Beyond the Border and Regulatory Cooperation A Year On

Beyond the Border, 2013: inching toward a deal iPolitics Insight

By | Dec 12, 2012 9:01 pm

It’s been a year since Prime Minister Stephen Harper and President Barack Obama announced framework agreements on Beyond the Border and the new Regulatory Cooperation Council. While most of the subsequent work has been below the waterline of media interest, let’s look at the progress to date.

Access to the United States market — still the largest in the world and, for Canadians, the most accessible — is an enduring Canadian objective dating back to when we were British North America. A European-style union is not in the cards but a more integrated continental economy, one which includes Mexico, makes a whole lot of sense.

Access to the U.S. has been the trade priority of every Canadian prime minister. Our domestic market is too small to generate the sales we need to put bread on the table and pay for those things, such as medicare, which define what it is to be Canadian.

Defence production led the way under Mackenzie King and Roosevelt. It was followed by the Auto Pact (Pearson and LBJ), the Canada-U.S. Free Trade Agreement (Mulroney and Reagan) and NAFTA (which transitioned from Mulroney/George H.W. Bush to Chretien/Clinton). Some relief from the security curtain imposed after 9-11 was provided by the Manley-Ridge ‘Smart Border Accord’ but the border continued to thicken. The Security and Prosperity Partnership — started by George W. Bush, Paul Martin and Mexico’s Vicente Fox — came to naught.

Mr. Harper had the border on the agenda when Mr. Obama came to Ottawa just after his first inauguration but the issue lost traction. The prime minister had to personally put it back on the president’s agenda – another vindication of Brian Mulroney’s axiom: “If you don’t have a friendly and constructive personal relationship with the president of the United States, nothing is going to happen.”

It is estimated border inefficiencies cost the Canadian economy 1 per cent of GDP, or $16 billion a year — roughly $500 for each Canadian.

So what do our two nations have to show for their efforts a year on, besides some frequent flyer points for civil servants doing the capital shuffle (and not a lot of those, given the bite of austerity)? Three areas stand out: getting goods across the border, easing border congestion, and the process itself.

Supply chain dynamics increasingly account for most of our trade in things like trains, planes and automobiles, soup, and the ubiquitous BlackBerry. Just-in-time delivery is especially critical for the auto trade, still our biggest traded manufacture.

Getting stuff efficiently and quickly across the border is vital for manufacturers. Global production means that more and more of our parts come from Asian workshops. The port closest to those suppliers is Prince Rupert, B.C., where containers are put on trains and shipped south, passing through Portal, Sask., enroute to the industrial hub around Chicago.

Rail cars crossing the border have long been screened for illegal migrants as well as chemical or radiological content — but they’ve still been subject to secondary inspection. Southbound, rail is now handling about 60 per cent of the surface volume (trucks carry the other 40 per cent). Containers arriving at U.S. ports still avoid this kind of rigorous inspection.

Now, joint inspections in Prince Rupert allow faster transit — giving real effect to the principle ‘inspected once, approved twice’. Montreal likely will be the next pilot port for this fast-tracked inspection service, with Halifax and Vancouver to follow. The value of integrated gateways was demonstrated recently when Hurricane Sandy obliged the diversion of cargo to Halifax from East Coast U.S. ports. Halifax was able to double its intake and, between re-transit by sea and more rail cars for land travel, the containers reached their southern destinations with minimal disruption.

For the frequent traveller there are now designated NEXUS lines at most major airports giving ‘fast-pass’ cardholders one less travel headache.

The challenge will be to preserve the pre-clearance facilities at Canadian airports as the fiscal crunch bears down on U.S. departments. Unlike other foreigners, we can remind the Americans that Canadians continue to flock south of the border to spend their money, making more than 21 million visits to the U.S. last year (including 59,619 nights in Florida).

Canadians represent more than a third of all foreign visits to the U.S. Canadians’ annual spending in the U.S. — $24 billion in 2011 — dwarfs the sum spent by Americans stationed in Canada.

We are also beginning to make the border more accessible by constructing new lanes and building facilities designed for easier flow in places like St. Stephen, N.B., and Calais, Maine.

Despite recent blocking efforts, it appears the vital second crossing between Windsor and Detroit is back on track. The trade that crosses the Ambassador Bridge is worth more than all U.S. trade with Japan. National security alone would argue for presidential approval of the necessary waiver and a quick start to bridge construction, which will create thousands of jobs.

The bureaucratic process set in place by the initiatives — especially on the regulatory side — is very promising. Here the Americans are ahead of us. A pair of Executive Orders (the equivalent of cabinet directives) oblige U.S. regulators to demonstrate why they would diverge from complementarity in new regulations with regulatory partners like Canada.

Working groups across the current designated areas are using a sensible schematic in looking at new rules:

  • Is it really required?
  • Is there another way to address the requirement (i.e., data sharing)?
  • For those deemed necessary, can administrative burdens be reduced or eliminated?

There is also a process to re-examine old rules and bring them into line with the new approach. The best net effect would be a change in attitude among those who administer the rules. The current enforcement mentality should evolve into one of common sense and risk-management aimed at expediting people and goods. This alone would be a very positive outcome.

A shrewd Canadian ‘ask’ was for an inventory of border fees and charges. As the U.S. approaches its ‘fiscal cliff’, it’s almost certain that there will be an effort to find alternate revenue sources such as the $5.50 fee levied last October on Canadians entering the U.S. by air or sea as ‘compensation’ for revenue lost under the U.S.-Colombia Free Trade Agreement. We need to be vigilant about new border fees.

After nearly seven years in office, Prime Minister Harper has got to be thinking of his legacy. Beyond the Border and regulatory cooperation would be an historic achievement.

But President Obama also needs this deal. He has pledged to double American exports. The twin initiatives with Canada, America’s biggest trading partner, will advance that goal but it will require continued attention from the president to make it happen.

At a time when questions are being asked about the direction of American policy, the ability of the U.S. to deliver on a deal with Canada will not be lost on officials in Mexico City, the partners in the Trans Pacific Partnership and friends and allies everywhere.

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Colin Robertson, December 12th 2012 | Tags: , , , , , , , ,
Posted in op-ed

Harper Foreign Policy

Excerpted from Embassy Harper grips the Diplomatic Reins tightly by Ally Foster
Published: Wednesday, 12/12/2012

tighter, as part of his years-long undertaking to fundamentally rebrand Canada at home and abroad, say former diplomats and other observers.

A look at the scorecard over the past year reveals both diplomatic courting and breakups for Canada. There has been talk of sharing consular digs with the Commonwealth, as well as temporary and permanent boarding up of embassies.

Security reports for missions abroad and foreign policy plans have been leaked, and major foreign investment deals have been made.

In November, Mr. Harper visited India for the second time since being elected in 2006, and also made a second visit to China in February of this year.

In late-breaking news, Mr. Harper announced the approval of the $15.1 billion takeover of Nexen Inc. by Chinese oil giant CNOOC, as well as giving Malaysia’s Petronas oil and gas company the green light to buy Calgary’s Progress Energy, on Dec. 7.

Meanwhile, Mr. Harper laid out rules that will block most foreign ownership of oil sands assets by state-owned enterprises.

Canada expanded its reach in 2012 by announcing in July that it would open its first-ever embassy in Myanmar, also known as Burma, after months of easing sanctions against the country in light of perceived democratic and human rights progress.

But the November leak of the government’s long-awaited foreign policy plan was, according to CBC News, focused largely on trade priorities, to the chagrin of some observers. The CBC also reported that it lacked any mention of prior Canadian foreign policy hallmarks such as peacekeeping and international development.

‘Fundamental rebranding’

This was “not a banner year for Canadian diplomacy,” argued former Canadian diplomat Daryl Copeland, now a senior fellow at the Canadian Defence and Foreign Affairs Institute.

“It’s less…what we did do in the world, than what we didn’t do,” he said, adding this has been part of a growing trend over the past decade.

Nevertheless, he highlighted the breaking of diplomatic ties with Iran, which Foreign Minister John Baird announced on Sept. 7, and Mr. Baird’s decision to temporarily recall Canadian representatives from Israel, the West Bank, and the United Nations after voting against the successful Palestinian bid to become “non-member observer state” at the UN. That effort saw Canada end up in the severe minority, with nine nations voting against the bid, 138 voting in favour, and 41 abstaining.

There has been a “fundamental rebranding of Canada,” said Mr. Copeland—one that shows the country drawing a hard line on issues, as opposed to its previous international reputation as a moderate.

But another former Canadian diplomat, Colin Robertson, said he sees a promising government approach to foreign policy. He wrote in an email of “an increasingly coherent Conservative international [policy].”

He highlighted Trade Minister Ed Fast’s “quiet diligence in promoting trade deals” and Mr. Baird’s “articulation of the Conservative foreign policy.” While Mr. Fast works to tie the knot in trade talks, he argued, “he has been the quiet constantly plodding forward tortoise to John Baird’s Energizer Bunny.”

“Like it or not, John Baird is an authentically Canadian voice on foreign policy. There is no question about us not having a policy.”

Harper in control

The CNOOC and Petronas decisions showed that the Harper government is committed to racing “full speed ahead” into Asia, wrote Mr. Robertson.

He was surprised, however, at “the government’s poor job in selling the Asian strategy,” compared with the amount of time the government talked up its potential trade deal with the European Union.

Meanwhile, Gordon Smith, a former deputy minister at what is now DFAIT, said the government has a “foreign policy that’s driven by the people around the prime minister.”

This has happened with previous PMs, and isn’t entirely new, he added. Even so, he said this Prime Minister’s Office “doesn’t fully trust the public service [and] isn’t comfortable with the kind of advice the public service gives. There’s an uneasiness in that relationship.”

Canada’s relations with the UN are also uneasy, noted Mr. Smith, who is now a distinguished fellow at the Centre for International Governance Innovation.

“The UN obviously is in the dog house with this government,” he said, pointing to Mr. Harper’s decision not to attend the UN General Assembly on Sept. 27, despite being in New York to accept the world statesman of the year award for 2012, presented by the Appeal of Conscience Foundation.

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Colin Robertson, December 12th 2012 | Tags: , ,
Posted in Uncategorized

Canada and the Americas

Americas strategy? It takes three to tango

colin robertson From Tuesday’s Globe and Mail Apr. 03, 2012

Our size and global placement give Canadians multiple perspectives as we compete in the international market. But these advantages too often distract us, at a time when we need to focus and follow-through.

History and early trading patterns make us an Atlantic nation. With half of all new Canadians coming from Asia, we now have a Pacific outlook that we embrace. Our climate is a constant reminder that we’re also a northern country, and the Harper government has made the Arctic a priority.

As we were reminded by Monday’s trilateral summit in Washington, we are also a nation of the Americas. Our propinquity to the United States has always been a challenge – initially around security, then through cultural seduction – as well as an economic opportunity promised by the world’s biggest market.

For most of our history, with the exception of the Commonwealth Caribbean relationships, we avoided our neighbours south of the Rio Grande. It was a Latin land of dictators and revolutions. Besides, since the Monroe Doctrine, the U.S. had staked its hegemony.

NAFTA gave us a serious relationship with Mexico but, as Monday’s summit illustrated, we continue to be a somewhat reluctant partner.

Taking advantage of our shared continent is a good idea, but it requires vision and boldness if we’re to realize the advantage of resources, market and labour. For now, trilateralism is on life support.

As we saw again Monday, these meetings are essentially “dual bilaterals” between Mexico and the U.S. and then, time permitting, between Canada and the U.S. We have to await the outcome of this year’s elections in Mexico and the U.S. before we can revive the North American idea.

Mexico deserves our support in combatting the drug menace as well as in developing its institutions. If we can wage war in Afghanistan and Libya, then surely we can lend a helping hand in our neighbourhood.

We also have increasing commercial interests. The World Bank says Mexico is the easiest place in Latin America to run a business and, by mid-century, Goldman Sachs reckons the country will be the world’s fifth-largest economy, bigger than that of Germany, Russia and Japan.

Meantime, we should be doing useful continental planning around our shared infrastructure – roads and rail, electrical grids and pipelines and at our gateways. And as soon as we fix our made-in-Canada refugee problem, let’s lift the visa for Mexicans.

With the exception of our ongoing commitment to Haiti, Canadian efforts toward the rest of the Americas have been characterized by quixotic spasms of tango-like embrace – joining the Organization of American States and committing to the now-moribund Free Trade Area of the Americas – followed by a long siesta.

The Harper government developed an Americas strategy with an emphasis on democratic governance, prosperity and security. We’ve made progress through a series of boutique trade agreements, but the grand strategy has been slow to take shape. As we approach this month’s Summit of the Americas, it’s ready for a “reset.”

It takes two to tango, and Latin American governments share responsibility for not taking advantage of Canadian interest and opportunities. During Stephen Harper’s visit to Brazil last year, he promised to be ambitious, saying that, for “too long a time we neglected relations. … Too much grass grows in the cracks on the road between out two great countries.”

Ambition is important. But so is perseverance.

Mr. Harper will need to devote more time and energy if we’re to demonstrate that there are more steps in our dance repertoire. The Canadian business community is engaged. Our mining companies are especially active, and our banks have long had a presence in the Caribbean that has since expanded, notably into Mexico.

Business can be a driving force for taking the relationship to the next level. Twenty years of freer trade has given Canadian companies experience and confidence that they can compete on the wider world stage. As we have learned in Asia, however, our commercial interests are advanced when ministers are there to show the flag.

For Canadians, the U.S. market and relationship will always remain No. 1, and we can take some comfort from Barack Obama’s promise on Monday to make the border “faster and cheaper to travel and trade.”

But the slow economic recovery increases the likelihood of renewed protectionism. Even when it’s not aimed at Canada, we are always at risk through collateral damage. It’s why, while we need always to keep our focus on the U.S., we should look to other markets in the Americas, starting with Mexico. And if we’re to keep the grass from growing back in the cracks, we need a good plan, perseverance and senior political level follow-through.

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Colin Robertson, April 3rd 2012 | Tags: , , , , , , ,
Posted in op-ed

Trilateral Summit in Washington

From Ipolitics April 2, 2012:  The North American idea

by Colin Robertson,

When Barack Obama welcomes Stephen Harper and Felipe Calderon into the Oval Office on Monday, the leaders will smile and the cameras will click.

But will there be anything more to report than the usual bromides about the need for greater cooperation and collaboration at this latest iteration of the three amigos?

Probably not.

Sadly, the idea of closer economic integration creating an uber-North America — effectively a customs union between Canada, the U.S. and Mexico that would marry resources, labour and market — is on life-support.

For Stephen Harper, the first priority is on making the Canada-U.S. border more accessible, while enthusiastically embracing a ‘Trade R Us’ approach through the Trans-Pacific Partnership, a deal with the European Union and a smorgasbord of bilateral agreements. For Barack Obama, the priority is on creating jobs against what is shaping up as another polarizing election. For Felipe Calderon, the focus continues to be on battling the drug cartels. Calderon is in his last months as president and the July election will likely see the defeat of his party and the return of the long dominant establishment PRI.

Since NAFTA, the continental association has seldom gone beyond a pleasant conversation on aspirations, with a couple of notable exceptions including pandemic planning in the wake of H1N1 or, as it was initially known, the Mexican swine flu. Unfortunately, the substance of the ‘trilateral’ summits quickly descends first into the U.S. relationship with Mexico, because Mexican issues are top of mind for the American president, and then, time permitting, the U.S. relationship with Canada.

This dual bilateralism has left Canadian practitioners with the view that Canadian interests are better advanced dealing directly with the United States. They are mostly right although, as we’re learning yet again in the latest initiative to expedite border access, if getting the framework agreement is difficult, achieving measurable results is an even bigger hurdle. It requires consistent effort and continuing high-level instruction to shift a post 9-11 bureaucratic mindset that has still to understand that you can have both secure frontiers and economic integration.

NAFTA, the anchor for trilateralism, has never enjoyed the popular acclaim that it deserves.

Canada was initially a reluctant partner – we signed on for reasons similar to what is taking us into the Trans-Pacific Partnership – so as to avoid becoming a spoke in the American hub.

For the Americans, the decision was strategic: give Mexico a hand-up that would create jobs, a market and keep Mexican migrants at home. It worked, but only to a degree. Many of the maquiladoras that initially sprung up across the U.S. border have long since been dismantled and reassembled in China. Mexico’s northern states are now a war zone. In the USA, NAFTA has become a synonym for job loss and outsourcing.

It’s too bad because NAFTA did what was intended for all three partners. From 1994-2001, NAFTA trade tripled and foreign investment quintupled among the partners. Intra-regional trade accounted for 46 per cent of the three amigos international trade — up from 36 per cent in 1988.

Then came 9-11.

America reasserted its borders and a combination of the rise of China, slowing economies and the existential war with the cartels saw intra-regional trade slide back towards its pre-NAFTA levels.

At Waco in 2005, George W. Bush tried to revive the trilateral idea with the Security and Prosperity Partnership (SPP). But the SPP suffered from too many little objectives (over 400) without focus or political will. While the North American Competitiveness Council did good work, its pro-business orientation made it an anathema to the new Obama regime and the SPP process petered out.

It’s too bad because a key feature of globalization is the successful development of intra-regional trade – Europe showed the way and now Asia and Latin America are following suit. With labour, resources and the biggest market in the world, North America is well placed.

But it requires a willingness to look at the kind of bold ideas outlined in Robert Pastor’s vision of a continental future, The North American Idea (2011). A tireless champion of the North American idea, Pastor makes a solid argument for a customs union involving labor mobility and coordinated infrastructure, with a special focus on energy and transportation.

The energy dimension is further explored by the Peterson Institute’s Jeff Schott and Meera Frickling. In their useful NAFTAand Climate Change (2011), they recommend harmonized renewable energy standards, regional cap-and-trade regimes, and a coordinated mapping of carbon capture and storage sites.

The ideas are there. So is the potential for growth.

Canadians are well aware of the importance of the U.S. market, but we sometimes forget that Mexico is more than a cheap winter holiday. 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.

Canadian companies, like Bombardier, RIM and Magna, already have a significant manufacturing presence in Mexico as part of their North American supply chain. Walk down any main street in Mexico City and you are likely to see the red and white signature of Scotiabank, now Mexico’s sixth largest retail bank.

We have opportunities in Mexico and a useful outcome of today’s meeting would be an announcement that we are lifting the visa requirement for Mexicans that was clumsily imposed in July 2009. Designed to assuage our refugee determination system, a made-in-Canada problem, it has since been corrected by legislation.

Alas, in current circumstances there is neither the political will nor popular support for the North American idea. This is why at today’s trilateral summit we should not expect much beyond a photo and aspirational declarations of good intentions.

But, after a two year hiatus, that it is even happening at all is cause for cheer. While we await more propitious circumstances, the North American idea remains alive.

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Colin Robertson, April 2nd 2012 | Tags: , , , , , , ,
Posted in Newspaper

Three Cheers for the Commonwealth

Excerpted from ipolitics, March 12, 2012

oday is Commonwealth Day. At the Pearson Building, they will run up the Commonwealth flag, a golden globe set on a blue background. The flag originated from car pennants used at the 1973 Commonwealth Heads of Government meeting in Ottawa.

The 61 spears that form a “C” around the globe on the flag represent not its members but rather the
functional work of the institution – practical, people-oriented and aimed at giving people a hand-up through technical assistance.

It is the Commonwealth’s usually overlooked functional work that deserves our first cheer. Commonwealth-supported initiatives range from setting standards and sharing best practices on everything from life-saving to lawyering. While no longer enjoying preferential arrangements, the idea of giving developing nations preferred access, now a principle of the WTO, began with the imperial preferences.

Sports play a big part in encouraging fellowship. The Commonwealth Games were first hosted in Hamilton by Canada in 1930. Every four years they bring together Commonwealth athletes in what are purposely styled the ‘Friendly Games’.

The second cheer goes to Canada’s continuing contribution.

Born out of the old British Empire, the Commonwealth is arguably the oldest continuous intergovernmental association. That it evolved from Empire to Commonwealth owes much to the initiative of then prime minister Louis St. Laurent and Lester Pearson, then our minister for external affairs.

The challenge in 1948-9 was how to incorporate the new republic of India, the former ‘jewel in the Crown’, into a group that still pledged allegiance to that Crown. Working with Indian prime minister Nehru and others, St. Laurent and Pearson came up with the London Declaration whereby the Crown is recognized as “symbol of the free association of its independent member nations and as such the Head of the Commonwealth”.

The first Secretary General of the Commonweath was Arnold Smith, a distinguished Canadian diplomat and contemporary of Pearson. Appointed in 1965, his ten-year tenure put in place the core political values that culminated in the 1971 Singapore Declaration and the belief that “that our multi-national association can expand human understanding and understanding among nations, assist in the elimination of discrimination based on differences of race, colour or creed.”

Non-discrimination and respect for human rights are fundamental to the Commonwealth ideal. With strong leadership from Canadian prime minister John Diefenbaker, South Africa was shown the door over its apartheid practices in 1961 (then readmitted in 1994 with the end of apartheid).

In the intervening years, Nigeria and Pakistan were also suspended over human rights violations and Zimbabwe and Fiji are currently outside the Commonwealth for the same reason.

Prime Minister Harper has criticized human rights abuses in Sri Lanka and he has served notice that, without progress, he’ll boycott the next Commonwealth Heads of Government meeting (CHOGM), scheduled for Colombo, Sri Lanka in 2013.

The Harper approach is consistent with Canadian leadership since the inception of the modern Commonwealth.

Canadian Senator Hugh Segal is one of the ‘eminent persons’ who are currently leading the reform movement within the Commonwealth. Inspired by the core values of non-discrimination, the Eminent Persons Group presented 106 ‘urgent’ recommendations, at the Perth 2011 CHOGM. They reported that the Commonwealth was in a state of decay and in urgent need of ‘people’ oriented reforms, including a Charter reflecting human rights, democracy and the rule of law.

Leaders agreed to the need for “one clear, powerful statement” but there was no consensus on recommendations that, as well as the proposed Charter, included the repeal of anti-sodomy laws and the creation of a human rights commissioner.

Punted to study groups, Commonwealth foreign ministers will take another look at the reform plan this fall. It’s the kind of difficult file deserving the personal attention of John Baird, who is energetically advancing human rights.

The third ‘hurrah’ goes to the Head of the Commonwealth, Queen Elizabeth. We celebrate her diamond jubilee this year and her reign virtually tracks the evolution of the modern Commonwealth. Behind the CHOGM curtain, her counsel has been described as wise, pragmatic and progressive.

In this year’s annual message for Commonwealth Day, the Queen says we “celebrate an extraordinary cultural tapestry that reflects our many individual and collective identities… however different outward appearances may be, we share a great deal in common.”

The Queen’s message of tolerance and pluralism captures the original spirit of the Commonwealth. It is one to which Canadians, in particular, can relate. Importantly, it should inspire the Commonwealth leaders as they look to the future. The useful institution is not broken but it does need to be fixed.

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Colin Robertson, March 12th 2012 | Tags: , , , , , ,
Posted in op-ed

Harper visits China

CPAC anchor Peter van Dusen interviews Colin Robertson, vice-president of the Canadian Defence and Foreign Affairs Institute, and discusses the prime minister’s continuing visit to China.

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Colin Robertson, February 7th 2012 | Tags: , , ,
Posted in TV Interviews

Canada in the Americas

Excerpted from Americas Quarterly Winter 2012 Diplomacy: Canada’s New Policies Toward Latin America

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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Colin Robertson, January 8th 2012 | Tags: , , , ,
Posted in Major Research paper

Beyond the Border: Noise and Promise

Beyond the Border: noise and promise from Globe and Mail Dec. 05, 2011

On Wednesday, Prime Minister Stephen Harper and President Barack Obama will announce a framework agreement on their Beyond the Border initiative with “risk management” as its guiding principle.

The deal is likely to include the following: Pre-clearance, currently offered at our major airports, will be extended to cargo leaving the factory gate; thresholds for inspected goods will be more generous; the “fast pass” privileges for trusted travelers will be expanded; access roads and ports will be improved to make them gateways rather than chokepoints; electrical grids, oil and gas pipelines, and the circuitry for everything from ATM transactions to air traffic control will be reinforced against cyber threats.

There will be reforms aimed at greater regulatory compatibility because differing national “standards” are the new barrier to commerce. They range from baby food bottles to seat belts to the Cheerios that U.S. Ambassador David Jacobson eats for breakfast.

Inevitably, there will be complaints about a loss of “sovereignty.” But the reality is that we are leagues away from a European-style common market or common currency. We maintain separate immigration regimes while sharing data on cross-border flow in people. Privacy is a legitimate concern, but there’s probably more self-inflicted embarrassment on Facebook sites than can be gleaned from government.

The new deal would be a substantive advance on the Smart Border accord, quickly and cleverly cobbled together in the wake of 9/11. The test will be in the pilots and practical implementation to improve supply-chain security and efficiency by moving inspection to the perimeter. An attitudinal change on the part of border staff will be essential to expedite the flow of people and goods. Early results must include faster passage through the border and, for business, less red tape. If implemented as envisioned, the deal holds out the promise of transformational progress.

But there’ll bumps on the road.

The stalled second crossing at Detroit-Windsor and the debate around the Keystone XL pipeline are a reminder of how special interests in the U.S. system can thwart the common good. Uncle Sam is broke and the American allergy to taxation means they’ll continue to look elsewhere for revenue, thus the new fee on air and sea travellers. The IRS “granny hunt” for tax scofflaws, a port tariff, and the Buy America provisions within Mr. Obama’s jobs bill corrode our confidence in Uncle Sam’s ability to negotiate in good faith.

Much of this is noise. Unlike our Westminster system, most American legislative proposals wither on the congressional vine. We need to better understand the U.S. system, so we aren’t constantly sounding the alarm bell without cause.

Past deals, including the Canada-U.S. free-trade agreement and the North American free-trade agreement, mostly shield us from U.S. protectionism, but they must be constantly reinforced. The fractious nature of the American system means a permanent campaign on behalf of Canadian interests. Those who worry about putting our eggs in one basket should recall that we have 50-plus trade negotiations under way globally. A deal with the European Union is imminent, and the invitation to the Trans-Pacific Partnership is promising. But the U.S. remains the world’s biggest market.

A majority government and support from the premiers, a sea change since the 1988 free-trade election, ensure that we can meet our obligations.

The American picture is more clouded. Some will object to “giving” Canada a special deal, forgetting that the supply-chain dynamic creates jobs. Others will be reluctant to lower the drawbridge at the border, but U.S. border czar Alan Bersin got it right, saying the “old dichotomy between the promotion of trade and heightening of security … is a false choice.”

Bureaucratic resistance to change will be reinforced by the inertia that descends on Washington during a presidential election year. The Canada-U.S. Partnership inaugurated by Bill Clinton and Jean Chrétien in 1999 evaporated into the bureaucratic ether. The trilateral Security and Prosperity Partnership launched by George W. Bush, Paul Martin and Vicente Fox in 2005 turned into a zombie.

It took Ronald Reagan’s personal intervention to conclude the FTA in 1988. Will Mr. Obama demonstrate that same commitment in implementing the new deal?

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Colin Robertson, December 5th 2011 | Tags: , , , , , ,
Posted in op-ed

Looking to the Border Deal

From Global News/The West Block : Sunday, December 04, 2011 Border pact won’t compromise sovereignty: former diplomat
OTTAWA – Just days before Prime Minister Stephen Harper heads to Washington, D.C., ostensibly to sign a perimeter agreement with President Barack Obama, Canadians still have many questions.

The precise details of the agreement, which aims to ease trade and increase security in both countries, are still unknown.

With questions of potential privacy infringements and loss of sovereignty, the deal could be a tough sell in Canada.

One of the keys to a successful agreement will be balancing sovereignty and privacy with the need to increase efficiency at the border, said Colin Robertson, a former diplomat who helped negotiate the FTA and NAFTA.

Canada should be confident, knowing it can hold its own in terms of trade with the U.S., he said, pointing to Canada’s ability to prosper and grow through the NAFTA deal – which some also feared would hurt Canadian sovereignty.

“Trade is what makes us Canadian,” he said. “It pays for our schools, pays for out health care, it’s our ability to trade not just with the United States, but with the rest of the world as well.”

The bi-lateral agreement is supposed to help trade flow easily between Canada and the United States – the countries that boast the largest trading partnership in the history of the world. But critics warn Canadians could be giving up their sovereignty and personal privacy for this economic gain.

The deal will likely include the following:

- Offering pre-clearance for trucks carrying commercial goods as they leave the factory gate.
- Expanding “fast pass” border-crossing privileges, such as the NEXUS pass.
- Using biometrics to track travelers in real time.
- Eliminating redundant inspections by means of harmonizing standards and equipment.
- Making regulations on a variety of goods more compatible.

Many in Canada, including the federal privacy czar, have raised red flags around the suggestion that Canadians will have to divulge personal information when crossing the border.

Gordon Giffin, a former U.S. ambassador to Canada, acknowledged that several aspects took precedence over security when the details were being hammered out.

“I don’t mean to suggest that security is not very important here,” he said during an appearance on The West Block. “But the economy and jobs, and how we more efficiently manage our pocket book here has become almost equal to security.”

Americans remain concerned about security and privacy, said Giffin, who helped negotiate a pre-clearance agreement with Canada in 2001.

“It’s not as if we’re giving up everything in the United States to the government,” he said. “So I think that there’s probably more rhetoric on that subject than is necessary.”

Another key to ensuring the success of the agreement, Robertson said, will be getting players at all levels to work toward a common goal, and changing the attitudes of border staff.

Economically, the ties between the Canada and the U.S. are longer than the border that divides them.

In Michigan alone, bilateral trade with Canada in 2010 was worth $62.1 billion; trade with New York State accounted for $35.1 billion.

In total, trade between the two countries was worth $646 billion last year – that’s $1.7 billion a day, or more than $1 million every single minute.

Still, Canadian businesses have been losing billions of dollars every year since the borders were tightened following 9/11, causing long delays in getting goods across the border.

The border discussions between Harper and Obama represent the third effort since the terrorist attacks to reduce congestion at the border.

And although Harper and Obama officially launched the talks in February, Robertson suggests they date back to February 2009, when Obama made Ottawa his first foreign visit after becoming president.

“Obama recognized he’d have to double his exports if he’s going to bring America back to prosperity,” he said. “And his ambassador, David Jacobson, said ‘look, if you’re going to double your exports, you should start with what is your biggest export. And that is Canada.’”

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Colin Robertson, December 4th 2011 | Tags: , , , , ,
Posted in TV Interviews

Stephen Harper’s World View

Excerpted from October Policy Options ‘Harper’s World View’

…Argue with the taxonomy, but there are essentially three traditions in Canadian foreign policy. The first is the realist, power-and-interest tradition that holds close to the hegemon, initially Britain and then the United States. The external counterpart to Sir John A. Macdonald’s National Policy, it has been followed, in varying degrees, by Macdonald, then Sir Wilfrid Laurier through to Brian Mulroney. The second is the Mackenzie King tradition, nationalist, regional in outlook, and both cautious and skeptical about international entanglements. It also appealed to populist, regional third parties from the Progressives through the Bloc Quebecois. The third is the St- Laurent-Pearson tradition, further refined by Pierre Trudeau and Jean Chretien: strongly nationalist and internationalist – assertive, energetic, with an emphasis on international law and institutions.

Looking at Harper’s record suggests his approach to foreign policy fits comfortably within the realist, power-and-interest tradition.  At the outset the new PM promised to “build the relationships and the capabilities which will allow us to preserve our sovereignty, to protect our interests, and to project our values…In a shrinking, changing, dangerous world,” he declared in his first major foreign policy speech in October 2006. He continued: “our government must play a role in the world. And I believe that Canadians want a significant role – a clear, confident and influential role…they don’t want a Canada that just goes along; they want a Canada that leads. They want a Canada that doesn’t just criticize, but one that can contribute. They want a Canada that reflects their values and interests, and that punches above its weight.”

… The debate within Canada around energy and the environment is symptomatic of another rule of politics. What may constitute good public policy – taxing carbon, ending sales of asbestos, abandoning supply marketing, permitting foreign investment in our resources, is not always good politics. Regional differences make national consensus difficult. National unity comes with a price and there is more than a little wisdom to F.R.Scott’s lampoon of Mackenzie King: “Do nothing by halves/ Which can be done by quarters.”

While putting on the blue beret has considerable romantic appeal, Canadians have not led in peacekeeping for a couple of decades and contemporary circumstances make it unlikely we’ll do so again soon. In part, there has been an effort to ‘regionalize’ peacekeeping pools and in part, as Denis Stairs points out, contributing to UN peacekeeping operations is “a source of badly needed foreign exchange” for the main source countries – Bengladesh, Pakistan, India and Nigeria.

Technology and more failing states means what is required is less peacekeeping than peacemaking or peace enforcement or acting as a first responder to disasters. To echo historian Jack Granatstein, we owe former Chief of Defence Staff Rick Hillier a great debt for “changing the conceit that Canadians were peacekeepers first, last and always.” Our experience in Afghanistan has given us the ‘best little army’ in the world and the skills we’ve developed proved adaptable and effective in the relief of Haiti after the hurricane. This is a much more realistic role for Canada and while Canadians wanted us out of a combat role in Afghanistan, there is strong public support for the Forces.

Rather than flog the dead horse of peacekeeping, the bigger policy question for Canadians is how far, and how much, should we commit to duties beyond our border that actively involve us in other people’s conflicts with significant risk to the lives of Canadians. Observes Australian diplomat-scholar Owen Harries: “The successful promotion of democracy calls for restraint and patience, a sense of limits and an appreciation of the wisdom of indirection, a profound understanding of the particularity of circumstances.”

As we have learned in Afghanistan and Iraq, liberal democracy is not an easy transplant and any policy of imposing it through force will also fail. Acting with the best of intentions is inherently difficult to translate into significant change because of the extent to which they depend on other people and other, often intractable, societies.

The  2008 Canada First Defense Strategy gives teeth to our ambitions in homeland defence and in making a necessary contribution to collective security.: “`A handful of soldiers is better than a mouthful of arguments,”’ said Harper in Trapani, Italy the base for RCAF CF-18s flying over Libya, “For the Gadhafis of this world pay no attention to the force of argument. The only thing they get is the argument of force.”
Restoring the traditional designations – Royal Canadian Navy, Canadian Army and Royal Canadian Air Force – to strengthen their identities as national institutions is a positive step.

But the real test for the Conservatives will be to meet the new recruitment targets, ultimately 100,000 personnel (70,000 Regular Force and 30,000 Primary Reserve), and to meet the procurement timetable for the new ships and planes that will “give us the ability to act.” Our procurement process is inadequate. As the Auditor General and the Canadian Association of Defence and Securities Industries (CADSI) and others have pointed out, the likely result is that new kit will be delayed, abandoned or diminished in quality and quantity. We need to quickly develop a defence industrial strategy and a viable ship building industry.  A useful first step would be to look to the experiences of our British and Australian allies…

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Colin Robertson, October 4th 2011 | Tags: , , , , , , , , ,
Posted in Major Research paper
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