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4

Engaging a Preoccupied Partner

The U.S. is a vast, self-contained world within the world. It spans the most fertile and temperate part of the western hemisphere. With more than 300 million people and the world’s richest economy, it’s self-absorbed. This combined with a powerful Congress with members being re-elected every two years means it’s law makers are excruciatingly sensitive and responsive to the interests of their constituents.

The House of Representatives has 435 seats, and to win the day 218 votes are needed. Much of the decision-making at the federal level in the U.S. comes down, as a senior congressional figure told me, to those 218 votes.

This is important for Canadians to keep in mind. So much of what emanates from Washington has nothing to do with other countries, or with Canada, it has to do 435 members of Congress being re-elected every two years and passing legislation in the House of Representatives. U.S. policy is about domestic interests operating within a remarkably self-contained and self-absorbed world.

This is reinforced by the fact that extraordinarily little of American wealth comes from exports: only about 10 percent. So while about 20 percent of U.S. exports go to Canada, that is less than 2 percent of U.S. gross domestic product!

Other than the world’s hot spots into which the U.S. is drawn, the outside world simply doesn’t appear upon the mental map of most Americans.

Here’s an example: an exact quote as related to me by a Canadian minister who was part of a small dinner with former President George W. Bush in the dining room off the Oval Office. The discussion turned to Devils Lake where water is being diverted from North Dakota into Manitoba. Bush, after much listening, finally said, “You’re telling me this water runs into Canada, but water doesn’t run south to north.”

What Bush meant to say was “In the U.S., water for the most part runs north to south, sometimes to the east and west, but rarely from the south to the north.” The head of the United States had seldom been outside of the U.S. before becoming president. Like so many of his fellow citizens he is wonderfully insular and self-absorbed. The U.S. is his world. A world of rivers like the Mississippi and Hudson that run north to south.

Bush resonates so well with average Americans because they see things the same way. For the average American, water doesn’t flow south to north. It’s not that it can’t, it just doesn’t.

This is what that vast, self-contained world looks and feels like, with its powerful Congress constantly and highly responsive to domestic interests. This is the world, through growing integration with the U.S., into which Canada is being drawn.

Relations between the two countries are so broad and deep that the current structures of their management do not reflect the reality of the situation. As Canada’s economic space is increasingly becoming more integrated with America’s, the Canadian political space is infused from the U.S. Therefore, there is a steady pressure to find new ways of engaging and interacting with the United States.

To reflect and better capture what’s happening, we are increasingly moving beyond the normal models within which nation states interact, and increasingly organizing some of our systems of government to align with, and engage, the Americans’. The federal government, in both Canada and the U.S., is reorganizing and expanding initiatives to engage the Americans. In the U.S. we are opening more offices: a massive increase of thirteen offices to forty-one. Author and columnist Jeffery Simpson captures the logic:

The Congress and the administration represent the basket, where points are scored. The whole country is the basketball court, where plays develop and strategies unfold that eventually lead to something happening around the basket. There are no lay-ups or slam dunks or 15-foot jumpers without playing well over the whole court.[1]

In Washington we have set up a new branch in our embassy to focus on Congress. Our embassy representatives visit Congress daily to lobby members and their staffs on how their districts are affected by Canada. Through a new database, they point out how many jobs amongst their constituents are dependent on Canadian employers.

While former Canadian ambassador to Washington, Allan Gotlieb, claims to be the inventor of lobbying Congress, he didn’t so much invent it as respond in the mid-1980s to the failure of an east coast fisheries agreement in which two U.S. senators reacted to pressure from a few hundred scallop fisherman and derailed a treaty that had been negotiated and signed by the two governments.

The move to put more gears, and oil, into the U.S. system means we are becoming more a part of that system. Former Prime Minister Paul Martin created a committee on our relations with the U.S. in our federal cabinet. And some, such as former Deputy Prime Minister John Manley and former Alberta Premier Peter Lougheed, are advocating that our ambassador to the U.S. should be a member of cabinet, so, as Manley says, “He would have real clout in D.C.”

The launch in March 2005 of the Security and Prosperity Partnership (SPP) was part of this process of striving for closer cooperation. It represents an understanding between the leaders of Canada, the U.S., and Mexico to enhance coordination of their economic and security relations. For Canada’s purposes, it is about more fully harmonizing our procedures and regulations with the U.S. The SPP recognizes that three can talk, but two can do. Both Canada and Mexico are largely engaged in separate discussions with the U.S. on many issues. This is consistent with the findings, in a later chapter, about how Mexico should sensibly fit into our relations with the U.S.

These initiatives that involve reorganizing government capacity and procedures — be they special committees of cabinet or the processes of the SPP — are measures of our growing integration. This is a process whose ultimate logic, if we are not mindful of the dangers, is direct Canadian representation in the U.S. Congress.

As we have seen, both sides of the debate over our relations with the U.S. frame it as a problem. Right-continentalists tell us they have a big solution to the problem. A problem with these big solutions is they put us in huge asymmetries of size and power. Take one of their favourite proposals, a monetary union. At best, Canada would become the thirteenth regional Federal Reserve bank, joining the twelve that currently shape U.S. monetary policy.

There is, however, one notable anomaly to this problem of asymmetry: the International Joint Commission (IJC). Formed in 1909, the IJC manages environmental issues along the border. Each country has three commissioners, and all decisions require a majority vote. It’s a system for making decisions, which, apparently, the U.S. doesn’t like and can’t believe it’s saddled with; it is not the way the U.S. is used to operating around the world. It exists as a special case, perhaps because it was signed with Great Britain near the height of its power, and because it is about managing a border that is done most effectively jointly. It is understood as a “narrow gauge” organization, not transferable to other areas of the management of our relationship with our neighbour.

What about that biggest of big solutions — formally joining the United States, becoming part of the Union? Surely that is the most decisive way to have influence in Washington.

If part of the premise is that there is a problem to be solved — the biggest of big solutions would not solve the problem either. We would have less power than California. That state, the largest in the union, has a population of over 36 million. It has fifty-three of 435 seats in the House of Representatives. Even with so many seats, California’s voice is never decisive. Canada’s population of 33 million would give us perhaps forty-eight seats. We would, however, do better than California in Senate seats. That state, like all others, has two seats. Canada could be expected to come to the Union as at least five states — perhaps as British Columbia, the rest of the West, Ontario, Quebec, and the Atlantic. Still, that’s only ten Senate seats out of 110. Clearly, formal integration into the Union is not a solution.

With NAFTA we have a dispute settlement mechanism, and now the continentalist right would have us contemplate a NAFTA-Plus to further stabilize our relationship with the U.S. There is an irony that the more deals we do with the U.S., to bring our relationship within special norms, the more we become subject to U.S. practices, to the point that we become a part of U.S. practices.

It’s easy to see how this can and, perhaps in the fullness of time, will happen. Here’s what then-Maryland Senator Joseph Biden said of Prime Minister Martin after they met in April 2004:

He got it right away. I could have just as easily been speaking to the president of the U.S., or governor of a state, or one of my colleagues in the U.S. Senate. It didn’t need any translation. It’s one of those incredible things about the relationship. You don’t have to explain. You sort of finish each other’s sentences. Canada and the U.S., it’s like ham and eggs. It’s kind of hard to separate them whether we like it or not.[2]

“Getting it” is a precursor to “getting together.” You’ve got to wonder if union, despite its shortcomings, isn’t in our future.

One can also imagine scenarios where further integration with the U.S. might happen suddenly. This could happen, for example, if there was a simultaneous terrorist attack on Canada and the U.S. Imagine also that the president was more in the mould of John Kerry — from a northern liberal state, played hockey, and spoke French — and saw the role of the U.S. not in unilateralist terms but in a multilateralist sense. Add to this a president who took a personal interest in Canada and was well disposed to Canada and the Canadian prime minister. Like Ronald Regan was toward Brian Mulroney, and who suggested a Canadian attend meetings of the U.S. cabinet. A president who might advance a joint currency when the Canadian dollar was 25 percent lower than the U.S. dollar, yet still propose that the Canadian dollar be merged at par.

The ball, as they say, is very much in our court. It’s up to us to decide how involved we want to be in this process of integration. Where is our centre of gravity in our relations with the United States? Will it someday be said, “It started with a Canadian cabinet committee on the U.S., and ended with a Canadian in the U.S. cabinet?”

Our Segmented Neighbour

One of the big mistakes we make in dealing with the U.S., in fact the biggest mistake, is that we don’t properly understand how the U.S. political system works.

We imagine that because we are exposed to the U.S. every day that we have a pretty good idea of how things work south of the border. That is a conceit that hurts us. The U.S. is a much more regional country than we realize, and the U.S. political system arrives at decisions in a way that is so foreign to our own that we don’t get it. As a result we misunderstand the U.S. and make wrong decisions.

In our system, the prime minister has only one political constraint — the ability to get decisions through Parliament — in a majority government that is particularly easy. We think the president and the prime minister can agree on something and that’s all that’s necessary. It doesn’t work that way. As former ambassadors to the U.S. have written, “The players are so numerous and dispersed you can never explain what actually happened,” and “If anyone tells you he knows where a particular decision was made in Washington, he is either a fool or a liar.”[3]

Once one considers the sheer size and scope of the U.S. and the division of powers between the president, the Congress, and the judiciary, the concept of building political capital in Washington is of limited value. And yet our pundits and politicians — including senior ministers — insist on analyzing and acting on the basis of a false understanding. Perhaps it’s because their egos get in the way of appreciating both our country’s insignificance and their personal insignificance in how decisions get made in the U.S. capital. Too often senior ministers think that because they have a relationship with their U.S. counterpart that Canada’s policy needs to reflect the views of their American interlocutors.

The U.S. is simply not keeping track of whether Canada has been helpful. Our ministers are stroking their egos and making poor decisions for Canada if they allow their judgment to be clouded by misunderstanding how significant they are to their American counterparts. Think of the U.S. president, as an example, who spends not days but only hours each year thinking about Canada.

The U.S. is preoccupied with so many issues that as long as Canada doesn’t work actively to counter U.S. interests, we don’t register in their thoughts. What Canada does or doesn’t do is more irrelevant in the American political system than we realize. We are taken for granted. It’s a mistake to think that we need to play a “war-fighting” role in Afghanistan because we didn’t go to Iraq. A former chief of staff to our minister of defence says the decision to play our current role in Afghanistan was due to the minister and other government leaders feeling we had to assuage U.S. opinion because we hadn’t supported Ballistic Missile Defence (BMD). In fact, the U.S. was going ahead with BMD regardless of what Canada did and wasn’t that concerned about the Canadian decision.

Moreover, there is no spillover from such a strictly military issue into U.S. economic policy. A dramatic example of this is the U.S. Congress placing stiff tariffs on U.K. steel despite U.K. participation and leadership in Iraq and Afghanistan. And textiles from Pakistan, a key ally of the U.S. in the fight against terrorism, continue to face prohibitive U.S. tariffs. The U.S. is a vast, self-absorbed, and segmented world.

One should not forget the nature of the U.S. bureaucracy in all of this. It is massive and, like Congress, lacks cohesion and reflects divergent and competing views and opinions. So, like Congress, the U.S. bureaucracy is not going to turn as one corporate entity and promote or punish Canada.

This is how Michael Kergin, a former Canadian ambassador to the U.S., put it to me: “Think of at least three kinds of events — political, economic, and military. Three parts of the jungle. The three constituencies are very different. Be skeptical about linkages among them.”[4]

The sheer size and power of the U.S., combined with its system of government, leads to decisions that affect other countries. But these decisions do not make the U.S. bad. Not honouring a NAFTA dispute settlement panel ruling does not really make the U.S. bad; it’s a reflection of its heft, combined with the nature of its Congressional system of government.

We are not going to change either the sheer power of the U.S. or its Congressional system of government, with the prerogatives of powerful senators and members of the House of Representatives to protect their constituents’ jobs and money.

The NAFTA Dispute Settlement Mechanism does not change that, but it does help to condition the outcome of disputes, such as those over softwood lumber. Canada did not get everything it wanted, and was awarded by the dispute settlement mechanism, but in late 2006 it did agree to 80 percent of what it was due, with approximately $1 billion held back from the $5 billion collected in inappropriate penalties.

Interests in our self-absorbed, segmented neighbour often work in alignment with Canadian interests to determine outcomes. On soft wood, part of the pressure in the U.S. to resolve the issue was from the U.S. National Association of Home Builders and from the American soft wood companies that own 40 to 45 percent of the Canadian industry.

The Prime Minister and the President

While we may on occasion want our prime minister to express indignation to the president, there is not a lot the president can do — are we asking him to change the U.S. system of government and decision making? A close associate of Prime Minister Jean Chrétien told me of a meeting he was at in the Oval Office, where former President George W. Bush said to Chrétien: “If you can’t convince Senator Baucus from Montana, who is the head of the Commerce Committee, then I’d like to help but there’s not much I can do.” At best, all the president can do is use some of his limited political capital with Congress. And he normally needs all of that to advance his administration’s policies. When we ask the president to make the Canadian position part of his policies, how does that help his survival and success which depend on his sway among Americans and American interests, not among Canadians and Canadian interests?

As former Canadian ambassador to the U.S., Michael Kergin says, “The president operates in a free market economy. Congress is supreme in trade policy, the president is making all the time, all kinds of deals with Congress. So how much of his capital is he going to use in an area in which he has little power to help another country?”

The relationship does not at all work on the basis that if you lose favour in the White House you pay a big price. It is better to have good executive to executive relations, but so much of U.S. decision making is associated with Congress.

Speculating on relations between the two leaders is something of a parlour game. Not infrequently, I’m asked by the media to comment on aspects of the Canada-U.S. relationship. Their favourite question is, “How is our prime minister getting along with the president, and what does this mean?”

As you know, here’s my answer: “Their relationship is but a part of a broad and deep interaction between the two countries. Moreover, the president doesn’t have that much power in our relations with the U.S. He constantly has to consider Congress. And Congress has jurisdiction over a lot of the issues like U.S. trade laws that preoccupy Canadians.”