FAIT Committee Report

CHAPTER 5: A CANADIAN AGENDA FOR
ENHANCING BILATERAL AND TRILATERAL RELATIONS IN NORTH AMERICA

5.1  Introduction

This chapter includes three major sections. The first of these addresses the topic that is the traditional and ongoing focus of Canada’s attention: the particularly crucial challenges of managing Canada’s bilateral relationship with the United States. In the broader context of developing a North American dimension of international relations, however, the Committee holds that it is also in Canada’s long-term interest to pursue closer relations with Mexico, and in addition to examine seriously the potential for trilateral forms of partnership. These are the subjects of the two remaining sections of the chapter.

Before proceeding to those discussions, it should be emphasized that the North American reality calls for a sophisticated approach at several levels to the question of plural bilateral and trilateral relationships. Marc Lortie, DFAIT Assistant Deputy Minister for the Americas, outlined it this way: “North America is really about four relationships, three bilateral and one trilateral: Canada-U.S.; Canada-Mexico; U.S.-Mexico; and the three of us, Canada-Mexico-U.S. The Canada-Mexico relationship is the least known. It is growing but it needs nurturing. It deserves its own space. We should not view trilateral relations as an alternative to either Canada-United States or Canada-Mexico [relations], but as complementary and enriching”.¹

At the same time, there is no question that the Canada-U.S. relationship overshadows the others and includes aspects that will need to be tackled bilaterally as a matter of priority. As George Haynal, Mr. Lortie’s predecessor, expressed this point: “It’s important to be very clear as to what is a North American agenda and what is a Canada-U.S. agenda, just as it is very important for Mexico to understand what is a North American agenda, [and] what is a Mexican agenda.… As this discourse proceeds, it’s going to be increasingly important to bring the North American dimension into it but not confuse it with the fundamental issue for us, which is a survival issue of managing our relationship with the U.S. well. If we don’t manage that well, the rest of it doesn’t really matter an awful lot.”²

Witnesses from the business community, and the strategic advice of former Canadian trade negotiator Michael Hart among others, would certainly agree with that assessment. However, the Committee is concerned that a bilateral-first emphasis may tend to undervalue the Canada-Mexico and trilateral dimensions of North American relations. The Canada-U.S. focus is often so strong by force of habit that these other dimensions get passed over or brought in as afterthought. For example, the written submission from the Canadian Chamber of Commerce made no mention of Mexico. In oral testimony, Robert Keyes, Vice-President of the Chamber’s International Division, did mention that a “trilateral working group” on NAFTA issues had been established with counterparts from Mexico as well as the United States, but indicated it was then dropped, largely because of a lack of American interest. And yet the relevance of working trilaterally in certain specified areas, and not only bilaterally, was readily acknowledged by Chamber policy analyst Alexander Lofthouse in the following comment:

… I don’t think we should look at it as an either/or choice. We work either bilaterally or trilaterally. We’re not going to work at the same speed on all issues at all times. This is one area where the European experience is really instructive.… There’s a concept in Europe of multi-speed integration, where not all partners are integrated in the same way at the same time.… The Schengen Agreement on internal boundaries; they’re not all part of it because they’re not all ready for it.

I think we can look at the same thing with Canada, the United States, and Mexico. There are some things on which we can work on a trilateral basis, such as what we already have — tariff reduction, investment policy, and the list goes on. But on some issues, such as border security or movement of people, we’re simply not working that way. There’s nothing wrong with that, because we’re talking about three very different countries operating in three very different contexts.

So I would say if there are issues on which it is better for us to work bilaterally — Canada-U.S., or for that matter U.S.-Mexico — then so be it. I just think we can do the same as we construct this trilateral economic space and still work on issues bilaterally. I don’t think the two are mutually exclusive.³

On broader foreign policy grounds as well, a too narrow or exclusive approach should be avoided. Like George MacLean in Winnipeg, University of Alberta Vice-President Brian Stevenson made the point in Edmonton that Canada could significantly enhance its multilateral goals in the hemisphere through regional arrangements as well as through trilateral arrangements such as NAFTA. Canada and Mexico could also learn much from each other’s “collateral relationship” with a common neighbour. Stevenson argued that: “the two least-desirable arrangements are an asymmetrical bilateral relationship [with the United States] on one end of the spectrum, and a fully universal multilateral relationship on the other.… They must be complemented by a variety of options through the middle of the spectrum of multilateralism, and even selected strategic bilateral relationships. Our menu of options has to be broad, but it must begin with North America.”⁴

Laura Macdonald of Carleton University, who agreed that Canada’s future increasingly, “whether we like it or not, lies in North America,” pointed to signs of “an inevitable trilateralization of previously bilateral concerns” and added that “politically it’s very difficult for policy-makers in Washington to argue that they have to treat Canada differently from Mexico.” As she stated: “Canada’s commitment to North America and a truly trilateral relationship among the three member countries prior to September 11 was rather tepid. The importance of the bilateral U.S.-Canada relationship was reinforced after September 11, both in Canada and in the United States. Nevertheless, I would argue that this is a short-term perspective, the idea that we can do a sort of two-track approach and focus on our bilateral relationship, leaving out Mexico. I would argue that we’re not going to get our old special relationship back with the United States, however much we might want it.… When people think about North America in the U.S., they’re largely thinking about Mexico”.⁵

Whether or not this is so, other witnesses concurred that it would be a mistake to treat the question of where Mexico fits into Canada’s North American strategy as something that can be safely ignored or put off till later. Stephen Blank argued that Canada’s best option is to participate in a complex North American-wide effort of building the coalitions, alliances, and constituencies for North America, adding that he disagreed “with this bilateralism that has been the recent trend in Canadian policy and a retreat from trilateralism”.⁶ And Guy Stanley made the following point:

The problem now is that the U.S. was attacked on their territory and the stakes are quite high. If we don’t want an American strategy to be forced on us, we must have something to balance their strategy, with the same sense of urgency and a position based on our strengths and our different traditions, as well as a range of concrete contributions that we can provide within a common approach.

I also believe it would be desirable to include Mexicans in the same discussion and dialogue because we don’t know what the direction of American policies will be in the near future. If we want to be able to encourage or to deter some things, we’d better have a major and recognized contribution, and a partner who supports or shares the same perspective with us and who is capable, in a trilateral context, to provide a stronger dimension and a higher value than what can be done unilaterally. Otherwise, I would be concerned about the decisions the Americans will be making in the short term.⁷

In short, a one-track approach to North American relations is not sufficient. But the need to balance more than one at the same time raises questions about how best to manage these several tracks of Canada’s relationships with North American partners. There are also questions about when and how to combine or go beyond these in trilateral terms. It is to such questions that the Committee now turns.

A.  MANAGING THE CANADA-U.S. RELATIONSHIP

The pervasive economic, security, and environment linkages between our two countries have always made the management of the Canada-U.S. relationship a critical domestic and foreign policy challenge for us.

Jon Allen, Director General,
North American Bureau, DFAIT
Evidence, Meeting No. 42, November 20, 2001.

… maintaining an effective working relationship with the United States is the only true imperative in the conduct of Canadian foreign policy.

Denis Stairs, Dalhousie University,
Evidence, Meeting No. 45, November 27, 2001.

Canadian diplomats have known for 25 years that there is no single recipe for managing the U.S. relationship, because there is no single power center in the American system of government.⁸

Stephen Clarkson, University of Toronto.

Canada needs better intelligence and advocacy in the U.S. We need to engage the Americans at the local, regional and state levels where the interests that drive congressional and administration policy are being developed and articulated.⁹

Hon. Pierre Pettigrew, Minister for International Trade.

5.2  Strengthening Canada’s Management of Relations with the United States

In the long and complicated history of Canadian-American relations, Canada has always had to take into account the obviously superior power of its closest neighbour and to devise diplomatic strategies for dealing as effectively as possible with the most important international relationship Canada has.¹⁰ Previous chapters have offered recommendations in some specific areas of Canada-U.S. bilateral relations. At least as important, however, is the more general question of how best to manage our intense, evolving relationship with the United States to ensure that a strong, clear and coherent Canadian message is being delivered in the United States both on a day-to-day basis and in exceptional cases, such as when we are trying to solve a trade dispute or advance Canadian initiatives.

Many witnesses focused on the latter case of subjects receiving high-profile attention, and a significant amount of testimony therefore related to the relative merits of “big ideas” versus incrementalism in pursuing these matters with the United States. Yet while the strategy chosen will depend on the issue at hand, the mechanics of developing a broad-based position and effectively delivering strong and consistent Canadian messages to multiple points in the United States are similar, and equally challenging. As Michael Hart warned:

An appreciation of … fundamental differences in political institutions and philosophies is critical to the successful pursuit of bilateral initiatives. Experience with the FTA, the Acid Rain Accord, and similar initiatives indicates that well-crafted and deployed Canadian initiatives can succeed, but not quietly or quickly. They require a full-court press in Washington and across the United States from both private and public interests, they need the full support of the President, his senior cabinet colleagues, and leading members of both the House and the Senate, and they take time to mature. Anything less is doomed to fail.¹¹

Denis Stairs pointed out to the Committee that Canada has traditionally employed a combination of macro- and micro-strategies “… in attempting to level the playing field with the United States at least a little.” The macro-strategies included attempts to diversify our economic and other relationships and to get as much bargaining as possible into multilateral arenas. While he argued that neither of these was as useful as it had been in the past, he noted that “The micro-strategies have been aimed mainly at de-escalating the politics of the relationship as a whole, and they’ve included a number of tried and true techniques.…” These include avoiding linkages, practising quiet diplomacy when helpful, establishing rules-governed bilateral institutions, agreeing to disagree on certain issues (such as the sovereignty of Arctic waters), and lobbying the American Congress and public. He added that while such strategies are still very important, “… we need to recognize that they will not be effective overall in cases in which the Americans perceive that their fundamental national security interests are at stake.”¹²

Some approaches have proven more useful than others over the decades, and we have identified several of particular importance in managing what will always be a challenging relationship given the disparity in power between Canada and the United States. Because of this disparity, many have also argued that it is generally better for Canada if initiatives in our bilateral relations come from this country rather than the United States.¹³ Finally, while it is more difficult than is often suggested to draw direct links between such issues as Canadian defence spending and this country’s credibility in Washington, following the recommendations contained in this report could only increase Canada’s credibility there.

1.  The Need For Better Understanding on Both Sides

Given the depth and complexity of our ever-evolving relations with the United States, witnesses agreed on the need for at least three levels of understanding as we attempt to deliver clear Canadian messages that have the maximum influence.

First, it is necessary to understand the American political system, from the fact that “all politics is local” through the continuous competition of multiple constituencies for attention and the key role of the U.S. Congress. While he was speaking more broadly, political scientist James Laxer of York University was correct in 2000 when he stated, “Understanding the U.S. has become a Canadian question, perhaps the Canadian question.”¹⁴

Reginald Stuart recommended to the Committee that it be a Canadian priority to

… educate ourselves on the nature of the American political process and Americans on the nature of Canada’s political process. Those who deal with Americans must understand how it works, the shared yet separated powers, the role of Congressional committees, their chairs, members, and staff. Too many Canadians, even those who should know better, do not understand the differences between our political systems, and the reverse is likely true as well.¹⁵

Second — even acknowledging Andrew Cohen’s point that “America is not discriminating against Canada; it knows as little about anyone else as it does about Canada”¹⁶ — it is important to ensure that American decision-makers have a factual understanding both of Canada’s position on particular issues and, more important, of Canada itself. Above all, American politicians should be aware of Canada’s economic importance to the United States as a whole, as well as to almost three dozen individual states and thousands of businesses. American decision-makers should also understand Canada’s international role, including its real ability to pursue avenues not always open to the United States.

At the broadest level, it is important that Canadians understand what they want from the United States — or, as Denis Stairs put it more precisely, “what they want that the Americans are currently preventing them from getting.”¹⁷ It may be relatively easy to decide what we want on particular trade and other issues, especially given the professionalism and expertise of Canadian diplomats and other civil servants. But while the final answer to the broader question may always prove elusive, this is one case in which the journey in search of an honest answer may be as important as the destination.

2. Strengthening and Expanding Canadian Diplomacy

The Canadians most directly engaged in delivering Canadian messages and advancing Canada’s interests in the United States are professional Canadian diplomats. The Executive Director of FOCAL, Don Mackay, told the Committee that the high quality of our diplomats — particularly our ambassadors in Washington — has played an important role in their effectiveness. He argued that

… the Canadian embassy in Washington has always been headed by an extremely senior level official. Whether you go back to Derek Burney or Monsieur Chrétien… or consider the current ambassador, Michael Kergin, these are extremely senior people, and that embassy works with a singular focus. The singular focus is that anybody of note within the U.S. government will take a phone call from that Canadian ambassador. I don’t think access has been the problem, because in my experience, presidents on down, they will take phone calls from that resident ambassador.¹⁸

Yet while Canada’s diplomats — like its military personnel — are of very high quality, they are also under-funded, and therefore overworked. According to Dr. Tom Axworthy:

There is plenty of American goodwill towards Canada, but it takes a tremendous amount of work to penetrate the U.S. bureaucracy, secure a place on the congressional radar screen or get calls placed through the White House switchboard. Indeed, it is not only Senators, Members of the House, or White House staffers who need to be lobbied: the staffs of the myriad of House and Senate Committees and the personal staffs of the politicians are also critical gate keepers. Washington is a constant beehive of activity … [and] the Canadian Ambassador needs to influence not a handful of people but literally hundreds of individuals, because the U.S. government is a many-splintered thing.

He also contrasted the diplomatic representation of Canada and Mexico in the United States in this way: “In our most important foreign posting … Washington … Canada’s human resources pale in comparison with Mexico’s. Mexico has consulates in scores of American cities and the Mexican Ambassador in Washington is almost of cabinet rank in importance. In contrast, Canada has few outposts in major U.S. cities and a very over-worked staff in Washington.”¹⁹

Likewise, Stephen Clarkson has recently argued that a combination of underfunding of Canadian diplomacy and a changing context in Washington means that “… Ottawa is forced to rely on its overstretched embassy in Washington, which practises the ad hoc, reactive, crisis-management techniques it had worked out before free-trade times, when Canadian interests were less deeply affected by the vagaries of Congress’s moods or the White House’s tactics.”²⁰

In a recent speech to the Canadian-American Business Council, Minister for International Trade Pierre Pettigrew seemed to acknowledge concerns about the adequacy of Canada’s presence, not just in Washington but across the United States, when he proposed “the need for smarter advocacy and representation in the United States … to ensure and enhance our access and advocate our interests.” He added: “We need offices to promote trade, seek investment and technology, and advance the interests of all Canadian government departments, provinces and the Canadian private sector.”²¹

The Committee has earlier noted the need to provide increased resources to support Canadian diplomacy. This need applies particularly to our diplomats in the United States. While Washington remains key, the Committee believes it is also necessary to increase the number of Canadian consulates elsewhere in the United States. That number was reduced years ago as a deficit-fighting measure.

3. Focusing On Congress

All modern governments are complex; yet the American political system was designed over 200 years ago with complexity as a goal, separating power in order to ensure checks and balances. American professor Stephen Blank told the Committee that “Americans are difficult. The political system is difficult to operate. Watch West Wing; it’s a pretty good image of how things work. Can you win parts of it? Yes, but we need to do it together in a coordinated strategy.”²²

Michael Hart cautioned, however, that:

In Washington, the way things work is very different from the way things work in Canada. In Canada, we’re used to a form of government in which power emanates from a centre and spreads down and out from that centre. In Washington, it’s exactly the opposite. Power emanates from the bottom and gradually concentrates at the centre.”²³

The President is undoubtedly the single most important individual in Washington, and it is important to interact effectively with the administration. Fortunately, as Denis Stairs pointed out, generally “we can satisfy the executive branch in the United States with solid workaday cooperation …”²⁴

Congress is another matter, and as an institution, Congress is not only much more complicated but probably more important for Canadians than the presidency. When asked in June 2002 whether the fact that one party or the other controlled the White House had an impact on Canada-U.S. relations, Alexander Lofthouse of the Canadian Chamber of Commerce responded that “… so much of the agenda there is congressionally driven. Even in areas that are clearly within the administration’s purview, as trade policy is, the White House is often led by Congress. That’s true whether it’s the same party in control of both branches or it’s divided government.”²⁵

Dealing with U.S. Representatives and Senators can be frustrating, given their very real power on the one hand and the fact that they must be almost continually campaigning on the other, thereby privileging local interests. Politicians from Canada and other countries have undoubtedly repeated the statement of former U.S. Speaker of the House Tip O’Neil, who said that “all politics is local.” Nowhere is this the case more than in the United States. As Professor Isaiah Litvak told the Committee:

Although the United States is a global economic and political power, its particular policy is made locally. So when you’re looking at, for example, the House of Representatives, and even the Senate, which has as its members some of the most distinguished statesmen in the United States, the politics are local.

I don’t have to tell you … about the separation of powers. The concern is with the election. So you appeal and address to local interests. Local interests will override, quite often, what we would expect American national interests to be.²⁶

This fact has important implications for Canada. As former Canadian Ambassador to the United States Allan Gotlieb has written, “In Washington … a foreign power is just another special interest, and not a very special one at that.” He continued: “The foreign government must recognize that it is at a serious disadvantage compared to other special interests for the simple reason that foreign interests have no senators, no congressmen, and no staffers to represent them at the bargaining table. They have no votes and no political action committees.”²⁷ Partly as a result of this, a number of witnesses pointed out the difficulty of getting on the “radar screen” in the United States — although others agreed with Stephen Clarkson that “… the less the U.S. thinks about us, often the better it is.… As I see it, it’s better for the Americans to be ignorant about some of our differences than to be too focused on them.” ²⁸

4.  Building Coalitions

The work of Canadian diplomats in the United States has changed over the last two decades, with their focus broadening to include Congress as well as the executive. 29 While crucially important, this is still not sufficient. As Stephen Blank noted, years ago

… Canadian ambassadors in Washington would only visit the executive; they wouldn’t go to Capitol Hill because they felt it was not appropriate. And then, after ambassadors Gotlieb and Chrétien, the Canadians discovered Capitol Hill.

Well, let me tell you what has to be discovered: the rest of the country.… the reality is that the U.S. policy-making process is long, local and permeable, but it requires efforts to participate in the process.

He particularly focused on the natural constituency Canada has in American border areas that already trade and interact with Canadians extensively. In his words:

… you don’t spend much time building the constituencies and building the coalitions that are necessary to have influence in the U.S. The image of Canada being a small player and being treated in this fashion is simply as much a Canadian doing as anyone else’s.… Canada is not small and it is not irrelevant, but it has to participate in the complex policy-making process. ³⁰

Professor Don Barry warned in Calgary that such coalition building will not be easy, however, since

… one problem in dealing with the Americans is there’s no real Canadian constituency as such in the United States. Our impact upon the U.S. is sectoral and regional, and this forces a certain kind of approach upon us. Because the impact is sectoral or regional, U.S. perceptions of Canada are very rarely aggregated at the national level. In fact, some presidents have even described Japan as the leading trade partner of the United States. Reagan and Nixon both did that. And Condoleesa Rice, the President’s National Security Advisor, didn’t know that Canada is the leading trading partner of the United States.

We have this pattern of diplomacy forced upon us by the nature of our impact upon the United States. What it forces us to do is to almost start over again every time an issue arises, because we have to find the appropriate allies on each issue. You can’t rely on the same group all the time. ³¹

Isaiah Litvak made the point that cultivating allies at the Congressional, state, and local levels in the United States should be part of a proactive Canadian strategy for “putting the best case forward” in matters of regional and national interest. As he put it:

… you’re not going to be able to put the best case forward by simply linking up with a handful of people in the executive branch. You’re not going to be able to put the best foot forward by having things done purely at the ambassadorial level.  You won’t put the best foot forward unless bridges and links are made with members of the House of Representatives and the Senate.  One of the things I would view as being very positive in 2002 is the increasing activity of provincial government leaders in meeting with their counterparts on a regional basis. … The best way to build sensitivities that can be translated in Washington into something more significant, so that Canadian interests will have a better airing, from my vantage point, is through stronger alliances and partnerships at the local level.  That means at the regional level, but not at the regional level to the exclusion of national interests.³²

5. Coordinating Multiple Contacts

While Canadian diplomats will remain the “front line” in terms of engagement with the United States, no single channel of communication can be successful in a relationship so complex. For this reason, the Government must increase its cooperation with Canadian business and other groups, including public-private linkages, as well as with like-minded U.S. groups. In addition, the government may wish to directly support Canadian industry associations in key sectors. Perhaps Canada also needs to support its own industry organizations better so that they can compete against U.S. lobby groups. For example, in the agriculture context, Larry Hill of the Canadian Wheat Board pointed to the extreme sophistication of U.S. agricultural interests:

… the American government subsidizes the American farm lobby. They put money into the farm groups doing the lobbying, so they have the ability to hire professional, sophisticated people. … They have the National Association of Wheat Growers, the U.S. Wheat Associates, the Wheat Export Trade Education Committee. All of these groups are very sophisticated, have presences in Washington, and are partially funded by the American government, so in fact they’re putting taxpayers’ money into the lobbyists.³³

Beyond such associations, a key element in building coalitions in the United States and delivering coherent messages lies with the provinces. Professor Litvak, a Canadian academic now living in the United States, told the Committee:

The best way to build sensitivities that can be translated in Washington into something more significant, so that Canadian interests will have a better airing … is through stronger alliances and partnerships at the local level. That means at the regional level, but not at the regional level to the exclusion of national interests….

I consider it to be rather important to work with the provincial governments and recognize the important role the provincial governments can play in their relationships.… The more interdependent they become, the more dependent they become on each other, the stronger the Canadian voice in Washington will be.³⁴

While the federal government and the provinces will obviously not always agree on every issue, the benefits of ensuring clear messages means that they should try to coordinate their efforts much more closely.

6.  Increasing Contact Between Legislators

A unique avenue of communication also exists between Canadian parliamentarians and their U.S. counterparts. According to Jayson Myers of the Canadian Manufacturers and Exporters Association, “… close relationships between Canadian and U.S. policy-makers, together with Canada’s ability to find allies within the U.S. and among other influential trading partners, are more important than ever in shaping policy outcomes in the United States.”³⁵ 

A bilateral Canada-U.S. Inter-Parliamentary Group has existed for decades, and in recent years has begun to move beyond the traditional formula of one annual meeting per year to address key issues in more depth. Later in this chapter the Committee will suggest the possibility of creating a trilateral inter-parliamentary group that includes Mexico. However, innovations are available even within the bilateral Canada-U.S. group, such as the possibility in exceptional circumstances of including Canadian ministers on delegations to help lobby and better educate key U.S. legislators.

More generally, Denis Stairs suggested that:

… the primary objective of Canadian parliamentarians would be to try to deal with misunderstandings about Canada among people in the American Congress, and to enhance informal communication to the extent that it might be possible for a congressman puzzled by a Canadian policy to call up a colleague in Canada to ask what the devil you folks are doing up here, so that you can explain things to them, and so forth. I know that sounds rather soft, but I’m not sure one can expect more than that out of a congressman-parliamentarian direct relationship. On the other hand, that could be very important, so if you have room to promote those sorts of contacts, I would certainly advocate doing so to the best of your abilities. ³⁶

Professor Andrew Cooper of the University of Waterloo also suggested that the Committee itself could

… tap into organizations like … the Center for Strategic and International Studies, like the Woodrow Wilson International Center for Scholars, because doing so gives you access to a whole variety of people. The other is to do end runs. Even Jesse Helms went to Mexico with a committee. Why not grab attention in a different way by linking up in some way? That strategy obviously has its risks, but it opens up some possibilities at the same time. This is an older idea in Canadian foreign policy, going back to energy issues and to north-south issues in the early eighties, but it still might have relevance.³⁷

The Committee accepts this challenge. It has already participated in the first joint meeting of the Canadian and Mexican foreign affairs committees in the course of this study and undertakes to do more along these lines with its Mexican and American counterparts.

7.  Using Information to Get Canada’s Message Across

An important component in managing the bilateral relationship is providing information, both to help Canadians understand the United States and its policies and, even more important, to ensure Americans understand Canada. A number of witnesses referred to the fact that some American commentators believed that September 11 terrorists had come from Canada, and noted that the popular television program West Wing spoke of terrorists crossing a non-existent Ontario-Vermont border as evidence of American stereotypes and lack of knowledge about Canada. While Deputy Prime Minister Manley’s personal visit to Senator Clinton was undoubtedly helpful, a somewhat broader strategy might be needed as well.

The Committee was told repeatedly of the need to better promote Canadian trade interests in order to prevent or resolve trade disputes such as that over softwood lumber. A number of witnesses argued that to do this it was necessary to go beyond diplomats and Washington to bring Canada’s message directly to consumers and industry associations in the United States. As Gordon Gibson noted: “Washington tends to be a producer’s town rather than a consumer’s town. If it were a consumer’s town, the obvious interest of the American consumer in softwood lumber would have solved that problem for us.”³⁸

A number of witnesses therefore suggested launching an information campaign in the United States. According to Denis Stairs:

… it seems to me that we need a major public relations and advertising campaign in the United States to deal with any inconvenient misconceptions that we think they have of us. To do this, I think we need top-notch professional help. I wouldn’t for a moment suggest how we do it, what the themes should be, who the targets should be, or how it should be executed. But we’re going to have to spend a great deal of money getting that kind of assistance in mounting the campaign. Properly done, however, it seems to me that the job would be worth every penny.³⁹

The advocacy funds available to DFAIT have been increased, and a small Canadian advertising campaign was undertaken last fall following the September 11 attacks. While the diversity of the United States would complicate such a strategy, the Committee believes an expanded campaign could be useful if properly targeted to key audiences. In order to ensure the greatest impact, the Canadian government should draw on the experience of industry associations that deal with the United States.

A number of witnesses also stressed the need to increase Canada’s lobbying capacity. In the Washington context, Michael Hart emphasized that many agencies of the U.S. government have a very independent base of power, and therefore “Canadians need to be very active in dealing not only with the President and senior members of his administration, but with senior members of Congress and with senior representatives of a variety of interest groups who share our interests but who also need to be reminded of that fact.”⁴⁰ Laura Macdonald of Carleton University suggested that funds be directed into an effective lobbying strategy. She noted that the “Mexicans have been extremely effective in hiring high-priced help in Washington and getting their people out there across Congress.”⁴¹ Gordon Gibson, a Senior Fellow at the Fraser Institute, underlined the need to “double and redouble our lobbying efforts” because Washington “is very much a lobbyist town. There are some 20,000 registered lobbyists.”⁴²

Recommendation 33

The Government of Canada should increase both the number of DFAIT personnel resident in Washington and the number of Canadian diplomatic consulates in strategic locations elsewhere in the United States. It should also again increase the advocacy funds available to DFAIT, and consult with industry groups and others in the design of targeted and coordinated information campaigns.

8.  Avoiding Short-Term Linkages and Using Institutions

Responding to a question about linking issues, the Deputy Minister of Industry Canada, Peter Harder, admitted that “… any time you go through a period where some files are prolonged and difficult, as we are at present, it provokes the question.” He added, however, that “the evidence suggests that over the longer term, it is not good for us to make linkages.”⁴³

Professor Joseph Nye of Harvard University, who has dual experience as a scholar of Canada-U.S. relations and a former senior U.S. government official, answered similarly:

With the question on linkage, one of the things that struck me in the study I did of these U.S.-Canada disputes in the past was that the Canadians did very well when they unlinked. When you got an issue and dealt with it on its own merits, you tended to do quite well. Canada was often successful in lobbying in Washington or found an American interest or corporation that would work in Congress on Canada’s behalf and so forth. When you link together, you get back to the fundamental difference in size. If you link everything together, you get back to the fact that the U.S. is ten times the size of Canada. So I would think linking is the wrong strategy. If you do linkage, essentially, you are in the domain of overall power, whereas when you do a particular area, you may win some and you may lose some, but you’ll find in many areas you’re actually quite capable of holding your own.⁴⁴

In regard to Canada “holding its own”, another important element in the management of the bilateral relationship has been the use of institutions (notably, at the binational level, such structures as the International Joint Commission and NORAD). In addition to Denis Stairs’ remarks cited above concerning multilateral institutions, Stéphane Roussel argued that in the bilateral context “… institutions helped in the past to protect Canadian sovereignty rather than harming that sovereignty.”⁴⁵ Beyond making the best use of existing institutions, Canada can also argue for both a strengthening of NAFTA institutions, as we recommended in Chapter 4, and for a consideration of broader North American structures and channels for influence, as we will suggest later in this chapter. As Brian Stevenson advised the Committee:

I think we have to use all the tools available to us. One of them, of course, is to develop coalitions with Americans who have common interests with us, and I think that’s a very sensible thing to do. But I think that in the long term — we’re not moving anywhere, so we’re going to be here in the long term — we have to develop institutions and processes not only for trade but for a number of other issues we want to deal with the Americans on.

9.  Giving Political Direction

The complexity of the Canada-U.S. relationship is such that it is impossible for any one minister to control effectively. At the same time, as Stephen Clarkson has recently argued, responsibility for Canada-U.S. relations is now even more divided than usual because Deputy Prime Minister Manley retained responsibility for security cooperation with the United States when he ceased to be Minister of Foreign Affairs. The situation with Minister Manley was the result of a combination of circumstances that are unlikely to be repeated.

As we noted in Chapter 1, however, there is a need for the Canadian government to concentrate more specifically on developing a clear strategy for its relations with the United States. The new Cabinet Committee on North American Relations recommended in Chapter 1 should pay particular attention to ensuring a clear Canadian message is delivered to the United States. In addition, the success in the security field of the Manley-Ridge process raises the possibility that such a delegation of responsibility for key files to high-level representatives could enable progress in other areas. While it might be unreasonable to expect such a process to resolve high-profile trade disputes, a number of the areas raised in earlier chapters might benefit from such attention.

Recommendation 34

The Government of Canada, using the new Cabinet Committee on North American Relations we have recommended, should identify specific areas of interest for enhanced cooperation. Specifically, the Government should encourage the United States to designate a high-level political representative and should pursue the model of cooperation that has been developed in the security field by the current Canadian Deputy Prime Minister and the current U.S. Homeland Security Director, proposed to become Secretary of the new Department of Homeland Security.

B.  DEVELOPING CANADA-MEXICO RELATIONS

5.3  Getting Beyond Past Limitations

In Mexico City in March 2002, on the same day that the Committee was holding meetings its former chair, Foreign Affairs Minister Bill Graham, stated in an address to the Mexican Ministry of Foreign Relations: “… our countries are trading more; our private sectors are investing more; and our governments, our Parliaments, and the many non-governmental players are getting to know each other better and to a degree never before experienced. We are not only becoming better acquainted, but we are witnessing a convergence around an increasingly shared set of values and expectations as neighbours.”⁴⁶ Indeed, the desire on both sides for such closer collaboration had been visibly expressed a day earlier in the Committee’s historic televised joint meeting with Mexican congressional counterparts.⁴⁷

The NAFTA relationship, now almost a decade old; the watershed democratic election of Vicente Fox as Mexico’s president in 2000, and his administration’s advocacy of closer North American cooperation; a continental focus following the events of September 11: all these have brought greater attention to the ties between Canada and Mexico. Before the NAFTA era — and it is worth recalling that NAFTA originated as a bilateral Mexican initiative with the United States to which Canada had reacted coolly — Professor Laura Macdonald observed: “… there were hardly any Mexican experts in Canada. Hardly anyone was interested in Mexico. We had this big mountain between us, the United States, and we couldn’t peer over that big mountain to see each other.”⁴⁸ Or if Mexico was noticed it was usually in comments like the following: “Canada and Mexico, as the saying goes, have only one common problem between them. This problem, of course, is their relationship with the United States.”⁴⁹

Even today, there is a tendency for such longstanding separate if parallel bilateral preoccupations to come to the fore. It is harder to sustain political engagement on the still-developing Canada-Mexico and trilateral agenda. Antonio Ocaranza, Director of Public Strategies Inc., described to the Committee in Mexico City a “difficult paradox: Mexico and Canada cooperation is most effective if it plays a significant role in each country’s relationship with the United States. At the same time, it is the significant weight of the United States which impedes Mexico and Canada from being more effective in developing their bilateral relationship.”⁵⁰

A bit of history provides some context for the current state of the relationship. Prior to the 1990s, Canada’s relations with Mexico (and indeed with Latin American countries in the rest of the hemisphere) were both very limited and overshadowed by each country’s particular bilateral focus on the United States. As several scholars describe that period: “While it is undoubtedly unfair to expect an equivalent relationship to that experienced with the United States, it is nonetheless notable that bilateral Canada-Mexico ties remained underdeveloped, at best, or ignored, at worst.”⁵¹

Canada’s 1990 decision to become a full member of the Organization of American States (OAS), followed by Canada’s joining the Mexico-U.S. trade negotiations, which then led to the trilateral NAFTA, signalled a major policy shift. NAFTA, in particular, carried the relationship to a new level. Writing before the election of President Fox and the activist diplomacy pursued by his Foreign Minister Jorge Castañeda, Julian Castro Rea, a professor with both the Centre for Research on North America at the Universidad Autónoma de México and the University of Alberta, put it this way:

NAFTA helped Canada and Mexico discover each other after many decades of a relationship that one could characterize as “polite indifference”. The last five years have witnessed an unprecedented deepening of Canada-Mexico relations. Mexico and Canada now cooperate in a wide variety of issues that extend far beyond trade and include a comprehensive agenda that is assessed yearly by joint ministerial teams. Canada has become the most immediate alternative for Mexican desires to diversify its foreign relations, away from its overwhelming priority on the United States.⁵²

Early evidence of a post-NAFTA widening and deepening of the bilateral agenda was the “Declaration of Objectives for the Canada-Mexico Relationship” and “Action Plan” signed by the two heads of government in June 1996. As well, notwithstanding the effects of Mexico’s financial crisis of the mid-1990s, bilateral trade and investment posted impressive growth through the last half of the decade.⁵³ While Canada-Mexico trade is still a very small part of total NAFTA trade, the statistical tables in Chapter 2 show a more than five-fold increase in this trade since 1990. Indeed, the value of Canada’s exports to Mexico increased by 93% from 1997 to 2001, compared with an increase of 44% in the value of Canada’s exports to the United States over the same period. Priority export sectors identified by the Canadian government in regard to Mexico have included advanced manufacturing and information technologies, agricultural modernization, automotive products, and oil and gas equipment and services.

Beyond these burgeoning commercial ties, there has also been significant growth in civil-society linkages with Mexican NGOs, and in cooperation in the fields of higher education, training and research. In terms of people-to-people exchanges, DFAIT Assistant Deputy Minister for the Americas Marc Lortie told the Committee: “Now almost one million Canadian tourists travel to Mexico annually, with over 180,000 Mexicans visiting Canada. Canadian educational institutions host over 10,000 Mexican students annually, and 11,000 seasonal Mexican agricultural workers come to Canada.”⁵⁴ Parliamentary exchanges with Canada, begun formally in 1975, have intensified too, and there is increased potential to benefit from these exchanges, given the push for democratic reforms within Mexico and the greater role being assumed by the Mexican Congress, in matters, inter alia, of foreign policy.

Despite such advances, Wood and MacLean, writing at the end of the 1990s, observed several remaining obstacles to be overcome in realizing a closer and fuller Canada-Mexico relationship.⁵⁵ The first and most obvious of these is the large gap in the level of development between the two countries. This is a persistent problem that is manifested in socio-economic and regional inequalities within Mexico that have grown despite the aggregate trade and investment gains promoted by NAFTA. These political and social, as well as economic, development challenges are perceived as holding Mexico back from being a full North American partner. They surfaced as a repeated and underlying concern during the Committee’s meetings in Mexico City in March 2002.

Canadian policy towards Mexico has gone some way towards responding. As Marc Lortie stated to the Committee: “Mexico now sees Canada as a valuable partner in its efforts to address its many and deep-seated social, political, and economic challenges. Cooperation on governance has provided the new focus to bilateral relations.… Canada is clearly committed to helping Mexico reform its government institutions so that it may address overriding concerns of poverty and regional disparity. In addition, CIDA, primarily through the Partnership Branch, has disbursed an average of $7 million per year in Mexico over the past three years. This includes the Canada Fund for local initiatives, with $500,000 in annual funding for grassroots projects, most of which is disbursed in the poorest states in southern Mexico.”⁵⁶

A strong message conveyed by many Mexicans is that NAFTA has left unfinished business.⁵⁷ Equally, Mexicans would welcome increased Canadian partnerships (private-sector and non-governmental as well as governmental) in working, both bilaterally and trilaterally, to address Mexico’s development challenges from an increasingly integrated North American regional perspective.

Two more subtle obstacles to closer relations were identified by Wood and MacLean: the lack of a deep understanding between the two countries at a broadly social and cultural level; and historic divergences in foreign policy goals, notably in the lack of a common security agenda and in sensitive areas such as human rights. The first may be gradually overcome through the educational initiatives and people-to-people exchanges noted above (including more Canadians learning Spanish;⁵⁸ unlike the United States, Canada does not have a large population of Mexican or Hispanic origin), improved communications and media links, and more public diplomacy, including regular contacts among Canadian and Mexican legislators.

The second issue of closer cooperation and coordination in international affairs has taken on a new light under the Fox administration and since September 11, 2001. Mexico was already a convert to trade liberalization and has now signed ten free trade agreements with 31 countries including those of the European Union. With regard to other multilateral arenas (and it should be noted that Mexico is currently serving a two-year term on the UN Security Council), under Foreign Minister Jorge Castañeda, there has recently been a pronounced shift away from Mexico’s traditionally non-interventionist posture towards a position much closer to Canada’s. As Castañeda has stated: “We are convinced that it is in Mexico’s best interest to adapt itself to the new rules-based international system that is gradually emerging. We therefore now subscribe to the argument that certain principles are universal and beyond the sovereignty of the state.”⁵⁹

In continental security matters, however, Mexico has never enjoyed the decades-old closely integrated relationship that Canada has had with the United States through NATO and NORAD. Mexico’s relationship with the United States along its northern border has also been a thorny one given issues such as illegal immigration and drug trafficking. Following the terrorist attacks of September 11, Mexico’s border region — which has been its most economically dynamic even though still beset by social and environmental problems — quickly felt the negative effects of new U.S. security measures,⁶⁰ a situation with which Canadians can certainly empathize. While Canadian officials have tended to see the resolution of Canada-U.S. border access concerns as a separate bilateral discussion, the Mexican government has suggested the goal of a more comprehensive North American approach to securing continental borders without jeopardizing the growing volumes of trade and travel within the NAFTA area. For the moment there are two bilateral tracks. Canada was first off the mark in negotiating a 30-point “Smart Border” accord with the U.S. in December 2001. Mexico was, however, able to use that as a model in pursuing its own 22-point “Smart Border” agreement with the United States, which was signed by presidents Bush and Fox in Monterrey in March 2002 at the time of the UN Summit on Financing for Development.

Interestingly, as Wood and MacLean observed, a few years ago it had been the Canadian government that seemed to be the prime advocate of “trilateralism” (then-foreign minister Axworthy in particular promoted the idea of developing a “community” relationship within North America that could also provide an “important model of regional cooperation”⁶¹), whereas the Mexican government was seen as most sceptical and wary of potential intrusions into Mexican domestic affairs.⁶² A few years later the roles seemed to be reversed when the new Mexican administration of Vicente Fox presented a long-term “Vision 20/20” for such a continental community that was “met with polite scepticism in Ottawa” during Mr. Fox’s first Canadian visit in August 2000.⁶³

Canada now appears more ready to engage with Mexico on some aspects of a North American agenda. Speaking for DFAIT, Marc Lortie stated to the Committee before its visit to Mexico: “The Government supports the development of a North American relationship. President Fox has said that a common currency and customs union are long-term goals. Over the short term, we are working to identify issues that would be best served through trilateral engagement.”⁶⁴ At the same time, the current Mexican government has clearly been the most enthusiastic about pursuing trilateral North American approaches and the “community” concept. Indeed, in Monterrey the Mexicans submitted proposals to Canada and the United States to further the study of ambitious initiatives along these lines.⁶⁵ Several senior Mexican officials who spoke to the Committee in Mexico City in March also suggested that some sort of expert group or commission might be formed, reporting to the three governments, as a possible vehicle for moving forward the agenda for trilateral cooperation.

Although the Committee will examine such ideas more fully in the next section of this chapter, there are several caveats to be borne in mind at the outset in regard to such proposals. For one thing, President Fox and his National Action party (Partido de Acción Naciónal, PAN for short) do not command a majority in the Mexican Congress. That fact was underscored in a way that drew notice in Canada when on April 9, 2002 the Mexican Senate voted 71 to 41 to disallow the President’s planned visit to the west of Canada (Vancouver and Calgary) and the United States.⁶⁶ This marked the first ever time that the Senate’s obscure power had been used. It was not so much an issue of foreign policy as it was symptomatic of the domestic difficulties President Fox has faced in obtaining congressional approval for his multiple agendas, which may have raised unrealistic expectations.⁶⁷

There is a related caveat for building Mexico’s relations with Canada, and within a North American context. That is whether it is advisable to emphasize a sweeping vision or new institutional design for the North American relationship, such as Fox has suggested, at a time when not only is Fox’s domestic standing uncertain but there appears to be little appetite for such a vision in U.S. governmental and congressional circles. A more achievable Canada-Mexico agenda might therefore concentrate on concrete progress in selected areas, and notably those pertaining to Mexico’s priority development objectives and its expressed desire to attain a level of “economic convergence” with its NAFTA partners. In that regard, FOCAL’s Stacey Wilson-Forsberg, whose June 2002 testimony before the Committee concentrated on the Canada-Mexico relationship, has argued that: “The most appropriate role for Canada would be to facilitate Mexico’s ability to face its own challenges by providing financial support when possible, and more importantly technical assistance in the form of sharing knowledge and building capacity.”⁶⁸

5.4  What Mexicans Told Us

The Committee’s meetings in Mexico, although condensed into several days, were rich in content. They convinced us of a growing Mexican interest in engaging Canada in a relationship that is not only more substantive in bilateral terms but also holds out the potential for realizing important social as well as economic gains through North American partnerships. While Canadian ambassador to Mexico Keith Christie remarked to us that the trilateral relationship is “perhaps a bit of an orphan” given the more urgent demands of each country’s relations with the United States, he also emphasized the “very clear sense that Mexico’s home is North America.”⁶⁹ According to one analyst, “Mexico believes that Canada could function as a counterweight to U.S. power and that in the distant future the Mexican people would accept joining ‘North America’ over joining the United States.”⁷⁰ This is at the same time a fluid period of North American relations when neither Mexico nor Canada should take anything for granted in their respective relationships with each other or their superpower neighbour.⁷¹

In the Committee’s March 13, 2002, meeting with the Foreign Relations Committee of the Mexican Senate, in which other members of the Mexican Congress participated, Committee Chair Senator Fernando Margain was among those expressing the desire for closer friendship and cooperation with Canada on matters ranging from borders and migration to the environment. He noted some 35 bilateral agreements reached between Mexico and Canada to date. The ensuing discussions touched on a range of areas for building on that cooperation, from tourism to cultural exchanges, education and training, seasonal workers, migration, and border issues.

At the same time, Senator Sylvia Hernandez, Chair of the North America Committee, referred to Canada and Mexico as still having a “paradoxical relationship” that has not yet realized its full potential given the frequent fixation of each country on the United States. And despite common challenges of managing the huge asymmetries across North America or confronting U.S. trade protectionism, neither country has done much to form “strategic alliances” around issues or to persuade the United States of the merits of moving trilaterally. She suggested it was time to think in terms of newer trilateral as well as older bilateral types of engagement, notably at the parliamentary level. In that regard, she also hoped that inter-parliamentary engagement could be focused on concrete agendas that would continue to develop around common interests and objectives.

Whereas security imperatives dominated the Committee’s meetings in Washington, these were a relatively subordinate issue for Mexican interlocutors. Most were more concerned with seeing that, in addition to the NAFTA trade agenda, North American cooperation includes a social or “human development” dimension aimed at addressing poverty and persistent disparities, and also at promoting democratic participation and public accountability. The relative youth of Mexico’s population compared with Canada’s may be a source of future demographic advantage, but it is also a challenge in providing better jobs and incomes and in meeting Mexicans’ expectations of an economy that has increasingly tied itself to a North American destiny (a point underlined by Scotiabank Mexico’s President, Peter Cardinal, who also chairs the Canadian Chamber of Commerce in Mexico City).

While many Mexicans would prefer to see more trilateral than strictly bilateral approaches taken, they acknowledged as did Rafael Fernando de Castro of the Instituto Tecnológico Autónomo de México, that the “trilateral agenda is very elusive.” At the same time, as Gustavo Vega of the Colegio de México put it, “September 11 has added a new dimension to NAFTA” in dramatically underlining the risks of border disruptions to the functioning of the continental economy. Several witnesses were concerned about where this might lead. For example, Mr. Vega’s colleague Monica Serrano mentioned learning what to avoid from Mexico’s experience with a “criminalization of migration” and “militarization of the border.” However, former ambassador Andrés Rozental, president of the newly formed Mexican Council on Foreign Relations, pressed the case for proceeding with North Americanized approaches even in the sensitive border and security-related areas. And, he added: “We will never have an integrated North America without freedom of movement of people.”

Mr. Rozental, along with senior Fox administration officials (Under Secretary of Foreign Affairs Enrique Berruga, Carlos Flores Alcocer from the office of the President, and Luis de Calle, Secretary for International Trade Negotiations), argued for much greater attention to the structures and processes that might broaden the North American agenda beyond NAFTA — a step they considered necessary. As Mr. Berruga put it: “In this country we are ready for a North American community.” What started out as a “club of free traders” ought to mature into a “club of nations on security” and development, he urged. On institutional mechanisms, Rozental saw that a “regular organized permanent forum for the North American governments would be useful”; however, in his view even more important would be to create a “wise persons” group or something similar to do some farsighted thinking, not simply react to events. Flores Alcocer suggested having North American working groups or task forces that could engage multiple stakeholders, and also put forward the idea of a “NAFTA development council.”

Several witnesses (e.g., economist Antonio Ortίz Mena L.N., and former International Trade Minister Jaime Serra Puche) concentrated on measures that could be taken within the existing NAFTA framework. Others took a more critical view of that framework, arguing that a stronger governance regime was needed, both to better manage integration processes within the North American economic space — addressing problematic issues such as the Chapter 11 investment provisions — and to distribute the benefits of economic growth more widely. For example, Professor Isidro Morales supported Robert Pastor’s idea of establishing a “North American commission” to prepare the way for that larger vision. In Morales’ view, such a commission “must have some autonomy from national agendas.”

Other social scientists such as Maria Teresa Gutierrez Haces emphasized more the need for widening civil society involvement in the articulation of any common North American project. This could be done through national public debates and input from what Guadalupe Gonzalez referred to as a “more dense web of social networks”, not just hearing from business interests and elite spokespersons. Professor Gutierrez Haces suggested “there needs to be a change of attitude” on this. In her view, Canada-Mexico relations could also be strengthened at a societal as well as political-economic level through taking cooperative problem-solving approaches to matters of shared interest — e.g., addressing NAFTA’s deficiencies, concerns over Chapter 11, resources, environment, etc. — while respecting each other’s national sensitivities, such as Mexico’s on energy and Canada’s on culture.

In addition to growing political, business, educational and NGO contacts, Mexicans expressed the hope for more knowledge-sharing with Canada on a wider scale. Mexico can benefit from Canadian experience and support in a number of governance-related areas (e.g., public administration and fiscal management, local government, indigenous communities, human rights, and democratic development). Some bilateral cooperation agreements are already in place, but more could be done, notably in the areas of culture, education and skills training. Also, as Antonio Ocaranza pointed out, Mexicans and Canadians seldom hear much about each other; only a couple of media correspondents are actually based in either country.

With respect to Canadian support for Mexico’s socio-economic development efforts, there was some discussion of possible regional social-funding mechanisms. Several witnesses alluded to the European Union’s experience of creating “structural funds” to assist less-advantaged member states and regions. Such funds, of course, would go well beyond the existing small amounts Canada has channelled through CIDA and our embassy. Mexicans generally supported the idea of an additional development fund, ideally constituted on a trilateral basis. Jaime Serra Puche cautioned, however, that any such instrument should avoid in practice the mistakes of the U.S.-Mexico North American Development Bank (NADBank), set up to address border environmental concerns; in his view, that institution has not delivered on its promises. The question of trilateral cooperation is revisited in the last part of this chapter.

Overall, Mexicans presented the Committee with a challenging picture that encouraged closer future cooperation, but also put it in the context of a number of conditional elements being given more serious reflection than had been the case until recently. In that regard, the following perceptive observations from Antonio Ortίz-Mena Lopez Negrete deserve citing:

… support for greater economic integration will require demonstrating that it will promote economic well-being for a significant majority of the population, and enhance security. For the United States, the paramount concern in the near future will be security. For Canada and Mexico, both security and economic issues will drive or hinder further integration in North America. Greater economic interaction between these two countries will help offset the exceedingly high concentration of trade and investment relations each of them has with the United States and may help alleviate the uneven distribution of gains from trade that has so far been the norm in Mexico. If greater integration coupled with supportive measures, as described above, allows societal groups that have so far been largely marginalized by the integration process to start playing an active role in international economic activities, this will translate into greater cultural diversity among the stakeholders of integration, and would allay fears regarding “cultural imperialism” and a homogenization of culture in North America along [the lines of] United States preferences and practices.⁷²

5.5  Surveying Canadian Views

As indicated in earlier sections of this report, a few witnesses, such as Rod Hill in New Brunswick, had little interest in pursuing closer ties with Mexico. And notwithstanding NAFTA, business attention to Mexico tended to be overshadowed by a bilateral U.S. focus. This was strongly defended by Michael Hart, who stated that: “There is really no fundamental relationship between Canada and Mexico. Every time I go to Mexico, I’m reminded of just how thin that relationship is.”⁷³ Robert Keyes of the Canadian Chamber of Commerce observed that “Canada-Mexico is a long way behind where the Canada-U.S. relationship is, and that has to be our primary focus.” Asked about contacts with Mexican counterparts, he replied: “Have we had a detailed discussion on NAFTA integration or our bilateral relationship and where it’s going? No, we haven’t.”⁷⁴

At the same time, there was significant recognition of a potential economic challenge for Canada. For example, Jayson Myers of the Canadian Manufacturers and Exporters referred to “the increasing competitiveness of Mexico as an investment location, and of Mexican industry in the North American marketplace.… The Mexican market has tremendous growth potential, and it has the advantage of youth on its side. More engineers are being graduated today in the city of Monterrey than in all universities across Canada. All this means that Mexican competition now has to be factored into the design and the assessment of public policy. In many respects, Mexico has become the benchmark Canada has to surpass in building a more competitive business environment.”⁷⁵ Industry Canada Deputy Minister Peter Harder acknowledged that Mexico “is moving up the value chain extraordinarily fast, and we must pay attention to that. Canada has yet another incentive to innovate and increase productivity to compete effectively in the United States with other international exporters, Mexico included.”⁷⁶  Professor Isaiah Litvak urged that Canada take Mexico seriously as an important economic partner in its own right. As he put it: “It is imperative that Canada develop stronger linkages with Mexico and achieve a better understanding of the economy in Mexico or the political system in Mexico and explore way and means by which Canada can become more active in developing business with Mexican operations.… We should look at the Mexicans from the standpoint of what can we do to succeed in Mexico.”⁷⁷

With respect to border and security-related matters, there  has been a similar and understandable tendency to focus on the United States first. George MacLean also observed that Mexico’s desire “to be more integrated in a defence context with the United States … hasn’t been reciprocated in any real way in Washington.”⁷⁸ However, along with other witnesses, notably in Quebec, he strongly supported closer ties with Mexico as part of a Canadian strategy of counterbalancing U.S. dominance through multilateralism in the Americas. Stéphane Roussel of York University sided with the Mexican view that “it is not possible to have a two-tier free trade agreement. It is not possible to have a second-class member. And by that I mean Mexico. Economic integration requires security integration. The two are closely linked, and I do not think that we can leave Mexico on the sidelines for very long.”⁷⁹ Stephen Clarkson welcomed “that aspect of NAFTA that has drawn us closer to Mexico. … It has broadened our horizons, and it does give us someone with whom we can negotiate in Washington on some issues.” He agreed with Roussel “that on the border questions we’re going to be pushed to deal with them in a common way. We can’t just say that the Canadian border is so totally different from the Mexican-U.S. border that we don’t want to talk with the Americans and the Mexicans at the same time.”⁸⁰

On a more general level, George Haynal in an early panel saw the potential for Canada-Mexico relations continuing to blossom, despite a limited pre-NAFTA past, out of what he referred to as “the ‘bud of a new North Americanism’, as distinct from the convergence of the two bilateral axes centred on the United States.” In his view, Canada can approach Mexico as “a close partner of the United States who see the world in a way compatible with ourselves.” Arguing that “nothing could be worse than having a competitive dynamic between us in the management of this relationship”, Haynal said: “We have and want in Mexico a partner on the international stage who can help us pursue our values in the multilateral system while we have one. There’s a mutual interest in systemic cooperation — because every comment I made, I believe is reflected on the Mexican side — a cooperation that builds a North American identity, that does not exclude the United States but is focused on a basic objective that it shares: the creation of compatibility within our separate systems so as to make a closer cooperation and mutual benefit possible.”⁸¹

Brian Stevenson also emphasized what he called “the collateral relationship, the shared bond between Canadians and Mexicans about their relationship to our common neighbour”.⁸² But more than that will be needed if Canadians and Mexicans are to deepen their relationship within a North American partnership. As Laura Macdonald put it: “Mexico does represent a possible useful counterweight to the United States, if we can overlook our differences and tendency towards competition and get to know each other better. Mexicans share Canadians’ concerns about sovereignty, and we have many commonalities in our foreign policy perspectives. However we need to recognize that North America is a highly asymmetrical region, and to date there has been insufficient attention to the economic and other inequalities that exist between and within nations of the region, and that may, in fact, have been intensified by the neo-liberal model of integration that has been pursued so far in North America.”⁸³

Stacey Wilson-Forsberg of FOCAL offered a further compelling assessment of the situation and its implications for Canadian policy:

While still a country of haves and have-nots, Mexico is moving full force ahead in industry, manufacturing, and technology. It is skipping most of the 20th century technologically, and could become an economic tiger within the next twenty years. This would create an enormous consumer market for U.S. and Canadian products and services, as well as tremendous opportunities for partnerships and cooperation on a number of issues.

Canada and the United States need to give serious thought to where Mexico fits into this North American strategy. Ignoring the country at this particular moment in its history could prove to be a big mistake. Yet Canadians cannot be convinced of the value of working with Mexico if they know little about that country. Since NAFTA was implemented in 1994, the broadly based fear of Canadians that their jobs would be displaced to Mexico has been largely refuted. Numerous polls show that the Canadian public has lost its economic fear of Mexico, but that fear has not been replaced by anything approaching a broad-based understanding of Mexico, particularly in the area of social and political realities.

Economically, NAFTA has injected a tremendous amount of new energy into the Canada-Mexico relationship. There is, however, tremendous opportunity for more trade and investment between the two countries. Canadian companies need to develop a long-term strategy when setting up business in Mexico, and they cannot go for the purpose of chasing cheap labour. They need to be dedicated and not pack up and leave at times of political and economic instability.

At the ministerial level, Canada-Mexico political linkages are now informal and natural, and a book-length inventory of bilateral cooperation initiatives between Canada and Mexico could be composed. However, while daily interactions occur between some federal and provincial government departments in Canada and Mexico, most suffer from a lack of understanding or an incomplete understanding of each other.⁸⁴

Both Professor Macdonald and Ms. Wilson-Forsberg recommended deepening and broadening knowledge-based interactions of all kinds between Canada and Mexico — for example, through an expansion of existing exchanges, forums for dialogue, working-level interchanges and study tours, non-governmental linkages, research programs and the like.⁸⁵ Government has a role to play in supporting this and encouraging public participation in the development of Canada-Mexico ties.

Canada could also play a larger development cooperation role in Mexico, Macdonald suggested, noting that “while the per capita income levels in Mexico may be relatively good, the profound and growing inequities in Mexican society mean that there are large numbers of Mexicans living in poverty, particularly the indigenous peoples, peasants, and women, who need assistance.”⁸⁶ We should not forget that Mexico is still a developing country. Janine Ferretti of the NAFTA Commission for Environmental Cooperation had pointed out that it is “very difficult for Mexico to work together as a full partner with Canada and the United States in efforts to address common environmental issues. We find Mexico has a hard time even coming up with the resources to get to meetings, let alone put in place the technologies or the infrastructure to actually address an environmental issue.”⁸⁷ And Dr. Mario Polèse observed that within Mexico it is very clear that some disparities are increasing — for example, “southeastern Mexico is becoming marginalized ”— and that politically some form of “regional adjustment fund” is required.⁸⁸

There are difficulties, however, in defining both the how and the why of additional external assistance and what role Canada might conceivably play. Macdonald was supportive of a regional fund idea, but warned about “an unfortunate tendency in Mexico, because of its long history of a strong statist, centralized, and authoritarian system, to have a top-down approach. I think we need to work with Mexicans to develop a more bottom-up, gender-equitable development system.”⁸⁹ Wilson-Forsberg had more reservations given that no one, including advocates in Mexico, had yet come up with the details of how such a development finance mechanism would work in practice. As she put it: “Until these details are articulated, I don’t think this development fund approach can even be discussed. It’s very difficult to see Canada’s interest or stake in this development fund idea. In the United States, it’s a little more obvious, with the migration problem.”⁹⁰

5.6   Towards a Strategic and Substantive Canada-Mexico Engagement

On the eve of the Committee’s visit to Mexico City, Joseph Tulchin, Director of the Latin American Program at the Woodrow Wilson International Center for Scholars, expressed to Committee members in Washington, D.C., his view that there is “space for Canada to operate between the United States and Mexico … [but that] this is a future challenge that has not yet been taken up.” Mexico, he indicated, had higher expectations of the engagement with Canada that would follow in NAFTA’s wake. He suggested, however, that there “hasn’t been any special relationship developed that would confront” the asymmetries of power each country faces in relating to the United States in a North American context.

While some of the Committee’s witnesses seemed rather indifferent to this possibility, others argued forcefully that Canada should look to Mexico as a logical “counterweight” to a dominant U.S. influence. Mexican opinion was virtually unanimous in encouraging more Canadian involvement, working within a North American as well as bilateral framework. Under Secretary of Foreign Affairs Enrique Berruga underlined that point to the Committee in Mexico City when he suggested that, through strengthened partnership, “the leverage of Canada and Mexico could increase with our common neighbour, the U.S.”

In an address to a recent conference on North American integration, Mexico’s ambassador to Canada, Mrs. María Teresa Garcίa Segovia de Madero, has also put the matter somewhat provocatively:

One of the motives behind the concern of probably losing identity is that a vast majority of North Americans would be thinking that the U.S., being the hyper-power, will be the one setting the guidelines of the political convergence process. This perception may be strengthened in the aftermath of September 11th. It may be true. But the “strategic” alliance between Mexico and Canada can diminish the power asymmetries and thus [allow them to] work in a joint fashion and bring in their own inputs.

Mexico and Canada share values that are not shared with the Americans. … Canadians and Mexicans are particularly more tolerant to immigration, for instance. This type of natural bonding should be seized by the Mexican and Canadian Governments to advance in the negotiation process vis-à-vis the United States. These value commonalities between Mexicans and Canadians should be the basis of the “strategic partnership.”⁹¹

Of course, not all Canadians would necessarily share that view of a natural Canada-Mexico convergence around policies and strategies. Some of our witnesses saw Canada as having quite different priorities, and some continued to emphasize a bilateral route to dealing with the United States. However, the Committee takes the position that it will be to Canada’s long-term disadvantage if we do not pay more attention to the realities of Mexico’s growing weight within North America and develop policies that address the still largely unrealized potential of our relations with Mexico.

This is not just a matter of seeking to use Canada-Mexico relations as a strategic “counterweight” to U.S. influence and a way of avoiding a “hub and spoke” bilateralism. There are a number of areas in which intensified contacts and cooperation merit consideration in their own right. For example, the most recent Canada-Mexico inter-parliamentary meeting held in Canada in May 2002 (co-chaired by Senator Sylvia Hernandez, who had co-chaired our meeting with Mexican legislators in Mexico City) discussed the potential for cooperation in the fields of energy development, “smart borders” and “trade corridors,” migration and labour rights, improved NAFTA disputes resolution, and possible new North American institutions. That meeting’s call for enhanced parliamentary cooperation to advance a shared agenda echoed the message from the Committee’s March 2002 meeting in the Mexican Congress.

In sum, while many details remain to be worked on, and while moving to the next steps of broader trilateralism may still be an “elusive” goal, there are more than sufficient reasons for Canada to go forward on a basis that serves our national interests and values. Canada’s strategic engagement in developing relations with Mexico may need to be pragmatic and selective; it should also be substantive and sustained.

Recommendation 35

The Government of Canada should work to develop closer relations with Mexico, in particular through:

C.  PURSUING THE PROMISE OF TRILATERAL RELATIONS IN NORTH AMERICA

In North America the most significant trend at the end of the previous century was that states came closer together as a region. Inventing North America as a region may remain the most intriguing prospect for the United States, Canada and Mexico well into this century.

Guy Poitras, Inventing North America: Canada, Mexico, and the United States,
Lynne Rienner Publishers, Boulder, Colo., 2001, p. 2.

Our governments must start thinking strategically about how to respond to the changing North America, its opportunities and challenges.… Ultimately, what we will be talking about is building the future of North America. This will mean identifying those areas where the three countries share an interest in building a stronger North American framework, and assessing whether we have the right tools for this important job. We are only at the beginning of defining the future of the North American Community.

Hon. John Manley,
Address to the Canadian Society of New York, April 9, 2001.

Although North America is certainly a most powerful region of the world, it is not yet much accustomed to thinking in regional terms. Relations among the countries of North America have been explored, but usually with a focus on the United States and, until the NAFTA era, rarely in any trilateral sense.⁹² As we have seen in Chapters 2 and 4 of this report, there are strong forces of economic integration at work within an emerging North American economic space that call for proactive policy responses if they are to be managed to Canada’s long-term advantage. But beyond the minimally institutionalized NAFTA framework⁹³ examined in detail in the previous chapter, there is little in North America that corresponds, on this side of the Atlantic, to the explicitly socio-political and even constitutional “community”-building approaches that characterize the present integrationist path of an enlarging European Union.⁹⁴

Some witnesses would clearly object to anything that might accompany, expand or deepen a North American economic integration process they believe has already gone too far. Others were sceptical of developing the trilateral elements of North American relations or argued for staying focused on current core bilateral economic and security arrangements, at least in the short term.

Michael Hart, for example, stated bluntly: “I think it’s wrong to say we have a North American community. We do not have that. We have a North American Free Trade Agreement that provides the basis for two free trade agreements, one between Canada and the United States, and one between the United States and Mexico.” He went on to contend that the Americans, while they have many bilateral issues with Canada and Mexico, are “no longer interested” in pursuing discussions on these issues “on a North American basis.”⁹⁵ Even strong proponents of including Mexico in Canada’s policy thinking have concluded: “From Canada’s point of view, it is still not clear what could be achieved by working trilaterally with the United States. There are relatively few issues that really involve the three countries, at least in the sense of shared political or social policy objectives. … Canada’s principal interest in a North American approach is the protection and enhancement of its privileged relationship with the United States.”⁹⁶

Still, even if this were so, it does not mean Americans or Canadians could not become more interested in genuinely North American approaches, or that Canadians might not have good reasons of their own for promoting such trilateral approaches. Indeed, without a trilateral context, the value of developing Canada-Mexico relations as a strategic counterweight to the asymmetrical power of U.S. influence seems greatly diminished: it would count least in the area, that of North American relations, where presumably it matters most. Furthermore, witnesses pointed out that any initiative on trilateral cooperation would be best to come from Canada or Mexico (or perhaps from both jointly). Otherwise, it would almost automatically be perceived as a “big brother” imposition, thereby dooming the effort.

A few years ago, former Canadian foreign minister Lloyd Axworthy, who has consistently defended the need for Canadian foreign policy autonomy vis-à-vis the United States, provoked some reflections related to how that might be done when he spoke of getting “North American cooperation right.” As he told a U.S. audience: “At the moment, Canada, the United States and Mexico are all dealing separately with issues such as crime, drugs and terrorism — sometimes in ways that have the unwanted side effect of raising new barriers along our borders.… We need to update our shared instruments and institutions to deal with the challenges across a broad spectrum: everything from our shared natural environment to movement of goods and people, and to education and human resources.”⁹⁷ Under Mr. Axworthy’s guidance there was the beginning of a trilateral process, with a “Framework for North American Partnership” agreed to at the foreign ministers’ level. After returning to private life he observed: “There was considerable bureaucratic resistance and little analysis or understanding, yet this embryonic effort revealed enormous potential for cross-border community- and institution-building.”⁹⁸

Mr. Axworthy clearly believes this is still the case in the post-September 11 environment. Indeed he suggested to the Committee in Vancouver that having in place a more established ongoing trilateral framework for North American relations would help to protect Canadian sovereign interests, including those in the sensitive areas of security and defence cooperation. As he put it: “We haven’t pursued the trilateral mechanisms, even though I thought they were beginning to really bite fairly substantially in a number of key areas — energy, resources, cross-border issues. But the point is there were regular meetings — three or four a year — between the three foreign ministers. They spun off a number of organizational requirements, so that there was this overview or oversight.”⁹⁹

The Committee is keeping an open mind on these matters. We believe that where opportunities exist for strengthening trilateral ties on a basis that serves Canadian interests, these opportunities should be pursued. However, we do not foresee such pragmatic engagements as leading to some grand “architecture” of North American political integration. Moreover, we have reservations about how much can be achieved and how soon. Linked to that are questions about how any trilateral structures and processes that might be established to advance regional cooperation would also be made subject to the democratic oversight of Canadian citizens.

5.7  Comparing Canadian, American, and Mexican Views on Trilateralism

Since progress on a truly trilateral basis must engage the United States, it may be best to begin with reference to American views received by the Committee. These were decidedly mixed, to say the least. Frankly, we did not detect much receptiveness on the part of the members of Congress with whom we met. For example, NAFTA critic Democrat John Lafalce of New York poured cold water on the idea of dealing with Mexico on an equal basis to that accorded relations with Canada. While our contacts were admittedly not a broadly representative sample of congressional opinion, traditional bilateralist assumptions of this sort seem common and indicative of widespread attitudinal hurdles on both sides. Some Canadians may envy Mexico’s level of representation and lobbying in the United States, as noted earlier in this chapter. But there is still an almost ingrained presumption that the established bilateral relationship is the one that really matters; that a trilateral relationship, in the sense of including Mexico as a full partner, is still under construction. Assigned a lower priority, it can wait.

American officials, policy experts, and nongovernmental spokespersons also observed the lack of a political constituency or process for dealing with North American affairs, though there was some openness to considering options beyond the existing NAFTA minimum. As William McIlhenny, Director for Canada and Mexico at the National Security Council, put it, “institutions and infrastructure have lagged the real dynamics of [cross-border] transactions … in which a whole new North American architecture is slowly taking place.” At the same time, he and his colleagues remained very sceptical of “Cartesian” grand institutional designs, preferring an incremental pragmatism to what they saw as the unrealistic expectations raised by proposals coming from senior members of the Mexican government. At another meeting, Frank Vargo, Vice-President of International Economic Affairs for the National Association of Manufacturers, noted that NAFTA has spurred some new trilateral business interactions, but: “Until there is a demand for the rethinking of policy [on a trilateral basis], I don’t think it will happen.”

In contrast to such reservations, the Committee also heard from several of the leading American proponents of an ambitious trilateralism. In an early panel, Professor Robert Pastor outlined a comprehensive agenda for an encompassing framework of North American institutions and policy cooperation drawn from his seminal study, Towards a North American Community. The book was published by the prestigious Institute for International Economics in Washington on the eve of the early September 2001 Fox-Bush summit, and it has a strong resonance with the futuristic North American vision espoused by the Mexican president.¹⁰⁰ The argument has been made that September 11 abruptly cancelled that scenario, prompting a retreat instead into a reinforced double bilateralism on Washington’s security-conscious terms. But looked at another way, the aftermath of the terrorist attacks can be seen as highlighting NAFTA’s limitations and reinforcing the case for a “NAFTA-plus” institutionalization. Indeed, Pastor suggested to the Committee that the — in his view regrettable — absence of any common North American response or trilateral summit meeting was “a direct function of the lack of institutionalization.”¹⁰¹

Professor Pastor presented the Committee with ten proposals to rectify these and other related NAFTA “omissions”, several of which have already been raised in Chapter 4. The overall blueprint can be summarized as follows:¹⁰²

Now Vice-President of International Affairs of American University and Director of its Center for North American Studies, Dr. Pastor also chairs the board of directors of a new trilingual Montreal-based non-profit organization, the “North American Forum on Integration,” which is holding its inaugural conference in March 2003.¹⁰³

In the Committee’s final panel, a similarly comprehensive approach to North American institution-building was strongly promoted by Professor Stephen Blank, Director of New York’s Pace University Center for International Business. He has been closely involved with the work of the Washington-based National Planning Association’s North American Committee (NAC) and has advised it on proposals for creating an “Alliance for North America.”¹⁰⁴ Blank’s testimony expressly called for a concerted effort to embed North American economic integration within a broader socio-political framework. As he put it: “Our task now is to supplement the bottom-up process of integration with deliberate actions. We must build a vision of North America, create an authentic North American voice, launch projects that will enhance this vision, and create new institutions that will support a North American system.” Blank also agreed with Pastor that there is no more important goal than widening benefits for Mexico, demonstrating that an increasingly integrated North American market economy “can indeed embrace and offer meaningful opportunities for all North American citizens.”¹⁰⁵

Not surprisingly, prominent Mexicans are also engaged in these recent initiatives, as well as in other fora such as the trilaterally based North American Institute (NAMI), with which Professor Brian Stevenson (who testified in Edmonton) has been associated.¹⁰⁶ Indeed it was in Mexico City, as we have seen earlier in this chapter, that the Committee encountered the most enthusiasm for such expansive trilateralist approaches. Notably, presentations from Andrés Rozental, President of the Mexican Council on Foreign Relations, and from Enrique Berruga, then-Under Secretary of Foreign Affairs, echoed aspects of what might be called the Pastor vision. We have already noted Mexican proposals for creating some kind of commission-like body and/or a “wise persons group” tasked with advising the three North American governments on the next steps in managing North American affairs and pursuing closer regional cooperation in areas of mutual interest. Mr. Berruga also mentioned such ideas as developing a Schengen-type agreement for North America’s internal and external borders, which might include instituting a system of “NAFTA visas.”

Even more than increasing ease of cross-border access for North American citizens, virtually all Mexicans we heard from stressed their desire to see development and regional disparity issues addressed at a North American level through some means beyond the current bilateral and multilateral financing mechanisms. At the same time, Robert Pastor, while strongly advocating trilateral attention to development issues, was notably critical of the European Union’s record on regional funds. As he told the Committee:

… I would not want to replicate what they did. They have spent over $400 billion over the last 25 years and wasted most of it. From the analysis I did of what they did, I concluded that there were really only two areas that were very effective, and those were infrastructure and education. That can be managed very neatly by just the World Bank and the IDB [Inter-American Development Bank]. I would not want to set up a new institution, frankly. I think that’s the beauty of North America, that we don’t bureaucratize. Let’s use what we can to keep it lean and focused. I wouldn’t move into social funding. I think there’s enough that they can get from the Inter-American Development Bank. I would really target just those two areas.¹⁰⁷

Moreover, apart from exploratory academic discussions in books like Pastor’s, practical details of suggested new trilateral institutions — how they would be structured, operated, funded, and so on — remain scarce, and have barely entered into the public domain. Some Canadian as well as Mexican witnesses expressed concerns that the agenda not be driven by elite top-down approaches and only thereafter sold to citizens. Stacey Wilson-Forsberg of FOCAL observes that “elite actors dominate the integration agenda,” and that “there is a growing disconnect between these elite actors and the public.” Her conclusion: “To avoid a public backlash, greater public awareness and participation in North American dialogue and debates should be encouraged.”¹⁰⁸ The Committee agrees. Broad public participation should be part of the process of North American institution-building from the outset, not added as an afterthought.

 Another element to be considered in trilateral institution-building is the fact that, while all three countries are federations, there is no place where the provincial and state governments of these federal systems can discuss and promote cooperation in areas under their jurisdiction.  In the Canada-U.S. context, the experience of the International Joint Commission has been valuable in, among other things, bringing together representatives of provinces, border states, and local communities on environmental management issues pertaining to the Great Lakes and boundary waters.  This is the type of forum for intergovernmental cooperation that might be extended in a trilateral context.

There was also shared Mexican and Canadian emphasis, which surfaced in our joint parliamentary meeting on March 13, 2002, that progress not be stymied by a lack of official U.S. interest in trilateralism. In other words, Canada and Mexico should move ahead to enhance their cooperation in all areas of common interest without having to wait for “elusive” trilateral structures and processes to be created. As Professor Antonio Ortίz Mena put it to the Committee in Mexico City: “I believe that significant progress can be made to increase, and share more equally, the benefits of economic integration through a myriad of comparatively minor actions, and that we should not wait to implement them until we have a grand vision or strategy for North American integration. Both processes can go in tandem and may be complementary, but concentrating exclusively on grand visions and actions runs the risk of postponing much needed action in the short term.”¹⁰⁹

It must also be said that Canadian views on the merits of North American trilateralism remain divided, among both supporters and detractors of the existing NAFTA-style institutions. A number of witnesses agreed that institutional solutions should be explored in order to remedy observed deficiencies. Among the proponents of additional formal North American agreements and arrangements, Stéphane Roussel put the case that “it is preferable to manage the situation rather than try to thwart it. About 30 years ago, the diplomat John Holmes … said that continentalization was a force of nature which requires us to impose the discipline of institutions.… This is still true today.”¹¹⁰

But whereas Roussel strongly favoured including Mexico from the beginning, Michael Hart, who called for a comprehensive treaty-based evolution of the Canada-U.S. relationship, seemed to dismiss going down a trilateral path. As he told the Committee: “I have been going to various kinds of committees, like the North American Committee, the North American Institute, and the Canada-U.S Relations Committee — which is now the North American Relations Committee — and one of the things that is striking about those committees is the extent to which the Americans are no longer interested.… I think that reality should inform our approach to the kinds of issues we are currently facing.”¹¹¹ Daniel Schwanen also pointed to a related reality check when he cautioned the Committee that “a move towards integration that would involve either common political institutions or a supranational court sensitive to Canadian or Mexican interests is not likely to work, even — and especially, perhaps — for the United States.”¹¹²

In terms of “disciplining” the forces pushing North American integration — which to date have been mainly defensive and commercial — NAFTA critics were of several minds on prospects for trilateral responses. Those most hostile to further integration tended to reject North American approaches, along with proposals for new structures and processes, as just more of a bad thing. By contrast, Laura Macdonald suggested strengthening NAFTA-related institutions among measures that might redress the “inadequate attention to possible mechanisms that can be taken both nationally and at the level of North America to address the social and economic disparities and the democratic deficit that have accompanied integration.”¹¹³

Others had little confidence in pursuing reforms through the NAFTA framework. Arguing that “NAFTA has no institutions that might give Canada and Mexico the voice they need to offset Washington’s increased power over them”, Stephen Clarkson saw a NAFTA path as weakening Canada’s position in North America. It may have raised Mexico’s position, he seemed to suggest, but not Canada’s. Rather than seeking to redress that situation through integrationist “big ideas” or trilateralist institutions, Clarkson urged pushing policy-makers “to rebuild the diminished capacities of the Canadian and Mexican states in order to correct the glaring imbalance that trade liberalization created between market forces and the needs of citizens in these countries.”¹¹⁴

5.8  Is a Democratic “North American Community” a Desirable Goal?

The attractiveness, or not, of moving towards something that might be described as a “North American Community” largely depends on the position one takes in the above debate. How should Canada and the institutions of the Canadian state respond to the recent evolution of economic integration on a continental scale that, since NAFTA, includes Mexico? What are the potential benefits and risks to Canada of continuing, if not intensifying, that integration; of choosing to manage its spillovers into wider policy domains through more formalized processes, institutional structures, regional mechanisms, shared policy frameworks, and the like? Where is this road really leading?

The allusion to “community” suggests comparisons to the earlier development of the European Economic Community, even though the European situation is both very different and has become far more heavily institutionalized than anything conceivable in a North American context. Nonetheless, the negotiation and implementation of the NAFTA with a developing country, and the ancillary debates over various alleged deficiencies — what might be termed the institutional, democratic and developmental “deficits” in the governance of an increasingly integrated North American market economy — have stimulated reflections that a regionally integrated “community” of sorts may also be emerging on this side of the Atlantic. In addition to environmental and labour side effects, it has been argued that the deepening regional economic integration encouraged by NAFTA will sooner or later force a consideration, ultimately on a trilateral basis, of the social, political and other dimensions of North American “community” relations under these conditions.¹¹⁵

As a result, talk of moving towards a “community” relationship has entered the official discourse, as in the advocacy of Lloyd Axworthy when he was Minister of Foreign Affairs and in the statement by his successor, John Manley, cited at the beginning of this section of the chapter. Shortly after that address by Mr. Manley, the heads of government of Canada, the United States, and Mexico, meeting during the Quebec City Summit of the Americas, issued a “North American Leaders’ Statement” on April 22, 2001, which affirmed: “We will work to deepen a sense of community, promote our mutual economic interest, and ensure that NAFTA’s benefits extend to all regions and social sectors.”

That statement suggested that trilateral partnerships were emerging in many areas (energy and migration were highlighted; transportation, communications, border issues, health, justice, agriculture, employment, education, travel, culture, and joint research were also mentioned). The leaders went on to say: “These patterns of cooperation — by governments, business, and other members of civil society — are building a new sense of community among us.… We encourage broad reflection in our societies on ways to advance the trilateral relationship”. In July 2001, U.S. Trade Representative Robert Zoellick spoke of getting out the message that “NAFTA is much more than a trade agreement; it is a form of creating a North American community.”¹¹⁶ And in a December 2001 address, Mexico’s ambassador to Canada told an Ottawa conference that: “NAFTA has definitely created a community. That is a reality, and we should not have any doubts in that regard.”¹¹⁷

But testimony before the Committee revealed that, in fact, there are still many doubts on that score, ranging from whether a NAFTA-based North American relationship is, or can be, truly trilateral (e.g., Michael Hart), to whether it is, or can be, democratically accountable (e.g., Stephen Clarkson). For some, the solution is to make a big leap forward by deliberately extending and institutionalizing North American integration well beyond the realm of trade. In an April 2002 address that drew on international parallels and European inspiration (but did not mention the Pastor vision), Hugh Segal, President of the Institute for Research on Public Policy, went so far as to state:

The time is right for a Canadian white paper on a North American Community replete with a suggested process for institutional structures for monetary, immigration, environmental, security and economic aspects of the relationship. The time is right for a white paper that discusses what a North American Assembly would look like, how its members could be elected within the three founding countries, and what initially advisory, consultative and auditing roles it might play.¹¹⁸

The Committee’s witnesses, for the most part were considerably more restrained and raised some serious cautionary flags. For example, Professor Yasmeen Abu-Laban stated: “If we take the North American community to mean political elites wholly representing business interests in Canada, the United States, and Mexico by further enhancing trade policies premised on neo-liberalism, this will serve the interests of some more than others. If the forging of a North American community focuses only on institutional intergovernmental mechanisms — however much these may be needed — without considering also popular groups, it could create its own problems.”¹¹⁹

Reg Whitaker contended that “European anxieties about the democratic deficit would be dwarfed by a Canadian anger about an unaccountable and undemocratic North America.”¹²⁰ And indeed, concerns about the future of Europe’s integration project are deep and fundamental.¹²¹ Comparing integration paths on both continents, it has been argued that the European Union suffers from over-institutionalization that alienates citizens from the bewildering complexity of community decision-making, whereas North America suffers from under-institutionalization that fails to provide citizens with continent-wide political levers for regulating market forces and mitigating power imbalances.¹²²

Reflecting on the limited nature of NAFTA institutions discussed in Chapter 4 of this report, we note Whitaker’s observation¹²³ that

… NAFTA has no supranational political infrastructure, and it was never intended to have such. NAFTA was intended to subordinate national politics and policies to the discipline of the continental market. The vastly disproportionate weight of the U.S. within NAFTA means that where political decisions are being made, they are almost invariably the decisions of the U.S. administration and Congress, the courts, and various administrative and regulatory agencies of the U.S. government, as Canada well understands from the softwood lumber debacle. Even if we were to imagine a political superstructure like that of Europe, neither Canada nor Mexico, even in an alliance, could wield enough weight to seriously influence the hold of U.S. national institutions over North American decision-making.

Advocates of a North American community approach are no doubt aware of the challenges raised by such sceptical realism. This may be one reason why Stephen Blank told the Committee that “support for the next steps in creating a North American community must be deeply rooted in North American civil society, and not only in the creation of three national governments. In fact, a framework for this community already exists in the wide array of organizations that work along our borders and in many sectors of our economy. Many groups share deep interests in cross-border linkages and are prepared to work to build a North American community. What must be done is to link these groups, organizations, and associations with a common vision and purpose.”¹²⁴

The Committee accepts the point that voluntary North American associations and alliances are essential if trilateral relations are to be more than just occasional official rhetoric about partnership and cooperation; more than just a top-down intergovernmental affair decided in distant capitals with minimal public engagement. However, such informal “community-building” as Blank recommends only partially sidesteps, and does not resolve, the dilemmas of designing adequate democratic institutions at a North American level. It does not address how governance decisions might be arrived at trilaterally through transparently democratic structures and processes in key policy areas, especially if, as a result of continuing integration, certain older instruments or levers of democratic control are no longer available or effective at the national and/or local levels.

In sum, a democratic “North American community” may well be desirable over the longer term. But its content, form, and feasibility are all still far from being clearly or consensually defined, much less established. Referring to a new book on North American integration published by Washington’s Brookings Institution, and based on the proceedings of a December 2001 conference that brought together leading thinkers from Canada and Mexico as well as the United States, David Crane writes that it “shows why the idea of a North American Community, our continent’s version of the European Union, would be so difficult.”¹²⁵

Certainly, the concept of such a community is not one that can simply be asserted or wished into being. Accordingly, we believe that realizing progress on trilateral relations needs to start at a practical level by governments pursuing and supporting initiatives that could be achievable within a time frame of the next few years. The measures we have in mind would not unduly affect the sovereignty of any of the partners. And they would be undertaken for the demonstrable purpose of benefiting each partner’s citizens. If there is to be a common trilateral vision, it will be one based on a mutual recognition of each partner’s interests, and on a shared commitment to forms of North American cooperation that serve each other’s interests. It is to these final considerations for action that we now turn.

5.9  Towards a Practical Canadian Agenda for Trilateral Political Cooperation

Whatever one thinks of ambitious designs for a North American “architecture” corresponding to deepening levels of integration,¹²⁶ there should be no question that, under any reasonable scenario of Canadian national interest, Canadian governments should be seeking the best possible relations with our two North American neighbours. That means we should be constantly seeking better ways to manage these relationships — bilaterally as necessary; trilaterally wherever possible and appropriate — in the long-term best interests of Canadians. And that also means being forward-looking, innovative and proactive; learning from historical experience but not being limited by it; nor held back by self-imposed constraints resulting from a failure of imagination or lack of confidence in ourselves.

Looking at the state of North American relations in the light of all of the analysis presented in this report, some institutional and democratic development “deficits” are readily apparent. But in the Committee’s view, these are solvable, and they need not require hugely complicated or costly initiatives that would almost surely be non-starters with our largest neighbour to the south. We believe that a more substantive trilateral political relationship can be pursued in at least four areas: executive leadership; parliamentary cooperation; agenda setting and institutional innovation; sectoral cooperation and future policy development.

1.  Executive Leadership

Surely it is not enough for the three North American leaders to meet only irregularly, and usually — if it happens at all — on the sidelines of some other international gathering (e.g., the Quebec Summit of the Americas in April 2001, the Monterrey Conference on Financing for Development in March 2002, the Los Cabos APEC Summit in October 2002). Although Canada’s economic relationship with the European Union is now only a diminishing fraction of that with our NAFTA partners, we have an established formal framework for political cooperation with the EU, including a summit meeting every six months between Canada’s Prime Minister and the EU leadership (the President of the European Commission along with the head of government of the state holding the rotating EU presidency). In the G8 context, the leaders meet regularly in annual summits, and numerous between-summit activities involve a growing number of ministers. There is nothing analogous at the heads of government level with respect to North American relations. Why not?

At present, trade ministers meet every so often under the auspices of the NAFTA Free Trade Commission (most recently in Puerto Vallarta in May 2002). Environment and labour ministers also meet periodically to review the work of the other two NAFTA-related commissions. In 2001, energy ministers created a North American Energy Working Group to share information and coordinate certain activities. But these are minimalist structures at best, and North American cooperation should be able to look beyond just the NAFTA status quo and a few other mainly economic sectors. As well, as former minister Axworthy wondered aloud to us, whatever happened to the framework for partnership that was being developed among the three foreign affairs ministers?

In the Committee’s view, it would not be a big leap to formalize a more regular pattern of interaction among the key national government decision-makers in North America. Canada should put forward the case for it. We should also develop some practical options for how best to support this more intensive level of interaction, likely beginning with the sort of small-scale rotating secretariat supplied by the host country that now serves the G8 process.

Recommendation 36

Canada should approach the United States and Mexico with a proposal for a trilateral North American cooperation framework under which the heads of government of the three countries would meet at least annually, and preferably every six months, on a prepared, mutually agreed agenda relating to matters of shared North American concern. Under this framework, foreign ministers and other ministers as appropriate should also be encouraged to have periodic trilateral meetings. A small supporting secretariat could be supplied by the host country on a rotating basis. In addition, Canada should investigate further options for enhancing this level of trilateral intergovernmental interaction on a more permanent and sustained basis.

2.  Parliamentary Cooperation

Trilateral political cooperation cannot be only an executive-dominated affair among the national governments. There is already quite a lot of other cross-border political interaction, involving not only Canadian federal parliamentarians but provincial and local politicians as well, especially in border regions. Parliamentary groups are more often travelling to meet with counterparts in the United States (usually in Washington), and occasionally to Mexico as well, as the Committee did in the course of this study. But the fact that we were able to meet directly with only a few members of the U.S. Congress, and that our meeting in the Mexican Congress was the first ever of its kind, indicates that we are still at an early stage of the process.

The elected representatives of our three societies have not yet developed habits of regularly meeting with each other on a basis of some continuity to discuss issues of shared North American interest. Currently, parliamentarians from the three countries do meet approximately annually, but on a bilateral basis only.¹²⁷ There is a longstanding Canada-U.S. parliamentary group and a more recent Canada-Mexico parliamentary relationship. Yet there has been little or no interaction between the two. Taking these groups’ meetings to a trilateral level might seem to be the next logical step. Robert Pastor in his proposals recommended combining these separate bilateral associations into a single “North American Parliamentary Group.” Pastor argued that such a trilateral group “might raise the sensitivity of American Congressmen, and it could provide a chance for Mexican and Canadian parliamentarians to think hard about what they share.”¹²⁸

Based on our meetings with Congressional counterparts in the United States and Mexico, the Committee believes that probably only the Mexicans are ready to consider that kind of trilateral parliamentary arrangement. But as Dr. Brian Stevenson suggested to us, where there’s a will, there may be other ways:

… if U.S. legislators cannot be convinced to participate at this time [in a North American parliamentary association or committee], how about bringing the two parliamentary bilateral committees to a one-time session to discuss North America? How about inviting the counterparts of this Standing Committee to share your conclusions regarding this very study and asking what the next steps might be? Another idea could be to establish a North American Congressional and Parliamentary internship program. This would certainly help in bringing together future political leaders and encouraging them to understand the very different political systems in North America.¹²⁹

The Committee welcomes these helpful suggestions. We intend to share the findings of this report with our counterparts on the international affairs committees of the U.S. Congress, and with those of the Mexican Congress in a Spanish translation. In addition, we  hope to be able to convene a follow-up meeting in Ottawa with American and Mexican parliamentarians from these committees to discuss jointly with them priorities for the future development of North American relations.

Moreover, in regard to taking into account the diversity among respective political systems, the Committee recognizes that all three countries are also complex federations with their own regional political cultures. Indeed, Pastor has noted that any “serious attempt to coordinate policies on North American issues inevitably collides with the federal structures of the three governments,” and in each country “subnational governments have substantial power and autonomy.”¹³⁰ We therefore see merit in investigating the idea of holding a tri-level as well as trilateral North American parliamentary forum, perhaps every several years, that would include participation by elected representatives at the non-federal as well as federal levels. Imaginative thinking should not stop there. Part of such a forum might be set aside for dialogue with several invited ministers on the specific theme(s) of North American interest chosen for the forum. Another part might aim to engage in dialogue with a range of representatives from civil society organizations working on these issues, recognizing the growing North American ties among a variety of non-state actors, interested stakeholders, and citizens generally.

While ideas of a rather academic or speculative nature have been put forward — for example, to establish standing legislative committees on North American issues in all three countries;¹³¹ or, going much further, Hugh Segal’s proposal to create a “North American Assembly not unlike the early European Parliament”¹³² — the Committee believes we must be able to walk before we can run. That means steadily building on and broadening the existing channels for inter-parliamentary communication and deliberation while, just as importantly, ensuring that these activities are adequately prepared and supported.

Recommendation 37

Consideration should be given to the following Canadian initiatives aimed at strengthening parliamentary cooperation on a North American basis:

3.  Agenda Setting and Institutional Innovation

Proposals such as those of Robert Pastor for creating a “North American Commission” (NAC) tend to raise instant suspicions and reservations, because they suggest a slippery slope to some supranational bureaucratic entity analogous to the European Union’s Commission. In fact, however, Pastor’s idea of such a commission, as he explained to us, envisages rather more modestly that its role would be

… to define an agenda for Summit meetings by the three leaders of North America and to monitor the implementation of decisions and plans. The NAC would have an office that would gather statistics from the three governments, and it would commission studies of different sectors, like transportation, energy, or technology. These studies would ask what could then be done to facilitate economic integration in these sectors on a continental basis, and then, it would submit these analyses with specific options to the Prime Minister and the two Presidents.

Unlike the sprawling, regulatory European Commission, North America’s should be lean and advisory — just 15 distinguished individuals, 5 from each of the countries. Their task would be to help the leaders think continentally. To deal with immigration and customs at the border, they could propose “North American passports” for frequent travelers, or “North American Customs and Immigration officers” to patrol the perimeter and reduce the documentation by half.

The Presidents and the Prime Minister would continue to be staffed by their own governments, but the NAC would encourage them to respond to a longer-term vision and a more panoramic view of the opportunities.¹³³

This is still a fairly elaborate and perhaps fanciful menu, one that probably bites off more than any of the three governments would be prepared to chew. Whatever its merits in theory or over the longer term, it contemplates far more than either Washington or Ottawa is likely to consider in the foreseeable future. It also begs some key questions. Would the United States ever agree to equal representation in such a trilateral body? Yet on what other basis, could Canada or Mexico accept it? Where would a commission be based and would costs be shared equally? Without such details it is hard to make any realistic assessment.

However, the Committee believes that there may be a way to take some elements from this idea, considered together with the Mexican idea for creating a high-level “wise persons” advisory group of some kind. What we suggest is that the three governments, rather than simply managing business as usual or dismissing ideas such as Robert Pastor’s out of hand, could benefit from the in-depth investigation and reflection of a small expert panel. The panel’s mandate would be to examine and report back to the governments on the future of the North American partnership overall and the feasibility of trilateral next steps in particular. Such a panel could be very small, perhaps only three persons, with each of the three governments appointing one member in consultation with the others.

We see the mandate of this panel being defined only as broadly as the three governments are able mutually to agree. Moreover, none of its recommendations would be in any way binding. At the same time, we believe the striking of such a panel would provide an opportunity for a rigorous exploration of promising future agendas for North American cooperation, together with possible forms of institutional development and innovation, that would be extremely useful to feed into the more intensive executive and parliamentary trilateral processes that we have recommended. In addition, the expert panel would be encouraged to consult widely within the three societies. Its findings would be released publicly and would hopefully stimulate more informed debate.

The Committee sees this kind of high-level process as a useful prelude to the three governments actually giving serious consideration to provocative, forward-looking ideas, if the expert panel’s reports were to find a particular idea worth pursuing further in the interests of each country’s citizens. Such ideas might, for example (besides calling for setting up a permanent North American court on trade and investment, as already endorsed in Chapter 4), call for an ongoing North American commission, a North American development fund, or large-scale trilateral schemes for infrastructure or other shared programs. There is nothing to be lost or feared from a study of such options, and much potentially to be learned.

Recommendation 38

The Government of Canada should propose to the governments of the United States and Mexico the setting up of a small advisory high-level expert panel on the future of the trilateral North American partnership. The panel’s mandate would have to be mutually agreed by the governments, and it would have to be given sufficient time to consult widely within the three societies before making its findings public. Such a panel could be asked to conduct an in-depth examination of the feasibility and desirability — notably from the standpoint of democratic transparency and accountability — of options for new trilateral institutions, including:

4.  Sectoral Cooperation and Future Policy Development

Finally, and not least, the conversation about where we want North America to go needs to be about more than launching expert studies of political/institutional structures, forms, and processes, crucial as these are to any democratically acceptable public agenda. It must also consider how policies can be developed trilaterally in major sectors of activity that have an increasingly North American dimension, and how such policy initiatives can be carried out to achieve public interest objectives.

George Haynal gave several examples of how cooperative trilateral relations might be applied to the pursuit of such practical and mutually advantageous policy objectives. As he told the Committee:

We’re already engaged in discussions about North American approaches to the management of our energy needs and resources. Cooperation among us can have enormous beneficial effects, not just in supplying new sources of hydrocarbons, but in concerted action to address environmental challenges and stimulating research and development of new sources of energy. The consultative mechanisms that now deal with this issue, informal as they are, can potentially be made less so and more participatory, more in a position to sustain a policy discourse in which broader constituencies and publics are engaged.…

Other practical areas for trilateral cooperation abound. Markets are driving toward integrated and intensified North American transport infrastructures. Flows in North America have an increasingly dynamic north-south component. Governments need to ensure that the infrastructure is in place to facilitate that in a way that is congenial with our environmental objectives, of course, and not choke them off. Active discourse on the investments necessary to create these North American arteries would be timely for cooperation.¹³⁴

Education was another area of potential North American cooperation that witnesses mentioned. For example, Brian Stevenson of the University of Alberta suggested to the Committee that “we should develop more programs that foster educational exchanges and we should also expand the North American Mobility Program.”¹³⁵

In short, there is no shortage of positive ideas for how Canada might engage North American partners in North American initiatives for the benefit of Canadians. And if we are to take the North American “leaders’ statement” of April 2001 at face value, it invited expectations that there would be advances in trilateral relations touching numerous sectors. Without concrete follow-up, however, most of these declaratory intentions are likely to remain unfulfilled, if not forgotten. The Committee believes the North American governments can, if they want, avoid such a disappointing, desultory outcome. How? Our message is simple and direct: by beginning today to set out a substantive, coherent agenda for the expanded trilateral cooperation of tomorrow.

Recommendation 39

The Government of Canada should propose that the first formal North American leaders summit, on the model we have suggested, undertake to identify key sectors on which there is agreement to pursue enhanced trilateral cooperation as a matter of priority. On that basis, a framework for trilateral cooperation should be developed for approval at a future summit, and progress in its implementation should thereafter be reviewed systematically at each summit meeting. The expert panel that we have recommended be established to advise on the future of North American partnership could also be tasked with providing an assessment of policy sectors that show the greatest potential for strengthened trilateral cooperation.