Not a day goes by without another meeting, colloqui- um, study or think-in on how we should deal with Uncle Sam. We are in the midst of an avalanche of words, ideas and proposals on the topic. Some are good, some bad, some awful. Canada’s chief executives migrate south in large groups for briefings; research teams produce vast quantities of documents; bitter exchanges are heard (or not heard) in the corridors and classrooms of the academy.

It was not always thus. Unbelievable as this may sound, so har- monious were our relations with our southern neighbour that the United States Division of the Department of External Affairs consisted of just two officers, when I joined the Canadian for- eign service in 1957. When a massive review of Canadian foreign policy took place under Pierre Trudeau a decade later, the six-volume product did not even address Canadian-US relations.

A few years later, in the early 1970s, the government finally stepped up to the plate and analyzed options for the conduct of our relationship. Its preferred policy for dealing with the US ”” it was called the Third Option ”” was really an option for not dealing with the United States. It called for intensifying our relations with other countries in order to counter-balance US influence.

The Third Option notwithstand- ing, our economic dependency on the US mushroomed in the decade that followed ”” and under the Canada-US Free Trade Agreement further expand- ed to the point that at least-one third of our GDP depends on it.

What happened in recent years to change so profoundly Canada’s percep- tion of its relationship with its south- ern neighbour? What moved us from indifference to national obsession?

First, the relentless growth of our dependency on the US market ”” to the point today where some 85 percent of all our exports go to this one destination.

Second, the dominant role that Congress began to play in all matters of trade. We woke up to realize that our interests could be grievously harmed by the arbitrary action of Congress, congressional committees and even individual legislators.

Third, the emergence of the US as the world’s sole superpower. Instead of declining, as it was fashionable in Canada to predict, US economic power skyrocketed. We began to understand that countervailing power, at least as far as Canada is concerned, is an illusion.

Fourth, the transformation of Europe, all of it, into a political and economic union, establishing the world’s largest preferential trading zone and looking more and more inward. The illusion of Canada as a sort of Atlantis spanning two conti- nents rather than a North American state was thus shattered.

Today a national consensus has emerged in Canada and in all its regions: Canada’s prosperity depends on the continued and secure access of our goods, people and services south of the border.

Since September 11, 2001, Canadians know that American con- cerns about its national security are absolutely paramount and will remain so. No flights of imagination are need- ed to conjure up nightmare scenarios about what could happen to our bor- der after another terrorist strike. Even now, with ”œSmart Borders” et al., the points of entry into the US have become the choke points of our econ- omy and we are not far from choking. As the Ontario Chamber of Commerce points out, the cost of border delays is now running into many billions of dollars annually.

Canadians are now pretty well ready to follow Warren Buffet’s advice to private investors. If you are going to put all your eggs in one basket, you better take care of your basket. There is, however, absolutely no consensus in Canada about how we should go about doing this. What’s the best way to protect our eggs? What, in two words, is the game plan?

The debate in Canada gels around three broad approaches or themes.

The first approach ”” call it incre- mentalism ”” is to proceed in future as in the past, but try harder. Its advocates ”” and they are very vocal ”” say: address each issue one by one, negoti- ate on an ad hoc basis, do not link issues or problems, use our formidable diplomatic skills to work out solutions, engage in more intense lobbying and more aggressive public advocacy, search out US domestic allies who share our position and be prepared to spend more money for these purposes. Just keep doing what we are doing now. We haven’t done too badly in the past.

The second is to pursue the ”œbig idea,” ”œbig bang” or ”œgrand bargain.” This strategy builds on the radical free- trade initiatives taken by Canada some twenty years ago. It foresees a compre- hensive negotiation on economic and security issues that could provide deeper economic integration (a single economic space), more predictable rules and new institutions to apply them in an objective manner.

As a long-standing practitioner of the diplomatic arts, I have always been a believer in the ad hoc or incre- mental approach. But there are prob- lems in relying on this strategy. They are of a deeply structural nature and have gotten more intractable in recent years.

In advanced industrialized coun- tries, the democratic process has become increasingly driven by relent- less special interest groups, champi- oned by powerful and influential legislators. They are often local or regional and, of course, they advocate particular policies in their favour. On opposite sides of an international bor- der the pressures of special interests can produce opposite results. This leads to transborder conflict ”” whether on hogs, lobsters, wheat, berries, beef, wood or whatever.

There is, in reality, a conflict of legitimacies. In each jurisdiction, the policy is legitimated by the democratic processes that produce it.

In democratic societies driven by interest groups, no politician is willing or able to subordinate the interests of his or her constituents to those of a foreign jurisdiction. In domestic dis- putes the court steps in. On the inter- national plane disputes can fester, go on indefinitely and become virtually unresolvable.

The problem is made more acute because of congressional primacy over external trade. Remember that our his- toric fisheries agreement with the United States was never ratified because of the opposition of, at most, two senators. Remember that the soft- wood lumber dispute (a subject not covered by our Free Trade Agreement) has now entered its third decade. For fortunate lawyers, it is a way of life.

In my years in Washington, I preached the ”œincrementalist” message to Ottawa: lobby more vigourously on Capitol Hill, engage in public diploma- cy and public relations. But I also preached that ”œin Washington, a for- eign power is just another special inter- est and not a very special one at that.”

The reality is there are distinct lim- its on what a foreign country can achieve through lobbying. It has little clout unless it can affect a legislator’s political base. But it cannot participate in elections or contribute to political campaigns.

Foreign lobbying can also be a dangerous game. It can create a back- lash and lead to charges of interference in the domestic political process, as was the case in the acid rain debate on the Hill. Of course lobbying is some- times essential. I was not exaggerating when I called myself ”œCanada’s chief lobbyist” in Washington. But it pro- vides no magic key to sustaining our interests. It cannot be the leading strat- egy for protecting one’s interest in the United States.

Obviously, the consequences of this predicament are graver for the weaker or more dependent power. We must of course continue, on a case by case basis, to plead for the access of our goods. Lumber and beef raise again the funda- mental question: are there better ways to conduct our relations with the US?

Some twenty years ago the Mulroney government proposed the most ambitious two-way free trade agreement ever launched between two leading industrial states. Our leaders had the vision to recognize that build- ing a rule-based community, with impartial institutions and tribunals for settling disputes, would be a huge step forward in achieving a more predictable and secure economic environment.

It is now in Canada’s interest to build on and deepen NAFTA so to pro- vide a more comprehensive North American community of law. It would create agreed rules and procedures applying to all significant aspects of the movement of people, goods and services across our border. Such a com- munity of law, inspired by the European model, could lead to a full- scale customs union, embracing a common security perimeter, common standards affecting all commerce, joint tribunals to adjudicate disputes, and, in time, complete freedom of move- ment of people.

Canada-US relations take place today within a rules-based system, most obviously NAFTA and the World Trade Organization. But highly important areas of our economy are not covered and those that remain are witheringly exposed to much criticized ”œtrade reme- dies” ”” anti-dumping and countervail among them. Remember that Canada’s supreme goal in proposing the Free Trade Agreement was to eliminate these protectionist tools, as the Europeans have done in trade among themselves.

But we failed in our attempt to substi- tute a single competition policy for dumping and countervail.

It is simply not possible to negotiate the components of such an agree- ment on an ad hoc basis. Broad con- stituencies must become involved to allow room for trade-offs. There must be enough gains to outweigh the impact of narrow interests. The issues involved must be sufficiently large to bring the national interest itself into play.

Most recently in the grand Canadian debate we are beginning to hear a third theme.

Sure, some say, maybe we should try to enter into a customs union or some other big deal. Maybe it would be good for us.

But it’s a waste of time. The US will never agree to such a thing. The US, they assert, doesn’t need an agreement with us. It is turning inward, has other priorities and in any event can satisfy all its security concerns by pressuring us. It doesn’t need to give up anything to get some- thing from us.

The critics of the big idea fail to realize that the quality of the United States’ relations with Canada is a vital aspect of American national security. It was so throughout the long history of the Cold War and during the Second World War. It is even more so today. In the geopolitical scheme of things, the US needs no country more than Canada. No other country matches our importance to the US.

The US knows its national inter- est requires close relations with its northern neighbour. Time and again, history has shown its willingness to negotiate mutually advantageous agreements with Canada. Many astute political observers predicted that Congress would never authorize a Canada-US free trade area. They were wrong. They argued that, even if we could get a free trade agreement, the US would never surrender its sov- ereignty by agreeing to binational procedures that could set aside deci- sions of US tribunals. They were wrong again.

If Canada wants to return to the negotiating table, there is some degree of urgency. The winds of protection- ism are blowing south of the border and blowing stronger every day. To some on the Hill, NAFTA has become a dirty word. The voices of protectionist senators once regarded as marginal are proclaimed by the New York Times as mainstream today.

This is particularly so within the Democratic party where the export of jobs through free trade has become a patriotic rallying cry. Protectionism in the United States is also an expression of the prevailing mood of anti-multilateralism. It is aggravated by a growing sense of betrayal by friends and allies. These trends can cause the US to turn inward in the years ahead. This would be to the detriment of the world, but to no country more than Canada. By entering into a comprehensive community of law with the United States, Canada can do much to insulate itself from such eventualities.

With a new government soon to be in place in both Canada and the United States, the time may soon be propitious for launching a new negotiation. The ini- tiative will have to come from Canada, at the highest level, as it did in the case of the Canada-US Free Trade Agreement. There is a large risk of rebuff. But for Canada to do nothing creates greater risks. The Canada-US trade relationship is of such vital con- cern to both parties that it would be folly to allow it to rest on so slender a legal foundation as exists today.

If such an initiative were possible it would be unlikely to proceed in much less than a year, both for political rea- sons and for the necessary prepara- tions. For failure of vision in Ottawa or the prevailing mood in Washington, it might never come. Whatever the future, our new incoming government might consider a few suggestions, or do’s and don’ts, in dealing with its greatest policy challenge.

1) Do. Try to create some momen- tum or impetus for forward move- ment in the period immediately ahead. Propose the appointment of two special envoys to oversee progress on each and every issue in the relationship. The two envoys would be personal repre- sentatives of the president and prime minister and report directly to them. This technique was used to good effect by President Reagan and Prime Minister Mulroney on the leading issue of the day, acid rain and by President Carter and Prime Minister Trudeau on all fisheries and boundary issues on our East coast.

Without high political impetus, issues get bogged down, special interests block progress, bureaucrats get dis- tracted, positions get entrenched.

2)  Do. Try to remember that it is not only Canada that has an agenda. Try to understand that the US agenda is security and recognize that by being helpful to the US, with its global interests, we have a better chance of our own agenda being considered.

3)  Don’t expect too much from lob- bying. Remember that on the Hill a foreign power is just another special interest. Remember that the US president is and remains by far the single most important player in the US political system. He sits at the command of a vast administrative structure, led by legions of his own appointments. Our leader’s personal relationship with him is potentially Canada’s greatest asset. If his relationship with him is not special, Canada is unlikely to get special considera- tion. Be at the front, not the back, of the long queue of foreign leaders seeking the presidential ear. No foreign power has more at stake in Washington than we do. 

4) Don’t appoint a businessman to represent Canada in the United States. With the greatest respect to our captains of industry, the skills that make for a successful chief executive officer in the business world are not transferable to diplomacy. Don’t choose an ama- teur to perform surgery on your brain. For Canada’s top diplomatic job, choose someone experienced in public service, preferably a pro- fessional, who is at the top of the class and who is also a sociable workaholic.

5) Don’t make the Canadian ambas- sador a member of the Cabinet. If the purpose is to increase the ambassador’s access, it is not nec- essary. The US treats ambassadors with high regard (their role is rec- ognized in the US Constitution) but the degree to which they can use their access to gain influence depends entirely on their person- ality and skills. On the other hand, Cabinet status can impair the role of our ambassador. As a veteran of the trenches, I know that an ambassador has more free- dom of action, more room to manoeuvre, more chance to float trial balloons and broker ideas if he is not acting as both agent of his government and a principal at the same time.

6) Don’t weaken the unity of Canada in Washington. Beware of creating a cacophony of multiple Canadian voices in Embassy Row. In the deadly games that are played in that city, Canada’s interests can be triangulated or played off one against the other if we speak with conflicting voices. We have learned this in the softwood lum- ber disputes and there are other examples.

For this reason the initiative of the current government in Ottawa to establish a federal-provincial secretariat in the embassy in Washington is a risky one. If it is not under the clear com- mand of the ambassador, if it is answerable to a dozen pre- miers, trouble lies ahead. Our national cohesion and ability to speak abroad with one voice is a quality of our representa- tion that the US, with it divid- ed powers and complexity, does not always enjoy. It is our com- parative advantage in our deal- ings with them. We should not place it in jeopardy.

7. If you are the new prime minister of Canada, do meet with the pres- ident as soon as possible after the election. Don’t listen to your advisers. If they are the same polit- ical gurus and foreign policy experts who advised your prede- cessors, they will urge you to take your time. Brian Mulroney was the only prime minister not to fol- low their advice; he went to Washington within weeks of vic- tory. His visit set the stage for the most productive period in our relations in modern times.


Excerpted from an address to the Montreal Economic Institute in June 2004. 

You are welcome to republish this Policy Options article online or in print periodicals, under a Creative Commons/No Derivatives licence.

Creative Commons License

More like this