On IMF Leadership

Excerpted from Jeremy Torobin Globe and Mail May 30, 2011  Harper straddles fence on IMF leadership

The Harper government has played both sides of the Old World-New World coin.

Last year, Mr. Flaherty was instrumental in keeping the Group of Seven’s gravitas on life support for a bit longer, hauling his counterparts up to Iqaluit for a meeting to lay the groundwork for the larger G20 gathering in Toronto instead of just letting the antiquated G7 club fade away. At the same time, Mr. Flaherty has rarely missed an opportunity to contrast the debt woes of Europe (or of the United States) with Canada’s relatively sound fiscal footing, and he took on the old economic order by rallying countries like China and India to oppose a bank tax.

Mr. Flaherty has pointedly noted that the countries that have been most vocal about the need for an open, merit-based selection process at the IMF – Brazil, Russia, China, India and South Africa – are all in the G20, one of whose oft-stated goals is to give emerging powers more say in running the global economy.

Though Ms. Lagarde is a tough negotiator and extremely popular with her counterparts around the world, there’s a strong case to be made that if nobody else emerges Canada should back Mr. Carstens, head of Mexico’s central bank, a former top IMF official and – perhaps most important – an influential economist from a NAFTA partner.

“If Carstens and Lagarde remain the only two candidates, then they will need to be assessed against the background and experience needed to run a global economic institution and their ability to garner support from the broad membership,” said Thomas Bernes, Canada’s former executive director at the IMF. “I would hope that Mr. Carstens’ much more extensive economics background and experience, and his coming from an important North American partner for Canada, would weigh heavily in the government’s decision.”

Indeed, backing Mr. Carstens could be symbolically important in building Canada’s trade links with Latin America. At the same time, former Canadian diplomat Colin Robertson pointed out, the government is also trying to seal a free-trade deal with the European Union.

In other words, supporting either candidate could theoretically serve or thwart Canada’s interests, which helps explain why most observers say staying neutral is the best course until it’s clearer whether other candidates are going to come forward. Especially since the Americans haven’t come out in favour of either Ms. Lagarde or Mr. Carstens.

“You don’t have to always come out on things,” Mr. Robertson said. “I think that’s probably what Harper’s thinking right now, that this is one where we don’t have to pronounce, there’s no percentage in going either way, so play it straight.’’

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Why Canada should deepen its ties with Mexico

Excerpts from Globe and Mail series Time to Lead Why Canada should deepen its ties with Mexico by Marina Jimenez May, 24, 2011

Already Canada’s third-largest trading partner, with $20-billion a year in two-way trade, Mexico is home to foreign operations of 2,500 Canadian companies, including Manulife Financial Corp., Rio Tinto Alcan, and Power Corp. of Canada. Mexicans assemble everything from BlackBerrys for Research In Motion Ltd. to aircraft parts for Bombardier Inc.

With an economy that is the world’s 11th largest by World Bank estimates, the country of 113 million is already a vibrant mecca of world-class film, art and food. In the past five years, the number of Canadian tourists visiting Mexico doubled to 1.5 million – in spite of travel advisories and ubiquitous headlines about the violence of drug cartels.

It is this violence which poses Mexico’s biggest challenge, to both its security and its governance. Since Mexican President Felipe Calderon declared war on the drug cartels in 2006, more than 40,000 people have been killed. There have been countless stories of headless corpses and mass graves, of corrupt local police and politicians – even though the violent death rate is still lower than it is in Brazil and Central America.

Many experts believe that by forging closer political, economic and development ties with Mexico, Canada could enhance its credibility in the Americas, help to fortify hemispheric security, and assist Canadian companies and investors to take advantage of this huge and growing marketplace.

In the past, Ottawa has been reticent to deepen its links with Mexico owing to concerns that a closer relationship with one partner in the North American free-trade agreement (NAFTA) could dilute its special relationship with the other, far larger, partner. However, with Washington increasingly focused on Mexico’s challenges and opportunities, it is in Canada’s interest to deepen its ties south of the Rio Grande, experts say. The prosperity and security of all three countries are inextricably linked.

“Embracing the Americas should start with Mexico,” says Colin Robertson, vice-president of the Canadian Defence and Foreign Affairs Institute. “While for many years we ignored our Latin neighbours south of the Rio Grande, the Americans have never thought this way. … We also play back into our principal relationship with the U.S.”

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Solid Americas strategy would reap big rewards for Canada

Excerpted from Globe and Mail May 24, 2011. Campbell Clark’s Time to Lead: Solid Americas strategy would reap big rewards for Canada

Stephen Harper steps onto the world stage this week for the first time as a majority-government Prime Minister, with a four-year mandate that gives him a new opportunity to make good on a foreign-policy promise he made four years ago to expand Canada’s presence in the Americas…

A solid Americas strategy, fully implemented now, can bring together Mr. Harper’s foreign-policy goals. It can build political capital with Washington, improve security, marry the region’s needs with Canada self-interest, and expand trade. It can serve Canada’s interests, and the world’s.

The region offers the lure of expanded trade with big, booming economies such as Brazil. The potential is already being proven, with Canadian trade with Latin America rising 28.8 per cent in 2010 from the previous year, faster than with any other region. And with China and other Asian countries expanding investment and trade with Latin America, a bigger presence in Latin America provides a back door to promising Pacific Rim trade.

But the place to start is closer to home, with a major effort to secure stability and growth in Mexico, our biggest Latin American trading partner and NAFTA colleague, as well as the Central American nations on its border.

A bold step there, pouring in hundreds of police and justice trainers and new resources to combat the crippling forces of extreme economic inequality, organized crime, insecurity and weak institutions, can build Canadian ties by countering troubling threats in a region that has largely turned to democratically elected governments, but still faces instability…

The grand shift that Mr. Harper promised was unfunded, unfocused and beset by distractions. The government pushed through free trade and aid with Colombia and delivered a major response to Haiti’s earthquake. But across the hemisphere, many other governments see Canada’s new era of engagement as a chimera, and still wonder what it means. It’s time for Mr. Harper’s government to make it clear.

“Now they’ve got a majority government, they can afford to be strategic,” said former Canadian diplomat Colin Robertson, vice-president of the Canadian Defence and Foreign Affairs Institute. “They’ve decided through a couple of minority parliaments that the Americas matter. Well, now put some meat behind it.”

The missing substance to the plans has been a liability. An internal government evaluation, completed in January, found the strategy Mr. Harper pledged lacked funds, focus and co-ordination…

But the strategy needs a strategy, and Mr. Robertson has one to offer: “Start with Mexico and move south.”

Canada’s links to Latin America are deepest in its trade, travel and personal ties to Mexico, so expanding them is a way to build Canadian strengths, he argues. Aiding its education system and bringing Mexican students to Canada can pay off in bigger trade ties in the future. And a broader strategy can serve as a pattern for Canadian commitment in the hemisphere…

“If we can train Iraqi police, as we were doing in Jordan for a while, why aren’t we doing this with the Mexican police, where our interests are much greater?” Mr. Robertson asked.

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‘Doing More for Mexico’ on The Source

Ezra Levant host of The Sun’s The Source interviews Colin Robertson on why Mexico matters May  23, 2011

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Put Mexico at top of Canada’s Aid List

Published Wednesday, May. 18, 2011 Globe and Mail

Lurid headlines about mass graves and headless corpses – the premise for Carlos Fuentes’s most recent novel Destiny and Desire – are a daily reminder of Mexico’s existential war with the cartels that smuggle people and drugs into the United States. Mexico has other problems, including basic governmental institutions like policing and justice, that would benefit from Canadian advice and assistance.

Since NAFTA, Mexico has suffered from a lack of strategic consideration by Canada. Our policy initiatives often lack follow-through, especially in maintaining regular contact at the ministerial level, or reflect the kind of heavy-handedness for which we criticize the United States. The imposition of a visa on Mexican visitors in 2009 was badly handled. Still in place, it is a reminder of our ineffectual refugee determination system and its reform should be a priority for the re-elected Harper government.

Mexico is Canada’s third-largest trading partner and our fourth-largest export market, and its economic prospects are positive. The World Bank’s 2010 annual report, Doing Business, declared Mexico the easiest place in Latin America to run a company. Goldman Sachs predicts that in 40 years, Mexico will be the world’s fifth-largest economy, bigger than Russia, Japan or Germany. More than 2,500 Canadian firms are active. Walk down any of Mexico City’s main streets and you will spot a Bank of Nova Scotia, now the sixth-largest bank in Mexico. Shop in the supermarket and you are likely to find Canadian products.

The supply-chain dynamics that underpin the Canada-U.S. relationship now embrace Mexico. Magna has over 30 auto-parts plants while RIM produces BlackBerrys for the global marketplace. Aerospace facilities in Queretaro also build components for Bombardier aircraft, including those shipped north to Montreal for final assembly. Canadian mining firms are major players and bolster our place as Mexico’s fourth-largest foreign investor.

Our provinces, especially the premiers, have put effort into the relationship but we must do more. “We need,” argues Bob Pastor in his new book, The North American Idea: A Vision of a Continental Future, “to start over with a big North American idea, one based on the simple premise that all three countries benefit when one succeeds, and we are all hurt when one fails.”

Parallel with the new Canada-U.S. border and regulatory initiative, we need to develop a coherent strategy towards Mexico that looks at our integrated trade and investment. Identify opportunities for common cause, as we demonstrated in pandemic planning over H1N1. We both have shared interests in curtailing U.S. gun imports, in securing better access for our trucking, in joint action against U.S. agricultural subsidies.

Most of all, Mexico needs help with institution-building in areas like training an independent judiciary, reliable policing and managing pluralism. If we can provide 1,000 trainers in Afghanistan, then surely we can do more for Mexico, where our interests are vastly more important.

Self-interest alone should motivate us. If things go badly for Mexico in its war with the cartels and the situation worsens on the U.S.-Mexico border, it will be very difficult for any U.S. administration to differentiate and grant special dispensation on the northern border. Immigration is changing the political demography of the U.S., with nearly 50 million Americans claiming Latino roots.

Mexico should be our main target for aid and development. With almost half of its 110 million citizens under 30, Mexico needs jobs and opportunities, schools and hospitals, roads and infrastructure to build a new social contract. Putting Mexico at the top of our development agenda would also signal that we are serious about the Americas. We will reap geopolitical rewards in our relationship with the United States. It will also fuel the trade and commerce that guarantees our own prosperity. If ever there was a country where our economic interests and commitment to democratic development coalesce, it is Mexico.

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excerpted from Canada should come back to earth about cross-border shopping

From Neil Reynolds Globe and Mail  Canada should come back to earth about cross-border shopping May 18, 2011

U.S. trade policy analyst Daniel Ikenson got it right a couple of years ago when he proposed a long-overdue revision of product origin labels. They should all read, he said, “Made on Earth,” to reflect the fact that almost nothing is manufactured in a single country any more. What good is it to calculate the dollar value of China’s exports, he said, when other countries account for more than half of it? Global economic integration, he said, has made national trade policy and national trade statistics obsolete…

Take one relatively minor – that is, relatively easy – border issue: the amount of goods that Canadians may bring back duty-free from cross-border shopping trips to the United States. Here is a simple way to show Canadians that integrated borders mean a more tangible economic relationship with the States. Yet, as The Globe and Mail reported last week, the federal government has told the U.S. that it will not increase these nuisance exemptions.

Earlier this year, former Canadian diplomat Colin Robertson proposed that the government increase these exemptions tenfold: raising the one-day allowance from $50 to $500 per person; the three-day allowance from $250 to $2,500; that longer-stay allowance from $750 to $7,500. For most Canadians, these higher allowances would eliminate the us-versus-them hassles of cross-border shopping – and permit customs agents to spend less time on “looking for bottles of duty-free whisky,” as a Senate report exhorted in a 2007 report, “and spend more time trying to identify people who might be a genuine threat.”

With largely integrated economies, the historic reasons for these anachronistic regulations between Canada and the U.S. no longer exist. Compared with the trade that crosses the border every day, the tax revenue extracted from shoppers is insignificant. Cross-border customs agents monitor a minor part of Canada-U.S. trade. It should be enough to know that these “Made on Earth” goods have been happily “Bought on Earth” as well…

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On Wikileaks, the Arctic and Diplomacy

CTV National News: Roger Smith on the scandal When Prime Minister Stephen Harper talks about arctic sovereignty, the U.S. government hears just that — talk interviewing Colin Robertson

The United States thinks Prime Minister Stephen Harper’s tough talk on Canadian Arctic sovereignty is little more than chest-thumping meant to attract votes, according to a new WikiLeaks cable.

The diplomatic cable from the U.S. Embassy in Ottawa was posted today by the online whistleblower.

The cable said the Harper government has done little on its Arctic promises but has made domestic political gains regardless.

“Conservatives make concern for ‘The North’ part of their political brand . . . and it works,” says the note, entitled “Canada’s Conservative Government and its Arctic Focus.”

“The message seemed to resonate with the electorate; the Conservatives formed the new government in 2006.”

The cable, which is dated January 2010 and bears the signature of U.S. Ambassador David Jacobson, pokes fun at Harper’s statements regarding the Arctic.

“The persistent high public profile which this government has accorded ‘Northern Issues’ and the Arctic is, however, unprecedented and reflects the PM’s views that ‘the North has never been more important to our country’ — although one could perhaps paraphrase to state ‘the North has never been more important to our Party.'”

The cable notes some of Harper’s promises have long been forgotten, such as building armed icebreakers and Arctic Ocean sensors.

“Once elected, Harper hit the ground running with frosty rhetoric,” the notes says, referring to his 2006 election.

“Harper (who was still only Prime Minister-designate) used his first post-election press conference to respond to the United States Ambassador’s restatement the prior day of the longstanding U.S. position on the Northwest passage.”

The note says Harper once again brought out the Arctic issue for the 2008 campaign, but failed to bring it up even once during a January 2010 hours-long meeting with U.S. Ambassador Jacobson.

“That the PM’s public stance on the Arctic may not reflect his private, perhaps more pragmatic, priorities, however, was evident in the fact that during several hours together with Ambassador Jacobson on January 7 and 8, which featured wide-ranging conversations, the PM did not once mention the Arctic.”…

The U.S. embassy did not comment on the matter, but the U.S. went into damage control earlier in the year, warning more of the embarrassing documents would be made public by WikiLeaks.

Former diplomat Colin Robertson said the fallout won’t affect Canadian-American relations.

“This stuff is coming, some of this may be embarrassing, it’s certainly embarrassing to us but it doesn’t change how we want to do business with you,” Robertson said of the U.S. position.

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Embracing the Americas Starting with Mexico

Excerpted from May edition Policy Options Embracing the Americas, starting with Mexico

If Canadians needed a wake-up call to the power of regional blocs and the pace of political integration within the European Union, we got it last fall with our failure to secure a seat on the Security Council as a member of the Western European and Other Group (WEOG). The message is clear: we aren’t European. It is time we recognized geography and embraced our place in the Americas.

We’ve created the most successful bilateral relationship in the world with the United States. It will always be our primordial relationship. But our usually comfortable alignment with the colossus has meant that we’ve been reluctant to look further south on the continental map. The US has never thought this way and the since the earliest days of the Republic they’ve always been active in the Americas and the Monroe Doctrine (1823) has been one of the most durable and longstanding element in American foreign policy.

The combined populations of the Americas south of the Rio Grande gives them the potential over the coming decades to develop into a market as important as that of the EU, China and India. Growth rates are predicted to be 4.1 per cent a year for the next five years – double that of the G8 economies. The Chinese get it and are making significant investments. And with China competing with America for influence, there are geo-political reasons for our making our presence felt because we also have significant interests in the Americas. Yet, as a recent report conducted by our Department of Foreign Affairs concluded, we need “more concrete evidence on the ground of Canada’s interest.” Our relevance in the region will also be measured in terms of our capacity and willingness to participate in the broader social, political and economic agenda.

The Bank of Nova Scotia opened its first branch outside of Canada in Kingston, Jamaica in 1889 and Canadian banks are now found throughout the Caribbean. Our Foreign Direct Investment in the Americas outside USA is three times that in Asia. We’ve created a network of FTAs, far more in Latin America than in Asia: with Mexico, Costa Rica, Chile, Colombia, Peru. The Panama FTA is before Parliament and we are negotiating with Honduras, Caribbean Community and we’ve started discussions with MERCOSUR. We are now the number one investor in Chile. Despite bumps in the road, we have a growing strategic relationship with Brazil, the bookend to Mexico in Latin America. In terms of aid and development, we are committed to Haiti for the long-term.

By embracing the Americas we also play back into our principal relationship with the United States because when successive administrations, especially since Ronald Reagan, think strategically about the Americas, they think start with the trilateral relationship of Mexico and Canada. We should do the same and start our embrace of the Americas with Mexico.

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Foreign Policy under the re-elected Conservative Government

Prime time Politics with Martin Stringer May 9, 2010: Outgoing foreign affairs minister Lawrence Cannon gave his farewell address this morning to diplomats and bureaucrats in Ottawa. Cannon, who was defeated in last week’s election, is leaving the post after two and a half years.And what happens now for Canadian foreign policy and international trade now that the Conservatives have a four-year majority, with the NDP as official Opposition? Martin Stringer speaks with Colin Robertson, vice-president of the Canadian Defence & Foreign Affairs Institute, and Michael Hart, a trade expert at Carleton University’s Norman Paterson School of International Affairs.

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Excerpted From Weekly Standard

Triumph of the Conservatives

Are they now the natural governing party of Canada?

Fred Barnes

May 16, 2011, Vol. 16, No. 33 Weekly Standard

Who’s the most powerful conservative leader in the Americas, north and south? That may sound like a trick question, but it’s not. The answer is Stephen Harper, the Canadian prime minister who triumphed last week in an election that all but destroyed two opposition parties, the Liberals and the Bloc Québécois (BQ)….

Relations with the United States were not a major issue in the campaign. There was no U.S.-bashing, even from the left-of-center NDP and Green party. But dealing with the Obama administration is a top item on Harper’s agenda.

Since he became Conservative party leader in 2004, Harper, 52, “has practiced [former Conservative Prime Minister] Brian Mulroney’s golden rule for the conduct of relations with the U.S.—we can disagree without being disagreeable,” wrote Colin Robertson, vice president of the Canadian Defence and Foreign Affairs Institute. “Now he needs to follow the second Mulroney dictum—Canada’s influence in the world is measured by the extent to which we are perceived as having real influence in Washington.”

Harper has succeeded in building a solid relationship with President Obama. He never criticizes the administration, at least publicly. Now he needs Obama’s cooperation on two issues.

When Harper visited the White House in February, he and Obama announced the Declaration on a Shared Vision for Perimeter Security and Economic Competitiveness, an idea first broached, post-9/11, by President Bush. It would require a new agreement to ease travel restrictions between the United States and Canada, but is yet to be implemented. Also, economic regulations need to be harmonized.

The second issue is a proposed pipeline, the Keystone XL, to carry oil from northern Alberta to the Gulf Coast of Texas. The United States imports twice as much oil from Canada as it does from Saudi Arabia and Mexico combined, and the Keystone XL pipeline would allow us to rely even more on Canada, a friendly and nearby ally.

The problem, however, is that some environmentalists claim this is “dirty oil,” which contributes far more than other oil to global warming. It’s not true, but the argument has support in the Obama administration’s outpost of environmental extremism, the Environmental Protection Agency.

Because the pipeline would cross the Canadian-U.S. border, it must be approved by the State Department. Secretary of State Hillary Clinton seems willing to sign off, but the president also needs to be on board. Harper delivered a personal appeal to Obama at their February meeting and made the case for the pipeline at their joint press conference. The president was silent on the matter. Rejection of the pipeline would be a devastating blow to Harper, his party, and Canada….

Fred Barnes is executive editor of The Weekly Standard.

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