Towards a New North America

March 17, 2004

By Thomas d’Aquino (article published by the Council of the Americas in "Viewpoint Americas", volume 2, issue 2)

Canadians, once apprehensive about the idea of free trade in North America, are now confident that neither stronger economic ties with the United States nor a common security agenda will imperil our political sovereignty, social values or cultural vitality. The key question now is how best to shape Canada’s future within the continent we share.

In 2003, the Canadian Council of Chief Executives (CCCE) launched a major project to develop such a strategy. Based on the overarching imperative that Canada must affirm a vibrant independence and distinct personality in North America, we put forward two basic propositions: that the economic integration of North America is irreversible and that economic security and physical security have become inseparable.

The strategy we suggested was based on five interlocking pillars: reinventing borders; negotiating a resource security pact; maximizing regulatory efficiencies; reinvigorating the North American defence alliance; and developing new institutions for managing the increasingly complex bilateral relationship.

Since the tragic events of September 11, 2001, the focus of discussion between Canada and the United States, not surprisingly, has been on border management. Our two countries have been working closely, sharing information, developing and deploying new tools for managing risk, expanding border infrastructure and experimenting with new ways to speed the flows of low-risk goods and travelers, while beefing up security overall.

All this must continue, but we must go well beyond day-to-day border management. To ensure that governments can focus their resources on security, we must find ways to reduce other functions and costs at the border. By harmonizing tariffs, for instance, we can eliminate the need for rules of origin. We can also work on ways to reduce non-tariff barriers and trade disputes that require expensive and time-consuming border actions. Exemption from trade remedies is a long-standing goal of Canadian trade policy; perhaps we can achieve it, whether all at once or over time, sector by sector.

Meantime, there are other ways to reduce the frequency and impact of trade disputes. Energy security, for instance, has become a central preoccupation of the United States government. Yet only one in five Americans realize that Canada is the largest supplier of energy to the United States, providing 100 per cent of its electricity imports, 94 per cent of its natural gas imports and more oil than Saudi Arabia.

There is much that Canada could do to expand and speed up the development of our energy resources. On the other hand, Canadians have been frustrated for more than two decades by the relentless attempts by a narrow sector of the United States economy to restrict imports of Canadian softwood lumber. Perhaps through a comprehensive resource security pact we could achieve consistent respect for both security of supply and security of access across all resources.

The other way to reduce the potential for trade disputes and costly and time-consuming administrative procedures at the border is to encourage greater regulatory compatibility. Canada and the United States share many regulatory goals and have rules that often differ only in detail. Any Canadian strategy for North America clearly should seek to eliminate as many of these regulatory issues as possible, either through explicit harmonization or through mutual acceptance of each other’s standards.

Big changes in the way we manage our relationship also will require new institutions. No single bilateral institution can cope effectively either with the diffuse power structure of the U.S. government or with the provincial and federal dimensions of the challenge within Canada. Rather, we need to build on the strengths of the extensive networks our two countries already share, including the Permanent Joint Board on Defence and the North American Aerospace Defense Command (NORAD), to name just two in the military sphere.

In short, a successful strategy for North America must address every aspect of our North American relationships: trade and investment, tariff and non-tariff barriers, the movement of people and goods, energy and other key resources, regulations, defence and security and new institutions. Whether Canada chooses to deal with individual issues incrementally or opts for broad negotiations with links between issues, we need to develop a strategy that is comprehensive and coherent.

In the United States, concerns about free trade in North America are focused on Mexico. Canadians continue to support the NAFTA, but we recognize that in the post-9/11 world, the United States faces distinctly different challenges along its northern border with Canada than along the Rio Grande.

In the longer term, trilateral solutions may be feasible even for difficult issues such as immigration controls, and all three partners certainly should continue efforts to build on the NAFTA. The reality, though, is that the most urgent issues confronting Canada and the United States must be handled in the near term on a bilateral basis.

Is a comprehensive Canada-United States strategy feasible? Today, the case for closer continental cooperation on a multiplicity of fronts is vastly more compelling than it was in the 1980s. We are considerably more interdependent now than we were then, and an additional new factor is the need for effective security arrangements. Moreover, Canadians are much more at ease with the idea of closer cooperation with Americans, in large part because we are more confident of who we are and of our unique place in North America and the world.

Canada’s new Prime Minister, Paul Martin, has spoken of "nationalism without walls". This concept embraces a world where ideas, relationships, skills and economic activity transcend borders. It also implies that sovereignty is not an abstract goal or an end in itself but rather, a tool to be used to affirm Canada’s personality through our economic achievements, our vigorous diplomacy, our commitment to international development, and our willingness to share in the responsibilities of advancing and enforcing peace and security.

More than four decades ago, President John F. Kennedy captured the essence of the Canada-United States relationship with words that still resonate today. "Geography has made us neighbors. History has made us friends. Economics has made us partners. And necessity has made us allies. Those whom nature hath so joined together, let no man put asunder." We at the CCCE fully endorse these sentiments and believe that advancing a creative, bold and confident North American strategy should be high on our government’s list of priorities.

Thomas d’Aquino is President and Chief Executive of the Canadian Council of Chief Executives (CCCE). Composed of the chief executive officers of 150 leading Canadian enterprises, the CCCE was Canada’s private sector leader in the development of the Canada-United States Free Trade Agreement and the North American Free Trade Agreement.