Fraser Forum

Liberal victory may mean more cooperation with the U.S. but less growth

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Unlike most political events in Canada, the Liberal Party’s victory in last week’s federal election captured substantial attention in U.S. media outlets.

One reason is that Justin Trudeau is young and photogenic. A second is that he is the son of a recognizable (to many Americans) former Canadian prime minister. A third is that the Canadian election was held at a time when the primary campaigns for the Republican and Democratic presidential nominees are heating up, and the “leftward” turn of Canadian voters might inform how the U.S. electorate might vote in November 2016.

The surprise majority victory of the Liberal Party has been interpreted in the U.S. as a rejection of conservative principles of balanced budgets and limited government spending, as well as public support for pro-environmental and pro-immigration policies. If the Canadian vote is at all indicative of broader trends in the attitudes of North American voters, it must come as good news for Democratic candidates, particularly for the overwhelming front-runner, Hillary Clinton.

If Clinton does become the next president of the United States, it might usher in an era of more harmonious relationships between the administrations of the two countries, certainly compared to the thinly veiled animosity that has existed between President Obama and Prime Minister Harper.

Given the similar economic and political ideologies of the Liberal Party and the increasingly left-of-center Democratic Party, one would expect a greater concordance of positions on climate change and refugee policies, among other things.

Both a Democratic administration in the White House and the Liberal Party are also likely to concord in their lack of enthusiasm for trade and investment liberalization. Neither Clinton nor Trudeau has expressed much enthusiasm for the Trans-Pacific Partnership Agreement, which represents a major new potential trade liberalization initiative for both countries.

Nor is it likely that either would champion new initiatives to deepen bilateral trade and investment linkages under NAFTA, including ongoing efforts by the U.S. and Canadian governments to address the barriers to trade created by the need for companies to meet the separate health and safety regulations of each country.

In sum, the Liberal Party triumph may herald the emergence of closer political ties between Canada and the United States. It is less likely, however, that it will usher in policies that will promote closer economic integration and faster North American economic growth.