At the very outset, it attempts to come to grips with the issues arising from our massive dependence on U.S. markets. "The longest undefended border," it tells us, "may now be one of the most fortified borders between democratic states." It warns us that if the border grows even thicker or closes in response to a terrorist attack, the Canadian economy will be thrown into crisis, since a huge portion of our GDP derives from the joint production of goods as if there were no border. In short, our geographic adjacency to U.S. markets is in danger of becoming our comparative disadvantage.
In order to reduce dependency, two central strategic propositions emerge: Widen our relations with the new economic giants while deepening our relations with the United States, even in the face of its severe economic challenges.
But as the panel looks south, the road gets rocky.
The report sees our long-term goal to be a "Grand Bargain" with the United States that would assure access through a customs union or common market. "The Grand Bargain adherents may have the right vision," it acknowledges, but "it is the wrong time." We cannot achieve a Grand Bargain because of the "rigidities and obsessions of U.S. politics. The Department of Homeland Security is not about to outsource its security to facilitate greater Canadian economic access; Congress will not allow a dispute settlement process to frustrate its political rights of obstruction." It's impossible to argue with these propositions.
But the outlook gets even worse. Adherents - like myself - to the idea of securing a single Canada-U.S. economic space always believed that our energy would be a major bargaining card for Canada. Today, it is far from evident that the U.S. recognizes the strategic value of our energy exports. If we pay attention to the fulminations of Henry Waxman and his congressional band of haters of our so-called dirty oil, it seems some powerful legislators don't want our oil at all.
"If a Big Bang is out," the report concludes, "the best approach is a series of little bangs, a steady drumbeat of small gains that build confidence and momentum toward a more ambitious plan at a more propitious date."
If only. This is not the way the U.S. political system works. Incremental gains are hard to achieve in Congress because it is much easier for a special interest to block a small deal than a big one. The narrower the lobby, the more effective it can be. The broader the agreement, the greater the tradeoffs, so that winners can outnumber losers.
The reality is that Canada can expect to face more obstacles to access, rather than fewer - in the form of unvarnished protectionist measures (such as Buy American), environmental ones pretending not to be protectionist, or more regulations affecting vital supply chains. We are deceiving ourselves if we believe we can create a "steady drumbeat of small gains."
So what should Canada do? The report tells us that as the world's economic gravity shifts, we must diversify our trade by deepening economic relations with the great "game-changing" countries of the Far East. Yes, we must, but to do this, vast pipelines must be constructed to enable our resources to reach Pacific markets. As the building of our great railroads demonstrated long ago, infrastructure determines history. But the new infrastructure will not be built unless it becomes a national priority. As of now, there is little evidence of this. What are we waiting for?
As for deepening our relationship with the United States, congressional obstacles are not the end of the story. History shows that it is in the White House and administration, not in the Congress, that America's long-term strategic interests come into play. If a president takes the lead and the vision is grand, support can be mobilized in both parties. More than 40 senators opposed the Canada-U.S. free-trade agreement until Ronald Reagan put his might behind it.
Regrettably, there is little evidence that Barack Obama's administration has a strategic view of Canada. This state of indifference is inconsistent with the history of our relationship and is unlikely to continue indefinitely. There is no country of greater strategic importance to the United States than Canada. This is true from the standpoint of America's national defence, its security, its economy, its environment and its requirements for oil, gas, electricity and resources.
In the short term, a government's foreign policy can be driven by public opinion and special interests. But in the long term, nations act in accordance with their national interest. If we are to move the White House from short- to long-term thinking about our continent's future, the leadership must come from Ottawa. In Canadian foreign policy, this is our Prime Minister's greatest challenge.
Allan Gotlieb is a former Canadian ambassador to the United States and a senior adviser to Bennett Jones LLP.
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