WASHINGTON — If Barack Obama or Hillary Clinton wins the White House, trade could form the backdrop for a political crisis. If so, Canadian governments would bear much of the blame.

For too many years, our politicians have let Canada's trading relationship with the United States slouch along, undefended.

Now we face the prospect of having the North American free-trade agreement rewritten or torn up. Canadians would lose their jobs; companies would go out of business, our standard of living would decline.

Many observers have discounted the possibility, dismissed it as mere campaign rhetoric. CTV reported last night that the Obama camp contacted the Canadian embassy to give them a heads-up about the upcoming rhetoric and to reassure them there was no cause for concern.

Nonetheless, the Democratic presidential candidates, in threatening to revoke NAFTA unless it is renegotiated, are tapping into the growing nativist resentments of American blue-collar workers.

Can we take the chance? As some commentators have put it, Canada and the United States don't trade stuff. We make stuff together. Dismantling free trade would disrupt their economy and decimate ours.

We can do two things. Our politicians can wait with fingers crossed, hoping that Barack Obama or Hillary Clinton, if one of them does become president, won't follow through.

Or we can act, as we have acted in the past, to revitalize the Canada-U.S. relationship and turn crisis into opportunity.

Since 1993, when Jean Chrétien and Bill Clinton ratified NAFTA, Canadian prime ministers have largely ignored issues of economic integration.

After all, many Canadians share a visceral distrust of the United States. Promoting closer links could be politically dangerous. So crises have been dealt with piecemeal - this day, softwood lumber, the next, beef exports - without any larger lessons learned. Incremental efforts at harmonizing regulatory regimes - the once-much-vaunted Security and Prosperity Partnership - have been quietly shelved, left to the bureaucrats to work on, unperturbed by deadlines.

Canadian politicians worried and complained, but failed to act, as American security fears prompted new border restrictions and torpedoed joint efforts at expediting the flow of goods.

Meanwhile, the American economy deteriorated and manufacturing jobs disappeared, prompting xenophobic fears over immigration and trade. Anti-trade zealots such as CNN's Lou Dobbs promoted paranoia. Their poisonous message has filtered throughout the industrial heartland of the United States, where semi-skilled manufacturing jobs are disappearing by the millions, and talk of tariff walls resonates with workers wondering whatever happened to their security and their pensions.

And so Barack Obama and Hillary Clinton, locked in a to-the-death fight in industrial Ohio, have threatened to activate the six-month opt-out clause of NAFTA to force trade concessions from Canada and Mexico.

The first, cautious political reaction will be to do little. Politicians will cluck, as Finance Minister Jim Flaherty clucked yesterday, but that will be it. Leave the file alone; hope it goes away.

But that passivity has taken us this far down the road, and it is a road we want to get off. As Norman Ornstein, a fellow at the American Enterprise Institute, put it yesterday: "We have to try to make chicken salad out of chicken poop."

Twenty years ago, Canada's government did exactly that. Faced with growing protectionism in the United States, Canada proposed a free-trade agreement to protect and enhance the flow of goods across the border.

The challenge today is the same; the answer is the same. Prime Minister Stephen Harper should propose a second round of Canada-U.S. trade negotiations.

The Democrats want new environmental regulations? Then let's propose a bilateral carbon market based on a cap-and-trade agreement aimed at reducing greenhouse gas emissions.

The Democrats want new rules to protect American workers? Then how about dismantling barriers to labour mobility between Canada and the United States? This would increase productivity, promote the harmonization of wages and working conditions and help people in each country to get to know the other country better.

The Democrats want a new dispute-resolution mechanism? Canada has been pushing for one for years. But let's also propose to remove many of the irritants to cross-border trade: hidden subsidies and non-tariff barriers, and exclusions on industry sectors such as media and financial institutions.

No Canadian prime minister could have offered such a package to George W. Bush, because Canadians distrust him and would distrust a prime minister who tried to get that close to his administration.

But what if Barack Obama were president? If a Canadian prime minister could show him that rewriting NAFTA could actually mean improving and expanding it, might that not rebound to both the president's and the prime minister's political advantage?

A passive Canadian government will hope that the Democratic challenge just goes away. An activist government will get ahead of the story, with proposals to advance both economic and security integration with the United States as soon as the new president takes office.

We had it in us once before to meet this challenge in this way. Are we a lesser nation now?