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August 21st, 2017

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Foreign leaders see nation's governors as potential allies in trade talks with Trump

Dan Balz

By Dan Balz The Washington Post

Published July 14, 2017

The annual summer meeting of the National Governors Association (NGA) is often a low-key and sometimes sleepy event, mixing quiet policy discussions with socializing among the nation's state executive leaders. This year's meeting could be anything but that - reshaped by international concerns about President Donald Trump's trade policies and struggles by Senate Republicans to pass a health-care bill.

The meeting, occuring now in Providence, Rhode Island, features an appearance by Vice President Mike Pence along with private sessions between the governors and Trump's health secretary and his budget director. But what also has heightened focus on the meeting is the appearance of Canadian Prime Minister Justin Trudeau, along with other officials from Canada, Mexico, India, China and Japan.

The sudden interest in the work of the governors from abroad reflects fears by leaders of some foreign governments about the direction of U.S. trade policy under a president who has sharply criticized free-trade agreements negotiated by past administrations. Those concerns were on display at last week's G-20 meeting in Hamburg and have quickly become a prime topic of interest ahead of the NGA. One NGA official described the interest from other countries as "amazing."

The number of attendees from foreign governments underscores concerns that these nations' economic interests are at risk. The result is a more concerted effort by officials in other countries to create relationships below the level of the federal government that can help to maintain support for freer trade, particularly in North America. It is as if they are attempting to build a wall of protection, with the help of governors, as a bulwark against the president's intentions.

The governors welcome the attention. "Our point is, with the disarray going on in Washington, D.C., today, you should be dealing directly with governors," said Virginia Gov. Terry McAuliffe, a Democrat and the current NGA chairman who will complete his tenure this weekend. "You're not going to cut a business development deal in Washington. You need to come directly to the states."

At the beginning of his term, Trump pulled the United States out of the pending Trans Pacific Partnership (TPP), an agreement long in the making that was finalized during the administration of former president Barack Obama.

Later, the president appeared to be on the brink of pulling out of the North American Free Trade Agreement (NAFTA), which has been in place since the administration of former president Bill Clinton. At the last minute, after entreaties from Trudeau and Mexican President Enrique Pena Nieto, Trump agreed to try to renegotiate the pact.

But concerns about the future of trade relations between the United States and its northern and southern neighbors remain strong. Trudeau's keynote address will hit hard on trade and the importance of the U.S.-Canada relationship.

"This is part of a broad, longstanding strategy of engaging directly with the United States, both with the administration and with sub-national governments," said Cameron Ahmad, spokesman for the prime minister. "The main priority will be to reinforce the importance of free open and fair trade between our two countries."

Trudeau's government has been aggressive in developing relationships not only with the Trump administration but at the state and local level. Canadian ministers in the Trudeau government have fanned out across the country in the past few months, with trips to California, Florida, Michigan, Pennsylvania, Kentucky and Indiana for meetings with governors, mayors and industry leaders - all with the goal of reinforcing support for free trade ahead of the NAFTA talks.

But the effort involves more than the Trudeau administration. Among the Canadian attendees at the NGA meeting this week will be Kathleen Wynne, the premier of Ontario. Since Trump was elected, she has reached out to more 30 governors to talk about trade and mutual issues.

"Ontario has a full-blown engagement strategy," said Monique Smith, Ontario's representative in the Canadian embassy in Washington.

The effort began with letters to the governors, followed by phone calls. Wynne's outreach also has included visits to Illinois, Michigan, Georgia and the nation's capital. Wynne has been traveling this week and was not available for an interview, but sent a statement to The Washington Post about her reasons for attending the NGA this year.

"Strong relationships between governors and premiers are critical to developing meaningful economic opportunities for workers in Ontario," she said. "The NGA meeting will allow everyone participating to find ways of working across borders to create jobs and support businesses."

For Wynne, the stakes in the trade debate are enormous. Ontario is the first or second largest export destination for 28 states in the U.S. and almost 70 percent of Ontario's trade globally is with the United States, estimated at $299 billion in 2016, according to figures supplied by Wynne's office. Wynne's attendance is all part of an effort to raise the profile of international trade ahead of the coming NAFTA negotiations.

Mexico will be represented by the mayor of Mexico City, who heads a parallel organization to the NGA, as well as two Mexican governors. Ties between Mexican and U.S. governors have existed for many years, particularly the border states.

"There's a very keen interest from the NGA to engage with foreign governors," said a Mexican official familiar with these issues, who asked not to be identified in order to speak freely. "I can tell you there has been an uptick from governors from all political stripes to engage with us and I'm sure with the Canadians, because of the political climate in the [United States]. They know the value of trade."

Trade is an issue upon which there is common interest among governors of both parties. Health care, on the other hand, is one that divides an organization that prides itself on acting in bipartisan fashion. As the Senate Republicans prepared to unveil the latest version of their health care bill, the governors are camped in three different places.

Democrats, like their counterparts in Congress, oppose any effort to repeal and then replace the Affordable Care Act. Some Republican governors are strongly in favor of the efforts underway in Congress. But other Republican governors, particularly those who chose to expand Medicaid coverage and accept the federal funds that came with it under the terms of Obamacare, are worried about the impact on their states and either oppose the changes outright or are not willing to give the GOP legislation their backing.

Some of those Republicans who have been most outspoken in opposition will not be in Providence. That includes Ohio Gov. John Kasich, whose harsh words for the Senate and House bills have given him a national platform. That comes in the face of resistance he has faced from his own Republican legislature, which sought to freeze enrollment, which has increased by twice the original estimate in 2013.

But one of those who will be in attendance will be Nevada Gov. Brian Sandoval, a Republican who will succeed McAuliffe as the NGA chair this weekend. Sandoval's opposition and his popularity in his state contributed to the decision earlier by Sen. Dean Heller to announce that he could not support the first version of the Senate bill. Heller, a Republican who was standing next to Sandoval when he made the announcement, is facing a difficult reelection in 2018. His vote is seen as crucial to passage of a bill in the Senate.

McAuliffe and Massachusetts Gov. Charlie Baker, a Republican, sent a letter to Senate Majority Leader Mitch McConnell late last month asking that the Senate give governors time to review any proposed legislation to "ensure that the bill does not adversely harm" their constituents. Baker's state also is a Medicaid expansion state.

Apart from the action in Congress with regard to Obamacare, governors of both parties long have wrestled with the rising costs of Medicaid and over many years have shared ideas on how to keep costs in check without denying coverage to those who qualify under the program. That likely will be a topic for a fuller discussion at a future meeting.

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