Keystone and Clean Energy

Why Canada wants to feel more love from the U.S.

Globe and Mail Tuesday, Jun. 24 2014 and in RealClearWorld June 25

Living beside the United States, remarked Pierre Trudeau, is like sleeping with an elephant: “No matter how friendly or temperate the beast, one is affected by every twitch and grunt.” The twitching is getting to the Harper government and it has responded with a series of pokes.

A trio of senior ministers – John Baird, Joe Oliver, Greg Rickford – travelled to New York this month to voice what Stephen Harper calls our “profound disappointment” over the delayed Keystone XL (KXL) pipeline. Said Mr. Oliver: “This isn’t right, this isn’t fair.”

In Winnipeg, Agriculture Minister Gary Ritz accused the United States of behaving like a “schoolyard bully” over country-of-origin labelling.

Last week in Washington, Ambassador Gary Doer and MP Rob Merrifield delivered an invitation from House of Commons Speaker Andrew Scheer to Republican House Speaker John Boehner to visit Canada for discussions on KXL and other issues.

If the Obama administration wants further evidence that Canada deserves some attention it should watch the recent exchange between former ambassador Frank McKenna and U.S. Ambassador Bruce Heyman. “It’s like a marriage. It might be really good for you but I’ve got some problems,” said Mr. McKenna of Canadian frustration over KXL and financing the Windsor-Detroit customs plaza.

Canada-U.S. relations operate on three levels: international, intermestic and people-to-people.

Ours is a complex relationship that goes beyond the traditional diplomatic conventions. Supported by the hidden wiring of connections between provinces and states, business and civil society, it is usually a model for neighbourly relations.

In international summitry, President Barack Obama and Prime Minister Harper are aligned on the big-ticket issues of peace and security, banking and finance, even if they differ on approaches to climate change.

The people-to-people relationship is solid. Americans like us more than we like them. We share much in common, at work and at play, although beating Team USA at hockey is now our main Olympic goal.

It’s on the transactional level of trade and commerce that we have problems, with KXL top of the list. For Canada, KXL is the problem with the partner. For the United States, KXL is a problem with a partner.

Hillary Clinton is right when in Toronto last week she told Mr. McKenna that KXL shouldn’t be a “proxy” for the relationship.

But KXL raises the question: Does the Obama administration have a strategic sense of Canada? We now supply more oil to the U.S. than OPEC. Increasingly, it travels by rail although, as the State Department acknowledged again this month, pipe is safer.

Ms. Clinton calls Canada an “indispensable partner,” but we aren’t feeling the love. Any serious White House study should result in renewed appreciation of Canada’s strategic importance. Pushing forward the border and regulatory initiatives would be welcomed.

Franklin Roosevelt set the framework through a series of trade and security agreements. This approach – Canada as a reliable ally; the U.S. as a trusted trade partner – has been followed by most subsequent administrations.

Its logic holds. The emerging international order is looking more like that of Roosevelt’s era – a multipolar system of sovereign states pursuing national interests. It will put a premium on reliable allies and trade partners.

Last month in Montreal, Ambassador Doer outlined a North American clean energy strategy, one that includes water. Water, says Mr. Doer, will make the debate about going from 85 to 86 pipelines “look silly.”

First: energy efficiency – sharing best practices on oil and gas, wind, solar and other alternatives. We’ve already adopted harmonized standards on tailpipe emissions for cars and trucks. Oil patch collaboration is improving environmental performance, especially on water.

We’ve three carbon-pricing experiments under way: British Columbia’s carbon tax; Alberta’s emissions reduction fund; Quebec’s cap-and-trade. Saskatchewan is experimenting with carbon capture and storage.

Second: energy reliability and renewability. Complete the hardening of our pipelines and electrical transmission grid systems and recognize hydropower within renewable energy standards.

Third: oil and gas development. Together, Canada and the U.S. produce more oil than any nation. Add natural gas and we’re positioning for a North American manufacturing renaissance.

Having led the world in shale development, North American energy ministers should develop continental fracking standards for next year’s leaders’ summit in Canada and then present them at the Paris climate talks.

Mr. Doer’s constructive approach underlines another lesson in managing Uncle Sam: We do best when, through initiatives advancing our shared interests, we make their agenda “our” agenda.

On becoming prime minister, Mr. Harper promised a “new tone” in the U.S. relationship, banishing the drama of the later years under Paul Martin.

Twitches and grunts notwithstanding, Mr. Harper’s initial instinct for a constructive approach to the United States is still sensible.

A former diplomat, Colin Robertson is vice president of the Canadian Defence and Foreign Affairs Institute and a senior advisor to McKenna, Long and Aldridge LLP.

More Related to this Story

Safety regulators have placed two extra conditions on TransCanada’s Keystone XL pipeline. One of the conditions requires TransCanada to hire a third-party contractor to monitor the construction. Jameson Berkow has more.

Video: U.S. imposes new conditions on Keystone construction
Video: Joe Oliver on why Ottawa is so dedicated to Keystone
Attachments area

Preview YouTube video Vidéo CORIM – S.E. Gary Doer

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On retirement of Russian Ambassador Georgiy Mamedov

Russian envoy retiring from Canada post after 11 years

Georgiy Mamedov in TorontoGeorgiy Mamedov in Toronto on Tuesday April 22 , 2014. (THE CANADIAN PRESS / Chris Young)

Mike Blanchfield, The Canadian Press

Published Thursday, June 12, 2014 6:59AM EDT

OTTAWA — Georgiy Mamedov’s diplomatic career was forged in some of the fiercest political fires of the Cold War.

As he prepares to depart Canada as the so-called dean of the country’s diplomatic corps after 11 years, it is as if he’s being re-baptized in those old Cold War flames all over again.

The sharp-accented, sardonic and often provocative Russian ambassador to Canada has become the target of Canada’s political and public disapproval of President Vladimir Putin’s annexation of Crimea and the ongoing unrest in eastern Ukraine caused by pro-Russian gunmen.

He’s been called on the carpet behind closed doors in recent months by top Foreign Affairs officials, bearing Canada’s official outrage on behalf of the Putin government. He was even heckled in public — some called him a liar — at a recent business luncheon in Toronto.

For some who say they know him better than others, none of this has knocked the 66-year-old Mamedov off his axis.

“Behind the Falstaffian exterior is a canny and shrewd diplomat who knows how to play the game. (More) importantly, he likes to play the game and he is very good at it,” said retired Canadian diplomat Colin Robertson, vice-president of the Canadian Defence and Foreign Affairs Institute.

Mamedov is expected to depart his post at the end of June after 11 years at the Russian embassy in Ottawa, easily twice the length of most diplomatic postings. Unlike most other governments, Russians favour long postings.

In Mamedov’s case, it made even more sense because is widely acknowledged as one of his country’s foremost experts on North American affairs.

Over the years, Mamedov has worked hard to build economic ties between Canada and Russia, in between finessing various flashpoints that periodically raised the ire of the current Harper government.

Those include a Russian submarine planting a flag on the North Pole seabed, accusations of Russian bombers flying too close to Canadian airspace and disgraced Canadian navy sub-lieutenant Jeffrey Delisle, convicted of stealing and selling military secrets to Moscow.

As of late, Mamedov has become the Canadian face of a “regime” that Prime Minister Stephen Harper has personally branded a threat to world peace.

Paul Heinbecker, Canada’s former ambassador to the United Nations, recalled how Mamedov bore the brunt of some harsh criticism from his own government while the West was negotiating the end of the 1999 Kosovo crisis.

NATO had bombed the former Yugoslavia for 78 days, driving Russia’s ally in Serbia out of the predominantly ethnically Albanian province of Kosovo.

“He was constructive and resourceful and tough and faced down a lot of opposition inside Moscow to deliver the kind of deal Yeltsin could live with,” Heinbecker recalled. “I actually saw some of it.”

Heinbecker said he came to hold Mamedov in high regard for rising above that pressure.

“There were a lot of people in Moscow who thought this was abandoning the Serbs and letting NATO run wild. He was able to surmount that.”

Four years later, Mamedov began his diplomatic run in Ottawa.

“Mamedov played on various levels: Canada-Russia political, economic, social — people to people relations — as well as intellectual,” said Robertson.

“He also observed for Russian interests in the wider world especially reporting from Canada on U.S. affairs. We are a very good listening post.”

The son of a career diplomat, Mamedov began his own career more than 40 years ago, a doctorate in history on his resume, with a short one-year posting at the Soviet Union’s embassy in Washington. He returned in the 1970s for four more years that spanned his country’s invasion of Afghanistan in 1979.

When the Soviet Union collapsed a decade later, Mamedov was at the director of his foreign ministry’s desk for Canada and the United States.

For the 12 years prior to his 2003 appointment to Ottawa, he served as Russia’s deputy ministry of foreign affairs.

“He came with deep knowledge of the Kremlin,” Robertson said, “after having cut his teeth on the most critical issues of the Cold War: nuclear non-proliferation, negotiating removal of weapons from Ukraine, and U.S.-Soviet relations.”

Mamedov’s fingerprints are on the Budapest Memorandums of 1994, which resonate today with the ongoing Ukraine crisis.

The agreement was between Ukraine, Russia, Britain and the U.S. It called for the removal of Ukraine’s nuclear stockpile in return for Russian recognition of Ukraine’s territorial sovereignty — something the West now accuses Putin of leaving in tatters.

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Counterfeit goods and Bill C-8

Heyman cries foul on counterfeit bill

Extra inspections too pricey, say feds.

The Hill Times Photo: Jake Wright
US Ambassador Bruce Heyman, at a Canada 2020 event welcoming him to Canada on June 2 at the National Gallery of Canada in Ottawa.

Peter Mazereeuw
Last Updated: Wednesday, 06/11/2014 12:09 am EDT

United States Ambassador Bruce Heyman took a shot at the federal government’s stalled anti-counterfeiting bill in his first major public speech in Canada last week, decrying an exemption for goods in transit from a third country to the US.

Intellectual property lawyers, an import-export industry spokesperson and Canada-US analysts echoed his complaint that Bill C-8, the so-called Combating Counterfeit Products Act, would exempt goods passing through Canada on their way to another destination from an examination for intellectual property infringement by the Canada Border Services Agency.

Requiring border officers to search goods in transit for counterfeiting would be too costly, said Jake Enwright, press secretary for Industry Minister James Moore.

“Our government doesn’t believe taxpayers should be on the hook for the cost of seizing counterfeit products that are destined for the United States that do not threaten health or safety,” he said.

NDP and Liberal MPs said cuts to the CBSA budget have already strained the agency, and inspecting goods in transit would only make things worse. Both said their parties would support the bill.

The Combating Counterfeit Products Act has remained at third reading in the House since January.

A hole in the shared perimeter

“The United States is concerned because the bill does not apply to goods that are shipped through Canada, from a third country to the US,” Mr. Heyman said, according to speaking notes, at a Canada 2020 event on June 2 in Ottawa.

“Given our highly integrated supply and production chain…We should have laws and procedures stopping these illegal goods at our shared perimeter,” he said.

It wasn’t the first time a US official has raised the issue. A 2011 report from the United States Trade Representative said Canada “should provide its Customs officials with ex officio authority to effectively stop the transit of counterfeit and pirated products through its territory.”

The counterfeiting bill, which introduces new offences related to possessing or exporting goods that infringe intellectual property law and overhauls Canada’s trademarks regime, includes a clause exempting items brought into Canada for personal use (for example, a single counterfeit designer handbag) and for “copies that, while being shipped from one place outside Canada to another, are in customs transit control.”

The exemption comes despite the 2011 pledge by the Canadian and US governments to work towards a shared perimeter, where goods will be checked once and accepted twice, said a handful of lawyers and analysts.

“Putting in the legislation, and stating quite boldly, ‘We will not [inspect],’ that defies the perimeter that we agree upon and it leaves us open then to the Americans to break the covenant of: inspected once, cleared twice,” said Colin Robertson, a former Canadian diplomat and current adviser for McKenna, Long and Aldridge LLP in Ottawa.

“I think [the exemption] will have implications for our bigger trade policy interests with the US, because intellectual property is always their first ask from Canada on a trade issue,” said Laura Dawson, an Ottawa-based consultant on Canada-US economic issues who has advised both governments.

As Beyond the Border program initiatives come up for renewal in the coming years, “[US] officials cannot help but sort of look at a status report card from the last couple of years, and say, ‘How well has Canada been co-operating with us?’” she said.

“I think they’re getting some pressure from the US to re-think their position,” said House industry committee vice chair and Liberal MP Judy Sgro.

Mr. Robertson said he did not expect the dispute between the two countries to spill over into other areas of their relations. It is unlikely Canada would use the exemption as a tool for leverage, as such behaviour typically backfires for a smaller trading partner, he said.

How big is the job?

Commentators disagreed over how large of a burden checking for counterfeit would be for CBSA officers, who already examine goods in transit for contraband and dangerous contents.

“If they’re already checking, why aren’t they taking the extra step and checking for counterfeiting?” said Lorne Lipkus, an intellectual property lawyer, in an interview. He testified in front of the House industry committee on behalf of the Canadian Intellectual Property Council.

The more thorough inspection for counterfeiting would slow down trade and reduce the resources border agents have to inspect goods destined for Canada, said NDP industry critic Peggy Nash in a phone interview.

Ms. Nash said while she understands Mr. Heyman’s concerns with the bill, her party will support it in Parliament. Cuts each year to the Canada Border Services Agency’s budget have left it without the resources to take on the added burden, she said.

Ms. Sgro agreed, and said limited resources constrain the border agency’s ability to do a proper inspection of goods in transit.

The Liberal Caucus has decided that voting against the bill would be “obstructionist,” and will support it and press for improvements going forward, said Greg McClinchey, Ms. Sgro’s chief of staff.

The Canada Border Services Agency’s budget has been cut by more than $140 million since 2011-12, though some funding has been added for Beyond the Border program initiatives. The cuts are slated to continue into 2016-2017, where planned spending will be nearly $300 million less than the agency’s 2011-2012 expenditures, according to the CBSA website.

Mr. Moore told the House industry committee in November that the CBSA has enough resources to put in place the current counterfeiting bill.

Martin Lavoie, director of manufacturing policy for the Canadian Manufacturers and Exporters, opposed the exemption in front of the committee. The law, as proposed, would not eliminate all the hurdles faced by intellectual property rights holders looking to stop counterfeit copies of their goods from getting to market, he said in a phone interview.

Bill C-8 has drawn the wrath of some in Canada’s intellectual property law community for overhauling Canada’s trademarks regime, they say for the benefit of foreign multinationals. Some intellectual property law experts have also criticized the bill for failing to adequately clarify the legal status of parallel imports, legitimate goods that are imported and re-sold against the wishes of the manufacturer.

The EU dropped a requirement to inspect goods in transit at the last minute from intellectual property regulations introduced earlier this year, said Ralph Cox, an intellectual property lawyer in Fasken Martineau’s London office.

The provision was dropped, despite heavy pressure from large multinational rights holders, out of fear it would be too onerous for border officers to inspect for all forms of intellectual property violations, he said, and because European case law provides other avenues for rights holders to pursue counterfeiters.

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Canada needs to conclude EU deal

Canada needs to conclude EU trade deal

The Globe and Mail Tuesday, Jun. 10 2014

Within last week’s G-7 communiqué was a commitment to conclude outstanding trade agreements. Topping this list was the Canada-EU agreement. We need to close this deal.

Leaders also promised to strengthen the rules-based international trading system and to fight protectionism, and underlined the role of trade and investment as “key engines for jobs and growth.”

In the architecture of post-World War II institutions, the multilateral trade arena – first through the GATT and now the World Trade Organization (WTO) – raises global incomes and contributes to poverty reduction.

Trade negotiations, once the preserve of the trade-policy cognoscenti operating behind closed doors, are today highly public, very political and polarized on various fault lines: rich vs. poor, developed vs. newly developed nations.

Ambition is returning to the WTO, but negotiations among 160 members will be slower, and with more compromises, than focused initiatives among like-minded nations. Last year’s WTO ministerial meeting in Bali resulted in a Trade Facilitation Agreement that G-7 leaders have promised to swiftly implement.

Ultimately, in an era where goods are “made in the world” of supply chains, and of trade largely intra-firm or connected to global value chains (by some estimates, 80 per cent of all trade), business itself will demand one set of rules and the WTO likely will reassert its primacy as the main table.

For now, serious trade negotiations are conducted either bilaterally or regionally that increasingly head into “beyond the border” domestic regulations, public policy choices on investment (and dispute settlement) and innovation (intellectual property) and, for Asia, state capitalism.

The result is a ‘spaghetti bowl’ of different agreements. Companies parse the different agreements for advantages relating to differing rules of origin or intellectual property protection.

For Canada, trade and investment is vital to our continued prosperity. We rank 12th in the WTO table of leading exporters and importers and 17th in trade in commercial services. Half of what we produce is exported.

Include inter-provincial commerce and 80 per cent of our economy depends on trade. If we could bust barriers between provinces it could be even higher, with commensurate gains to consumers and provincial coffers.

Opening doors to trade involves the short-term pain of adjustment (eased through training in new skills). Better market access and improved productivity result in long-term gains, as demonstrated after implementation of the Canada-US FTA and NAFTA.

The Harper government boasts that it is creating the conditions for trade through an activist global markets plan – now 15 trade offices in China – and building infrastructure at home in the form of roads, rail, bridges, ports and pipelines.

Progress on our major trade negotiations can be grouped into three baskets:

  • What is important but won’t move fast: TRans Pacific Partnership is effectively stalled until the United States can secure Trade Promotion Authority from Congress. The Canada-Japan Economic Partnership plays a distant second fiddle to the TPP. Before the Japanese seriously engage they want assurance of pipelines to our Pacific coast with LNG terminals.

Then there is the Canada-EU Comprehensive Economic and Trade Agreement (CETA).

Announced triumphantly last October, CETA is not wrapped up. International Trade Minister Ed Fast says the issues are technicalities. Others suggest there remain hurdles around issues like investor-state dispute settlement, intellectual property and financial regulations. EU Ambassador Marie-Anne Coninsx recently warned that “if it drags on too long then …momentum might get lost.”

For the EU and USA, CETA serves as a guide for their own negotiations.

Championed tirelessly by the Canada Europe Business Roundtable, Canadian business leadership wants a deal.

Canadian provinces, initially divided on CETA’s efficacy, are now invested in the agreement. Provincial participation at the negotiating table changes permanently, for the better, the future conduct of trade negotiations.

CETA symbolizes the Harper government’s trade agenda with ministers and MPs criss-crossed the country its case. In Brussels last week, Prime Minister Harper linked hands with EU Commission President Jose Barrosso.

But Mr. Harper did not bring home the bacon.

In trade negotiations, perfection is the enemy of the good. To get a lot, you have to give a little. Nor does delay make for a better deal. It can make for a lost deal.

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