A position of weakness

Thomas Walkom's column on the dangers of racing into another set of free-trade negotiations is worth a read in general. But it's particularly worth highlighting that even those who think there's some need to keep tying government hands on both sides of the border have reason to worry about how the Cons have undermined Canada's bargaining position:

(A)ll trade deals come at a price. The original Canada-U.S. free trade deal bound this country to a permanent energy-sharing arrangement with America. Its successor, the North American Free Trade Agreement, limited the ability of Canadian governments to set up social programs that might interfere with private business, such as public auto insurance schemes.

The new deal under consideration will almost certainly curtail Ontario's efforts to refocus manufacturing around so-called green industries. Ultimately, the price could be higher...

For state and congressional politicians, forcing Canadian and other foreign suppliers to manufacture in the U.S. makes more electoral sense than allowing them to supply the American market from abroad.

Unless, of course, the Canadian side is willing to give away the store.

Which brings us to the second problem. What is Canada preparing to give up?

In any negotiation, the desperate are easy meat. In these talks – regardless of the fact that Canada has so far weathered the recession better than the U.S. – it is Ottawa that sounds desperate.

As Obama noted recently, "Prime Minister Harper ... has brought this up with me every single time we've met."

If I understand Trade Minister Stockwell Day's strategy correctly, he would have Canada's provinces unilaterally agree to end discrimination against U.S. firms as a gesture of good faith, in the hope that Washington might agree to a Buy America exemption immediately before beginning negotiations on a more detailed pact.

But aside from the logistical problems this scenario entails there is the more important question of what Washington will demand in return?

Walkom raises a few possibilities as to what the U.S. might demand, such as an Afghanistan extension or even more privileged energy access. But while it's difficult to guess at exactly what the U.S. would pursue first, it's not at all hard to anticipate that they'll smell blood in the water based on the Cons' desperation to push to bind all levels of government under NAFTA. And considering what happened last time the Cons decided they had to get a deal done with the U.S., there's plenty of reason to worry about what they'll be willing to give away this time.