justin Trudeau announced her formal appointment as ambassador in March, the White House was reportedly considering whether to send troops to the Canada-U.S. border to stop the spread of the coronavirus, even though just days earlier, the two countries had already worked out an agreement restricting border crossings in response to the pandemic. (No troops wound up being deployed.)

We sat with Canada’s first female ambassador to the U.S. — appropriately socially distanced, of course — and asked if she feels like she’s been in perpetual crisis mode since coming to Washington.

Hillman said she hasn’t been fazed by all of the ups and downs because the fundamentals of her job — strengthening the bilateral relationship — have not changed, regardless of what’s happening in Washington or the world.

“Because a lot of it’s dictated by the way millions of Canadians and Americans are interacting every day, whether it’s our businesses, whether it’s our lawmakers, whether it’s our border communities or families,” she said, her distinct Canadian accent making an appearance.

“All of these millions of interactions that happen every day are the underpinning and the driver of … the Canada-U.S. relationship. It’s an economic relationship. It’s a security relationship. It’s a defense relationship. It’s an energy relationship. And those factors in our relationship are pretty consistent over time — protecting our shared water spaces, protecting our environments, ensuring that we have energy security, making sure trade is flowing, making sure our borders are safe, making sure we’re cooperating so that the threats out there in the world don’t come back to our shores,” she said. “All that persists over time because it’s bigger than any one government or any one point in time.”

Hillman said the pandemic has only heightened the “incredibly close collaboration” between the two neighbors.

That includes their mutual decision in March to shut down the 5,500-mile Canada-U.S. border — the busiest land border in the world — to all nonessential travel. It was a decision whose magnitude should not be underestimated, the ambassador told us.

“Our border has, under normal circumstances, over 400,000 back-and-forth crossings every single day,” she pointed out. “It is [the] main artery for well over $2 billion in bilateral trade every single day between our two countries…. It’s the backbone of our economy, and it’s crucial to your economy.”

Hillman said the question of the border came up when Washington and Ottawa began imposing travel restrictions on other countries. “We were both saying to our citizens, ‘You need to stay home, you need to not venture out.’ And we both thought, ‘Well, if we’re saying that to our citizens within their own community, we should probably say it to them as between our two countries.’

“From the nub of this little idea, to making the decision, to implementing the decision, to having our border officers enforce the decision, was a matter of days — literally days. And I can’t tell you how — I don’t know if surprising is the right word — how impressive that is,” she said.

“And I think the last three months — in a very profound way — have demonstrated that when the chips are down … Canada and the U.S. are there for each other,” she added. “It’s a real test of the depth of the relationship that when policymakers are scrambling to try and do the right thing under imperfect information in an unprecedented situation, they’re still reaching out and working very closely and collaboratively, which we’ve done.”

The 30-day border restrictions began in March and have since been renewed three times.

Crucially, the border closure does not apply to two-way trade, which in 2018 totaled over $700 billion in goods and services. Nevertheless, the pandemic is likely to put a huge dent in bilateral trade given how interconnected the two economies are, especially when it comes to supply chains, which have been upended around the world by the coronavirus.

In April alone, as the pandemic began to take its toll, Canada-U.S. trade in goods was down 39% compared to the previous month.

“For example, auto plants shut down on both sides of the border and trade in autos and parts fell dramatically as a result. Also impacting the dollar value of trade flows was oil,” according to the embassy. “When oil prices collapsed, the value of this trade fell tremendously. Both of these factors can be expected to recover from the April lows quickly as our economies reopen.”

But Hillman admits that the ultimate economic damage is impossible to gauge for now because we’re still in the midst of the crisis.

“Forecasting into the future is something that is for the future,” she said wryly. “I think we just have to be honest and straightforward about what is happening and wait for the dust to settle.”

While the economic effects of the coronavirus are difficult to predict, the ambassador told us that the Canadian public is not clamoring for the border to fully reopen.

That’s probably because Canada is doing a far better job of curbing the spread of the virus than is the U.S., which now leads the world in both coronavirus cases and deaths.

There are distinct parallels — and differences — in how the two countries tackled the pandemic.

Similar to how the Trump administration has delegated authority to individual states, Trudeau’s government has given Canada’s provinces latitude in reopening depending on their particular circumstances. And like the U.S., Canada has implemented a wide-ranging economic stimulus program, including $2,000 a month to workers who’ve been affected by the virus.

Unlike the U.S., however, Canada has experienced roughly 100,000 coronavirus infections and nearly 9,000 deaths (as of the end of June) — compared to a staggering 2.6 million cases in the U.S. and nearly 130,000 deaths.

Experts say a lot of that has to do with Canada’s aggressive, early testing; a coordinated effort at the national level to distribute personal protective equipment; strong investments in public heath; and leadership that hasn’t politicized measures such as wearing masks. (The country’s response has been far from perfect, though, with the pandemic exposing problems such as neglect in nursing homes.)

Hillman attributes Canada’s successes to the public complying with government recommendations, which in turn have been based on “science, experts and facts on the ground.”

“I think that we are very successful in having Canadians follow the guidance around minimizing travel, social distancing, sheltering at home to the greatest extent possible,” she said, noting that the government also imposed a 14-day mandatory quarantine for anyone entering Canada from abroad. “And we believe that that is very effective in ensuring that while we are managing the spread within Canada we don’t have a resurgence that is caused by COVID being brought into the country from abroad.”

Trudeau (whose own wife was infected with the virus but has since recovered) has generally won plaudits for his handling of the pandemic.

An odd fascination has even developed among Canadians as they keep tabs on their prime minister’s ever-growing hair and beard (after all, barber shops have been closed). As The New York Times pointed out in a June 11 article, “three months into the coronavirus pandemic, as he has appeared day after day at televised briefings to answer questions — and sweep the bangs off his face — commentary on Mr. Trudeau’s mane has become a national sport.”

It’s a far cry from the comments Trudeau was receiving just last fall when parliamentary elections were held. While Trudeau’s Liberal Party won the most seats, it lost its majority, in part because of a corruption scandal in which a former justice minister accused Trudeau’s administration of pressuring her to drop bribery and fraud charges against a large Quebec-based engineering firm.

Trudeau was also hurt by revelations that he wore blackface makeup in high school and at a party in 2001.

The incidents took the sheen off the confident, youthful prime minister who strode into office in 2015 on a progressive platform championing inclusion, immigration and gender equality.

Since then, Trudeau has kept many of his promises, appointing the most diverse cabinet in Canadian history and reaching out to marginalized indigenous communities.

But he’s also been criticized for embracing energy projects that encroach on aboriginal lands. And the U.S. protests sparked by the death of George Floyd quickly spread to Canada, where people marched not only in solidarity with their American counterparts, but also to bring attention to racial injustice at home.

In fact, just recently, video surfaced of police beating a prominent indigenous chief, striking a national nerve given the disproportionate rates at which indigenous and black people are imprisoned.

The ambassador readily admits that racism is a problem in her homeland.

“Canada is a country that is built largely on immigrants from all over the world, both historically and continuing today,” Hillman said, noting that one in five Canadian citizens were not born in the country.

At the same time, “anti-black racism exists in Canada. Systemic discrimination exists in Canada,” she said. “And it’s important to know that the issue is not an American issue. These very important conversations that have been started here in the U.S. have triggered conversations all over the world, and absolutely in Canada because we, too, can do a lot better.”

But when asked about an on-air appearance in which Trudeau took an awkwardly long pause when asked about President Trump’s handling of the protests — before giving a generic talking point — the ambassador, too, diplomatically dodged the question.

“I think it’s the job of our government and our leadership to lead the conversation as it pertains to Canada. That’s their job.”

It’s obvious that Hillman would much rather talk about something else — namely the USMCA, which is understandable given the herculean effort that Canada, and Hillman herself, put into helping the free trade deal cross the finish line.

In 2018, the U.S., Canada and Mexico agreed to revamp the 1994 North American Free Trade Agreement, which is responsible for $1.2 trillion in annual trade among the three nations. The United States-Mexico-Canada Agreement updates NAFTA with new rules on intellectual property rights, car manufacturing, digital trade and agricultural market access, among other areas.

But passage of the sweeping accord was by no means certain given Trump’s open hostility toward NAFTA, which he described as “perhaps the worst trade deal ever made.”

Democrats, too, objected to parts of the deal, demanding stronger labor enforcement and environmental protections, which they ultimately secured (also see “Administration Tries to Assuage Democrats’ Concerns to Ratify Updated NAFTA Trade Deal” in the October 2019 issue).

Despite the hurdles, Trump finally signed the USMCA in January of this year. Among other things, it requires automakers to produce 75% of a car’s components in North America to qualify for zero tariffs; boosts the minimum wage for auto workers (an effort to put American and Mexican workers on a more level playing field); gives Americans expanded access to Canada’s coveted dairy market; and scraps a controversial arbitration system that allowed corporations to sue governments while maintaining the mechanism to settle disputes among the three governments (a win for Canada).

Hillman said that in addition to setting rules to liberalize trade and foster integration, the key to the deal was certainty for businesses, “so that they know that whatever happens within national governments, they can plan over time, that certain rules will be there for them to count on — and that incentivizes them to make investments and create jobs.”

“In the early days, there were some proposals that were being discussed that went counter to that,” she added, referring to Trump’s original demand for a sunset clause that would’ve required all sides to recertify the deal every five years (instead, the USMCA has a 16-year expiration date and a trilateral review every six years).

“So those were difficult discussions,” Hillman said. “And then it was the normal kind of push and pull of a trade agreement, which is we would like this, you would like that, we don’t really want to give you that. You push and pull and you get yourself to a place where you feel like, ‘OK, this is a good bargain.’

“And I would say, without a doubt — and virtually my entire career has been as a trade lawyer and a trade negotiator —  this is a standard-setting agreement for Canada, the U.S. and Mexico in terms of the trade components and also in terms of the innovations [and] the labor and environment chapters, which are fully enforceable,” she said. “There’s a lot in there that I think will be a template going forward.”

While it doesn’t grab nearly as many headlines, the Trans-Pacific Partnership (TPP) has also been a “highly successful” trade agreement for Canada, said Hillman, who was Canada’s chief negotiator for the deal.

Trump abandoned the TPP in 2017 but Canada and the 10 other Pacific Rim nation members pushed forward with it.

“So we say often, Canada has a free trade agreement with Europe that’s only a few years old, a free trade agreement with the Asia-Pacific that’s only a few years old and now we have a free trade agreement with the North Americans,” Hillman told us. “We’re sort of the platform for the world, really, in terms of the trade agreements.”

Canada’s pro-trade agenda, however, is anathema to Trump — and many people around the world who feel left behind by globalization.

But Hillman counters that globalization, including the post-World War II multilateral trading system, help to lift up the most vulnerable.

“I actually think the pandemic has demonstrated to the world that there are problems that go far beyond our own borders, and that these global problems cannot be solved without global cooperation,” she said.

“And I think international trade is very much the same thing. International trade is about finding ways to strengthen the economies of the countries with whom you are engaging,” she added, citing the importance of “fair, transparent, predictable rules.”

“Because if you don’t have that, then it’s just the biggest countries and the most powerful economies that are going to make the rules for themselves and everybody will be trying to figure out how to react to that.”

When asked where those rules should be established, she pointed to the World Trade Organization, where she worked as a senior legal advisor for Canada. When asked about Trump’s outspoken criticism of the WTO, Hillman said that many of those grievances pre-date this administration and that Ottawa continues to have “conversations” with the White House about reforming the global trade body.

It’s highly questionable, though, whether those conversations will go anywhere given Trump’s protectionist, zero-sum approach to trade — not to mention the upcoming election in November — but Hillman is optimistic that despite the tremendous turmoil that has come to define 2020, Canada and the U.S. can pull through it, together.

“We’ve come through a moment from the renegotiation of the NAFTA, to grappling with COVID-19 as a health issue, to now grappling with it also as an economic issue,” she said. “I think we have shown that … we’re going to be crucial partners to each other even more than we are now.

“And I’m excited and encouraged in the face of all of this hardship. I’m excited and encouraged at the prospect of being able to take this moment in time and build upon it as we all learn and look back on what we’ve lived through and try to make our societies better and our economy stronger and our health systems more resilient.”

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