Within the Washington beltway, SOTU (State of the Union) is as well known an acronym as POTUS (President) and SCOTUS (Supreme Court). It titled a Frank Capra movie and today it’s the name of a political talk show. But, on Tuesday evening, we’ll see the real thing. House Speaker John Boehner will gavel to order members of the Senate and the House of Representatives, the joint chiefs of staff, the Supreme Court, foreign ambassadors and invited guests. Then President Barack Obama will deliver the first State of the Union address – SOTU – of his second term.
The speech will spell out how the president wants to achieve the priorities spelled out in the recent inaugural, especially around the economy and the environment. With our deep economic interdependence and shared space, we need to listen carefully because SOTU has potential implications for Canada.
First, listen for a re-commitment to job creation.
With unemployment at 7.9 per cent, jobs and the economy continue to be top of the public agenda. A promise of new money for infrastructure could benefit the planned second crossing between Detroit and Windsor. Nearly a quarter of Canada-U.S. trade passes through this gateway. Dogged by rear-guard action from the owner of the Ambassador Bridge – including a failed effort in the November ballot to secure a referendum – it now requires a presidential permit before it can be built. Canada has committed a half-billion dollars for its construction.
In earlier SOTU addresses, Mr. Obama promised to create jobs by doubling U.S. exports. Even if his language is mercantilist, the emphasis on trade is important. In our global economy, trade depends on imports as much as exports to generate jobs. A commitment by the President to the Trans-Pacific Partnership can give it the political heft necessary to move the negotiations forward. If he also endorses a European free-trade agreement (FTA) then we need to quickly seal our own CETA deal with the EU. When the U.S. moved on its South Korean FTA, we were left in the cold. A Canada-South Korea deal is still not concluded.
Second, listen for a renewed commitment to the environment.
Frustrated by the failure of Congress to achieve significant climate change legislation in his first term, the administration used its regulatory powers, mostly through the Environmental Protection Agency, to raise auto emission standards (that Canada mirrored) and to tighten the screws on greenhouse gas emissions. King Coal still provides half of America’s power generation. With shale gas a game-changer for power generation, look to more regulatory action on coal-fired plants.
Canada’s immediate objective is getting the presidential permit for the Keystone XL pipeline. After his meeting on Friday with new Secretary of State John Kerry, Foreign Minister John Baird got the equivalent of a pat from a cousin when Mr. Kerry promised that he “would keep in touch” on Keystone. It underlines why we have to get our oil and gas to tidewater – new markets and better prices.
Mr. Kerry will be watching to see what happens this Sunday when the Sierra Club and its allies rally around the White House to “tell President Obama to shut down the climate-killing Keystone XL pipeline once and for all” in their “biggest demonstration yet” against ‘Big Oil’.
With Nebraska now onside, the State Department’s environmental assessment is the last significant hurdle to Keystone. It should be the ‘no-brainer’ that Prime Minister Stephen Harper once described it as, given that the first application received a positive environmental assessment. But the environmental movement has made the pipeline the surrogate for the oil sands, and thus a litmus test for the President’s commitment to climate change.
Third, look to what the President says on defense.
Looming ahead is ‘sequester,’ a terrible word with terrible consequences: across the board indiscriminate spending cuts, especially in defense. In his farewell remarks, Defense Secretary Leon Panetta warned that a “pattern of constant partisanship and gridlock and recrimination” degrades America’s national security, and “ability to respond to crisis precisely at a time of rising instability across the globe.”
Mr. Panetta has also called on the allies to contribute their fair share or, as his predecessor Bob Gates put it in his NATO valedictory, we face “a dim, if not dismal future for the transatlantic alliance.”
Only five members of the 28-member alliance currently spend the agreed minimum 2 per cent of GDP on defence. Canada is not among them. In an age of globalization, sea-power counts. As we develop Pacific markets we have a vested interest in secure sea lanes. The U.S. will expect us to move on our promised new warships and remind Mr. Harper of his own words that, “Canada and its economy float on salt water.”
For a second term president, the first eighteen months are critical in terms of achievement and legacy. The political dynamic then inevitably shifts to the mid-terms. After that the president is considered a ‘lame duck’ and the campaigning for 2016 and a new president begins in earnest. If the inaugural address provides the vision for a new administration, the State of the Union sets the blueprint. So listen carefully to tonight’s SOTU.
Colin Robertson, a former Canadian diplomat who held several high-level posts in the United States, is currently Senior Strategic Advisor for McKenna, Long and Aldridge LLP.