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Former U.S. president Donald Trump, left, and Canadian Prime Minister Justin Trudeau arrive for a round table meeting during a NATO leaders meeting at The Grove hotel and resort in Watford, Hertfordshire, England, on Dec. 4, 2019.Evan Vucci/The Associated Press

Claude Lavoie is a contributing columnist for The Globe and Mail. He was director-general of economic studies and policy analysis at the Department of Finance from 2008 to 2023.

Most analysts are concerned about the negative impact U.S. president-elect Donald Trump’s economic policies, especially those on trade, could have on Canada. But there are also opportunities. We can turn the Trump election and the 2026 renegotiation of the United States-Mexico-Canada Agreement (USMCA) into a positive for our economy if we take advantage of these opportunities.

There are many policies we could implement that would strengthen our economy and, at the same time, serve as concessions to the new U.S. administration to get additional benefits. These would bring benefits on their own and, in addition, help us maintain free trade with our southern neighbour.

These growth-enhancing policies have been difficult to implement because they would hurt some powerful interest groups in Canada, but the complaints from these groups will likely not matter so much with the coming of the new U.S. administration. These complaints would be drowned out by the noise of our entire business community as they warn about the consequences of not making these concessions: being shut out of the U.S. market.

The first obvious one is phasing out our supply-management system, which has been a constant irritant for the U.S. and would likely be raised during upcoming trade talks. Phasing out supply management would be a win-win because it’s an irritant in Canada, too. Because of this system, Canadians pay significantly more for milk (and other dairy products). Prices are kept high by limiting domestic production through a quota system and by imposing tariffs of up to 300 per cent on the import of goods that are supply-managed in Canada.

Supply management, which sets a floor on the prices and a ceiling on the quantities of products including dairy, poultry and eggs, is basically a transfer of money from consumers to farmers and distributors who live in vote-rich rural regions of Eastern Canada. It also stops our dairy producers from being able to export and be more productive. Australia and New Zealand both dismantled their supply-management systems many decades ago. It led to lower consumer prices at home and a more internationally competitive dairy industry. Milk became an important agricultural export for Australia and New Zealand is now one of the top milk exporters in the world.

The caveat is that it might soon be impossible to have supply management as a negotiable item in trade talks. Legislators in Ottawa have put a bill before the Senate that would bar the government from doing this. Let’s hope that, with Mr. Trump in the White House, the Red Chamber recognizes the detriments of Bill C-282, and it never goes to the third reading at the Senate.

Another policy we could offer as a concession to the U.S. during negotiations is to reduce our barriers to foreign direct investment, which are some of the highest among OECD countries. For example, in the transportation and telecommunication sectors, we hang tight to rules restricting foreign ownership and limiting the operation of foreign companies.

It should be no surprise that the cost of flying between two Canadian cities is usually much more than flying from Canada to another country, where foreign air carriers operate. We could reduce these barriers only for American- and Mexican-owned companies, limiting any risk posed by selectively loosening foreign-ownership rules.

What about the Industrial and Technology Benefits Policy? This policy requires that foreign companies awarded defence procurement contracts by the Canadian government undertake business activities in Canada of the same value of the contract and provide specifics on how they will contribute to economic growth in Canada.

These policies are sold as being job creators or helping Canada’s economic growth. But, like any other industrial policy, they are not. Foreign companies, forced to undertake business activities in Canada they wouldn’t otherwise undertake, would pass on the additional costs. At a time when we need to strongly ramp up our defence spending to meet our NATO obligations, this policy creates delays, inefficiencies and raises military procurement costs.

Canada has the least competitive procurement process in the OECD. To do away with Industrial and Technology Benefits Policy would not only benefit the Canadian economy but could serve as a concession in trade talks, which could result in less aggressive “Buy America” policies the U.S. administration may be tempted to introduce.

There are likely many more opportunities for win-win policies. In advance of negotiations, policy and trade analysts in Ottawa should put together a list of all the trade-impeding regulations that are hurting the Canadian economy rather than just a list of potential tariffs Canada could retaliate with.

The government just needs to be open to changing their approach, and above all, to show some political will.

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