Strange bedfellows: Justin Trudeau, Brian Mulroney and Donald Trump

The Ritcey Report

March 2, 2017

When I discovered that Mila Mulroney and Melania Trump, near neighbours in Palm Beach, have a habit of speaking to each other in Serbo-Croatian I knew that the relationship between President Donald Trump and Prime Minister Justin Trudeau was going to be better than many of us dared hope. That’s the good news. The even better news is that Brian Mulroney got a standing ovation for singing When Irish Eyes are Smiling during a cancer benefit at the U.S. President’s Mar-a-Lago estate last weekend.

These apparently disconnected and trivial matters – a fortuitous friendship between the wives of two powerful men, and a former Canadian prime minister’s public talent for carrying a sentimental song – might appear to be little more than anecdotal fodder for society gossip, but wait. They constitute key clues to the ultimate resolution of one of Canada’s most pressing trade issues: the status of NAFTA.

Brian Mulroney has known Donald Trump for more than a quarter century and they share numerous friends and business associates. Ben Mulroney and Justin Trudeau are friends (Mulroney junior attended the Trudeau-Grégoire wedding) and Mulroney senior expressed a strongly favorable judgment about Trudeau recently on CTVs Power Play:

“I’ve known Justin since he was a child. He’s young, articulate, attractive – a flawlessly bilingual young man. Anybody who … treats Justin Trudeau with scorn or derision or underestimates him does so at his own peril. He’s a man of some consequence.”

This remark was decidedly not casual.

According to The Globe and Mail (February 18, 2017): “Mr. Mulroney has taken on the role of Mr. Trudeau’s unofficial emissary to the United States, using his long-time personal connection to Mr. Trump and other members of his cabinet, as well as the President’s outside business advisory councils, to help shield Canada from America First protectionist policies.”

It turns out that both Brian Mulroney and Derek Burney, the former Canadian ambassador to Washington (1989 – 1993, under Mulroney) who helped negotiate the North American Free Trade Agreement (NAFTA), provided advice to Prime Minister Justin Trudeau and his cabinet ahead of Trump’s inauguration, and that advice has continued since.

Here’s the point.

Canada and the United States are expected to hold bilateral negotiations on NAFTA to reach agreements on issues such as e-commerce, pre-cargo clearance and making it easier for high-tech professionals to work in either country. Top of the list for Canada is working to avoid the imposition of a 20% border-adjustment tax – a measure that would, if passed, inflict considerable damage on the export trade of both Canada and Nova Scotia (seafood, lumber, motor vehicles and parts) to the U.S.

Love him or loath him, Mulroney’s influence appears to be having a positive effect on the process. He and Mila were head table guests of President and First Lady Trump at the Mar-a-Lago bash. Upon returning to the table after his performance, President Trump was heard to observe: “Relationships are just great between Canada and the United States. Justin had a terrific trip down to Washington.”

Media reports confirm that Prime Minister Trudeau won a major achievement from his recent visit to the White House when President Trump said he was interested in only “tweaking” the North American free-trade deal as it governs commerce with Canada.

While Brian Mulroney and the late Pierre Trudeau may have been bitter enemies in the past, old animosities appear to have taken a back seat to current economic reality. That’s excellent news both for Canada and Nova Scotia. Nothing is settled yet, but the signs are positive.

For further information and advice, please contact Dave Ritcey, Portfolio Manager at The Ritcey Team of ScotiaMcLeod®, a division of Scotia Capital Inc.
Tel: 902.678.0048