Keystone XL Pipeline decision

Excerpted from Embassy ‘Keystone XL pipeline: Politics or process?Bruise on Canada-US relations, but won’t leave scare’ November 16

The United States government’s move to delay a final decision on the Keystone XL pipeline until after the 2012 presidential elections has some observers saying that “politics prevailed” and that such a move could have a negative impact on Canada-US relations.

Others, though, say the decision was an example of the regulatory process at work.

TransCanada Corp. had proposed a $7-billion pipeline that would take crude oil from Hardisty, Alta. southeast through Saskatchewan, Montana, South Dakota and Nebraska, on its way to the Texas Gulf coast.

But the US State Department announced Nov. 10 that it needed to get more information on possible other routes. The State Department said the decision, which was expected by the end of this year, would likely be pushed back to early 2013.

Nebraskans had voiced concerns about the pipeline’s proposed route going over environmentally sensitive areas such as the Sand Hills region and the Ogallala aquifer.

Reports emerged this week that Nebraska and TransCanada agreed to find an alternative route for the pipeline, which TransCanada said could shorten the approval timeline. It was also said that Nebraska Governor Dave Heineman asked the US government to speed up the process. The State Department, however, appeared to stick firm to the 2013 timeline, according to CBC News.

Colin Robertson, a former Canadian diplomat and now a senior strategic adviser for McKenna, Long and Aldridge LLP, which has done work for TransCanada, said the State Department’s move has little to do with Canada and everything to do with US President Barack Obama’s re-election prospects.

Others also share this sentiment….

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XL Pipeline Decision

Excerpted from Saskatoon Star Phoenix editorial November 15 ‘Take new tack on world trade

President Barack Obama’s decision to delay, and potentially kill, the $7 billion TransCanada Keystone XL pipeline may be a watershed moment in Canada’s approach to international trade, as former Canadian diplomat Colin Robertson suggests.

It is safe to say that Mr. Obama’s 11th-hour about face on the massive pipeline project came as a surprise to everyone from Alberta ministers to oil executives to the highest ranks of the Canadian government, including Prime Minister Stephen Harper.

And as Mr. Robertson, who was a key figure in the CanadaU.S. Free Trade deal, noted on the weekend, the Keystone story has Canada’s chief executives sitting up and taking notice. It also had Mr. Harper speculating aloud, just minutes before a tête-à-tête with Mr. Obama, that Canada must spread its wings and seek out other markets for its oil.

If his was a bluff to frighten the Americans back into a continental energy strategy, it was a poor one. No one was more pleased with the prospect of Canada looking to Asian markets than Mr. Obama, who can use Canada’s vast resources as bait in his pursuit of an enhanced Trans-Pacific Partnership deal.

For both the American and Canadian leaders this may be more hyperbole than reality. Canada lacks significant infrastructure needed to get its goods, and especially its oilsands product, to Asia. Historically it also has lacked the will to kill the trade-numbing milk and egg marketing boards, which have precluded trade deals with Europe and Asia.

And before Canada starts to spend the billions it expects to reap from China’s interest in the oilsands, it’s worth remembering that building the pipelines, railroads and highways across northern British Columbia isn’t likely to be any easier than it was convincing the oil-starved Americans to accept Keystone.

However, even though broadening Canada’s global markets will pose a challenge, it will be worth the effort. Saskatchewan, which has become a “have” province largely because it was able to overcome American protectionism and expand its markets in the Middle East and Asia, is an example of what Canada could gain.

Among the top priorities for Canada is strengthening its environmental regulations, monitoring and enforcement. Under the guise of becoming more efficient, Environment Canada has been laying off hundreds of scientists just when it should be bolstering its ranks and increasing investment in research.

It’s worth remembering that it wasn’t for legitimate environmental concerns that Keystone ran aground. America still buys oilsands product from Venezuela and oil from Nigeria – countries with incredibly poor environmental records – and is developing formerly off-limits heavy oil reserves in environmentally sensitive areas of California.

And it’s not for the love of clean water that Keystone was scuttled. The rapid expansion of hydraulic fracking to extract oil and gas in Montana and North Dakota along the headwaters of America’s largest river system is evidence of the sincerity of that concern. Keystone fell because a coalition of anti-government conservatives and anti-intellectual liberals saw the pipeline as easy prey.

If Canada is serious about developing new markets, it needs a new approach to marketing boards and to end shortsighted cuts to essential government services.

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APEC, TPP and Canada-US relations

excerpted from John Ivison’s ‘A trade deal that Stephen Harper can’t refuse’ in the National Post November 14

With the Beyond Borders trade and security agreement likely to be signed by the President and the Prime Minister in early December, this weekend’s development is an affirmation of the Harper government’s prudent policy of reasonable accommodation of the U.S. – progress over the approach of successive Liberal governments, who, in the words of former diplomat Colin Robertson, delighted in “tweaking the beak of the American eagle to underline Canadian independence.”

It’s a good result for the Prime Minister but he is still left with the prospect of dismantling supply management – a system that inflates prices for Canadian consumers and flies in the face of everything else he believes in. Pre-negotiated reform may be off the table but concerted opposition remains among the other nine or so participating countries.

There will be pressure on Canada to phase out protection of the dairy and poultry industries over time and Mr. Harper’s decision to participate in the TPP talks may signal the slow death of supply management, regardless of the assurances to the contrary given in the House of Commons.

A free trade deal that includes the NAFTA countries and Japan is a glittering prize worth potentially billions of dollars, not least for Canada’s beef producers. The country’s economy cannot be held to ransom by 12,000 dairy farmers.

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Trans-Pacific Partnership, XL Pipeline and Canada-US relations

Host Seamus O’Regan interviews Colin Robertson on Canada AM about the APEC Conference, the decision to participate in the Trans-Pacific Partnership, the implications of the postponement of the XL pipeline presidential permit decision and the state of Canada-US relations.

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On the postponement of the XL pipeline

Excerpted from  CTV News ‘Flaherty warns that delay could kill XL pipeline project’

The delay is largely due to the upcoming U.S. presidential election and Barack Obama’s need to shore up votes among both unions and environmentalists — both core democratic supporters who are on opposite sides of the pipeline — says Colin Robertson, a former trade envoy to the U.S.

“This wasn’t about Canada. This is about the presidential election. This about the president really being caught between a rock and a hard place,” Robertson said Friday on CTV News Channel. Environmentalists are opposed to the pipeline while the unions support it and expect it will create some 20,000 jobs.

An earlier and comparable pipeline, Enbridge Clipper, “sailed through” the U.S. approval process, he added.

Robertson predicted that the U.S. will revisit Keystone. “I’m not convinced this is over … There will be other acts to this because at the end of the day, Americans still need hydrocarbons.”

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Diplomacy: Canada’s New Policies Toward Latin America

From America’s Quarterly, November 2011:

In August, on his fourth official visit to Latin America, Prime Minister Stephen Harper set out to reboot Canada’s on-and-off-again relationship with the region. In the first stop on a four-country tour that took him to Brazil, Colombia, Costa Rica, and Honduras, Harper declared in São Paulo that “during too long a time we neglected relations[…]too much grass grows in the cracks on the road. It is time,” he added, “for increased ambition.”

Ambition is important. But so is perseverance.

Canadian efforts in the Americas are characterized by quixotic spasms of tango-like embrace: joining the Organization of American States (1990); negotiating the North American Free Trade Agreement (NAFTA, 1993–1994); and committing to the Free Trade Area of the Americas (1994)—all nearly 20 years ago. But this rush of engagement was followed by a long siesta until 2007, when the Harper government announced its Strategy of Engagement in the Americas, which emphasized democratic governance, prosperity and security. The plan is only now taking shape.

It does take two to tango, and Latin American governments share equal responsibility for failing to take advantage of Canadian interest and opportunities.

So what makes Harper’s newest effort different?

First, there is the economic malaise in the United States and the recognition that Canadians really do need options to the U.S. market. Agree or not with Standard & Poor’s’ reevaluation of American creditworthiness, there is no disagreement with its analysis that “the effectiveness, stability and predictability of American policymaking and political institutions have weakened.”

For Canadians, the U.S. market and the bilateral relationship will always remain primordial, but as the U.S. hunkers down and the administration focuses on a “jobs” agenda, there is a likelihood of renewed protectionism—which could affect the huge Canada–U.S. resource trade in everything from lumber to fish. Notwithstanding President Barack Obama’s promise to export his way out of the economic malaise, certain Democrats and Tea Party Republicans equate free trade with the outsourcing of jobs. And that may impede further efforts to broaden the opportunities for Canada under NAFTA.

While Canadian and U.S. negotiators are in discussions to ease border access for people and goods, these steps alone will not strengthen the Canadian market. Canada must look to new opportunities to hedge its bets.

That is being done slowly in Latin America. On August 15, a free-trade agreement (FTA) with Colombia—an economy equal to the state of Connecticut—went into effect, and new implementing legislation for the Canada–Panama Free Trade Agreement (similar in economic weight to Vermont) is being introduced in Parliament this fall. Canada also has FTAs with Costa Rica, Peru and Chile.

Beyond FTAs, Latin American countries are making it easier for Canada to invest and do business in the region. A decade-long dose of the Washington Consensus, whatever its faults, has rinsed away the previous attachment to the Prebisch-inspired statism that stigmatized earlier efforts at boosting investment and terms of trade.

Mexico is a prime example. The World Bank and International Finance Corporation’s Doing Business 2011 report declared this NAFTA partner as the easiest place in Latin America to run a company. The International Monetary Fund says Mexico’s economic growth will eclipse that of the U.S. and Canada from now until 2015, and Goldman Sachs predicts that in 40 years Mexico will be the world’s fifth-largest economy—bigger than Russia, Japan or Germany.

Third, Canadian business is prepared for risk, recognizing that the options are either grow or get absorbed. Twenty years of freer trade have given Canadian companies, especially the larger ones, the confidence that they can compete internationally and the experience of operations on the global stage.

CTV network anchor Andrea Mandel-Campbell notes in Why Mexicans Don’t Drink Molson that Canadian companies are historically timid about venturing into international markets, but Mexicans ride on Bombardier-constructed subways and Scotiabank is the sixth-largest retail bank in Mexico. Where once Canada’s business associations focused almost exclusively on the U.S., their membership is now encouraging them to look beyond its neighbor to the south.

Fourth, the renewed Canadian approach melds trade objectives with development aspirations. Attitudes toward aid are changing with the increasing recognition that a job is the best form of development assistance. A key feature of the rebooted relationship with Brazil is a CEO Forum, staffed by the Canadian Council of Chief Executives and the Brazilian National Confederation of Industry.

This business-to-business dimension promises real gains, especially if Brazilians and Canadians can agree on a set of practical objectives such as increasing direct flights and identifying business impediments that can be addressed by working with governments. CEO forums should be included in every FTA negotiation and built into the existing relationships with Mexico and Chile.

To sustain the opening with Brazil and to move the relationships with key partners like Mexico and Chile to the next level will require a series of focused blueprints. These will have to address critical questions such as how to attract more Latin American investment in Canada and what barriers—especially those specific to Latin America—can be addressed by Canadian initiatives. The Canadian business community is engaged and should be a driving force for taking the relationship to the next level.

In every case, there needs to be a systematic plan of engagement starting at the most senior political level.

For one, the prime minister needs to block at least one week a year for visits to the region. To provide the needed intellectual capital, Canadians also need to actively support the work of think tanks and improve existing synergies among organizations.

The demise for lack of funding in September of the Canadian Foundation for the Americas (FOCAL) research center, after 21 years of advancing Canadian interests, is a setback because it consistently provided useful intellectual heft and intelligent trend-spotting.

FOCAL had been largely dependent on Canadian government funding after it was created by an act of cabinet under Prime Minister Brian Mulroney (1984–1993). In its next iteration it should look more like the Inter-American Dialogue or Americas Society/Council of the Americas, with strong private-sector involvement and a focus on investment and trade as the best means of generating development and creating long-term relationships.

The current Canadian government is not the first to promise a new look at the region, but all too often action never followed rhetoric. If the Americas are truly a priority, and Harper’s promise to be “ambitious” is more than just repetition of the old rhetoric, the prime minister’s continued attention to the region will be necessary.

Unless the Canada–Latin America relationship is given a place of priority on the agenda and moves from aspiration to pragmatic results, the grass will grow back in the cracks.

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Election season in the U.S.

Former Canadian diplomat Colin Robertson talks with Power Play’s Don Martin and says he believes it’s very important for the Prime Minister Stephen Harper and U.S. President Barack Obama to conclude the first phase of talks concerning perimeter security between the two countries.

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