Q and A with Canadian Ambassador David MacNaughton

BUSINESS MONDAY

 MARCH 19, 2017 3:00 PM

NAFTA, free trade and jobs, oil pipelines are all on Canadian ambassador’s plate

BY MIMI WHITEFIELD

mwhitefield@miamiherald.com

A spur of the moment decision to attend a student Liberal Party convention when David MacNaughton was in college that was influenced more by his interest in a fellow female student than politics serendipitously launched a political career that has taken him to Washington as the Canadian ambassador to the United States.

Along the way, he served in provincial government posts and as an adviser to the minister at the Departments of Transport, Industry and Foreign Affairs as well as built a successful career in public affairs and public relations.

MacNaughton was in Florida recently for a rocket launch at Kennedy Space Center, to visit the Canadian Consulate in Miami and to pay a call at the Southern Command in Doral.

He said he makes a concerted effort to get out of Washington. “I’ve been to Boston, New York, Seattle, Los Angeles, Denver, San Diego,” MacNaughton said during an interview at the Biltmore Hotel in Coral Gables. “I’m going to Houston later in the week and now I’m here.”

Florida, he said, is a very important economic partner for Canada. Not only is Canada the top destination for Florida agricultural products, but two-way trade between the state and Canada tops $8 billion annually and Canadians make more than 4 million annual visits to Florida, spending more than $5 billion. That easily makes Canada the state’s No. 1 tourism market.

Florida also is a big destination for Canadian investment, and Canadians hold around $50 billion in residential real estate in the state.

MacNaughton took up his post in Washington last March, and now with a new American president in the White House, he must deal with such hot-button issues as the potential reopening of NAFTA negotiations and the controversial Keystone XL pipeline that would run from the oil sands of Alberta, Canada, to Steele City, Nebraska.

While president, Barack Obama rejected a bid to build the pipeline, citing its impact on climate change. But in the first days of his administration, President Donald Trump took executive actions that would expedite the approval process for both the Keystone and Dakota Access pipelines.

Q. How would you characterize Canada’s relationship with the new U.S. administration?

A. I think it’s very good. Since the inauguration we’ve had very positive dealings with all of the members of [Trump’s] staff leading up to the visit of the prime minister to Washington. I spent 3 1/2 hours at the White House one day and two hours the next. [Canadian Prime Minister Justin Trudeau visited the nation’s capital Feb. 13.]

I think this administration has been responsive and forthcoming and professional. It’s going very well on a relationship basis. We still have some tough issues to deal with, but I think the prime minister’s visit to Washington went extremely well.

Q. One thing that seems somewhat resolved is the future of the Keystone XL pipeline. Are you confident that it will now be built?

A. I don’t see any obstacles at the federal level for it to move ahead. Obviously there are a few things that have to happen in Nebraska, but I’m optimistic they can be resolved. They have a process, a regulatory process. under way, but the governor of Nebraska has been positive of late so hopefully all will go well. We’re pretty confident.

Q. What is Canada’s position on reopening NAFTA negotiations as President Trump has said he wants to do?

A. I think it was the day after the election when I was interviewed and I said that we were more than happy to have discussions about improvements to NAFTA. We will try to focus on areas where it would be beneficial to the United States and Canada and Mexico also. There have been 11 or 12 changes since NAFTA was first signed in 1993 and there are improvements that could be made and we’re open to having those discussions. I think it has to be beneficial to all three countries.

Q. What about Trump’s rationale for reopening NAFTA, that the treaty has resulted in a big loss of American jobs? Do you agree with his assessment?

A. There are those who think that NAFTA hasn’t been as beneficial to the United States as they would have liked it to be. There certainly hasn’t been a drain of jobs out of Canada to the United States. The reality is that our trade is more or less in balance. Take manufacturing trade, the United States has a surplus with Canada. The president has said that as far as Canada is concerned, it will be more tweaking [of NAFTA] than anything — tweaking, not tweeting.

Q. What about the idea that free trade agreements, in general, are causing the United States to lose manufacturing jobs?

A. I think there are other factors involved, but one has to realize that among a certain segment of the U.S. population, particularly the middle class, that wages are static and that has caused some anxiety. It’s always easier to blame someone else than it is to look at job loss as the result of technology and other things.

There are also countries whose markets aren’t as open as those of Canada and the United States. Something that we’ve indicated to this administration and the last administration is what we’d like to do in partnership with the United States to deal with those issues and those countries that may be dumping products in North America. In fact, we have been working with the United States or steel and aluminum to prevent the overcapacity in some countries that has caused substantial problems in North America.

Q. In auto assembly, certain parts may cross the border several times during the manufacturing process. Are there other products that are jointly produced?

A. There are many things from soft drinks to lipstick that go back and forth between borders during the manufacturing process. We make things together and sell them to the rest of the world.

Q. Do you think that message is being lost?

A. I don’t think we’ve done a good enough job of making people aware of it. It is very much the problem of the Canada-U.S. relationship that it works so well it goes unnoticed and then the only time it gets noticed is when something happens that disrupts it — more often than not, that’s not by design but accidental. We get inadvertently caught up in things when the United States is trying to deal with something that also affects us.

But what we’ve got to do is a better job of convincing and demonstrating to Americans that their prosperity is very much dependent on continued trade, investment and tourism with Canada. If you look at the 4 million Canadians that visit Florida every year, the 400 Canadian companies that have investments here — quite apart from the 625,000 jobs that depend on investment and selling things to Canada — it’s a pretty important relationship.

But I suspect most Floridians don’t have a clue of that.

Q. I think Floridians are aware of the snowbirds, but beyond that maybe not so much. What are some of the major Canadian investments here?

A. Most of our banks are here. There’s TD (Toronto Dominion Bank), RBC (Royal Bank of Canada), Bank of Montreal, National Bank of Canada, the Desjardins Group [of credit unions].

Emera, which has a regional office in Tampa, also purchased TECO Energy. [Other Florida holdings by Canadian companies include Circle K convenience stores and Mayors Jewelers.]

Q. What do you think about Trump’s proposal to build a wall along the southern border of the United States with Mexico?

A. I think that’s probably an area that I’ll leave the United States and Mexico to deal with. I was on a panel with the Mexican ambassador, and someone asked me if I had any advice for the Mexicans, and I said no because we are actually going to build a bridge between Canada and the United States and the United States has gotten us to pay for it. The state of Michigan and United States refused to pay for it, so we’re putting up all the money.

[The Gordie Howe International Bridge will span the Detroit River between Detroit and Windsor, Ontario, and carry 30 percent of trade between Canada and the United States. The Canadian government has promised to fully back the $4.5 billion project through a public/private partnership.]

I told the Mexican not to bother asking me for advice. Over time, I think we’ll recover our investment [on the bridge], if not directly, then certainly indirectly.

David MacNaughton

Position: Canadian ambassador to the United States

Career: Became Canadian ambassador to the U.S. in March 2016; chairman, Strategy Corp., 2005-2016; board chair, Aereus Technologies, 2015-2016; board chair, Comcare Ltd., 2007-2010; principal secretary to Ontario Premier Dalton McGuinty; 2003-05; senior adviser, CIBC Capital Markets, 2000-2003; president and chief executive, Strathshore Financial, 1996-2000; president and CEO, Canada area, Hill+Knowlton Strategies, 1989-94; president, Public Affairs Resource Group, 1981-89: also served as campaign chair for the Ontario Liberal Party, president of KinMac Consultants and executive assistant to former Liberal Party leader Don Jamieson.

Education: Bachelor’s, in political science and history, University of New Brunswick, 1971.

Personal: Born in Ancaster, Ontario, now a part of the city of Hamilton. Married; has four daughters.

Read more here: http://www.miamiherald.com/news/business/biz-monday/article139307713.html#storylink=cpy