The United States in Canadian Foreign Policy
It is a great privilege for me to be invited to deliver this first O.D. Skelton Memorial Lecture on Canadian foreign policy, on the occasion of the 60th anniversary of the Statute of Westminster. I congratulate External Affairs and International Trade Canada on the creation of this annual lectureship in honour of a man who, as Under-Secretary of State for External Affairs, was, more than any other one individual, responsible for the creation of Canada’s foreign ministry as we know it today.
I have selected as my theme, “The United States in Canadian Foreign Policy”. I have chosen it because I believe that it is from this perspective – the perspective of our relations with our superpower neighbour to the south – that we can acquire the greatest insight into the general nature of Canada’s foreign policy.
You are deliberating today and tomorrow on whether Canada has made a difference. My focus tonight is on the forces that have created the foreign policy that has, in my opinion, made the difference.
It is my thesis that, over the past 60 years (and it is this period I will examine), Canada’s strategies on the international plane have largely been driven by our concerns about our relationship with the United States. In the drama of Canada’s foreign policy, the U.S. is always the principal actor; at the table where Canadians prepare the ingredients of their foreign policy, the U.S. is always the principal guest; when Canadians assemble to discuss their needs and destiny, the spectre of the U.S. is always there to dominate their thoughts.
It would be folly to try, in the course of a single lecture, to portray the history of our relationship with the United States; or to catalogue the various phases in its development; or to describe all the initiatives, ideas and efforts – good, bad, creative and sterile – that our politicians and diplomats have come up with, to cope better with the challenge of existing next to the world’s strongest and richest nation.
I will try, instead, to put forward certain generalizations about the United States as the central factor in our foreign policy and will do so on two levels or planes.
First, I will address the U.S. factor as it has affected the fundamental character of our foreign policy in the broadest sense, that is, our relations with the entire international community. Second, I will address the subject in terms of our policies for dealing directly with the U.S. in a bilateral context, in pursuit and defence of our national interests.
Developing our own distinctive international outlook while managing our all-pervasive bilateral relationship with the U.S. are but two dimensions of a single preoccupation that has dominated our existence for half a century. Our overriding national preoccupation has been about how to limit U.S. power over our national destiny while deriving maximum advantage from our propinquity.
In the 60-year period between the creation of Canada through the British North America Act and our independent membership in the world community, the U.S. figured importantly in our national agenda, with trade, fisheries and boundary issues giving rise to many concerns, but Canada dealt with them through its imperial ties. The record does not support the conclusion that our interests were regularly overridden by London or ignored. Indeed, even before Westminster, Canadian representatives began to sign agreements with the U.S. in our own right, the Halibut Treaty of 1923 being the first example.
Many of the disputes between our fledgling confederation and the U.S. were highly contentious. But there is no question that, as our nationhood took form in the first three decades of this century, the principal concerns of the Canadian political cadre focused not on Washington, but on the imperial connection. Increasingly, in this turbulent century, our preoccupation was with the tutelage role of London and the perceived subordination of Canadian interests to imperial goals and strategies.
In the Department of External Affairs, the dominant anxieties of our most senior officers and powerful minds related virtually to a single matter – emancipation from our subordinate imperial status. Even after the Statute of Westminster acknowledged the equal voice of the dominions in international affairs, many of our brightest and best directed their energies to arguing why Britain should not lead Canada into another European war. The brilliant Loring Christie even went so far as to believe that even if Britain went to war against Germany, Canada might not have to be drawn in. Mackenzie King shared these isolationist sentiments but knew that Canada could never stand aside in the event of war. A week after the British declaration in 1939, we followed with our own. Christie, a disappointed man, went to Washington.
Our preoccupation with the influence of Whitehall may have helped blind some of our diplomats to what was happening in Europe. This was certainly not true for all our officers – Lester Pearson, for example, saw clearly what was happening – but it is curious that, apart from our determination not to subordinate ourselves automatically to imperial strategies and goals, the Department of External Affairs did not always, in those days, vigorously pursue national interests when these departed from imperial company. For example, at the historic Hague Codification Conference on Territorial Waters in 1930, the Canadian delegation made only one intervention during the entire lengthy proceedings. It consisted of a single sentence; the Canadian delegate said, “I agree with the statement of my distinguished British colleague” (or words to that effect). The Canadian delegate was Lester Pearson.
So, prior to World War II, it was the shadow of London, not Washington, that fell over Ottawa, and, not surprisingly, the primary focus of our fledging foreign policy was emancipation from the imperial tie. Not only was Washington not seen as threatening; it was the target of our strong embrace. First wanting to see the U.S. in the war, then wanting to support its efforts in the most effective way, the Department of External Affairs, under the leadership of Hume Wrong, Norman Robertson and Lester Pearson, articulated the principle of functionalism to describe the role we might legitimately seek to play in allied counsels and to determine when we might appropriately claim a voice of our own at the committee tables.
Concerns about British dominance in our foreign policy died during the war and, of course, were never revived. But, in the early postwar period, they were not immediately supplanted by concerns about dominance from Washington.
On the contrary, our principal worry was that the world’s most powerful nation – the most powerful nation in the history of the world – would pack its bags, quit Europe and go home. Out of the immediate post war concerns , the most dominant characteristics of our modern foreign policy were born.
I refer first of all to our transatlantic vocation and then, more generally, to multilateralism, globalism and support for international organizations as the principal features of our foreign policy. From World War II until this day, Canadians have seen in the Atlantic community, in multilateralism, universalism and international institutions, the pillars that support virtually the entire structure of our foreign policy.
It is in the multilateral arena that the most distinctive features of our foreign policy were moulded. It is through our multilateral vocation that Canada has made a difference.
The origins of this orientation, this commitment to internationalism, did not reside in desires to countervail or limit U.S. influence over Canada. The very opposite is true. If the U.S. returned to a state of isolationism, any number of bad consequences would follow. The failure of the League of Nations might be repeated and yet another global war follow suit. Collective security would be an unachievable goal and the world could once again be threatened by an aggressor state.
In this respect, we were giving expression to a long-standing concern in our foreign policy; we believed that, to borrow a phrase used by Professors Granatstein and Hillmer about an earlier time, “a happy Anglo-American relationship was vital to Canadian security”.
If the U.S. withdrew into itself, if the triangle were broken, Canada might have to choose a closer alignment with the U.S., given British decline and European weakness. To have to choose one side of the Atlantic over the other would be a very unattractive proposition for Canada and would place great strain on our national unity. So both logic and the national interest suggested a commitment to building institutions, such as the North Atlantic Treaty Organization (NATO), that would keep Europe and the U.S. together, and global organizations in which the U.S. would do its full part to maintain collective security.
Hence it made excellent sense for Canadians to place multilateralism at the centre of our newly emerging foreign policy. Building effective international institutions was perfectly in accord with Canada’s national interests. And the pursuit of this goal was also in perfect harmony with other qualities shared by Canada’s diplomats.
For the most part, this cadre of officers was idealistic and internationalist in outlook. Not a shadow of the old isolationism was to be found anywhere in the East Block (the building on Parliament Hill where External Affairs was then located.) Many in the cadre were children of the Manse, strongly anti-imperialist and anti-colonial in their attitude, embued with a missionary spirit. They were anxious to help maintain a peaceful and secure world, to see the end of colonialism and to champion justice for the poorer nations about to emerge as the Third World. Consequently, in this early postwar period, there was a remarkable harmony between our idealism and our national interests.
Nor did the pursuit of these goals produce friction with the United States. Canada and the U.S. were partners in the enterprise of building world organizations – the United Nations (UN), the General Agreement on Tariffs and Trade (GATT), the specialized agencies – and in making them work. Subsequently, the U.S. and Canada were both architects of the most important innovation in the history of the UN – after its creation – the transfer of effective political power from the Security Council, paralysed by the Cold War, to the General Assembly.
Thanks to gifted politicians and diplomats, Canadian diplomacy was innovative, effective and much admired in those years. The growing body of memoirs of Canadian diplomats testifies to this creativity. We wanted to help make NATO into a transatlantic community and not just a military alliance. We wanted to make the Commonwealth into a multiracial organization of developed and developing nations. We wanted to make the UN an effective player in both economic and humanitarian affairs. In all these instances, we made important contributions.
In my last year as a student at Oxford, I recall mentioning to the eminent English philosopher Stuart Hampshire that I had just joined the Canadian diplomatic core. “The finest in the world”, he said, “and crowned by the remarkable achievement of the head of your UN delegation, Paul Martin, in breaking the impasse over new members”. Indeed, that Canadian initiative reflected Canadian foreign policy in its most characteristic mode – seeking a universal United Nations. This Canadian success came just one year before an even greater Canadian achievement – that of Lester Pearson and his aides in creating a UN peacekeeping presence in the Suez under the aegis of the General Assembly, not the Security Council.
The period of the 1950s and early 1960s marked the high-water mark of U.S. power in the world and the most intense moments of the Cold War. Our participation in international institutions gave us the opportunity, through forming associations with like-minded states, to exercise creative influence over the U.S. in a very dangerous and tense period. The fear of nuclear war was a very strong force motivating our energetic stance in international organizations.
To say that, in this period, Canada began to look to the rest of the world, that is, to multilateralism, as a counterweight to the U.S. in our national life might sound simplistic, but it has an important element of truth to it.
And look to the rest of the world we did. To the dismay of the purse-keepers and managers of the federal bureaucracy, Canadian diplomats were never very successful in establishing priorities in the shaping of Canadian foreign policy. The need was to be everywhere. New embassies burgeoned in every continent, a major aid program took shape with funds directed to every corner of the globe. A major participant in the Colombo Plan in Asia, we were in time to become a larger contributor to Anglophone Africa than the U.S. and second only to France in Francophone Africa.
We became principal architects of the Commonwealth and La Francophonie and regarded them as centrepieces of our foreign policy. It became our proud claim that Canada was a participant in every major peacekeeping operation held under the auspices of the United Nations. The UN, the specialized agencies and GATT were a principal focus of our international effort. Europe and Latin America, the Caribbean and, indeed, every continent and region required our diplomatic presence. An endless battle between the diplomats and the treasury led to the typically Canadian phenomenon of opening embassies and then closing them, then opening them again and closing them – what might be called the Ecuador Embassy syndrome. The battle continues to this day, when we have 146 offices throughout the world.
Thus, though not by any means a global power, Canada nevertheless came to practise a global foreign policy and sought consistently through the decades to play a global role. A story that is probably apocryphal might help explain this phenomenon.
I heard long ago that an eminent member of the Toronto establishment, Dean Acheson, once said that the problem with Canada was that it was a regional power without a region. I tried to find the actual quotation, poring through all possible sources, but failed to trace it. I did manage to find his unkind comments about Canadian high-mindedness and hypocrisy, but no reference to Canada as a regional power without a region. But if Acheson didn’t say this (I have heard it attributed also to Buckminster Fuller and Herman Kahn), he could well have done so because it seems to sum up perfectly the geographic reality underlying Canadian foreign policy.
The United States is our region. That is the reality.
The primary consequence of this simple fact is that, as a counterweight, to find lebensraum, so to speak, we directed our efforts and creative energies to a foreign policy based on a presence and role in every other region and in every international organization. The Commonwealth, where the U.S. had no presence, was a typical example. Globalism, multilateralism, universalism, and an active role in international organizations: these mainstreams of our foreign policy flowed naturally from our need for balance in the external forces shaping our national destiny.
The secondary consequence of the “regional power without a region” dictum is that, if there was, for many years, one area on the face of this globe that Canada tended to neglect, it was Latin America – the basic reason being that it was the backyard of the U.S. and, hence, not a natural area to seek counterweight. We kept very clear of the Organization of American States (OAS) and did not wish to find ourselves the specialized agencies.
Until very recently, we did not pull our weight in this region and it is no credit to us.
I don’t think it is possible to put a date on the time when Canadians began to see multilateralism as a way of constraining the exercise of that power as it might apply directly to Canada.
Based on my own experience, I believe that, by the mid-1950s, it was quite normal for Canadians to see multilateralism at least partly in this light.
During the Diefenbaker years, Canada began to use multilateralism as a form of pressure against the U.S. in a bilateral context. In the late 1950s, the Canadian Cabinet accepted a recommendation of the Interdepartmental Committee on Territorial Waters to seek to establish a 12-mile exclusive fishing zone off our coasts. The U.S. was strongly opposed. For several years thereafter, we waged an enormous diplomatic campaign to gather support for a new international rule of law in favour of 12 miles. We blocked agreement on a rival U.S. proposal at the First UN Conference on the Law of the Sea in 1958, and, eventually, thanks in no small measure to Canada, a rule emerged in the 1960s that legitimated the Canadian, not the original American, approach to a 12-mile zone. Then we moved unilaterally.
The Canadians understood perfectly what they were doing. They consciously refrained from an untimely unilateral act that would have offended the United States. They supported an international consensus to legitimate what they intended to do and then did it. With variations, this is a fundamental strategy that Canada was to adopt again and again over many years in the pursuit of jurisdiction over territorial seas, navigation through Arctic ice, pollution control on the high seas and so on. We persistently sought international sanction, in the form of new rules, for actions that were strongly opposed by and largely directed against the United States.
Similar examples can be drawn from areas other than territorial waters, resource management and environmental controls.
In a misguided move, the Diefenbaker government sought to achieve a quick UN agreement on disarmament in order to allow it to resolve a dangerous (and ultimately fatal) division in its own ranks on the issue of a nuclear role for our armed forces. Aimed at forcing the U.S. hand, it produced one of the worst periods of tension in our relations with the United States.
By the late 1960s, Canada’s vocation for international organization was at its high point. At the UN, Canada was instrumental in contributing credibility to the very idea of a middle power. And we were comfortable in our role as a middle power, forming alliances on key votes with Sweden, Austria, Mexico, Egypt, Yugoslavia, Mexico and other middle powers, working assiduously for disarmament, trying to dull the edges of the instruments of the Cold War, seeking compromise and advocating moderation, yet with our roots firmly grounded in the Western camp.
To some Canadians, there was, at times, something a little too strenuous in our efforts to be a leader of the middle camp, something a little presumptuous about the way our politicians, media and others regarded Canada as the virtuous torchbearer for a better world. But, to some other Canadians, our efforts did not seem strenuous enough and were damaged by our too close association with the U.S. and our lack of neutrality.
These factors, together with a growing nationalist sentiment in Canada, led to a sense of impatience about our international role, a certain cynicism about our Boy Scout internationalism, about Pearsonism without Pearson, about overreacting, about being too close to the Americans, about the absence of successes as in former days, and so on.
Against this background, the newly elected government of Pierre Trudeau undertook a foreign policy review. The results of this effort, laid out in the six booklets of Foreign Policy for Canadians, struck many in the Canadian academies, in the media and in official circles, as rather strange or even eccentric. Packaged in the trendy language of the time, the report was criticized for weakness in its commitment to internationalism and for placing too great a stress on the national interest rather than on a better world. And why, it was asked, was there no separate document on relations with the United States?
With the perspective of time, one can perceive these documents in a rather different way. The decade of the 1960s saw a tremendous increase in Canadian concerns about our vulnerability – actual or perceived – to the United States. Controversial measures were planned or adopted to limit U.S. capacity to buy up an increasing share of Canadian industry, and some sectors of the economy (banking, communications) became protected in whole or in part. Deep conflicts arose over pollution and other environmental issues, sovereignty over territorial and international waters, the Arctic, the movement of U.S. icebreakers through the Northwest Passage, fishing resources and other matters.
United States power was at its height but, because of Vietnam, confidence in U.S. leadership was at an all-time low among Canadians. This newly felt Canadian nationalism brought an increased focus on the national interest and protection of our sovereignty.
Despite its different rhetoric and terminology, I believe that Foreign Policy for Canadians was not so much a break with mainstream foreign policy thinking as a fresh way of seeing and presenting traditional policies in a more nationalistic period.
There was no separate document on policies for dealing with the U.S. because Canadians to a large extent perceived foreign policy as dealing with all the world except the United States. Otherwise put, there was no separate paper on the U.S. because Canada’s dealings with the rest of the world were simply an expression of the way we dealt with the reality of the United States. The authors of the papers rightly said that our policies toward the U.S. were to be found in all the documents dealing with the world, secreted, so to speak, from their interstices, and that, in any event, a detailed study would come later. Notwithstanding the changed rhetoric and the scaled-down pretensions to the helpful-fixer role, there were, in the larger scheme of things, no true discontinuities in outlook and goals.
When, a few years later, the next chapter finally came forward in October 1972, in the form of the Secretary of State’s paper on Canada – US. Relations: Options for the Future, there were really no surprises and, again, no discontinuities.
The Options paper was unusual in that it focused squarely on the dominant question in our foreign policy: how to limit the impact of the U.S. on Canadian nationalism and identity – that is, how to reduce Canadian vulnerability to U.S. policies and actions. In the domestic field, the third option called for strengthening control over vital areas of the national interest in the economic and cultural spheres, while in foreign affairs it called for – guess what – an increased commitment to the rest of the world. This was our old friend multilateralism and globalism presenting itself in a new form – diversification of our economic relations with important countries other than the United States.
It was also our old friend presenting itself in a very old form - transatlanticism as a counterweight to continentalism.
Hence, whether we look at Foreign Policy for Canadians or at the third option, the principal actor in the play, the principal guest at dinner was the United States. The dominant concern remained the same – Canadian vulnerability to U.S. power and influence.
Moreover, our policy responses, in their essence, also remained the same: intensify the effort to build counterweights and accelerate the effort to establish deeper, more valuable relationships with the rest of the world – minus the United States.
If the vocabulary of these studies was somewhat different from what was characteristic of an earlier period, was there anything else that was different?
The answer is yes, but the differences are not easy to define:
There was very little will, in government, officialdom or business, to implement the diversification in our foreign relations prescribed by the third option. While the government was exhorting in favour of diversification, economic and trade relations with the U.S. were continuing to deepen. When the third option was proclaimed in 1973, our trade with the U.S. stood at around 60 per cent of our total exports; by 1984, when the Liberal government was defeated, it had reached over 75 per cent. The Contractual Link of 1976 notwithstanding, our trade with Europe declined in value by 50 per cent during the same period.
There were subtle changes in the way we began to perceive our multilateral vocation. With insome of the government’s pronouncements, there were increasing echoes of a sort of incipient neutralism. First heard in the defence policy review in the early Trudeau years, there was a growing tendency to present ourselves as standing equipoised between the two superpowers, morally at arm’s length from the two, so to speak. While it is true that these expressions were more characteristic of the outlook of Mr. Trudeau than his foreign ministers, they found some resonance within the Department of External Affairs. If anti-Americanism was not a typical state of mind among our diplomats, it is nevertheless the case that, in the decades of the 1970s and 1980s, a number of officers sometimes gave the impression that they judged the legitimacy of our foreign policy by the extent to which it differed from that of the U.S. The effect of this was to distort and, in some respects, undermine the rationale underlying our historic commitment to multilateralism.
Notwithstanding these changing nuances, multilateralism remained the constant behind our foreign policy during all these years. But the sense of vulnerability of our nationhood to the pervasive influences of the U.S. was, so to speak, the constant behind the constant.
During policy, these decades there was a third constant in our foreign and it also arose from our relationship with the United States.
This constant concerned the way in which Canada tried to manage the American relationship, and it came down to this: the best method for getting along with our sprawling, unpredictable and sometimes insensitive neighbour was to follow the diplomatic way. In other words, the relationship was best managed by utilizing diplomatic skills, maintaining maximum control over our own negotiating position and, above all, not relying on intermediation in any form other than in the most exceptionable circumstances.
As that brilliant practitioner of the diplomatic arts, John Holmes, put it, “Our wordly wisdom has been that no mechanisms provide a valid alternative to the rough and tumble of diplomacy”. Formal dispute settlement, whether in the form of arbitration, third-party conciliation or mediation, judicial recourse or whatever, was to be avoided.
Again, as John Holmes put it, Canada and the U.S. became, in their respective classes, “leaders in the creation of new institutions for world order. There was little interest on either side, however, in creating new institutions for the continent. There was the traditional fear of mortgaging our political sovereignty.” He was quite right. We wanted to maintain three things: control, control and control.
There were no distinctive Canadian contributions management of international relations.
It has been speculated that our unhappy experience with international arbitration in the days when the British were responsible for our relations with the U.S. was the cause of our lingering hostility. I think it might also be due in part to the limited influence of lawyers in the corridors of power – at least until recent years. Many of our most gifted diplomats – Norman Robertson, for example – were not enamoured of international lawyers, and few thought international law of much use when the task was to be flexible and seek compromises, build bridges, or find middle ground toward which others could move.
Many of our diplomatic stars in the postwar era were also active during the years of the League of Nations and would remember the central role of the international lawyers in the deliberations of the League and the futility of their efforts.
As a result, virtually all attempts to create bilateral institutions in the North American context were stillborn or aborted or faded after some initial use. Even recourse to the historic International Joint Commission declined significantly.
The Americans were no more enthusiastic about such institutions than the Canadians, although, as the stronger power, this is not surprising. What is surprising was the failure of successive generations of Canadian diplomats to warm to the idea that Canadian interests could be protected by an equal voice in a bilateral institution. “The assumption was John Holmes, ‘that joint mechanisms tend not questioned’, said toward integration.” I was no exception.
In the first speech I made in the U.S. in my capacity as Ambassador – it was in Lansing, Michigan, in 1981 – I chose as a theme the reluctance of our two countries to resort to binational institutions or third-party techniques in the management of our affairs. Although there were signs of a change of attitude in the air, I thought I was expressing eternal verities.
To sum up, Canada’s foreign policy, for a period of half a century, was characterized by two dominant strategies, both arising from our concerns about U.S. power and influence over our national destiny. Multilateralism and distrust of bilateral institutions endured through the decades and through changes in governments as the twin hallmarks of our foreign policy.
These strategies are now challenged by events entirely beyond the control of Canada. Not only are they challenged; they are being undermined by the deep and enduring trend of events in both the United States and Europe.
We are at one of the great disjunctions in the history of our foreign policy. We are now in an era of discontinuity.
To understand why, it is necessary first to look at the course of domestic change in the U.S. The idea of centralized diplomatic management of our relations with the U.S. and of avoiding mechanisms that could constrain our sovereignty evolved in the era of the imperial presidency. The Great Depression, the Second World War and then the Cold War all contributed mightily to the growth of power in the White House. It was feasible, therefore, and even logical to concentrate power in the foreign affairs bureaucracy in Ottawa in order to deal effectively with our neighbour.
Freewheeling departments, provincial officials and even Cabinet Ministers could weaken our voice in Washington and complicate our strategies. As tensions grew between Ottawa and Washington in the 1970s and 1980s, the Cabinet regularly endorsed directives enhancing the capacity of External Affairs to exercise greater control over all the players in the Canada-U.S. relationship. Anything that weakened the centralization of power was seen as a threat to our capacity to deal effectively with the U.S.
The deep tension in our relations caused by the National Energy Program (NEP), the Foreign Investment Review Agency (FIRA) and communications policies served only to reinforce the need for External Affairs to act as a centralized agency co-ordinating Canadian strategies and responses. The spectre of linkage by Congress of separate issues (such as border broadcasting and tourism) and threats of retaliation further reinforced the principle of centralized management.
Paradoxically, at the very time when these centralizing, managerial tendencies grew stronger in Canada, decision-making in the U.S. began a precipitous flight to decentralization. Vietnam, Watergate and the decline of the presidency helped swing the pendulum of power over to Congress, which, in the meantime, began to witness the dispersal of its own power from the centre to the Committee and Sub-Committee chairmen and their staffs. Accelerated by reforms in Congress, the weakening of the seniority system, the rise of special interests and a myriad of other forces, a massive process of subinfeudation ensued. Congressional barons became the true wielders of political power in the domestic field.
The warning signals were apparent by the late 1970s. In the area of perhaps the most long-standing friction – fisheries and territorial waters – a stunning reversal occurred in Ottawa’s traditional posture for dealing with the U.S. Led by an outstanding negotiator, Marcel Cadieux, Canada sought and obtained agreements for arbitrating maritime boundaries on the east coast and for creating a binational council to which both countries would delegate regulation and management of their east coast fisheries resources – the richest such resources in the world. But the Senate walked away from the treaty creating the supranational management body.
Although the negotiations therefore failed, the agreement was historic for us. It marked the first evidence of our realization that to deal effectively with these vital issues, we had to accept the reality of decentralization of U.S. power and the need, in some form, for supranational management or dispute settlement.
Meanwhile other forces, equally pervasive but more insidious, were complicating our ability to deal with the United States.
For decades, Canada worked with the U.S. in multilateral bodies to abolish or reduce all tariffs. We succeeded perhaps better than we knew. By the beginning of the 1980s, two thirds of our goods were crossing the border duty-free and the tariffs on the rest averaged only about 9 per cent.
In large measure, we had gained free trade with the U.S., but we realized we had, as a result, become subject to a new type of vulnerability. The GATT had removed tariffs but it had not constructed, in parallel, effective measures to settle trade disputes. When tariffs were replaced with an explosion of non-tariff barriers, that is to say, when neo-protectionism spread its shadow across the world’s largest trading relationship, Canada, the more dependent and vulnerable partner, had no objective mechanisms, no shield other than retaliation, to cope with the threats.
By 1983, when the Trudeau government proposed sectoral free trade, there was a rapidly growing realization in Ottawa that the status quo was unstable and potentially unfavourable to Canada. Hence, new moves in the trade field were urgently necessary to create protective mechanisms against trade harassment and neoprotectionism.
Thus was born the consensus within government circles that bilateral institutional mechanisms were essential to protect Canada’s economic interest from protectionist initiatives inspired by special interests and Congress.
The free trade negotiations were mounted at the same time as we were experiencing the nastiest trade dispute with the U.S. in our history. We learned from the softwood lumber countervail that Canada’s largest industries were at the mercy of U.S. administrative tribunals subject to political pressures generated by Congress. At the very same time, we saw the rise of unilateral action in U.S. trade relations and the appearance of powerful new legislative instruments in support of unilateralism. The political forces aroused by foreign competition, the fear of economic decline and congressional pressures could hardly be contained by centralized management by the State Department or the White House or the President himself.
For this reason, the most significant goal sought in the free trade negotiations was the creation of institutional means to remove the consequences of unfair trade decisions. The system of binational panels set up in Chapters XVIII and XIX of the Free Trade Agreement (ETA) is the most important part of the Agreement.
Some 25 cases have already made their way to the tribunals. As the monstrous softwood lumber dispute comes to the fore again, “the big difference between now and the last case in 1986” – to quote a member of one Canadian industry – “is the stage in the Free Trade Agreement for a binding panel review where the political factor is reduced to a minimum”.
Now we are hearing demands to speed up the task of getting a single North American law of dumping and countervail. This, I believe, is an inevitable consequence of this type of trade harassment.
Thus are we witnesses to a major discontinuity in our approach to co-existing with the U.S. As fragmentation of political power continues in that country, as the voices of special interests get stronger and stronger, as respect for political authority everywhere declines, Canadians will turn more and more to the rule of law in our dealings with the U.S. and to bilateral institutions that can abridge the raw power of public pressure and special interests through objective intermediation.
The increasing resort to law and supranationalism will accelerate because of the second great factor of external change that is affecting our foreign policy.
The strategy of multilateralism as a counterweight to U.S. influence presupposes a world in which middle powers build coalitions in international organizations embracing most of the component states of the international community as equal units.
It has also presupposed superpowers in opposition to each other, which create the conditions for middle-power leadership in the world organization. The postwar world first saw an explosion of its component members as the process of decolonization took hold and national sovereignty flashed like a contagion across the globe.
Yet, while it is still flashing in the Balkans, powerful counterforces have been at work. In the continent that gave us the nation-state, the fatigue of a 100-year European civil war triggered a vision of a larger community in which sovereign powers are pooled and exercised by central organizations. Slowly, over 40 years, we have witnessed the greatest voluntary transfer of sovereignty in history.
The Community of 12 members will soon be expanded, in its economic dimension, into the 19-member European Economic Area. This new grouping, the EEA, will encompass 46 per cent of world trade. With 10 countries that desire to become full members waiting in the anteroom or holding pen of the Community, it is poised to become a Community of 22 or more, embracing Scandinavia and the key East European nations. Historically neutral countries such as Sweden and Austria have lined up to transfer their sovereignty – and their foreign policy – to the new super state. If, in time, the Baltic and some other former Soviet states adhere – and this is likely – we will see a new international union of some 25 to 30 states and some half-billion people or more, all transferring sovereign powers to the new regional superstructure.
This structure supports far more than a preferential trading bloc or single market. The historic Maastricht Summit deliberates as we meet here. In my view, it is beyond doubt that Europe will evolve into a full-fledged economic and monetary union. Political union, and a common foreign policy, is only a matter of time.
The European union is a new phenomenon in international organization and international law. It is not just a regional organization, albeit one likely to dominate the Euro-Asian land mass. It is a legal community, organized around supranational central organizations that exercise the most important sovereign powers. Adherence is a matter of accepting the obligations of the legal union, and this is why it is non-exclusive and its capacity for growth is so great. Let’s not be misled by the outbreak of ethno-cultural nationalism in Eastern Europe. These new entities can’t wait to transfer their newly won sovereignty to a federated European community.
In North America, we are seeing the formation of a widening free trade area or economic space of comparable geographic size, population and wealth. It, too, has a capacity for growth, as we are seeing in the current tripartite free trade negotiations among Canada, the United States and Mexico. Important hemispheric nations such as Venezuela and Colombia want to become part of a free trade zone with Mexico, and Chile is awaiting such an agreement with the U.S. It is likely, in time, that a single, unified free trade zone will emerge, embracing a large number of the nations of the hemisphere, with the centre of the economic space being the capital of the strongest power – Washington.
Whether this economic space will follow the historic pattern of the Community and lead to a pooling of sovereignty in common institutions remains to be seen. We are a long way from this, but the supranational methods for dispute settlement created by the Canada-U.S. ETA are likely to evolve on a wider geographic basis.
Whether common economic or even political institutions also evolve will depend on many factors. Not the least of these is the future evolution of the Canadian federation. If it were to break up into component parts or to decentralize economic power in an extreme way, the surviving states, even if relatively wealthy – say on the order of Sweden – will have very little leverage at the centre of the economic space, that is, Washington.
Thus demands and proposals for power-sharing – for a voice at the table in the centre of the economic space – will start to grow.
It may be many years before the nature of the North American or Western Hemispheric economic space is known, but there is no escaping the nature of the European one. Nor can there be any denial that a preponderate amount of political and economic power has become concentrated in three large clusters or groupings in Europe, North America and industrialized Asia, with Japan at its centre.
Even if the current Uruguay Round of GATT succeeds, the centres of true power will reside in these groupings, and, at least in Europe and possibly North America, the central institutions are likely to continue to widen and deepen into more supranational legal structures.
Against this background, it is difficult to perceive of multilateralism in the same way that we have done for the past several decades. Inherent in the notion of multilateralism as a political strategy is the assembly of nation-states in which middle powers broker solutions and act as counterweights to the great superpowers through the force of their public opinion and moral weight.
But what happens to the concept of the middle power if some key middle-power members – countries such as Sweden and Austria – become part of a super federation?
What happens when three great powers and four Economic Summit members are part of a grouping with a common foreign policy and perhaps military force as well? Is it too fanciful to think of a fourth great power or superpower, that is, Russia itself, as eventually forming part of the Euro-Asian super state? Probably not.
In this world of larger and expanding economic and political spaces, power will be concentrated more and more in the groupings and in their common institutions or at the centre of the space.
This is why policies that favour multilateralism, international organization and globalism cannot be understood in the same way that they were in the era that is now fading before our eyes.
For one thing, influence will be brought to bear by the Europeans primarily at the centre of their space, while in North America Canada will need to retain as much leverage and political clout as possible to ensure that our voice is heard directly in Washington.
This is, to my mind, a strong argument for central economic power in Canada as a prerequisite to national survival. Regions or units exercising decentralized economic power will lack international leverage and credibility in sufficient clout Washington.
This is why I also believe it is in Canada’s interest to promote the widening of the Western Hemisphere free trade area and to build common consultative and quasi-judicial institutions in the economic area. A wider grouping will contribute to greater balance and counterweight in the North American economic space.
If this does not succeed in providing an adequate balance within the space, a demand will eventually develop for power-sharing at the centre, that is, the gradual pooling of sovereignty in order to have some greater say in the governance of the economic space.
Surely there will be an important and even critical role for multilateralism and global institutions in this transforming international order. It is a role that will be increasingly directed to advancing human rights and dignity, to addressing problems of poverty and disease in much of the world, to aiding refugees and preventing the oppression of minorities, and to coping with the sources and prevention of regional conflicts.
These are areas of great concern to Canadians and, for this reason alone, multilateralism and support for international organizations will continue to be a critical dimension of our foreign policy. Canadian diplomacy will, I am sure, continue to excel in the multilateral arena.
But multilateralism will no longer be a strategy for limiting the influence of the U.S. over our nationhood and our lives. It seems that history at this time has dictated the inevitability of the second option – closer economic integration with the United States.
If we are to survive and flourish as a nation in the coming 60 years, we will have to look to ourselves as a strong, united and prosperous economic power, to strengthened bilateral institutions for dispute settlement, to the development of a common law of international commerce and to an effective voice in an expanding and perhaps deepening North American economic space.
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