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37th PARLIAMENT, 2nd SESSION

Standing Committee on Foreign Affairs and International Trade

EVIDENCE

CONTENTS

Thursday, March 27, 2003

0910

The Chair (Mr. Bernard Patry (Pierrefonds—Dollard, Lib.))

Mr. John Noble (Associate, Centre for Trade Policy and Law, Carleton University)

0915

0920

0925

0930

0935

The Chair

Mr. Gordon Smith (Executive Director, Centre for Global Studies, Chair, Board of Governors, International Development Research Centre, University of Victoria)

0940

0945

0950

The Chair

Mr. Deepak Obhrai (Calgary East, Canadian Alliance)

The Chair

Mr. Gordon Smith

The Chair

Mr. John Noble

0955

The Chair

Ms. Francine Lalonde (Mercier, BQ)

1000

The Chair

Mr. Gordon Smith

The Chair

M. John Noble

1005

Ms. Francine Lalonde

M. John Noble

The Chair

Mr. Murray Calder (Dufferin—Peel—Wellington—Grey, Lib.)

The Chair

Mr. John Noble

1010

Mr. Gordon Smith

The Chair

Mr. Bill Casey (Cumberland—Colchester, PC)

Mr. Gordon Smith

1015

Mr. Bill Casey

The Chair

Mr. John Noble

1020

Mr. Gordon Smith

The Chair

Mrs. Karen Redman (Kitchener Centre, Lib.)

Mr. Gordon Smith

The Chair

1025

The Chair

Mr. Gordon Smith

1030

Mr. John Noble

1035

The Chair

Mr. Keith Martin (Esquimalt—Juan de Fuca, Canadian Alliance)

The Chair

Mr. Gordon Smith

1040

The Chair

Mr. John Noble

Mr. Keith Martin

Mr. John Noble

Mr. Keith Martin

Mr. John Noble

1045

Mr. Keith Martin

The Chair

Mr. André Harvey (Chicoutimi—Le Fjord, Lib.)

M. John Noble

1050

Mr. André Harvey

M. John Noble

Mr. André Harvey

Mr. John Noble

The Chair

Mrs. Karen Kraft Sloan (York North, Lib.)

1055

The Chair

Mr. Gordon Smith

Mrs. Karen Kraft Sloan

Mr. Gordon Smith

The Chair

Mr. Irwin Cotler (Mount Royal, Lib.)

1100

Mr. Gordon Smith

The Chair

Ms. Francine Lalonde

M. John Noble

1105

The Chair

Ms. Aileen Carroll (Barrie—Simcoe—Bradford, Lib.)

1110

Mr. John Noble

1115

The Chair

Hon. Art Eggleton (York Centre, Lib.)

Mr. Gordon Smith

1120

The Chair

Mr. John Noble

The Chair

Mr. Stockwell Day (Okanagan—Coquihalla, Canadian Alliance)

1125

Mr. Gordon Smith

Mr. John Noble

1130

The Chair

Mr. Murray Calder

Mr. Gordon Smith

The Chair

Mr. Keith Martin

Mr. Gordon Smith

The Chair

1135

Mr. Gordon Smith

The Chair

Mr. John Noble

The Chair

Mr. Stockwell Day

The Chair

Ms. Aileen Carroll

Mr. Stockwell Day

Ms. Aileen Carroll

Mr. Stockwell Day

Mr. Art Eggleton

Ms. Aileen Carroll

1140

The Chair

Mr. Stockwell Day

The Chair

CANADA

Standing Committee on Foreign Affairs and International Trade

NUMBER 026

2nd SESSION

37th PARLIAMENT

EVIDENCE

Thursday, March 27, 2003

[Recorded by Electronic Apparatus]

¿ (0910)

[English]

The Chair (Mr. Bernard Patry (Pierrefonds—Dollard, Lib.)): We're going to start. The order of the day is, pursuant to Standing Order 108(2), consideration of a dialogue on foreign policy of the Minister of Foreign Affairs.

As a witness this morning we have Mr. John Noble from Carleton University, Associate, Centre for Trade Policy and Law. Mr. Noble is a former Canadian diplomat who's served as ambassador to Greece, Switzerland, and Liechtenstein and as deputy chief of mission in France. Also, from the University of Victoria, we have Mr. Gordon Smith, who is the executive director, Centre for Global Studies, and chair of the board of governors, International Development Research Centre. His last position in government was as a deputy minister of Foreign Affairs, and he was the Prime Minister's personal representative for the G-7, G-8 summit.

Welcome to you both.

We're going to start with Mr. Noble.

Mr. John Noble (Associate, Centre for Trade Policy and Law, Carleton University): Thank you, Mr. Chairman, and members of the committee.

It's a pleasure for me to be here this morning and to renew my acquaintance with some members of this committee who I've met in their capacity as members of the Canada-Europe Parliamentary Association and through their participation in the Canadian parliamentary observer delegation to the Council of Europe Parliamentary Assembly, which, as you know, groups the members of the national parliaments of 44 member nations of the Council of Europe; it's not the same as the European Parliament, whose members are elected directly to the Parliament, and they only come from the member states of the European Union. I just wanted to say that the participation of the Canadian parliamentary delegation in the Council of Europe Parliamentary Assembly is greatly appreciated by everyone. Madame Lalonde is a faithful participant in almost every delegation. The reason I was connected with it is that I was the permanent observer of the government when I was stationed as ambassador in Bern. I also want to mention the work the Honourable Charles Caccia does in that assembly. He works very diligently, as does Ms. Aileen Carroll. Unfortunately, Canada can't become a member of the Council of Europe, because we don't meet the geographic criteria, but otherwise, in sentiments and values there is a great similarity between most European parliamentarians and Canadians.

This is the first time I have addressed this committee, not being a public servant, and I suppose it gives me a bit more liberty. The last time I was here was 10 years ago, talking about Boutros Boutros-Ghali's agenda for peace, which at the time was all in vogue, and we thought maybe things would change and that the United Nations might finally become what it had originally been intended to be, the prime instrument for international security. Of course, we all know that hasn't happened.

I will try to address the overarching questions in the document. I should first say that during my 35-year stint in Foreign Affairs I witnessed several policy reviews and many differences with our neighbour, the United States. I have chronicled some of these in an article that appeared in the February 2003 issue of Policy Options, entitled “Gettingthe Eagle's Attention without Tweaking its Beak”. I have made that document available to the clerk, and it's accessible on the IRPP website.

Let me now turn to the challenges of the future. Mr. Chairman, in doing so, I must congratulate this committee and yourself for your report of last December 12, which called for Canada to advocate a strategic North American vision. The clerk was kind enough to send me the report last January, when it was finally published, and I've actually gone through the whole report, which is a very weighty document, not only in volume, but in substance. Given the timidity of the current government in wanting to discuss some of the issues in your report, it's not surprising that your report was perhaps not as ambitious in setting out prescriptions as it might have been, but you have at least identified many of the key issues that need to be examined and made suggestions that these issues be studied. You have fundamentally expressed the need to look at Canada's interests, not just sentiments, in the development of such a strategic vision.

Your report also includes many comments by critics of any further rapprochement with the United States. Many of these critics are sore losers from the free trade debate of the 1980s, and I don't think they reflect the attitude of most Canadians in wanting closer relations with the United States, as shown by the most recent polls released this week by the Liberal party pollsters. But the naysayers will always get the headlines, which is why I have been suggesting to various people that we need another royal commission on Canada's economic prospects, to ensure that everyone gets their say and that there is a firm analytical basis on which to make a political decision. That is what Pierre Trudeau did in creating the Macdonald royal commission.

I'd also remind this committee of something Pierre Trudeau said in May 1983 in an open letter to Canadians regarding the testing of the cruise missile in Canada: “The knee jerk anti-Americanism of some Canadians verges on hypocrisy.” Relations with the United States have to be a top foreign policy priority of any Canadian government. North American economic integration is happening whether governments like it or not, and unless the Canadian government does more to limit the impact at our border of the uncertainties created by the post-9/11 situation, we are putting Canadian jobs at risk and all that entails for the maintenance of our social welfare system.

The naysayers worry that economic integration is a step towards political integration, which I think is arrant nonsense on both sides of the border. The Americans have long abandoned any pretence to manifest destiny, and certainly the Republican Party would be most wary of having the political balance in the Senate and House upset by what they term liberal extremists, Canadians. Canadians, for their part, have a long history of not wanting to become part of the United States, but also of wanting to share in the economic benefits of a close association. The American ambassador to Canada has stated recently that U.S. security concerns trump Canadian economic concerns. I think the challenge for Canadian policy-makers is how to find a way to mesh these two objectives in a manner both sides find acceptable.

Your committee heard from many witnesses in the preparation of the December 2002 report, and I will not repeat their proposals, except to say you were right to call for a strategic vision that deals with all aspects of the matter and doesn't simply try an incremental ad hoc approach. There are some difficult choices ahead, and not making them will allow others to make them for us, with consequences that could be very negative for Canada's interests.

First, I would suggest that we need a Canadian national security strategy, in which we would put in one place our objectives, the challenges, and how we propose to deal with them, not simply a foreign policy and a defence policy, but a national security policy. Last September President Bush issued his national security strategy, which included the doctrines of pre-emption and unilateralism, but also had a lot of strategy and policy for multilateral action, including such words as “no nation can build a safer, better world alone” and “alliances and multilateral institutions can multiply the strength of freedom-loving nations.”

Most Canadian commentators, and indeed Minister Graham, failed to comment on chapter 8 of the national security strategy, which mentioned Canada as a centre of world power. Any Canadian politician who claimed that Canada was a centre of world power would be derided immediately by almost anyone. He went on to say in that same chapter 8, “There is little of lasting consequence that the United States can accomplish in the world without the sustained cooperation of its allies and friends in Canada and Europe.” That is a direct quote from the national security strategy. It's been totally ignored by everybody in the Canadian press, which is always interested in taking umbrage at American omissions, but when the Americans give credit to Canada for something, it's totally ignored. I would claim that the validity of that statement didn't get buried in the sands of Iraq or in the failure of our efforts to promote a compromise proposal at the United Nations on Iraq. It means we have to engage the United States on a variety of issues and be prepared to discuss their concerns as much as our own. That is how Canada's commitment to multilateralism can be combined with efforts to influence the United States. Take them at their word, engage, rather than constantly carping from the sidelines.

I'm not sure Minister Graham's reference to an international policy framework in his speech to this committee two days ago covers what I have in mind in a national security strategy. A Canadian national security strategy would not just deal with relations with the United States, it would cover the world at large, and it would deal with issues ranging from defence spending to the environment, trade, energy, aid policy, as does the American strategy.

Getting back to relations with the United States, let me highlight just a couple of many key issues. First, do we seek a North American security perimeter, or do we want the Canada-U.S. border to be the point where U.S. security concerns have to be satisfied? Second, what are the implications for foreign direct investment in Canada of the continuing uncertainties of the border?

¿ (0915)

The concept of a North American perimeter is not new, and the idea was considered in chapter 3 of your report and your recommendation 28, which recommended looking at the implications of such an idea. We have had NORAD for over 45 years, which created a North American perimeter against the Soviet bomber threat, which no longer exists. Equally, in the reverse sense, we created a North American perimeter to control exports of sensitive technologies, so that Canadian companies could benefit from those technologies and the Americans would be assured that they wouldn't leak to countries they didn't want them to go to. So the principle of a North American security perimeter has been long accepted in Canada in various areas.

The new threat to Canada and the United States comes not so much from states, but from non-state actors, and the most significant response to that threat comes not, I think, from any new massive spending on defence, but from changed policy in other areas. I agree that we need more spending on defence, but I don't see that as dealing with the direct threats posed to North America by terrorist activities. First and foremost, I think we need to plug the holes in Canadian policies and practices that permit terrorists easy access to our shores under our refugee policy or visitor visas. I don't think our regular immigration program, which ensures full security screening before applicants arrive in Canada, is an issue with the Americans. Their concern is with the administration of our refugee policy, which encourages queue jumpers and opens a possibility that terrorists will try to slip in under its provision, with a view then to slipping into the United States through the back door.

The two governments have recognized the need for some actions not only on a perimeter basis, but inluding others that try to control high-risk people and cargos before they reach our shores. These are contained in elements of the smart border plan. We have negotiated the safe third country agreement with the United States, but that only covers about two-thirds of refugee claimants who come here from the U.S. That leaves another third of refugee claimants coming from other countries, mainly European, for whom our standards are among the most generous, looking at it from one perspective, or the most lax, from another perspective, in the world. The British have declared Canada to be a safe third country, and they will return any refugee claimants coming to the U.K.from Canada; they have done that on a unilateral basis. Heathrow is the largest single transit point in Europe for refugee claimants coming to Canada. I think the Government of Canada should declare all European countries safe third countries for refugees and announce that we will return all such claimants to those countries for determination of their claims. There's no need to negotiate those agreements with the countries. It can be done unilaterally, as the British have done with Canada. My understanding is that the Department of Foreign Affairs is balking at such an approach on the basis of concerns for political relations with certain European partners, rather than looking at the issue in terms of satisfying American security concerns. This is bad policy formulation within Foreign Affairs, and perhaps elsewhere in the government, and ignores our basic interests for sentimental reasons.

Let me be clear. I'm not advocating a reduction in the number of legitimate refugees Canada takes in. We need some fundamental adjustments to the administration of that policy to satisfy American security concerns. It makes no sense to go to Windsor and proclaim the weaknesses in the American system simply as a means of justifying continued weaknesses in our system. We don't need to adopt the American system, but we need a system we can convince the Americans is just as secure as theirs. We don't have that now, and until we do, there will be a major impediment to reducing the uncertainties of our bilateral border.

My second point relates to the negative impact the uncertainties of the border have on foreign direct investment. I couldn't find much on the issue of the impact on investment in your December 2002 report, Mr. Chairman, other than a comment by the Deputy Minister of Industry, Peter Harder, and there is no reference to this issue in any of the recommendations. Last November the Conference Board of Canada produced its report Canada 2010: Challenges and Choices at Home and Abroad. One of the major findings was that “border management is crucial to Canada's economic and physical security. Without assured access to U.S. markets, trade flows will be at risk. Moreover, future investment decisions will be made that locate plants and equipment outside of Canada.” A key policy choice suggested in the same report was that Canada should start to debate the merits of various options for securing access to the U.S. market that range up to and include a North American customs union. That's similar to one of the recommendations in your report.

¿ (0920)

In January 2002 the Centre for Automotive Research in Ann Arbor, Michigan, produced a report for Foreign Affairs and International Trade entitled The Canada-U.S. Border: An Automotive Case Study. The report concluded that “border crossing is an integral part of the approximately $1,000 Canadian dollars of Canadian components in U.S.-built vehicles and the approximately $7,400 U.S. of U.S. content in Canadian-built vehicles.” It appears that Canadian assembly and component parts are most exposed to any decay in the reliability and dependability of the border crossing. In particular, seeding operations that require absolute adherence to the just-in-time production schedule discipline and engine and transmission plants that are crucial and capital-intensive and require full utilization for profitability are at greatest risk. The key point here is that any foreign investor looking to invest in the North American market will be concerned about the uncertainties of the border and more likely to invest on that side of the border where he sells most of his product, and that, in almost every case, is not going to be Canada.

Investment Partnerships Canada issued a report earlier this month, the policy advocacy report, that shows that Canada's share of incoming foreign-direct investments from outside North America has declined from just below 10% in 1988 to just below 6% in 2000. In the same period the U.S. share of this foreign direct investment has increased from 88% to just under 92%. In other words, we're losing out on foreign-direct investment to the United States, not to Mexico. I think one of the major reasons for that is the uncertainties caused at our border. And this is despite all of the efforts employed by Canadian ministers, senior public servants, ambassadors, trade commissioners to show that Canada is the best place to invest to deal with the North American markets. Since we've had the Free Trade Agreement, we've gone around the world saying, Canada is your opening to the North American market. KPMG does an annual study that shows that our greenfield costs are much cheaper than they are in the United States, but despite all of those reasons, we continue to be losing out on foreign direct investment decisions. There is also the question of the myriad of differing regulations on either side of the border, which is another aspect of the border issue, and that appears to be the conclusion also reached by Investment Partnerships Canada.

As to the overall management of our relations with the United States, several Canadian sources have suggested a comprehensive approach dealing with both trade and security concerns. The C.D. Howe Institute launched a suggestion of a strategic bargain in a paper by Wendy Dobson last April--I think you heard from her--supplemented more recently by Alan Gotlieb. The Canadian Council of Chief Executives made a proposal in January of this year for a North American security and prosperity initiative. And my colleagues at the Centre for Trade Policy and Law Bill Dymond and Michael Hart have issued this week a paper for the C.D. Howe Institute, “Canada and the Global Challenge: Finding a Place to Stand”. All of these ideas suggest a comprehensive agreement that deals not just with trade issues, but also with security issues in a manner that ensures that security will not trump trade. They also present what I believe is a convincing case about the dangers of not proceeding in such a comprehensive manner.

I should say that Canada has never placed its security in the hands of the United Nations in a practical sense. When he was foreign minister, Louis St. Laurent was the prime instigator in the founding of NATO, which, together with NORAD, was the prime security instrument for Canada during the Cold War and into the 1990s. While peacekeeping came to be a vocation, our soldiers were trained to fight wars, and for almost 40 years we had troops and fighter aircraft in Europe as part of the NATO deterrence to Soviet aggression. Any ideas that the end of the Cold War might finally see the UN come into its own as an effective instrument for international peace and security, as espoused by Boutros Boutros-Ghali, have proved elusive for a variety of reasons, including an American unwillingness to put its security in the hands of such a diverse group of countries that have different values.

One of the early actions of the Chrétien government was to almost declare war unilaterally on the European Union for 3,000 tonnes of a fish no Canadian had ever eaten. Gordon Smith can tell you just how close we were to declaring war, because he was in the command and control centre at the time.

¿ (0925)

Prime Minister Chrétien tried to mount an international military effort to stop the atrocities in the Congo in the mid-nineties, but he struck out with the Americans, and since Canada didn't have a capacity to do anything on her own, all we could do was offer to lead a mission. As late as 1999, when faced with seven years of Serb aggression in the Balkans, NATO countries finally decided to resist the latest atrocities in Kosovo by starting an air war. A conscientious decision was taken by the Canadian government, as part of NATO, not to seek a Security Council mandate, because we knew the Russians would veto it. And that was at a time when Canada was on the Security Council. We took a deliberate decision. I think it was based on the principle that if you went to the United Nations and didn't get the mandate, it would hurt the UN worse. Our Canadian air force dropped 10% of the bombs on the Serbs in the Kosovo war.

By default, Canada long ago placed its security in the hands of the United States and our NATO allies. Canada and the United States are tied together by geography and many more things. Lloyd Axworthy, when he was foreign minister, took the decision to proceed with the highly successful anti-personnel landmines convention outside the United Nations process, because he feared, and rightly so, that the UN process would kill it. We kept the proposal for an international criminal court out of the Security Council because we knew the Americans would veto it. The idea espoused in what Alan Gotlieb has called the Chrétien doctrine, that the UN must henceforth endorse any military action against known tyrants, I think is the height of folly. It is unlikely to last in Canadian policy beyond the mandate of the current Prime Minister.

One of the reasons Canada is valued on the world scene is our ability to speak frankly to the Americans and to influence their positions. I am concerned about the rising level of knee-jerk anti-Americanism within the Liberal party and its elected members, and in other parties too. I think this is putting at risk a lot more than our economic interests. It's also putting at risk our ability to bear influence within the administration and Congress on foreign policy issues. The Prime Minister appears to have taken a page out of the Alliance party's populist credo that politicians must always bow to the collective wisdom of the electorate, rather than provide leadership. This is one of the reasons I've always felt the Alliance party was unlikely to provide the type of leadership a country like Canada needs. On the other hand, I must admit that Stephen Harper has abandoned his party's credo that the elected are always right and taken a position of principle, even if Canadian public opinion at large is against that.

If press reports from a senior source in the government are to be believed, that only two ministers expressed concerns about the government's position on Iraq, we are in deeper trouble than I thought. The same press report suggested that Canada and Mexico decided on this course because they got nothing from the Bush administration on issues of concern. Again, I think that's the height of folly, because it suggests that our so-called principles have a price, and as long as the price is paid, we really don't care. I don't think that's the case.

The reality is that we have more troops in the region providing support to the United States, even if indirectly, than almost any other member of the coalition. That means we could have supported the American action without involving any more troops than are already involved. This isn't Vietnam, where Canada's role was to represent the west and the Americans on the ICC. Poland represented the communists and India the non-aligned. I can remember hearing from one of my colleagues one day that he was out in the field on the ICC and he said, oh, there's a north Vietnamese tank there, and the Pole said, no, it's a south Vietnamese tank, and the Indian representative said, what tank?. That was what we did during the Vietnam war.

This issue is all about what the United States perceives as a fundamental threat to its security. We are no longer, unfortunately, the United States' best friend and ally. I wrote this last night, long before this morning's papers, and I think, and I've felt for some time, we may find that come May 5, President Bush will find better things to do than come to Ottawa, and he may choose to visit one of his real allies. I'm not saying we can't differ with the United States, but we have to choose our battles carefully. Appearing to side with Saddam Hussein puts us in bed with the tyrant. Siding with the United Nations puts us in bed with a process, rather than a concrete objective. As I understand the Canadian compromise at the United Nations, it would have led to armed intervention in the event of non-compliance, which was all but certain.

There are many aspects of Canadian foreign policy that deserve attention. I have devoted most of my time to those I think are the most important. I'm sure you will have many others who will want to divert you and your attention elsewhere. I would say we need a foreign policy that accurately reflects Canada's interest and is not based on the need to differ for the sake of being different or on sentiment. The policy of differing for the sake of differing was the practice Paul Martin Sr., who was my first foreign minister, practised with Dean Rusk, his American counterpart, who said on one occasion, “I always ask Mr. Martin to tell me what his position is first, since if I give mine, he will inevitably differ with it, just for the sake of being different.” I think Canadians have long abandoned that policy.

¿ (0930)

Because the Canadian family is so diverse, there is a constituency in Canada for almost any issue anywhere in the world. Successive Canadian governments have failed in efforts to develop a list of countries of concentration for our development assistance. I think Madam Marleau knows something about that. It's been both Conservative and Liberal governments. During the Chrétien years Canadian aid policy has been developed in focus groups in the Department of Finance. I think we need a somewhat more enlightened view of development assistance than that, and we need to increase our aid figures. We need to ensure that our military has the capacity to perform the new type of peace enforcement operations, which are more likely in the future than the traditional peacekeeping operations.

In conclusion, Mr. Chairman, the Liberal party and the New Democratic party were on the wrong side of history with respect to the free trade debate in 1980s. I'm concerned that if current trends continue, these parties will be on the wrong side of history with respect to how to deal with the realities of increasing North American integration. I hope, for Canada's sake, I'm wrong.

Thank you for your attention.

¿ (0935)

[Translation]

The Chair: Thank you very much, Mr. Noble.

[English]

Now we'll pass to Mr. Gordon Smith.

[Translation]

Mr. Gordon Smith (Executive Director, Centre for Global Studies, Chair, Board of Governors, International Development Research Centre, University of Victoria): Thank you very much, Mr. Chair. I am both please and honoured to be here this morning with you and your colleagues. I will begin my presentation wearing the hat of the Executive Director of the University of Victoria and then the hat of Chair of the Board of Governors of the Development Research Centre. In any case, I do not want to mix the two together.

[English]

As you've noted in the paper that was circulated, I did indeed say about the 1994-1995 policy review, though I never thought it would come back to haunt me in an appearance before this committee, it was fundamentally all about messages, as opposed to being about substance. Now I would like to argue with you this morning the case that we need something more substantial.

The three principles that are to be found in that paper remain, security, prosperity, and the projection of our values. Of course, these principles need to be balanced, and the real issues come in the trade-offs in the real world among these three. But it's also increasingly clear that it's necessary to redefine what these three principles mean, and above all, I will argue that in a few moments with respect to the one that deals with security.

I would also like to say to the committee that in my judgment, we should stop, as Canadians, thinking about our role as a middle power, or however one wants to describe it. I think it's much more important that we be pursuing our interests in a way that reflects our values and the changing circumstances of the times in which we live. That's the argument I will make to you this morning.

It seems to me it's clear, and John Noble has made the case in a compelling way, that our relationship with the United States is more important than ever. That's not to say that Canada must automatically agree with everything the United States says or does, but we do need to recognize our interdependence with, indeed our extraordinary dependence on the United States. Some 85% of our exports, as you know well, go south of the border. Economic integration progresses. What I would argue, and I think again it's what John Noble has argued and others are arguing, like Alan Gotlieb, whom he cited, is that we've got to have a clear sense where, as a country, we want that relationship to go. We can't just drift, and we tend to drift on the United States. I think back to the first foreign policy review with which I was associated, in the late 1960s, which produced six volumes, five of them dealing with our relations with different parts of the world. There wasn't a volume on the United States, and it was only when this was criticized that we came out later with a paper on our relationship with the United States.

I guess the most important thing I want to say to you this morning is that we need that overall policy relationship, and that's because we've got some big issues coming down the road at us. Maybe one of the biggest is water. To think the water issue is just going to go away is dreaming in colour. Given what's happening in the southwest part of the United States, declining aquifers, the impact of climate change, we're going to hear about the U.S. need for water, so we can't just pretend an issue like that is going to go away, and we do need to put it in a strategic framework.

I'd like to address also the security dimension of the relationship, because I am concerned. I go to the United States quite often; I live close enough to the United States in Victoria that when I walk my dog, I look at it. Most Canadians, in my judgment, fail to grasp the reality that since 9/11 there are a lot of people in the United States, including the leadership in the United States, Democrats as well as Republicans, who feel the United States is under attack from terrorists and deeply fear that terrorists will get their hands on weapons of mass destruction. There is a significantly different perception of security in the United States--I'm generalizing here, and I know there are exceptions--than one finds in this country or in most of Europe.

What 9/11 and the subsequent steps have done is provide a new lens for the United States to organize its foreign. defence. and homeland security policies. As John Noble has said, we will be in very deep trouble indeed if the United States is not satisfied that we can control those coming into this country and have an effective security apparatus inside the country. If we cannot do that, or if the United States, more particularly, isn't satisfied we can, borders will close to us, irrespective of economic costs, because indeed, security will trump at times like this.

I think it's also important to understand that Cold War doctrines that have been used to deal with enemies in the past, containment and deterrence, are history. The United States administration is deadly serious about pre-emption, and indeed about preventive attack, against those who are seeking to develop weapons of mass destruction that they could make available to terrorists.

¿ (0940)

The United States is also--this comes through in the strategic document that John Noble referred to--deeply worried about failed states and how failed states can contribute to terrorism. There's an intellectual basis for this--that's not to say many people may like it, but there is. If you look, for example, at the letter that was written in 1998 to President Clinton about Iraq, signed by Richard Armitage, John Bolton, Francis Fukuyama, Robert Kagan, William Kristol, Richard Perle, Don Rumsfeld, Paul Wolfowitz, Jim Woolsey, Bob Zoellick, all in or not very far away from the Bush administration, that was a clear call then that Clinton should follow the strategy of pre-emptive attack, or indeed preventive attack.

The kind of world that we're seeing come out is, of course, a long way from the multilateral, UN-based world most Canadians instinctively prefer. The U.S. is not prepared to be dependent on the UN, or even NATO, for its security. Moreover, the U.S. lists its friends, it notes the flag-burners, it notes booers of the national anthem and those who are dismissive of its leadership. I agree with John Noble that the costs of difference in this case can be very real. The fact is often cited that we've differed with the United States in the past, but we've never differed, even on Vietnam, on an issue where the U.S. feels that it's got an existential threat to its security.

So I think it's critical that we know where our interests lie. If the United States does not want to play the multilateralism way in international affairs, it may be satisfying to us, but not very satisfactory for us to do so on our own. What we need is a hard-headed assessment of where our economic and security interests lie. Indeed, I think it is true that the United States is today an empire of the 21st century. That's reflected in its military doctrine of full spectrum dominance. I could go on at some length about that, but I think we have to understand that we are now living next to the newest, if operating in a different form, empire in the world's history. But I believe fundamentally that if we can work with the United States and with others, we can have influence if we have solutions that involve international cooperation in strengthening multilateralism that will work. We've got to be able to document, articulate, and effectively communicate to the United States instances where multilateral solutions are congruent with their interests. It may surprise you, but I think one we should be focusing on in the next couple of years is climate change.

So we've got to work to find where U.S. interests underline the need to work in a multilateral way, but that is a very different approach from what some would advocate, which I might describe, to go back to the days of Gulliver, as the Lilliputians, all those little people, wanting to bind Gulliver with multilateral rules. If that's what the United States sees coming, the United States is heading in another direction. So we've got to do this by careful issue-by-issue diplomacy, not by trying to establish multilateral conventions as ends in themselves. We will never convince the United States of that, in my judgment.

I also think it's important, and I hope the committee will reflect on this, that our capacity in Canada to execute foreign policy is much diminished. Foreign Affairs has been penny-pinched. My sources tell me there may be cuts on human security and peace building, further cuts in the cultural area. This just doesn't make sense if we want to have more of a role in the world, if we care about failed states and projecting our values. The national defence continues, in my judgment, not to have enough funds, but it shouldn't just have funds that are spread everywhere. What it needs is a new focus, a focus on the new kinds of threats Canadian governments might wish us to be able to respond to. I also would argue that CIDA needs more resources, but it needs resources to get to recipients and not in the area of the overheads, which are extremely heavy in CIDA.

Now I'd like to switch my presentation to say a few words as chairman of the board of the International Development Research Centre. The board is meeting today, and I'm here having turned over the chairmanship to my vice-chair just so that I could take this opportunity to be with you today.

¿ (0945)

I want to underline the fact that the wealth gap in the world today is significantly exceeded by the gulf that exists in research and development capacity between the north and the south. There's a strong correlation between the indigenous research and development capacity and sustainable economic development and poverty alleviation. Knowledge is not an easily exportable commodity. It's not just a matter of transfer of knowledge. Each society, it is clear, needs a minimum capability at least to adapt and absorb knowledge from other sources, as well as producing its own. That leads to the need to build knowledge capacity in poor countries, which is something that was recognized in the Pearson report in 1970. The reality, however, is that there's only been limited progress since then.

There are huge gaps within the south, because it really is Brazil, China, India, and a couple of other countries that are spending most of the R and D resources of the south, leaving a huge number of countries that are entirely outside with no capacity to apply research and development to their problems. In IDRC we have a strong experience with engagement in knowledge and research networks, and we believe that's a very effective way to build and mobilize southern capacity. Learning by doing builds capacity and produces research results that are relevant to local problems. It's also worth noting that many IDRC-supported researchers have gone on to positions of significant policy influence.

Capacity building is vitally important to the south, but it's also important for us in an interdependent world. I would refer to the statement by the Minister of Foreign Affairs in his paper, a statement I very much agree with, that “our future is inextricably linked to the future of others beyond our borders.” So apart from its being morally questionable, it's now virtually impossible to be well fed in a hungry world, to be healthy in a sick world, and to be wealthy in a world riddled with poverty. Even a short-term viewpoint shows the mutual vulnerability of all humanity. For Canada and the world to be meaningful, we need to invest directly in knowledge capacity in poor countries and do more to foster collaboration between Canadian and southern research communities.

It's not easy for the Canada scientific community to shift gears. Putting Canada first is a key criterion for winning national research funds. However, Canadian researchers are realizing that with increased globalization, the well-being of Canadians is linked to global concerns, many of them borne primarily by the poor, and the research on problems in developing regions deserves the attention of our scientists. The global health coalition, CIDA, IDRC, Health Canada, and the CIHR, recognizes that a range of health problems that are important for Canadians will only be solved when our scientists collaborate with their counterparts in developing countries of the world. You can't be healthy in a sick world, and surely, what is happening now with SARS just underlines the importance of that statement.

We at the IDRC have watched with interest the Canadian Foundation for Innovation's opening up of major funding for international research and have been particularly struck by the major grant to the University of Manitoba for a Canada-Kenya research laboratory to provide outstanding researchers in Canada and their international collaborating partners in Nairobi and Oxford and Washington with a state-of-the-art facility to conduct research on infectious disease. As Inge Kaul has said--this is a person who works at the UN Development Programme's offices in New York, a project IDRC has supported--it's increasingly clear that countries need to cooperate: “national public goods have become interlocked and have 'gone global'.” Hence, she says, we're now entering a second phase of globalization, one where mutually beneficial international cooperation is vital.

This trend, Mr. Chairman, needs to be recognized and encouraged. Signalling that international collaboration in science and technology research for global development is a feature of Canada's foreign policy will do much to recruit Canada's scientists and contribute to their knowledge and skill to solve problems that beset our country and less favoured regions of the world. It will be innovative and consistent with the goal of taking Canada from fifteenth to fifth place in the science and technology research and development league tables, and it will put Canada in a leadership position.

Thank you very much.

¿ (0950)

The Chair: In his remarks Mr. Noble mentioned our recent report on North American relations, and I would point out that our most important recommendation, the first one, was to do exactly what Mr. Smith just recommended, to concentrate on our relationships in North America, rather than letting them drift.

Now we'll go to questions and answers, with a five-minute round.

Mr. Obhrai.

Mr. Deepak Obhrai (Calgary East, Canadian Alliance): Thank you.

Thank you for your views. It was very interesting to hear both of you. I won't talk about international development at this stage. I will e-mail you questions about international development. I think your views on CIDA and all that are very interesting.

What I would like to have is an overview from both of you in reference to this war in Iraq. There has been a great divide between the European powers and the Americans. We tend to see it as Europeans and Americans, but in reality, I think it has very deep consequences for the future, as I see the Europeans maybe trying to match the power of the U.S.A. Historically, we are tied to both the U.S.A. and the European Union, as you rightly pointed out, but that is historically. Now, post-September 11, everything has changed. Can you, from your experience, give us an overview on how dangerous this is for future relationships between Canada and the U.S.A. and Canada and the European Union and how you think we should play on that one?

The Chair: Mr. Smith.

Mr. Gordon Smith: My short answer to you is, very dangerous. I was ambassador to NATO from 1985 to 1990, and I was also at NATO from 1968 to 1970. NATO has had all sorts of problems in the past, real crises, but it was able to overcome them because there was a glue that held NATO together, and that was the Soviet threat. That glue has vanished. I think the depth of the problem we're seeing now is very serious. There have been problems in the past, of course, between the U.S. and France. What is the most serious, in my opinion, now is the gulf between the U.S. and Germany.

I was at a meeting in Britain just a couple of weeks ago where some very senior former members of the U.S. administration--I can't cite them by name--told the Europeans very clearly, there's no more threat in Europe, so either you're part of the quest to deal with this global threat of terrorism or you're not. If you're not, well, you're irrelevant. I think what we are going to see is U.S. forces being dramatically brought down in Germany, that relationship weakening--these U.S. forces instead, by the way, being pushed much farther east, into the new member countries of NATO, which can create a whole other set of problems.

So I think the problems are very grave and will affect not only NATO, but the functioning of the G-8. Is Mr. Bush going to go to Evian and give support to his good friend President Chirac? I wonder.

The Chair: Mr. Noble.

Mr. John Noble: I agree with Gordon. I'm not sure I agree with him that the Americans will move their forces out of Germany. Germany is a key strategic area for them; Ramstein is very important.

Europe is divided, and of course, the British have played a very different role in the EU for the last 15 years. Some people have said, if the British had been actively engaged in the EU, the EU might finally achieve what its objectives are. The British have a fundamentally different view of Europe from that of the Franco-German alliance, which, of course, is the key to this, because the whole raison d'être of the European Union was to prevent another Franco-German war. There were three Franco-German wars in the period 1871 to 1939. The Franco-German alliance is holding together, the rest of the EU has disintegrated, because there are as many EU countries supporting the American-British coalition as there are opposed to it.

Canada-EU relations are economically marginal. The idea that somehow we can diversify our trade dependence on the United States and go into Europe I think is a pipedream, one explored by Mr. Diefenbaker in the 1960s, and then explored when President Nixon came to Ottawa in 1972 and said, the special relationship is gone, go do what you want, and imposed a 10% surtax on all Canadian exports to the United States, along with everyone else. The third option was not Trudeau trying to say, hey, I don't want to have relations with the United States, it was, what do you do when faced with a President in Washington who basically tells you there is no special relationship? But the third option failed. Governments don't trade, companies trade, and Canadian business wasn't interested in going into Europe or Japan, except in certain areas. There are certain niche companies that have done very well, but most of them install themselves behind the barriers. McCain's, for example, transforms one-third of the French potato production into french fries and sells throughout the EU. When I was ambassador in Greece, the french fries in McDonald's were McCain's from French potatoes. They didn't come from Prince Edward Island or New Brunswick.

So I think it could have some dangers. I'm not sure that it's all that dangerous, because, as Gordon has said, the history of trans-Atlantic relations since World War II has been a history of all kinds of very different things. Clearly, NATO is at risk in this one, the European Union is at risk. How are they going to continue with expansion when they can't even agree among their existing members? Trans-Atlantic relations are a bit tattered. I said President Bush is unlikely to come to Ottawa. Will he go to Evian? What happens to the G-8 process if he doesn't go to Evian? That will be quite something. There are all kinds of situations that could be.

But at the end of the day, I think the United States realizes that it can't do everything alone. You heard last year from Joe Nye, who is the dean of the Kennedy School of Government at Harvard. He has come out with this book, The Paradox of American Power: Why the World's Only Superpower Can't Go It Alone. Now, Joe Nye is a Democrat, he's not in government, but I think he set out very clearly some of the reasons the United States can't do everything alone. Those are also reasons that are put in President Bush's national security strategy. They aren't just there as window-dressing. The last thing the United States wants to be saddled with is a long-term involvement in Iraq when no one else is helping to pay the bill.

It's a serious challenge for relations. I'm optimistic. Is the glass half empty or half full? I say it's half full, some others may say it's half empty.

¿ (0955)

[Translation]

The Chair: Ms. Lalonde, please.

Ms. Francine Lalonde (Mercier, BQ): Thank you both for your presentations.

Sir, I can imagine how often you must have had to restrain yourself when you were ambassador.

My comments, which take the form of questions, go in quite different directions. First, you take it for granted that the United States is going to win this war handily and that it will remain an unchallenged and unchallengeable superpower that can do anything it wants. But I can see how things will go. If the war is long, as it promises to be, there may be a series of catastrophes on the way.

I'd just like to recall that when the United States, like the other European countries, supported Saddam Hussein, it was to prevent the expansion of Iranian Islam. They hoped that Iraq's Shiites would support them at that time, but that isn't what is happening now. Still, the Shiites are in the majority, and once they're free, will they create the kind of democracy the United States wants? That's one question that has be asked.

At the same time, this war is going to make any more democratic movement in Iran impossible. The radicals will easily prevail. On the other hand, we mustn't forget that in Afghanistan, to push back Russia, the United States supported the organization that became bin Laden's organization, and the 20,000 individuals that became part of Al Quaida--this is documented--were supported and paid by the United States.

Now, this struggle against terrorism is genuine; I'm taking part in it. But right now, the problem is that the United States, by wanting to attack Iraq, is probably going to precipitate more terrorist attacks, and they'll need everyone, the coalition, the United Nations. There's something coming from that area. We can't identify what it is, but I can feel the tectonic shifts. My work has been history for a long time, and political evolution interests me.

On the other hand, you seem to be saying that Canada has no room to manoeuvre. That's mainly what I've gathered. It seems to me, though, that the real issue for Canada--you know that I'm a Quebec sovereignist--is to decide to be an independent country, while figuring out at the same time how not to be hostile to the United States.

As far as security is concerned, I think we have to be their allies; we don't have a choice. But does being allies where security is concerned and doing trade together mean not existing as separate countries, not having different foreign policies, not having different values, by holding them and declaring them?

À (1000)

The Chair: The comment lasted three or four minutes. The answer should last one minute, but we'll be a bit more flexible.

Mr. Smith.

[English]

Mr. Gordon Smith: Saddam is a real problem, a threat, there's no question in my mind about that. That weapons of mass destruction could go into the hands of terrorists is a real possibility, although it was not really established that it did happen, I agree with that. I think the United States badly bungled diplomacy, the whole lead-up to this. I think eventually Saddam would have needed to be dealt with, but the United States, with the way it pursued it--and I can tell you why later if you want the detail--ended up putting itself into a position where it had very limited international support. The war is going to be very difficult, for the reasons you've indicated, and the consequences in the region, for the reasons that I have cited before, with the United States as friends, are going to be very severe.

I didn't want to leave the impression--and John will speak for himself--that this means Canada has no margin for manoeuvre. I think on security, as you've said, we need to be very close to the United States. I think we need to define the economic relationship we want with the United States. Then we can pursue a foreign policy that indeed reflects our own interests, and where that takes us in different directions, I think that's fine. But the problem with this particular issue, as you recognize, is that the U.S. sees, maybe in an exaggerated way, that its security is very directly missed.

The Chair: Mr. Noble.

[Translation]

M. John Noble: Mr. John Noble: With regard to your first question, Ms. Lalonde, obviously, I don't have a crystal ball for predicting the future. You are quite right to say that the outcome of this war may have a very harmful impact on world interests. It's one possibility.

The other possibility is that a tyrant, Saddam Hussein, may be toppled and that this may be a very strong message from the Americans to the rest of the world that this kind of craziness is over. Personally, I'm an agnostic as far as the outcome of this business is concerned.

As for your second question, I say outright that we can always have our differences with the Americans, but we have to make the right choices. Choosing to say that the United States is wrong to want to get rid of Saddam Hussein, I'm not sure that it's a good thing to simply say that from now on Canada does not agree that regimes which are a real danger to the world should be changed. I think that this is a fundamental mistake that does not reflect Canadian interests. Our values and American values, in many respects, are the same. Wishing to distinguish ourselves from the Americans simply to feel we're different, I think that's a basic mistake. But that's what Mr. Chrétien said the other day; he said that we were an independent country and that we wanted to be different. That's one feeling, but does it reflect the true interests of Canadians?

We read in this morning's Financial Post that there will be a real drop in the number of jobs in the United States. If the number of workers in the automobile factories drops, is that in the true interest of Canadians? That's a question we have to consider, and it's not just a matter of values, it's a question on which our interests and our feelings differ. Ms. Francine Lalonde:

À (1005)

Ms. Francine Lalonde: So, the room to manoeuvre…

M. John Noble: Our room to manoeuvre is always quite small, but we can use it. The important thing is to have a good relationship with the President of the United States. In my opinion, Mr. Mulroney got Presidents Reagan and Bush to move on some things. He wasn't consulted on the impacts when Mr. Reagan imposed tariffs on lumber and some other things, but if we don't have this sort of relationship at the top, it affects everything that goes on within the entire administration on either side.

In this case, I think we went too far.

The Chair: Thank you, Mr. Noble.

[English]

Mr. Calder.

Mr. Murray Calder (Dufferin—Peel—Wellington—Grey, Lib.): Thank you very much, Mr. Chair.

I have a whole bunch of questions. I'm going to try to keep them condensed here.

I've been doing some comparisons between the first war in Iraq and the war we have now and the players that are at the upper echelons of the U.S. government at the present time. In the first one there were some representatives there who, with Mr. Bush Sr., were concerned as right-wing radicals. They caused his administration some problems. The President basically told them to calm down. Those same individuals are present today, and they have the ear of the U.S. President. That's the first thing.

We get into the situation of the coalition of the willing and the new American century. I'd like comments from both of you on what you see, but to you, John, right off the bat, Americans don't know Canada very well, that's obvious. We've watched This Hour Has 22 Minutes have a lot of fun with Americans' knowledge of us. What do you see as long-term consequences for both Canadian business and Canada-U.S. relations resulting from Canada's decision not to support the war in Iraq, given the fact that they are aware that we have larger oil reserves up here than Saudi Arabia, with the tar sands?

Gordon, based on your studies of terrorism, what impact will the present war against Iraq have on the growth of international terrorism? Is that, in fact, going to slow things down?

Finally, this isn't the first time Iraq has been exposed to democracy. That's obviously where the Bush administration is going to go post-Saddam Hussein. I'd like your comments on what's going to fill that void after the war.

The Chair: Mr. Noble.

Mr. John Noble: You're absolutely right, Americans don't know Canada very well. I spent last fall at Michigan State University in EastLansing, which is only 150 kilometres from the border, and you can pick up CBC. Actually, there are some Americans who watch it there, it's one of the few places you can do it, because they like to know what's going on. They like the hockey coverage better too.

I think it's very hard to predict long-term consequences, because the Americans looking at this situation are saying there's going to be a change in government in Canada either at the end of this year or the beginning of the next year. They're probably waiting for that. They've probably said, okay, we're not going to do much with the current government, they've taken this position. I don't think the President is necessarily going to make Canada pay for this. What I worry about is American congressmen and senators, people in the House and Senate, who have their own protectionist agendas for their own particular constituencies. They're going to use this as an excuse to hit us over the head. That doesn't mean that if we were in, they wouldn't have done it, there's no insurance on it, but they're going to use it. As you know, trade in the United States is not the purview of the administration or the President, Congress controls it, and they can initiate measures that can hurt us. They already have, Senator Packwood is a great adversary of Canada on softwood lumber and a few other things, all of which concern his constituents. Any senator in the United States can do that.

So I don't think there are any serious long-term implications of this, because I think, at the end of the day, the Canadian public will not tolerate a continuation of this anti-American sentiment. We had that at the end of the Trudeau administration. Mr. Mulroney said he would give the Americans the benefit of the doubt, and at the end of his administration he was criticized as being too cozy with the Americans and couldn't show benefits. I think there has to be a very healthy balance there, and right now we're out of whack. But the prospect that we come back I think is very close, because there's going to be a regime change in Canada.

À (1010)

Mr. Gordon Smith: I agree with you, Mr. Calder, entirely about the impact of the people who were around Bush 41 and are now in key positions in Bush 43. I could go on, but you're absolutely right.

As to the consequences of these differences in our relationship with the United States, I think what John has just said is absolutely correct with respect to the more protectionist minded senators and members of the House. It's a very difficult thing to point to, but the bottom line is that we're not as likely to get the President or the Secretary of State to intervene on some issue. You could well say, coming from the west now, on issues like softwood lumber and Pacific salmon, where were they? I've been with Prime Ministers when they've spoken to Presidents, who always say these nice general things, but not a whole lot happens. The situation could get worse, and I guess I feel it will get worse. It's very hard to be specific, but I think there will be a price to pay in the cooling of the relationship, which is not to say, if we conclude that's where our interests lie, we shouldn't pursue an independent policy, it's just that we've got to be able to weigh these things.

On the future of terrorism. I think, the way this war is going, it's going to increase it, there's going to be more terrorism. I wish I could say otherwise. Maybe less over the long term of 10 years or 20 years, less chance of weapons of mass destruction, I don't know, but I'm going to be very surprised if we get through the next couple of weeks without some terrorist act, probably against the United States, but potentially against Britain.

As to democracy in Iraq, I think it's going to take quite a while. I think the real risk here is what we've seen in Afghanistan. Afghanistan was a great focus of attention for rebuilding, and the result is that the Karzi government controls Kabul and the suburbs of Kabul. The warlords are back. I guess that's better than the Taliban in most respects, but it's pretty far from perfect. After Iraq, the U.S. administration has been very clear, there are going to be more. The next on the list for not necessarily exactly the same type of attention, but attention nonetheless, is North Korea. As the U.S. rolls on to further objectives and expects the international community to come along as sort of a poop and scoop brigade to try to put these countries back together, I think it's going to be very difficult. I think the United States is a bit shocked to see people aren't out there waving flags welcoming them. Maybe that'll come, I hope it comes, but I'm not sure it's going to come, and I think the process of democracy building is going to be very tough.

The Chair: Thank you.

Mr. Casey.

Mr. Bill Casey (Cumberland—Colchester, PC): Thank you very much.

You two certainly pack a lot of wallop with your comments.

Mr. Smith, you said the United States badly bungled the diplomacy on this, and it struck me that with a little more effort, there could have been a bigger consensus. You also promised to give us more details on that if we asked, so could you expand on that a little bit? I think we know what happened, but why did it happen? Why was there not more effort towards consensus?

Mr. Gordon Smith: I'll give you my view on this. I think President Bush painted himself into a corner. He had built up this enormous military machine overhanging Iraq, and it either had to be used or pulled back, and politically, he had to have a win. So he built, to my mind, a completely false timetable, and the U.S. would have been far better to set out a longer timetable that would have enabled inspections to work. You still would have had the military overhang there, because Saddam would never have let the inspectors in, would never have let the U2 overflights occur. So there had to be military pressure, but not driven to such a short timetable.

I think the initiative Canada took was a good initiative, where we tried to specify milestones and deadlines. Monday morning quarterbacking is always easy, but we probably should have launched that a month or two before we did. Even then, I'm not sure it would have worked. I'm not sure the French would have bought any milestones in the end, or the Germans. They didn't want military action, I think, under any circumstance. But if the process had been not one geared to come to a peak now in March, before the hot weather arrives, but one that permitted the peak to have occurred during the fall, I think the coalition might have been rather more impressive than Micronesia and Albania and other countries like that. The coalition is really pretty unimpressive.

À (1015)

Mr. Bill Casey: Thank you for your answer, and it will puzzle me for a long time how that happened.

You both, I think, said the relationship with the United States depends very much on the security Canada can provide, giving satisfaction and comfort to the U.S. Canadians aren't against that, but I think a lot of Canadians are skeptical about the imposition of security standards and who's going to provide the security. Are Canadians going to provide the security in our country, or are the U.S. going to demand that their personnel supply it? There are two issues there, but it is a big deal. If we can get over those, I think we can make a lot of headway in satisfying the U.S. What are your thoughts on that?

The Chair: Mr. Noble.

Mr. John Noble: There are joint teams now. The smart border plan that has been approved by the two governments does provide for joint inspection teams working in both countries. One of the key issues is, can you have Americans working in Canada? It's a problem. Currently, American immigration and customs people at Canadian airports are not allowed to arrest anybody; that's done by a Canadian police officer who is there at each of those instances, but it is an issue.

I think there are ways out of this. It's not insurmountable. In this situation it's in the common interest of both countries that we have commonly agreed plans. On the whole question of how we deal with all those people who come to this country and claim refugee status, even though many of them aren't, we have a two-tier immigration policy in this country. We find two-tier medicare abhorrent, but the two tiers we have on the immigration side are people coming in the regular slots and the ones who want to jump ahead of them claiming to be refugees. We don't know who they are, we don't incarcerate them, we don't do anything. We don't have to adopt exactly what the Americans do, but we need to have a better system of control, of knowing who these people are.

Work on this is under way, but as I say, the concept of the secured North American perimeter, which your committee recommended looking at and which I think Mr. Manley has said he doesn't agree with--I'm not sure, I wouldn't want to be quoted on that, but I think I saw a report on it--I think is important, the only way to go, and if we don't go that way, what you're going to see is these horrendous lines at the Canada-U.S. border, and I don't think that's in the interest of the Americans. If the Americans are spending 40% of the budget of homeland security to protect the United States from Canada, that's a tremendous waste of American resources. The problem is not just Canadian. The U.S. customs, I think, are almost decades behind the Canadian customs in their level of sophistication. But it's something where the key principle of a perimeter has to be accepted. Once you do that, I'm sure we can deal with all the issues under it in a way that respects both Canadian and American sovereignty. the Americans are just as jealous of their sovereignty as we are of ours.

À (1020)

Mr. Gordon Smith: I agree with that. Either we have a perimeter security the United States believes is effective or we are into a major build-up of Canada-U.S border security, with all sorts of implications for people and goods crossing.

[Translation]

The Chair: Mrs Redman.

[English]

Mrs. Karen Redman (Kitchener Centre, Lib.): Thank you, Mr. Chair.

I have three questions, which I'll pose to you, and then give you as much time as possible to answer.

You talked about the dependency of our economy on the American economy, and I'm wondering if you've ever turned your thoughts to a common currency, because it's something that's come up from time to time because of the EU. I'd like to hear your thoughts on that.

I'm also wondering if both of you would comment on how you see the evolving world of the diplomat, and I do this in face of Mr. Cellucci's latest comments, which clearly came right from the White House. I'd also look to examples where we ourselves have had diplomats in the Washington area commenting on what their preference would be for an electoral outcome. I personally didn't find that appropriate, and I'm wondering how you see that evolving in face of the changing isolationist attitude in the United States.

Third, we have chosen, as a sovereign country, not to enter the war in Iraq, but we did deploy forces to Afghanistan and we have been committed since day one to the war against terrorism. I would suspect that both Canadian and American administrations realized, when we did that, that it would preclude our active participation in the war in Iraq. I think there are probably many states where the fact that the Dixie Chicks made an untoward comment about the President coming from Texas will bring them a lot more air play than what we as Canadians are doing. After this offensive in Iraq, I do believe the United Nations will have a renewed role in the eyes of the Americans, as Mr. Smith said, as the poop and scoop brigade, probably the far more expensive piece of the whole exercise. I'm wondering if you'd comment on other international structures. We've already talked about the economy and the fact that there have been actions taken against the Canadians, and we need to look at the P.E.I potato, the softwood lumber, the salmon, and the fisheries industry. We go to the WTO and we win these moral victories, but we get kicked in the wallet every time. So I'm wondering if you could perhaps talk about how you see those structures evolving in the face of current situations and what you see in the future.

Mr. Gordon Smith: I don't regard myself, Ms. Redman, as being an expert on a common currency. I would just say a couple of things, though. First, I don't think the U.S. will adopt a common currency. I think we might be able to arrange it that we use the U.S. dollar. I don't think we should have any illusion about that. It will sound strange me saying this to you all, as elected members of Parliament, but to me, there's just a tremendous political issue if we went to use of--

The Chair: Excuse me, Mr. Smith, I'm going to suspend for two minutes. We have a problem, and the technician is here. It's not being recorded. Thank you.

À (1025)

The Chair: Okay, Mr. Smith, you can finish your answer to Madam Redman.

Mr. Gordon Smith: Thank you very much.

I was coming to your question on the evolving role of a diplomat. Quite frankly, what Ambassador Cellucci did is the kind of thing ambassadors do do--that was an unintentional pun, I'm sorry; I don't know how that got translated. We may not like it, but to me, it's not surprising and it's not inappropriate, and getting on our high horse about its being inappropriate is, quite frankly, immature.

I want to say something, though, to correct the record. I happen to have been in the room where Raymond Chrétien, then ambassador to Washington, made the statement, and there's an enormous myth about this subject. He was asked a question: Does it matter to Canada if Gore or Bush wins the election? His reply to that question was, well, Gore knows Canada much better, because he's been part of the administration, and he understands environmental issues, which are an important part of our bilateral diplomacy. Bush obviously comes from the south of the United States, is very much focused on Mexico, and doesn't know Canada as well, but I'm sure, given time, he would come to know us and what our concerns are. That is almost a literal repetition of what he said. I think it's partly because he's the nephew of we know who that this remark was picked up and made to be opposed to a Bush or Republican victory. That's false.

With respect to what we are doing in the region on the war on terrorism, you're right. I think, quite frankly, none of this blow-up we've had over the last couple of weeks would have occurred if some people hadn't said certain things that were unfortunate. These things get played up out of all proportion. So I think, in fact, where the government came out made a lot of sense and was being managed quietly, but the comments that were made publicly, and they also went back to the comment last fall of somebody in the PMO calling President Bush a moron, have really compounded our problem.

As to the UN role when all this is over, I think there's still going to be a debate. The United States is not going to give up control for quite a long while, and I think there are going to be tensions in this. And when I see, for example, that France wants to line up for the contracts that will be let through U.S. AID money, that really is a little over the top.

As to bilateral trade arrangements that can more effectively deal with our concerns, John Noble knows more about those than I do, and I would defer to him.

À (1030)

Mr. John Noble: Common currency, I think, is a red herring. The committee's recommendations on that were basically that it's far too premature to look at it. Europe had a customs union, then a common market, and it's only now come to a common currency, and not all members are members of the economic union.

On the role of diplomats the one thing I would say is that there have been a series of comments by members of the government or backbenchers. You can say that's democracy, but I think it's hurt, because if you take them all together, particularly Mr. Dhaliwal's statement.... He's a minister of the Crown, when he speaks, he speaks as a minister, and I think that was very dangerous. As for Raymond Chrétien's comments, I wasn't there, as Gordon was, but the impression that the Canadian ambassador, particularly the nephew of the Prime Minister, would say that we prefer one candidate over another.... I think that got back to the President. Canadians are upset with what Paul Cellucci said. Just imagine if Paul Cellucci said, we prefer X over Y in a Canadian election. You're all politicians, you know you don't want to get hit, particularly by the American ambassador.

But I think what the American ambassador says in Canada probably has a far greater role than anything the Canadian ambassador says in Washington. We get apoplectic when the American ambassador says anything. We have a long history. Paul Robinson, when he was here in the mid-1980s, was called Bull Moose, because he was always going on about how we should spend more money on defence. I remember that Alan McEachern met with George Schultz and said it would be a lot easier for us to increase our defence budget if Paul Robinson wasn't out there making complaints about it, and George Schultz said, we feel exactly the same way about John Fraser coming down and making comments on the Hill about acid rain. It works both ways. Sometimes public criticisms aren't necessarily the best way of getting what you want done.

On international institutions, the World Trade Organization isn't perfect, but it's a lot better than what we had before in the GATT. The dispute settlement mechanism procedures are still not perfect, but they're getting better. I think they're better than the ones that are in NAFTA, which, in turn, are better than the ones that were in the Canada-U.S. Free Trade Agreement. I think all of that argues that we need a new comprehensive agreement with the United States that covers security and trade issues and goes beyond. It has to go not just to a customs union, but beyond that. A customs union by itself will not satisfy things. You could create a perimeter for purposes of a common external tariff. You need a perimeter for purposes of security. You need a lot of other things. I don't think we need to go to a common market, which would involve the free flow of people, because we aren't there yet. However, more Canadian people have to be allowed into the United States. NAFTA has a huge book. The INS has a server 600 pages long on that. As George Schultz used to say in Washington, it's never over till it's over, and it's never over. You can win with the Americans or you can't win.

À (1035)

The Chair: Thank you.

We'll go to Mr. Martin.

Mr. Keith Martin (Esquimalt—Juan de Fuca, Canadian Alliance): Thank you, Dr. Smith and Professor Noble, for being here today. We're always struck by the fact that we have outstanding solutions that come to this committee. Unfortunately, what we don't have is action, and that's a chronic problem in this institution.

I have three questions. The first one is what specifically we should be doing, as a country, to improve our relationship with the United States, given that, Dr. Smith, as you said, we need to be arguing through the prism of U.S. self-interest. I believe we can argue through our self-interest to their self-interest, but it requires a bit of focus.

Second, given the failure of the United Nations and that it has created a paper judicial framework without an effective policing enforcement mechanism, is there a role for Canada within the context of the United Nations to work with other countries to develop a good policing enforcement mechanism that would give teeth to the myriad of treaties and agreements the UN has, but fails to implement in the defence of international security?

Finally, do you think we need a forensic audit for CIDA that would enable it to spend our money in a more focused fashion? As you know, it does have internal auditing mechanisms, but I don't think it will ever be as functional as it could be unless an external forensic audit is done.

[Translation]

The Chair: Mr. Smith.

[English]

Mr. Gordon Smith: Merci.

On dealing with the United States, I don't know that I can add a great deal more, other than to give you some specific examples. I just think we have to find ways to work with the United States and work with other countries to show what the benefits are of international cooperative approaches. That's true with respect to the war on terrorism, but it's true in other fields as well. I mentioned climate change, and I did that because while everybody is so focused on Kyoto, in about two years the negotiations will start for the regime that's beyond the year 2112. Finding a regime for climate change is a huge issue that engages the U.S. and the rest of the world, so it is really important that we're not on separate paths. I think something could be done in that area. In fact, in our centre we're working on that.

I think what you have to say about increasing the UN's capacity to deal with policing, and more generally with enforcement, is correct. I was involved in hosting a meeting last week with Lloyd Axworthy on the strengthening of something called SHERBRIG, the high readiness brigade to the UN. This is the UN's rapid deployment capability. We chair the international committee that manages that this year, which is something, to the best of my knowledge, not known by anybody. There are things we can do there, and we looked in that meeting at actually strengthening the capacity. Training for policing is always a tough issue, as Madam Marleau will remember well. Aid agencies, on the whole, don't like to go near it, because it's not ODA-able, and ministers responsible for international cooperation want to get the aid level as a percentage of GDP up as high as possible, particularly Canada, given how far down it's gone. But the bottom line is, the role of policing and the criminal justice system generally is critical, I think, and we need to find a way around that problem.

Looking to Madam Marleau as well as you, I suspect the last thing CIDA needs is more audits. I think, if CIDA had a few less audits, it wouldn't have the heavy bureaucracy and controls it now has. I think that's all part of the catch 22. I think it needs a different approach all right, but CIDA will do more audits, and they'll just build more reserves in the system, more delays. Anyway, there are others in this room who are more expert than I.

À (1040)

The Chair: Mr. Noble.

Mr. John Noble: Thank you.

Mr. Martin, the first thing that has to change is the attitude at the top. I perceive the present Prime Minister as wanting to have the same sort of relationship Mr. Trudeau wanted to project with Mr. Reagan. He wants to differ for the sake of being out there. I don't think he's been a very successful politician. I think he's made a mistake in this respect. I think the next government has to make a renewal of Canada-U.S. relations its top priority, and it has to deal with the many issues that are in this report, the North American report.

I don't think that's going to be done on a trilateral basis. I think the idea that we're ready for a North American community is premature. The Mexicans aren't ready to look at a North American customs union, because they would have to give up their free trade agreement with the European Union and a whole bunch of other free trade agreements. If Mexico has a common external tariff, it then can't give preferential treatment to the EU, which neither Canada nor the United States would give. So I think we're looking at this in a bilateral way. The Mexican focus is almost entirely on immigration. With all these illegal migrants in the United States, the Americans are schizophrenic on that issue--on the one hand, they need the low-cost labour, on the other hand, they're worried about it--but fundamentally, it's not a real security problem. The Mexicans aren't a security problem.

We need to get on with defining the next step in the Canada-U.S. relationship. The integration has gone well beyond the free trade agreement. The free trade agreement eliminated tariffs. What it hasn't done is eliminate a lot of other barriers at the border. The border still is an impediment. I worry about that. As I said, it's going to affect investment decisions--it already has. Since the FTA came in, investment is going to the United States, it's not coming to Canada. That, in the long term, is not in our interest. If there are long-term investment shifts in the auto sector south of the border, notwithstanding all the benefits Canadians have on that--and I think the CAW is being absolutely ostrich-like in this respect, it has its head in the sand--at the end of the day, if we don't watch out, we're going to lose investment in the auto sector, because of the uncertainties at the border.

The government has to take your report and be prepared to deal with it. I don't think the current government is. It's not on their agenda.

Mr. Keith Martin: We need the solutions. If there are other solutions that are not in your document, Professor Noble, I'm sure everybody on this committee would appreciate your tabling any other constructive suggestions you have.

Mr. John Noble: As I think I mentioned in my statement, there are several more comprehensive approaches than are in your document, the one Wendy Dobson did for the C.D. Howe, the one Tom D'Aquino and the chief executive officers came out with on January 14, and the one that has just recently come out from C.D. Howe, again, by my colleagues Michael Hart and Bill Dymond at the CTPL. So there are a lot of ideas out there, I just don't think the current government wants to deal with them: you're going to have a change of leaders, therefore this is not part of the end of regime plans.

On your policing enforcement, yes, policing is important, but don't think you can have an international organization that enforces--

Mr. Keith Martin: I probably was using the word policing in a different way, actually, not in the criminal sense, but actually ensuring that the treaty agreements we have have teeth in them, in other words, an obligation to act. I didn't express myself properly.

Mr. John Noble: In that respect, I'm less optimistic perhaps, and Gordon didn't answer it that way.

That was the attempt, in the early nineties, of the agenda for peace the former Secretary General came out with. The problem you run into there is that the five permanent members of the Security Council don't give the authority to the Security Council to do that. If you don't have the Security Council authority to do it, how do you do it? Then you run into an Iraq situation, where one or more of the members are prepared to do it. Canada, I think, would be quite prepared to do that, but it's not an end-all solution until you get an agreement that the U.N. Security Council is going to be that. On commercial issues, the World Trade Organization has teeth. That's why people are now suggesting that they want to bring labour standards and environment into the WTO. The International Labour Organization, which has a much longer history, has a whole series of international conventions on labour standards, but they're not enforceable.

À (1045)

Mr. Keith Martin: I was leading to Security Council reform, basically.

The Chair: Thank you.

Monsieur Harvey.

[Translation]

Mr. André Harvey (Chicoutimi—Le Fjord, Lib.): Thank you very much, Mr. Chair.

Allow me to thank our two witnesses. They provide us with an opportunity to demonstrate a lot of perspective in our evaluation of what took place in September. I think that we definitely must not underestimate the major military and political shift occurring in the United States. It really makes me stop and think.

But since we're here to review our overall foreign policy, I think it's important to display some convergence and try to relate that to our development aid policy.

Today, as we speak, 9,000 children are going to die of hunger. I think that this is not a small challenge either. There are hundreds of people dying elsewhere for all sorts of reasons, but there are 9,000 a day, I think, who die of hunger. So I'd like, given that the Canadian International Development Agency recently held consultations for several months on such topics as the whole agri-food system and especially on one of the ways to be more effective with regard to our international aid, which you told us could be the involvement of the private sector in receiving countries to try and accelerate the positive effects of the many billions of dollars that are invested in development aid. I'd like you to talk to us, Mr. Noble and Mr. Smith, about the way Canada could go about improving private sector involvement, consolidating it.

If we wanted, we've got a new program, a partnership with the Federation of Canadian Municipalities. Would it be a good idea to link certain local communities, for instance, in Africa, with certain Canadian cities, to try and create a partnership that could become a corridor for exchanges of technical expertise?

After all, everybody is thinking about this issue. How can we do better where our international aid is concerned and in cooperation with all donor countries?

Thank you, Mr. Chair.

M. John Noble: First, I agree completely with Mr. Harvey that things must be improved. The link with the private sector is very important, but one of Canada's policies--and this is the policy of most donor countries--is the policy of tied aid. So, it's tied to supply in Canada. This is one thing that should have… I think that some big Canadian companies have benefited enormously from that. For example, SNC-Lavalin has benefited enormously from projects granted to it for African aid, in the Maghreb and elsewhere.

Another example, I think, is the matter of trade policy. This is very important for opening access by the developing countries to markets in the North. One of the WTO agreements will abolish the infamous or regrettable multifibre agreement. Within five years, nearly all the textiles and clothing from Third-World countries are going to come to Canada. But there will be pressures because some Canadian industries are going to suffer from this.

The only way to ensure the real development of developing countries consists of opening access to our markets, and right now, that creates major tensions between domestic Canadian interests and international Canadian interests. Finally, I think that it is in everyone's interest to open up our markets and make sure that Canadian consumers have access to certain products at better prices, even if that jeopardizes some Canadian jobs. But in my opinion that is the only way finally of really helping development in those countries; they must have access to our markets.

Obviously, a country like India is huge. It has a huge domestic population, like Brazil and China. But China is very dependant on access to markets in North America and elsewhere.

The other problem is that there are the less advanced countries. For most of the African countries and some others, their chances of taking part in the exchange market are very slim, and they are still tied to the terms of trade in commodities such as cocoa, rubber and that sort of thing, and the terms of trade for these commodities have decreased in the past 30 years. Is there a change? For instance, Senegal only produces peanuts. That's all…

À (1050)

Mr. André Harvey: But is it possible in the short term to have a change and more consistency among our departments in all countries? For instance, if we take agricultural policy, do we have to continue like that with absolutely diabolical subsidies like in Europe and the United States? Do you have a little hope that we will be able to amend our trade policies and favour the development of developing countries? Are you optimistic?

M. John Noble: No, I'm not very optimistic. The Americans are always proclaiming that they want to abolish agricultural subsidies totally. They are sinners like the Europeans, and the common agricultural policy of the European Union is immense. France has become the second largest exporter of wheat in the world. This isn't because they have a natural advantage; they got it with all the subsidies. It's a big challenge, but the belief, as I said in my presentation, is that Canada, CIDA, spends too much money in too many countries. It's too scattered, but it's very difficult to do that.

Last week, when the President of Madagascar came here, I think that the Prime Minister mentioned that we were going to open an office in Madagascar, and when some minister goes to a country, we're going to open something else. Finally, there is no consistency in the CIDA program. We were never able--and it's not just true for this government; the Mulroney government did the same thing--limit our CIDA programs to certain countries, or focus on them.

Mr. André Harvey: The partnerships with the municipalities, do you think…?

Mr. John Noble: That's definitely a possibility.

The Chair: Thank you.

[English]

Now we're going to pass to Mrs. Kraft Sloan.

Mrs. Karen Kraft Sloan (York North, Lib.): Thank you very much, Mr. Chair.

There are a great number of commentators in the United States, and certainly high-profile individuals, and I also believe it was in the New York Times--I don't have the document in front of me--saying Americans themselves are greatly concerned about the reputation of the United States internationally because of this situation in Iraq. You have talked about ways of Canada looking towards the United States to repair our relationship, as it were, and we've noted the glass is half full. Canada is embarking on a very strong commitment to help with the reconstruction of Iraq, and perhaps Canada may also want to consider a restoration of the American image abroad as well.

The witnesses have noted, Mr. Chair, that other countries look at Canada as a platform to enter the United States for trade. I've had many discussions with Europeans and others, and they speak to Canadians because they want an interpretation of the Americans. Perhaps I'm talking a bit tongue-in-cheek here, but there may be some opportunities, realistically, because it's not just the people who haven't supported this attack on Iraq, it's not just our relationship with the United States, I think we also have to think about the United States' relationship with the rest of the world. Indeed, if there are economic sanctions against the United States or if there are situations where other countries are less willing to trade and enter into economic exchanges with Americans, that will hurt our economy as well. So we have to think of the American reputation and how it affects Canada. I think that is a point that perhaps the witnesses could respond to.

The other thing I wanted to address, particularly with Mr. Smith, is the whole issue of climate change. I'm really pleased you raised this issue. I was Parliamentary Secretary to the Minister of the Environment when there was the signing of Kyoto. I went down to the United States and met with Americans at that time. I've also been involved in discussions with European parliamentarians and British parliamentarians at the American Congress on this particular issue. There are people within the American government who are very concerned, as legislators, about the American decision not to sign on to Kyoto, but the administration has made an abrupt change from that of the previous administration. While there may be some advances they're making to a post-carbon-dependent world, they have an official policy that is very much against this, and they're very intransigent on this policy. So it would be very helpful to me to understand how we can move this along as an opportunity to improve our relationships with the Americans.

À (1055)

The Chair: Mr. Smith.

Mr. Gordon Smith: Thank you very much.

I think the most important thing Canada can do to help rebuild the United States' reputation in the rest of the world--and by the way, I don't think we have come to the end of the road in the changes in the U.S. reputation yet, but let's hope I'm wrong--is help the United States re-integrate itself as a leading member of the international community, wanting to work with as many other states as possible and wanting to find multilateral solutions where everybody is in it together, as distinct from, if I can put it this way, central command-type operations. This is not just the present war. If you look at what was happening in Afghanistan, the war was run out of central command, and the countries that were participating, including ours, all had trailers in the parking lot, one for the UN, one for Canada, one for France, and so forth. This is not multilateralism, this is opportunistic coalitions of the willing.

I think we can help in concrete ways, and I gave climate change as an example, but there are many others, including those that are more on the security area, that I could give, continuing to work on trying to find transfer of currency funds used by terrorists and so forth. I must say, after my experience, I am hesitant about our seeing ourselves in a role of interpreting one to the other or being a bridge. That's what I was getting at earlier. I don't believe we should get into roles, I believe we should be much more interested in projecting a policy as to where our interests lie. Obviously, an element of that will come too, but the role isn't the objective, the role is the way you get to your objective.

On climate change, there are people in the United States working on hybrid models that could follow the Kyoto period. I think of David Victor, for example, at Stanford University, and there's a new book that's just come out, I can't remember whether it's from the Brookings or the Carnegie Endowment in Washington, and there's a further one coming from them too, with new models that we should be looking at, which are ways of trying to engage the United States.

Mrs. Karen Kraft Sloan: New models of what? Is it a multilateral process?

Mr. Gordon Smith: A model of what the arrangement could be post-Kyoto, after 2012. The reality is that Kyoto doesn't adequately address the emissions problem, so it's to go beyond it.

One problem the Americans have, and I don't think we've picked this up particularly, is that they think the costs for them would be too high, which is arguable. The other thing is that many people in the United States were deeply worried about the amount of money that would be transferred to Russia, and also the Ukraine, which might have been as much as $100 billion, as a result of the hot air those countries had.

So rather than just throwing stones at the Americans on this one, I think we should be trying to find new arrangements where they can be part of the overall multilateral solution in the period nine years out from now. That regime will be negotiated in the next two or three years.

The Chair: Thank you.

Mr. Cotler.

Mr. Irwin Cotler (Mount Royal, Lib.): I have a question to both witnesses, but principally, I think, to Gordon Smith, because of his remarks. It appears from the war in Iraq that America did not appreciate the need for international legitimacy for what they were going to do, and we may not have sufficiently appreciated the post-9/11 mindset in the United States and their preoccupation with security. What kind of damage control can we exercise now? I think the problem with the tension now with the United States has been not so much the policy we adopted, but some of the intemperate statements that resonated south of the border more than the policy, which could have been seen as a disagreement on matters of principle. What are some specific initiatives we can take? Since terrorism is the issue that so much concerns them, maybe there's something in that area we can do, reaffirming what we are now doing and suggesting what we might yet do.

Á (1100)

Mr. Gordon Smith: I entirely agree with that analysis. I think there are three things we could do. The first is be more explicit in stating our recognition that there is a major problem the world faces of terrorism at the global scale and the risk that at some point weapons of mass destruction will be used by these terrorists. To state our recognition of the problem very clearly is the first thing.

The second is to be very clear what our role is, the role the government has decided to undertake in Afghanistan, the role we are playing in the Gulf, the military contributions we're making, but other roles as well, other things we are doing to try to combat this combined threat of global terrorism and weapons of mass destruction. We need to be much more explicit in spelling that out.

Finally, I think we need to underline--it's a little bit like the response I just gave to the last question--the need for a cooperative approach that engages the U.S. in these issues and to help bring it about. I can see two scenarios, either it goes quite badly or it ends up wrapping up quite well, and I can see both of those ends reinforcing unilateralism in the United States and reinforcing the gap between the United States and the rest of the world. This is bad. So I think we've got an interest in trying to bring about that kind of reconciliation when it deals with specific issues, like financing terrorism or whatever--I'm not sure what the top three or four should be.

Those are the three things I would suggest.

The Chair: Thank you.

Madame Lalonde.

[Translation]

Ms. Francine Lalonde: Thank you, My question is for both of you, but first Mr. Noble.

In the United States, in the media, if not on CNN, the victorious tone of the winner has already begun to change. A genuine concern is becoming clear. Moreover some very keen criticism was noted just before the troops became involved. Newsweek and Business Week had been very critical of American diplomacy since they indeed fear isolation. In the United States, that's what we see.

Don't you think that the policy stance Canada took, since Prime Minister Chrétien said that he was not becoming involved because it wasn't justified, may mean, at a time when the need for rapprochement is being felt with countries of the European Union and others, that Canada could play a role and the United States might appreciate that Canada held this position, which is nevertheless ambiguous.

As you know, we in the opposition say that Canada has more troops than many countries that belong to the coalition, though it does not agree with the coalition. So, for us, this is inconsistent. But if I speak in general terms, even though I would like Canada to withdraw its troops, don't you think that it could use that to say it has a position that might still enable it to play a role in the rapprochement?

My other question is about borders. I wish to say that we have heard all sorts of evidence here, and that there was a problem long before September 11.

M. John Noble: Could Canada play a bridging role among the major…? I'm not sure since obviously we are not in the same camp as the French or the Germans, nor that of the British or the Australians, either. So I'm not sure that Canada could have a major role to play as a mediator in this matter. In my opinion, we could have played our role, actually, given the contribution we're going to make in Afghanistan. We're not in Afghanistan yet; the troops are going there in three or four months. But the American troops that will be relieved with the arrival of our troops will be able to do something else elsewhere. We haven't done that yet, because our troops are not yet there. Obviously, the Navy is there; it's in the Gulf. That helps too, but we can package that much more positively for the Americans and not be a formal part of this business, on land. This would have helped greatly because finally, as you say, we have a lot more of our forces there than most of the 35 coalition countries. So the decision was made in the light of public opinion in Canada, and not on the basis of leadership.

Mr. Trudeau, in 1983, faced over 50 per cent opposition on the question of cruise missile testing in Canada and he made the decision to do so despite the fact that the Canadian population was opposed to it. It was a question of leadership. Mr. Chrétien has demonstrated leadership on certain issues, but on that one, I think he failed to show leadership, that he made a mistake.

As for your second question, about borders, you're quite right: there were many problems before September 11, 2001. But these problems have grown enormously since September 11, and that's what we have to deal with. We can't simply say that we want to go back to the pre-September 11 situation. That's not at all the case. In view of the creation of this new Department of Homeland Security, which consolidates all sorts of things, including immigration, agricultural inspectors and a bunch of other things, and in view of the fact that this mentality is one focused totally on security, that does not aim to have Americans benefit from imports and things like that, we have to deal with this mentality. And we're not going to deal with it by making anti-American comments like the ones made up to now. It has to be done with an entirely different approach. Our real interests are at stake; it's not a matter of feelings. But we're playing the sentimental violin, and we're playing with fire, while our real interests are at stake.

Á (1105)

The Chair: Thank you.

[English]

Now we'll pass to Ms. Carroll.

Ms. Aileen Carroll (Barrie—Simcoe—Bradford, Lib.): Thank you.

I really regret that I was late and missed the first hour, but such is the nature of my job at times.

Mr. Noble, I've read this very quickly, far too quickly to really comment, but this is my only chance to do so. Largely, I agree with your views, not all of them. It makes me nervous when you suggest that Wendy Dobson is a prophet I should follow. She goes to an extreme that is beyond my comfort level, also beyond my political comfort level, because I know we're not going to get consensus to go that far. But that's just an aside.

You can correct me, but while you're addressing today our North American situation with integration, and perhaps using our committee report as a point of departure, certainly using it within your analysis, you are not doing so to the exclusion of where Canada has to be vis-à-vis our European colleagues, because you bring great experience from that background. So I'm assuming that this is not to the exclusion of that, because the diversification there is vital.

I think you make excellent points, and I'm happy that you want to stop short on customs union, as our committee report did too. I do agree that our report will not find fertile ground, but reports like this take a little while to infuse the system. I agree with you even that the trilateral recommendation we made is probably premature. Actually, I'm giving a paper tomorrow in Montreal, and a lot of this is going to be involved there too, and so are Mr. d'Aquino and others. I think sometimes, when a committee such as the foreign affairs committee reports, we need to reach out, set some bars, and say, okay, the reader may think you're asking for the whole enchilada and you're pushing the envelope. I think it's good to do that, because if we don't put those out there, nobody's ever going to consider them, during this regime or the next.

I think we get caught up in words, and this North American perimeter is sending messages it ought not to send. As you've well shown, it's already been there in many ways, and that's a very valuable thing.

To conclude, there was a very interesting article, and I'm going to use it tomorrow, by Jeffrey Simpson on the weekend. I think it's called, “They're Mars, We're Venus”. What I think it says is that it's all right to separate our instincts on values from our economic interests. The thing in our relationship with America is to juxtapose the two, but there are times when one will have to pre-empt or trump the other. From his perspective--not that he passed a value judgment on it--that's what happened with the decision of the government on the war. We went with instinct and those past values. So while you say you don't see any evidence of manifest destiny, I think in the current American approach--and we've all discussed it--there are perhaps still bits of the Monroe doctrine, and that is bound to make people with our instincts and history a little nervous.

Finally, and then I'm going to shut up, I'm one member of this caucus who has spoken there and on CPAC and is appalled at the anti-American remarks. I get appalled at the fact that nobody wants to hear me. It isn't me, Aileen Carroll, I couldn't care less, but they don't want to hear the voices. The media are going with the criticizers, and they know damn well, because they had all the leaks, as ever, out of caucus. They wrote up those who spoke from the fringe on Mr. Cellucci, and they ignored all of what they knew darned well had been said on the other side. It's very hard to send another message out when a few loose cannons get out ahead of you. Anyway, I do agree with you completely, it's utterly detrimental. It's more detrimental than this government is realizing, and were going to know that in the next couple of weeks. It's not going to take years.

Á (1110)

Mr. John Noble: The key point is that it involves leadership from the top. You're all members of Parliament, you have your own views, but the signal has to come from the top, and that signal has been missing since the election of George W. Bush. The personal relations aren't there. I spent four months last year at Michigan State University, and I was absolutely shocked at the extent to which people seemingly in the know in Washington would come and say how bad the personal relationship was. I call those people Cassandras, because at the end of the day, Canada-U.S. relations are too important to come down to simply a question of personal relations, but on the other hand, personal relations count. If the guy or the gal at the top isn't sending the right signals, that gets translated down the whole system.

Wendy Dobson has offered a series of options. She's looked at what our fundamental interests are. She's not sentimental. I've talked to Jeffrey Simpson about his article, and I think he agrees with the government. I come down on the other side: I think we should go with our interests and not our sentiments. I think that's the key point. Canadian public opinion clearly supports the Prime Minister on this, except that you have this latest poll by the Liberal party pollster that says we want more and better relations with the United States. It all comes down to the question the pollster asked. You can get a poll that will show almost anything, that white is black; it all depends on what question you ask.

I do think Canadians worry when it goes too far. Just the other night at the Corel Centre here everyone was standing up clapping for the American national anthem, as opposed to what happened in Montreal, but Montrealers got very quickly onto that.

I didn't deal with Europe because Europe is not our top priority, and I didn't have enough time to deal with it, but I don't think the idea of diversification away from the U.S. market is a good one, because at the end of the day, Canadian business has shown it's not interested in that. There may be certain areas where it is, but whether we like it or not, Canadian business wants to deal with the market that is easiest to penetrate, and that happens to be the American market 95% of the time.

Á (1115)

The Chair: Merci.

Mr. Eggleton.

Hon. Art Eggleton (York Centre, Lib.): Gentlemen, I thank you for being here, even though I didn't hear the initial presentation. I'm delighted to see two former distinguished public servants here. I've known Gordon Smith for quite a number of years, and it's good to see him again.

I was actually commenting this morning for television on the pre-emptive strike doctrine of the White House. We're seeing it in action now in something I fundamentally disagree with. I think this has been a mistake. There could have been more time given to the diplomatic process, and the inspections were making some progress. Sure, I agree, the Americans put the pressure on, after all these years they upped the ante, but then they went over the top, pulled out of the United Nations process, and went ahead with the attack, along with the Brits. It's raised the question of where this pre-emptive strike happens next. Under whose supervision does the United States just go off and do this whenever they want to do it? Their case in Iraq, I think, was very weak. They never made a case for clear and present danger. The Iraqis are barely able to defend themselves in this current conflict. The links with al-Qaeda were never, I think, substantiated. They certainly have seen big damage to the American psyche as a result of September 11, we're supporters in this campaign against terrorism, and they're continuing in that effort in Afghanistan, but I don't think they made the case for this kind of action, at least at this time, bypassing the United Nations process.

How do we deal, as we go through this dialogue on our foreign policy, this review of our foreign policy, with our next door neighbour, the superpower of the world, and this new pre-emptive policy? There are a lot of bad people in the world, there are a lot of dictators around, so who's next? I think North Korea is a bigger threat at the moment to the United States than is Iraq. Who is next, and who decides? How do we rein this in? How do we deal with this new policy of the White House?

Mr. Gordon Smith: I'm sure Mr. Eggleton wouldn't want me to repeat all the things I've said before, because this is really what we've been talking about, and I'm sorry you weren't able to be here. The roots of the strategy of not only pre-emptive, but preventive attack go back to 1991 and the people who were around Bush 41, and you know a number of them--Richard Perle, Paul Wolfowitz, John Bolton in the State Department. In 1998, this group, about 20 of them, including Don Rumsfeld, wrote a letter to Clinton saying there was a need for a preventive attack against Iraq--very interesting. A lot of them are either in the administration or around the administration. So it's got roots, it's got legs.

I agree with you entirely that the diplomacy was badly bungled. The United States, as I said earlier, painted itself into a corner, got itself into a timeline from which there was no escape, and the price to be paid is huge.

Where next is indeed the question. I agree with you, it's probably North Korea, but North Korea is not the same as Iraq, it can't be dealt with in the same way. But I don't think the United States is going to be terribly worried, unless something happens--I don't what that would be--about what the authority will be. The United States believes it has all the authority it needs to act in advance of being attacked by dealing with problems out there, whether they're with Iraq or wherever. You said, and I listened to the words carefully, the world's only superpower. I think we've got to go beyond that. I said earlier, and I would stand by the use of this term, the United States is an empire. It's a new kind of empire, it's not the empire in the classic colonial sense, wanting to keep territory for many years, but it's an empire nonetheless. There's a wonderful article by Michael Ignatieff, by the way, on that subject that was in the New York Times Sunday magazine sometime back in January.

So what do we do with this? It's important to show the Americans that we realize there is a real problem out there, terrorism and weapons of mass destruction--I'm not saying they were linked in the case of Iraq--to emphasize what we're doing, what the military are doing and what we're doing in non-military ways to deal with it, and to underline the need for cooperative approaches that bring the Americans in to deal with some of these other problems. We can't do much about Iraq other than the damage control, to come back to Mr. Cotler's phrase, but what we can do is try to be thinking now about how to deal with the problem of North Korea. There is a real problem there. The United States is having problems with its allies, particularly South Korea. We ought to be one step ahead, where we can actually have some impact, because the giant south of the border, big though it is, tends to focus on one thing at a time. So let's get ahead and deal with the next set of problems, and North Korea would be number one on my list.

Á (1120)

The Chair: Thank you.

Rapidly, Mr. Noble.

Mr. John Noble: Article 1 of the UN Charter talks about preventive action, which is very similar to pre-emptive action, except that the Americans have taken it in the context of unilateral action, as opposed to a UN operation. But the concept of preventive action was there from day one in the first chapter of the UN Charter, so it's not as if this is a new doctrine. The Bush national security strategy has pre-emptive action in it, but it also talks a lot about multilateral action, and there's a recognition that they can't do everything by themselves. Why hasn't the Canadian government focused on that? Chapter 8 of the national security strategy and a few other parts of it are key in that, and we should focus on those things. That's how you get the Americans involved, take them at their word. We don't have to be preaching to them all the time. Okay, you say this, this, and this, here's how we think you can do this.

The Chair: Thank you.

Mr. Day.

Mr. Stockwell Day (Okanagan—Coquihalla, Canadian Alliance): Thank you to each of you for your deliberations and your presentations.

You're quite right that the United States is an empire, though not in the classical colonial sense, and that's an observation few of its critics fail to make. Pax Romana was achieved by massive military invasion, occupation, and no departure. Pax Britannica, it could be argued, was the same, massive ruling of the waves, taking over, and not departing. Pax Americana, if there's to be one, will not be joined with long-term American occupation. That has not been their history. Even some of their critics are referring to them as the benign superpower, and there's some truth to that. I think it's important that this is noted.

On the pre-emption factor also, this notion of leaving nations alone until attack is imminent was fine in the days when you could see their ships coming at you a week ahead of time, their armies were marching, and it was going to take six days to get there, but that timeframe is compressed with the technology available today, and the boundaries are no longer identifiable. The belligerents, especially the terrorist network, don't have boundaries, so you have to go after the networks. There is a precedent in history for this degree of pre-emptive action against either a network or a harbouring nation, when pirates threatened to literally cripple world trade in the 1800s. Piracy on the high seas was putting world free trade at risk. Once again, the United States and Great Britain--we forget our history--and a few other nations declared that they were going to put an end to it. They even extended that, literally, to the harbours that harboured the pirates who would sail in, unload their booty, load up their cannonballs, load up their water and rum and everything else. American and British boats went into the harbours in Tunis and in Algiers and said, stop supporting them, or we will bomb you, and in some cases they bombed them. They got the message, and that network of piracy was finally broken. So these things have precedent in history. Canada has been a part of moving without UN Security Council resolutions, and you've already mentioned Kosovo.

Along with the negative impact on foreign direct investment of Canadian over-regulation and over-taxation, now we have an overlay of anti-Americanism. The networks and the Internet have, just in the last several days, been filled with business people. We never thought this was possible, but especially American business people, who apparently only want profit and margins, are saying they're not going to deal with Canadians. I think that will subside, but can you give an estimation of what will happen now? As you know, Australia was in the process of negotiating a free trade agreement that was supposed to conclude sometime in late 2004. The Americans have said they want that speeded up. It will be in place virtually now, if not in a matter of weeks. Can you see a shift now of certain American enterprises having a very real option, a free trade option, between goods and services in Canada and goods and services in Australia? They will have to weigh in transportation, obviously. Can you see them making that choice based on not just our non-involvement, but that verbal belligerence that's been, unfortunately, a product of the last few months or few years, whatever you want to say? How big a factor is that type of thing going to be?

Á (1125)

Mr. Gordon Smith: Let me deal with the first part of the question and pass to John Noble the second.

You're absolutely right, Mr. Day, with respect to pre-emption and preventive attack. I don't think there's any question but that there is no alternative to the use of pre-emption and preventive attack, for just the reasons you've indicated. The real issue here is the question of authority and, ultimately, political legitimacy. That's where I think the United States, through its diplomacy over the last few months, bungled. It may never have been possible to do a lot better, that's not clear, we'll never know, but to me that's the critical issue. Remember that the Russians thought this was wonderful, because then they could go into Georgia and clean out the Chechens. The Chinese feel this kind of thing is wonderful if they can deal with somebody else who threatens them. That's the problem with the United States' unilateral approach. The United States doesn't see anybody else being able to follow the same rules it does in the case of preventive attack, but others will. So ultimately, there are questions here of authority, political legitimacy, and precedent.

On the trade impact, John is more expert than I am, and I think will say much the same thing I would have anyway.

Mr. John Noble: With respect to the Australia free trade agreement, the United States during the whole Clinton Administration didn't have what used to be known as fast-track authority, now trade promotion authority, it wasn't able to negotiate free trade agreements, and it's now in the process of catching up. So it's just recently negotiated an agreement with Chile, one with Singapore, and it's negotiating one with the five central American countries. In fact, I was down in San José two weeks ago giving them some advice about how to negotiate with the Americans. I don't know whether they learned anything or not--they probably know more than I do. Australia was another one. So they're looking at this. Of course, there's the Free Trade Agreement of the Americas, which is supposed to come on board in 2005. I think that target isn't going to be met. There's the next WTO round, the Doha round. That, again, I think is going to be delayed.

I don't think there are any direct threats to Canadian exports to the United States from Australia. First and foremost, if you look at what our major exports are, I don't think Australia would be competitive in the American market. Obviously, the Australians took a political decision that it was in their fundamental interest to participate in this American coalition, irrespective of public opinion. I think that's the key issue.

As I've said, my major concern is that American congressmen and senators will take actions against Canada. They already have a predisposition to do this, and they'll just use this as another excuse, and of course, they'll get support, because these nasty Canadians aren't supporting us in our fight for freedom and against terrorism. That's the fundamental issue, that Canadians don't feel threatened by terrorism, and we should, because if ever a terrorist nuclear bomb goes off in New York City, the fallout is going to come into eastern Canada. There's no way we can be excepted from that. But it's just a totally different mindset in this country from that in the United States.

Á (1130)

The Chair: Thank you.

Mr. Calder, without any preamble, just one question.

Mr. Murray Calder: Gordon, I'm going to pose this question to you. The United States in the past has set up military bases strategically placed around the world. With the poop and scoop analogy you used with Iraq, do you think, after this is all done, the United States will probably want to set up a permanent military base in Iraq? If so, would that be to address a second world power emerging, and who would that be?

Mr. Gordon Smith: I pray not. I would hope that after a couple of years the United States does not have any land bases in Gulf areas, out of Saudi Arabia. Diego Garcia is one thing, the fleets are something else. I'm not saying we should cater to Osama bin Laden, but it's very clear that for him and for a lot of others who support him, the maintenance of American military forces in Saudi Arabia was a major contributing factor. I worry a lot about if there's to be an American base structure maintained long-term in the Middle East. I would much rather the United States did what it really must do, in my opinion--we haven't talked about this at all this morning--namely, push a definitive peace between Israel and Palestine, the creation of a Palestinian state, security for Israel, and all the rest of that. That's what it really needs, and it comes back to Ms. Kraft Sloan's question about the overall image of the United States. That would be a much more positive way of going than looking at a military base in Iraq for a long period of time.

The Chair: Thank you.

Mr. Martin, one question.

Mr. Keith Martin: This follows what you said. Do you not think we can play a role engaging the Americans in dealing with the underlying causes of terrorism, the political and economic emancipation issues of countries like Saudi Arabia, Egypt, Pakistan, which have to be dealt with if you're going to deal with the loose, diffuse network of al-Qaeda?

Mr. Gordon Smith: I absolutely do. You're somebody who's thought a lot about failed and failing states and what we can do. I think there is significantly more we can do, particularly if we're strategic and pick the right countries to go in. I was hearing last night from the Minister of International Cooperation about the priorities she has set. On the one hand, our development assistance ought to be focused on the countries that have good governance. On the other hand, to deal with potential sources of terrorism, failed and failing states, which are laid out as the major threat to the United States in the national security document John Noble referred to, means going precisely into states where there is awful or no governance. I think some of our development assistance moneys and program priorities have to go in that area. I agree very strongly with you.

The Chair: Thank you.

I just would like to inform the witnesses that the committee will soon be starting a study of Canada's relations with the Muslim world. This is a very serious and complicated subject that we will learn about over the coming months. I'd like to ask you, as very experienced diplomats, if you have initial thoughts about this topic.

Á (1135)

Mr. Gordon Smith: I don't think there's anything this committee can do beyond what you are now doing here that is more important. Somebody asked the question about the risk of more terrorism, but another one in the aftermath of all this is the risk of a serious and long-lasting deterioration in understanding and cooperation between Arabs, Muslims generally, and the west. On the IDRC board we have a person from Kuala Lumpur, who I was talking to last night. We also have somebody from Egypt who lives in Kuwait. It was really sobering to hear both of them talk.

So there's a domestic dimension, but there is also an international one. I think it will be important to look in a hard-headed way at the roots that do exist in Islam for the fundamentalist terrorists. Often, I think, Muslims have been unwilling to be quite as tough as they ought to be on those elements. I've just finished editing a book, which will be out shortly, on religion, conflict, and peace building. All the major religions of the world say all the right things about peace building, yet we know we've had a lot of conflict among religions in the world, so I think there has to be that peace and conflict dimension to it as well.

I'd be happy to discuss this with you further. I don't want to go on at great length, but you're on the right topic.

The Chair: Mr. Noble.

Mr. John Noble: I think it is an important issue. Obviously, one of the areas you're going to have to watch is that the Muslim world is no more homogeneous than the so-called Christian world or anything else. You run from a secular state like Turkey, which, at the governmental level, is very secular and deliberately created that way, through a whole series of others that are on a religious basis. That, of course, is the public image one faces. One worries about Islamic fundamentalism, but that doesn't, to a very large extent, reflect a lot of what is going on in Islam. We saw in the Balkans that Bosnians, who, in fact, were ethnic Serbs who converted at the time of the Ottoman Empire, suddenly became radicalized because of the situation.

I think it's a key issue, particularly for understanding international terrorism, because that's where, whether one likes it or not, the international terrorist regime these days happens to find its roots, in Islamic fundamentalism. There are other terrorist groups, and the United States has its own internal ones, that have nothing to do with Islam, so I'm not saying Islam is the only source of terrorism, but it is the fundamental threat today. The United States is more threatened, I think, by Saudi Arabia than it is by Iraq, but it has been unwilling to deal with that issue.

The Chair: Merci.

I want to thank both of you for appearing before the committee. It was very interesting.

Before I adjourn, we have the motion from Mr. Day.

Mr. Stockwell Day: That's correct. To which one do you refer?

The Chair: Ms. Carroll wanted to speak about the motion.

Ms. Aileen Carroll: As I understand, Mr. Chair, Mr. Day is not going to put his motion forward today on Taiwan and the WHO. Your second motion, are you not going to put that forward?

Mr. Stockwell Day: Yes, that will be for today. It has been passed in the House, we could have it on record here today.

Ms. Aileen Carroll: Today while we've been at committee?

Mr. Stockwell Day: Yes, that's my information.

Mr. Art Eggleton: This one on Saddam Hussein? Why would we need it here, then?

Ms. Aileen Carroll: Could I ask Stockwell, then, what we do, because I don't believe that's correct. I have different information. What I understand is that the House leaders have met, there is full agreement on the wording of Mr. Kenney's motion, and we certainly are supporting it. My understanding is that it has not yet been brought forward, but it will be. When the request is made by Mr. Kenney, he'll have to seek unanimous consent of the House, and my understanding is that he will receive it. I stand to be corrected as to whether or not, as we sat this morning, it happened, but I do not think so.

I would ask that you be willing to defer your motion until next week, when we find out whether or not that has occurred. If it does occur and you also wish to pass it in committee, there's no problem, but I wouldn't want to pre-empt Mr. Kenney, particularly since all the House leaders, I think, have worked hard on trying to get agreement. So I would only ask to defer it till we find out the status in the House.

Á (1140)

The Chair: I agree. I think we're all supporting Mr. Kenney's and Mr. Day's motions, but we don't have a quorum to pass a motion right now. That's going to solve the problem for this morning. You're not deferring, we're not voting, we don't have a quorum.

Mr. Stockwell Day: Okay.

The Chair: That's it. Thank you.

Meeting adjourned.