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Lawrence Martin
Lawrence Martin

Lawrence Martin

The U.S. economy is in turmoil. Royal commission? Add to ...

The way things are going with the United States, Donald Macdonald was saying this week, it may be time to appoint another royal commission on Canada's future economic prospects, like the one he headed in the early 1980s.

That commission, appointed by Pierre Trudeau, reported 25 years ago and recommended free trade, which was brought in by Brian Mulroney.

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America's future seemed unlimited then, so the idea was to find a way to tighten the bond. America's future seems limited now, so the idea may well need to change.

"We in North America have passed away from really having a dominant position in world economic trade," Mr. Macdonald said, adding that the rise of China is no fleeting thing. A commission to redefine Canada's global prospects may be the way to go.

The country's trade levels with the United States maxed out a few years ago, started downward and, as Mr. Macdonald said, will probably continue to move that way. The United States has bounced back from lows in the past, he said, but "I just feel it's a very different situation today."

The American deficit of $1.6-trillion is "just stunning, absolutely incredible," he said. "I'm an old bugger, in my 70s. I can't believe in a trillion of anything."

What's more, said the 78-year-old, who is still working at a Toronto law firm, the political conditions in United States are so destructive that there is little room for optimism. "It's a mandate for stalemate."

In Ottawa, meanwhile, minority governments have created a situation wherein most everything is looked at in the short term. So it is unlikely that the idea of a commission would be welcome, Mr. Macdonald said.

He's probably right. In Canada, we tend to look on rather complacently at the developments south of the border and respond in an ad-hoc manner. The idea that the crisis in the United States is our crisis as well doesn't seem to register.

Our economy is currently performing better than theirs, but it is still true that as the United States goes, so goes Canada. That could well mean downward unless alternative strategies for a less America-centric world are developed. Such strategies would take a long time to bear fruit, but you have to start somewhere.

A year-long study by a blue-ribbon commission could help determine what course we should follow with the Americans, where our best foreign opportunities will be and what new political and cultural partnerships should be fashioned.

The Harper government has awoken, to some degree at least, to the changing global dynamic. Prime Minister Stephen Harper got around to visiting China and India. Last week, he won a smallish exemption from the Buy American laws.

But neither the Conservatives nor the opposition parties seem to view the American situation with any sense of alarm or long-range planning.

"It's a fair point," said Paul Dewar, the NDP's foreign-affairs critic. "Nobody is discussing this in real terms."

He said he would favour a new Macdonald-styled commission so long as it looked at a wide range of issues, not just trade. The government is still piggybacking the U.S. on matters such as the environment, he noted. "On acid rain, we led them," he said, recalling actions by the Mulroney government. "We didn't wait."

The Liberals' Bob Rae has faith that the Americans will pull themselves out of this jam as they have before. Although Ottawa has been slow off the mark in exploring new options, he noted that the premiers of Quebec, Ontario and British Columbia are very active on the Asian front.

A commission may be a good idea, although in the Internet age, Mr. Rae said, we look to do things faster.

Optimists point to the recovery that the U.S. made after the morass it fell into with Vietnam, Watergate and stagflation. But post-9/11, George W. Bush left the country with two wars, with staggering deficit and debt levels, in a paranoid state over terrorism and in a bleak recession. In the 1970s, there was no rival near the magnitude of China today, nor was the country in hock to the degree it is now.

No matter how enlightened the new President - and Barack Obama is enlightened - the lynch-mob mentality of the Republican right offers little hope for a bold way forward.

In the new Asia-driven century, a bold way forward is what Canada needs. It's what the Macdonald commission gave the country in the 1980s. We could do worse than a bipartisan panel to try to do the same today.

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