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Royal watchers hold British and Canadian flags as they await the arrival of the Duke and Duchess of Cambridge at Rideau Hall in Ottawa, on June 30, 2011.Adrian Wyld/The Canadian Press

The Union Jack and the Maple Leaf may soon fly side by side at embassies and consulates around the world, as part of a new cost-saving foreign affairs agreement between Britain and Canada, prompting concern that a hybrid diplomatic channel could weaken Canada's global standing.

Foreign Affairs Minister John Baird and British Foreign Secretary William Hague will announce plans Monday in Ottawa to begin sharing embassy space and resources. The arrangement is being touted as a money-saving move to offset budget cuts to diplomatic missions against the desire to establish a larger presence in emerging markets such as China and India.

Paul Heinbecker, the former Canadian ambassador to Germany and permanent representative of Canada to the United Nations in New York, warned that the relationship with a former colonial power in many parts of Asia and Africa could be a net negative.

"We have an incompatible brand with the U.K.," said Mr. Heinbecker, citing past disagreements, including Canada's support for sanctions to fight apartheid in South Africa, and Britain's reluctance to get involved in Bosnia militarily.

The agreement, according to sources, will include not just sharing real estate, but working together in other areas – representing civilians abroad, providing passports and visas, and dealing with emergencies such as revolutions, disasters and evacuations. The two countries will not share diplomatic representation, sources said – so British diplomats would not present Canadian views to foreign governments, or vice versa.

While combining resources for security may save on costs, there is some concern that it would add to the security risks for Canadian diplomats, especially in the Middle East. "The idea that we have a sufficient amount in common with the British that it makes sense that we share premises as a matter of routine, that, I think, is a mistake," Mr. Heinbecker said.

Sharing diplomatic space and services isn't uncommon between countries: Canada and Britain, for instance, already have several such arrangements, though none of them announced with the fanfare of an afternoon press conference in Ottawa. In Mali, British diplomats are housed in the Canadian embassy. In Myanmar, where Canada has just reopened its diplomatic presence, a sole Canadian is housed in the British embassy. Britain also has some similar arrangements with Australia.

Money is certainly a significant driver in the decision: The foreign service in both countries is trying to manage cutbacks while reserving funds for new consulates and trade offices in booming economic markets. Britain is cutting £100-million ($160-million) from its Foreign Office budget, while Canada's Foreign Affairs department is cutting $170-million. A senior government official with the Canadian government said, "Co-locating with our most trusted allies and making the most of our shared resources makes perfect sense. It increased our diplomatic reach in a cost-efficient way."

Mr. Hague's stop in Ottawa on the way to the United Nations this week is the first bilateral visit by a British Foreign Secretary since 1966. In the past year, Mr. Hague has announced plans to open seven new consulates and increase British diplomatic representation in more than 20 countries, as well as reopening the embassy, for example, in Paraguay and establishing representation in Haiti, though any role with Canada was not mentioned in the announcements.

It's not clear which embassies or locations would be affected by the agreement, or how extensive the resource-sharing would be – the memorandum is a plan to go forward with an eye to share resources. But foreign affairs experts were quick to debate the wisdom of so closely – and physically – aligning with a country that has a distinctly different history than Canada, and has taken diverging opinions in the past. (As well as the fact that having a stand-alone foreign policy was key to establishing Canada's independence from Britain, even after Confederation.)

Contrary to media reports in Britain, sources said the agreement does not include Australia and New Zealand, as part of a Commonwealth arrangement. British media have also been suggesting that aligning with Canada is an attempt by Britain to counter EU influence – a motivation sources also denied.

Mr. Heinbecker pointed out, however, that this theory is already floating around Britain, whether true or not. "That's a game," he said, "we don't have any interest in playing."

Still, both the Canadian and British governments are selling the idea as an economic advantage in lean times, with trade and diplomatic benefits for each country.

"We have stood shoulder to shoulder from the great wars of the last century to fighting terrorists in Afghanistan and supporting Arab Spring nations like Libya and Syria. We are first cousins," Mr. Hague said in a written statement to the media. "So it is natural that we look to link up our embassies with Canada's in places where that suits both countries. It will give us a bigger reach abroad for our businesses and people for less cost."

If it is simply the kind of resource-sharing arrangements embassies have had for years, "why the pomp and ceremony?" asked NDP foreign affairs critic Paul Dewar. "Diplomacy is about perception. It's one thing to require that all embassies have a portrait of the Queen, but it's another thing to have a British flag flying next to a Canadian one. … The bottom line is how is this going to benefit our interests."

Mr. Heinbecker also wondered how the decision will be perceived by Canadians – in Quebec, for instance, and among immigrant communities. "Domestically, it does raise the question of reinforcing this kind of British veneer that we are putting on Canadian foreign policy."

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