Canada US Relations: Flashpoints

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Harper, Obama need to keep up with the speed of business

The Globe and Mail Tuesday, Nov. 26 2013

Colin Robertson

No drama. In the conduct of Canada-U.S. relations it has been the modus operandi of both Stephen Harper and Barack Obama.

They are in alignment on the big issues of peace and security, economics and trade. Differences on climate change have not interfered with getting things done.

Their big joint initiative – easing border congestion and introducing closer regulatory co-operation – is moving forward despite the countervailing forces of sequester and budget cuts. The security perimeter, necessary for U.S. confidence, has been achieved. Regulatory collaboration is working.

But business wants to see results.

We need measurable progress on getting people, goods and services quickly and efficiently across the border. Canada created a cabinet secretariat that should be made permanent and matched by the United States. As the initiative approaches its second anniversary, both leaders need to give it another personal boost.

Transactional business – problems around bridges and pipelines, roads, rail and seaways – has been handled quietly and efficiently by our ambassadors. As a team, David Jacobson and Gary Doer were especially effective. Unfortunately, the designated new U.S. ambassador, Bruce Heyman, is stuck in limbo, a victim of various senatorial holds on presidential nominations.

Not having a U.S. ambassador in Canada handicaps both countries, especially as there are some potential flashpoints ahead:

– The interim Iranian nuclear deal should be a cause for celebration. Israeli Prime Minister Netanyahu called it an “historic mistake” and Foreign Minister John Baird said he was “deeply skeptical.” Our sanctions will remain in place until there is “verifiable implementation”. Will we break with the U.S.?

– Country of Origin Labelling (COOL). Our leading trade dispute with the USA has been quietly simmering but has taken on new urgency with the new rules now in effect. The dispute is at the World Trade Organization, where, with Mexico, we seek rescinding of the labeling rule that is upsetting century-old cross-border trade in pork and beef. How will this be resolved?

– Keystone XL Pipeline. It has been more than five years since the original application for a presidential permit. With the completion of the second environmental assessment, there was an expectation that the decision would be made this year. Will it happen?

– Windsor-Detroit second crossing. Canada and Ontario are putting up $500-million to finance the U.S.-Michigan share of this necessary bridge. The presidential permit was issued in April but without the money to build the U.S. customs plaza. When will we see the money?

All these issues require careful handling.

On Iran, reaction from the Sunni Arab nations and U.S. domestic politics has yet to play out. We can keep faith with Israel but be constructive. Re-opening our Embassy in Teheran would be a start to help assist in on-site verification.

On the Keystone XL pipeline, keep our sangfroid. The oil is flowing by rail. We will open new markets overseas through east-west pipelines.

The issue is now as much, if not more, a debate within the U.S. rather than a Canada-U.S. dispute. New EPA Administrator Gina McCarthy recently said of Keystone, “If there’s oil there, someone will find it and use it.”

We have a lot of allies – in industry, labour, and governors and legislators in the states through which the pipeline passes. With the House of Representatives onside, gaining the support of Senate Democrats is key.

On COOL, we have allies among producers. We need to convince consumers. Efforts by a team of federal and provincial legislators, working with allies in Congress, may obtain redress in the U.S. Farm Bill – but this would be a stretch. More likely, we will have to work the WTO process.

Meanwhile, with new access in Europe (through CETA) and opportunities in Asia, we should seek foreign investment (like China’s Shuanghui) to process in Canada.

On the bridge, the funding is the equivalent of the value of a couple of days commercial traffic through the Windsor-Detroit gateway. Keep working on Congress with our ally, Michigan Governor Rick Snyder. Meantime, look at border management using the NORAD model. Why not a joint, binational customs plaza?

These trade disputes are frustrating but we are in it for the long haul. Build on the support we already have in the US.

In the American system, as long as there is a countervailing interest, there is friction and debate. We need to better understand their system, its rules and conventions.

Identify our U.S. allies and work with them. Avoid drama. And remember, it’s a permanent campaign.