The Liberal Party insider who saved the TPP trade deal - Macleans.ca

The Liberal Party insider who saved the TPP trade deal

After Trudeau’s no show at a leaders’ meeting in Vietnam, the trade deal seemed at risk. So Canada sent Ian McKay to repair the damage.

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Prime Minister Justin Trudeau speaks at a press conference at the conclusion of the Asia-Pacific Economic Cooperation (APEC) Summit in the central Vietnamese city of Danang on Nov. 11, 2017. (LILLIAN SUWANRUMPHA/AFP/Getty Images)

Talk to anyone in the Liberal government connected to the international trade file and they won’t hide the fact that Danang was a mess.

On Nov. 10, with the leaders and trade ministers of 10 countries gathered in a room in Vietnam on the sidelines of the Asia-Pacific Economic Cooperation summit, ready to announce a Trans-Pacific Partnership trade agreement in principle, Prime Minister Justin Trudeau suddenly went missing.

Though it would later emerge that Trudeau’s government wasn’t satisfied at that point with the agreement’s outcome for Canada’s auto sector and cultural industries, a picture of Trudeau’s empty seat at that meeting left a mark and soured Canada’s relationships with key allies.

No TPP member was more irritated than Japan, which became the biggest champion of the agreement following the Trump administration’s withdrawal in Jan. 2017. Its former ambassador to Canada told the National Post what happened in Vietnam might lead to “stasis” in the bilateral relationship.

Fences needed mending—and quick.

When to the surprise of many International Trade Minister François-Phillipe Champagne announced in Toronto on Jan. 23 that Canada was now prepared to sign the rebranded Comprehensive and Progressive Agreement for Trans-Pacific Partnership, he expressed his gratitude to one person in particular: Ian McKay.

READ MORE: Three lessons from TPP that could help Canada in the NAFTA talks

A number of stakeholders regularly briefed on the status of the talks, including members of influential business associations, were caught off guard. Ian who? They didn’t know the name, let alone that he was involved.

To Liberals, however, McKay wouldn’t have needed an introduction. National director of the federal party from 2010 to 2013, he was at the helm for the party’s 2013 leadership race and got to know the then small Liberal caucus, including Justin Trudeau, quite well.

Back in 2000, McKay ran for the Liberals unsuccessfully in Vancouver, then went on to serve as a senior policy advisor to the minister of industry under Jean Chrétien and Paul Martin’s governments.

“Canada successfully concluded an agreement with hard-fought gains for Canadians, thanks in large part to a dedicated and hard-working negotiating team and Canada’s special envoy Ian McKay,” read Champagne’s official statement last month.

In contrast, when the Liberals named former trade minister Pierre Pettigrew as a special envoy to the European Union in August 2016—to help them get the Canada-EU trade agreement done—there was a press release and very public government acknowledgement of his role. That quickly led to scrutiny of Pettigrew’s position.

Within days, the Conservatives asked the ethics commissioner to investigate whether Pettigrew’s business affiliations presented a conflict of interest. (The commissioner’s office promptly replied that Pettigrew was not a reporting public office holder and therefore not subject to the Conflict of Interest Act.)

For McKay, that kind of scrutiny wasn’t possible. His role as TPP envoy wasn’t public knowledge until after his work had finished. As senior Liberal officials would explain, things had just moved too quickly. In their view, Pettigrew’s appointment had been a success and a precedent on which to draw, but it was fundamentally different. For one thing, it was longer, and involved many more countries; McKay had one target: Japan. And his appointment lasted all of about a week.

On the record, the Prime Minister’s Office provided some general information about the role McKay—now CEO of the Vancouver Economic Commission—played. (McKay declined to comment.) Cameron Ahmad, Trudeau’s deputy communications director, said McKay was appointed on a volunteer basis on Jan. 16 and arrived in Tokyo two days later.

His expenses were covered and he worked closely with Canadian chief TPP negotiator, Bruce Christie, Ahmad added in an email. He operated at the “political level”—meeting several times with the Japanese TPP minister—but not actually sitting at the negotiating table.

All of that was “coordinated with Ottawa, our embassy in Japan and with PMO,” Ahmad wrote.

But another senior government official, who couldn’t be quoted, went into detail about how McKay, a fluent Japanese speaker, helped make peace with the Japanese and get the agreement passed the finish line.

When the problematic photo of Trudeau’s absence from the Danang meeting was taken, Trudeau was actually meeting with Japanese Prime Minster Shinzo Abe and telling him that Canada wasn’t prepared to sign yet, said the official. Abe, disappointed, told Trudeau that the group meeting about to take place probably wasn’t necessary, and so Trudeau decided not to take part.

Abe and Trudeau had had a very good relationship to that point, the official said, and no one felt great about how things were left in Danang.

Fast forward to London, Ont., where the Liberal cabinet was meeting on Jan. 11 and 12 ahead of meetings of chief TPP negotiators in Tokyo scheduled for the end of the month. McKay, who’d worked in finance in Japan for over a decade and now runs a group that tries to lure foreign direct investment to Vancouver, was invited to facilitate a conversation with cabinet about Japan and TPP.

Protocol and optics dictated that Canada couldn’t send a minister to the Japan TPP talks, because it wasn’t a ministerial round, but McKay’s input in London gave Trudeau the idea of sending him as an envoy to Japan to reboot the relationship and better explain Canada’s positions, the official said.

Days later, McKay was on a plane to Tokyo with the assignment of making a connection at the political level. Jonathan Fried, Canada’s former ambassador to Japan and current personal representative to the prime minister on the G20, joined him.

At a Vancouver foreign ministers meeting on North Korea, while McKay was en route to Tokyo, Foreign Affairs Minister Chrystia Freeland made sure her Japanese counterpart knew McKay would be speaking for the government; Trudeau’s right-hand man, Gerry Butts, told the Japanese ambassador the same in Ottawa.

On Jan. 18, McKay and Japanese TPP Minister Toshimitsu Motegi spoke for over two hours, almost entirely in Japanese, according to the senior official, and hit it off. At the end of the meeting, Motegi invited McKay to dinner, where they spoke for two more hours.

They were making progress, the official said. McKay had explained why Canada needed to protect its cultural sector in TPP; that it needed improved market access for Canadian auto exports in Japan; and that it could make no further supply management concessions.

Nothing was agreed to as chief negotiators started to meet on Jan. 23, but by the end of the day progress had been made on autos: the Japanese agreed to automatically grant Canada any future concessions made to other trading partners and to a binding resolution process on non-tariff barriers.

On Monday, Montegi and McKay met again to have one more conversation. By end of the Tuesday in Japan, Canada was satisfied it could sign, having addressed all its outstanding concerns.

The official stressed that McKay was just one part of a team—that Canada’s ambassador to Japan, Ian Burney, other Canadian embassy officials, its capable negotiators, and, of course, Champagne, all played essential roles.

At the same time, it’s not clear Canada would be signing the agreement next month in Chile if McKay hadn’t been brought on board.

McKay’s work, the official said, ultimately came down to a few days of critical engagement, but having a political channel below the ministerial level was a successful approach. And one they’ll consider using again in the future.

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