Canada among Nations, 2009-2010 : As Others See Us [1 ed.] 9780773575899, 9780773536289

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Canada Among Nations 2009–2010

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Canada Among Nations 2009–2010 As Others See Us edited by fen osler hampson a n d pau l h e i n b e c k e r

Published for the Norman Paterson School of International Affairs, Carleton University, in cooperation with The Centre for International Governance Innovation By McGill-Queen’s University Press Montreal & Kingston • London • Ithaca

© McGill-Queen’s University Press 2010 isbn 978-0-7735-3627-2 (cloth) isbn 978-0-7735-3628-9 (paper) Legal deposit first quarter 2010 Bibliothèque nationale du Québec Printed in Canada on acid-free paper that is 100% ancient forest free (100% post-consumer recycled), processed chlorine free McGill-Queen’s University Press acknowledges the support of the Canada Council for the Arts for our publishing program. We also acknowledge the financial support of the Government of Canada through the Book Publishing Industry Development Program (bpidp) for our publishing activities.

Library and Archives Canada has catalogued this publication as follows: Canada among nations. Annual. 1984– Produced for the Norman Paterson School of International Affairs at Carleton University; in cooperation with The Centre for International Governance Innovation. Publisher varies. Each vol. also has a distinctive title. Includes bibliographic references issn 0832-0683 issn 978-0-7735-3627-2 (bnd) issn 978-0-7735-3628-9 (pbk) 1. Canada – Foreign relations – 1945– – Periodicals. 2. Canada – Politics and government – 1984– – Periodicals. 3. Canada – Politics and government – 1980–1984 – Periodicals. I. Norman Paterson School of International Affairs. fc242.c345

327.71

c86-031285-2 rev

This book was typeset by Interscript in 10/12 Sabon.

Contents

Foreword ix Fen Osler Hampson and Paul Heinbecker introduction Using Our Wits, Opening Our Wallets: Canadian Diplomacy in the Obama Age 3 Fen Osler Hampson and Paul Heinbecker Building a Stronger, Cleaner, and Fairer Global Economy: A Leading Role for Canada 20 Angel Gurría north america Bilateral Trilateralism 39 John Manley and Gordon Giffin Canada in Obama’s World Derek Burney

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Canada–United States Relations Michael Kergin The United States and Canada Thomas Pickering A Mexican Perspective Andrés Rozental

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54 61

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A North American’s View of the Old nafta and the New North American Agendas 82 Robert A. Pastor th e a m e r i c a s Canada and the Hemisphere: Between the Devil and the Deep Blue Sea 95 Jorge Heine Canadian Policy in the Americas: Between Rhetoric and Reality – A Needless Distance 103 John Graham a s i a - pa c i f i c Asian Power Shift: Ready or Not? Paul Evans

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Canada–China Relations: Growing Connectivity and Friction 122 Gordon Houlden Return to Realism and Restart the Relationship Mei Ping Will Canada Be the Next Argentina? Kishore Mahbubani Canada and India Ramesh Thakur

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India and Canada: Moving Ahead Kanti Bajpai

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Canada and Japan: Unfulfilled Promise Don Campbell

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In Search af Bilateral, Regional, and Global Synergies Sadaaki Numata africa Canada and Africa: Where Has Canada Gone? John Schram The Canada–Africa Relationship and Where It Should Be Headed: An African Perspective Kwesi Botchwey

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a s i a a n d th e m i d d l e e a s t Canada and the Middle East Patrick Martin

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Canada and Afghanistan: Regaining the Muscle-Memory of Leadership 202 Arif Lalani europe and russia Europe’s Perception of Canada, or Lack Thereof Marie Bernard-Meunier Canada and France: Past, Present, and Future Claude Laverdure

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Challenges and Opportunities in the European Union–Canada Relationship: A View from Berlin Karsten D. Voigt

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Between Friends: Can Canada and Russia Open a New Chapter in Their Relations? 230 Dimitry Ryurikov and Jeremy Kinsman arctic Rethinking the Arctic: A New Agenda for Canada and the United States 245 Donald McRae international institutions Canada among [The United] Nations: A Personal Reflection 257 Lakhdar Brahimi Canada at the United Nations: A Shadow of Its Former Self 265 Louise Fréchette “The Old Order Changeth”: Canada and Economic Summitry 275 Nicholas Bayne and Gordon Smith Canada and Global Financial Governance Eric Helleiner and Bessma Momani

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“Trade Policy Is [Still] Foreign Policy,” But It’s Not Sexy 292 Robert Wolfe Canada’s Contribution to Global Economic and Financial Governance 302 Cyrus Rustomjee arms control and disarmament Nuclear Disarmament: Building a Conducive Environment 311 Ernie Regehr Canada’s Role in Arms Control and Disarmament Jayantha Dhanapala human rights Human Rights and Canada’s Foreign Policy Kenneth Roth

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development assistance and food security Canadian Aid – More, Not Less, Is Needed Carolyn McAskie Innovating in Development Rohinton P. Medhora

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Responding to the Food Crisis: The Untying of Canadian Food Aid 360 Jennifer Clapp climate change Canada and Climate Change Politics David Runnalls and Adil Najam Contributors

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Foreword

This year, we celebrate the 25th anniversary of Canada Among Nations. It is remarkable that after a quarter of a century the series continues to flourish and attract such a large following of readers in both the college and trade market. The series has become a staple for courses in Canadian foreign policy and international affairs in colleges and universities across the country. It also counts the international affairs public policy community, members of the media, the business community, and the interested public among its avid readership. It is entirely appropriate that we dedicate this year’s volume to the two founding editors of the series, professors Maureen Molot and Brian Tomlin, both of whom taught in the School of International Affairs at Carleton University and served as past directors of the school. The original intention of the series was not simply to review international events and Canadian foreign policies in the preceding year or offer a comprehensive alternative package of priorities and policies for Canada. Rather, the purpose was to provide a better understanding of important developments in Canadian policies and environments that shape them and, in the process, to promote a more informed public debate about appropriate policies and priorities for Canada. The series has done so, admirably, and this year’s volume is no exception. It focuses on how leading foreign and Canadian thinkers and practitioners assess Canada’s prospects in a world in which the United States is increasingly more pre-eminent than predominant. The rise of

x Foreword

China, India, Russia, and Brazil, the significance of Europe, and the development of Africa, Latin America, and the Asia-Pacific region are transforming the context in which Canadians live. The change in tone, style, and substance of U.S. foreign policy under the new administration of President Barack Obama, combined with unprecedented international financial problems and global economic retreat, mark an important transition in international relations. Canada will need to formulate sound policies on key issues, such as energy security and environmental sustainability, nuclear nonproliferation, human rights, and trade and investment, and in key areas, such as Afghanistan and the Middle East. Astute bilateral diplomacy and constructive engagement in key multilateral forums, like the United Nations, the G8, and the G20, are also crucial to Canada’s interests and future. The highly distinguished group of Canadian and international authors gathered together in this volume assess Canada’s international performance and offer advice on initiatives Canada can take in its own interests and with others to advance shared interests. The essays in this volume are written in a manner intended to make them accessible to a wide audience as well as being rigorous and comprehensive. First and foremost, we would like to extend a heartfelt thanks to all of the authors who contributed to this volume. We appreciate your contributions, not only because we recognize the many demands on your time, but also because we value your insight and involvement in this endeavour. We also wish to recognize a number of individuals that were instrumental in the production of this publication: Jim Balsillie and John English at the Centre for International Governance Innovation (cigi), who have been extremely supportive of the partnership between Carleton University and cigi in the Canada Among Nations series; Clint Abbott, senior researcher at cigi, who worked directly with us to provide guidance on substantive content and manage the project from concept to reality; Breanne Carter, Jennifer Beckermann, and Deanne Leifso, research assistants at cigi, and Daryl Whitehead, Karen Howard, and Eric Jardine of Carleton University, who all provided efficient assistance with multiple tasks during the project; and Sandra Garland for her diligent copy editing. We are also especially grateful for the financial support provided by the International Development Research Centre, Carleton University, and cigi. Without the support of these institutions, this book would not have been possible.

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Foreword

We wish to thank all of those who have been involved with Canada Among Nations a very happy 25th anniversary. Long may this important series and published record of Canada in world affairs live on! Fen Osler Hampson Chancellor’s Professor and Director The Norman Paterson School of International Affairs Carleton University Paul Heinbecker Distinguished Fellow Centre for International Governance Innovation and Director, Centre for Global Relations, Wilfrid Laurier University

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Canada Among Nations 2009–2010

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Introduction Using Our Wits, Opening Our Wallets: Canadian Diplomacy in the Obama Age fen osler hampson a n d pa u l h e i n b e c k e r

When prompted to reflect on their role in the world, Canadians are likely to reply in one of four ways: We are a peace-loving people. We are respected, listened to, and admired abroad. • We favour the use of international institutions to solve global conflicts. • We are able to “fight above our weight” in international affairs. • •

These widely held notions of self-identification stem from historical experience and past achievement. In reality, what we see in the mirror is not always a fair or accurate representation of what others see. This is the 25th anniversary edition of Canada Among Nations. We have used this occasion to assemble a wide range of distinguished international and Canadian contributors to take stock of Canada’s changing image, its international policies, and the many challenges we now confront. Canada has key foreign policy interests and values to promote and protect, but it is not an axiom of our diplomacy that Canada will do so. To be sure, our key allies, especially the United States (U.S.), applaud the vital role our military is playing in Afghanistan. However, we have not built on this commitment to play a corresponding diplomatic role to bring stability to Afghanistan, Pakistan, and the region as a whole. Nor have we used this key presence on the international stage to the fullest advantage in our relations with the U.S. on the bilateral issues that matter deeply to us. China and India are rising powers on the world stage. Alas, we have gone out of our way – at least until recently –

4 Fen Osler Hampson and Paul Heinbecker

to snub China. Our relations with India have long remained suboptimal, handicapped by India’s nuclear weapons ambitions and a nuclear deal gone sour more than 30 years ago. And Japan, a longstanding ally and trading and investment partner, has only just resurfaced in our attentions. In the run-up to our bid for a non-permanent seat on the Security Council of the United Nations (un), it was evident that this world body was not at the top of the list of our foreign policy concerns and priorities. The un is an organization that has many warts and blemishes, but it has also responded to changing times better – and faster – than its critics suggest. In any case, the un continues to have an important role that includes contributing to the sound functioning of the global order. Those who doubt the un’s value should ask themselves why India, Brazil, Germany, and Japan are so keen to secure permanent seats on the Security Council. There is much potential, necessity, and opportunity for our diplomacy at this moment in international affairs. The tectonic plates of the international system are slowly shifting with the rise of China, India, and other developing nations. These countries are demanding a stronger voice in the world’s leading international bodies and councils to reflect their new-found economic wealth and power. The current economic crisis seems likely to accelerate this trend and increase pressure for adjustment. The recent creation of the G20 is just one example of the reform process that is currently underway, but more initiatives are likely to follow. There is also a growing list of problems that require collective action. They include the mounting risks of nuclear weapons proliferation, the outbreak of infectious diseases and pandemics, energy security, and the epic challenge of climate change. These problems require new and unprecedented levels of international cooperation, and not just at the level of the nation-state, but also from civil society, business, and non-governmental organizations (ngo s). Canadians tend to sell Canada short in international affairs, underestimating the assets at our disposal. We are not a superpower, obviously, but we are not inconsequential either, when measured by the strength of our economy, our military capability, and even the size of our population. In any case, traditional metrics of power are less relevant in today’s world than are a country’s “smart power” assets – the skill that it shows at the negotiating table, the energy of its diplomacy, its willingness to take the initiative and be a catalyst for action, its ability to forge effective working partnerships, and the commitment and engagement of its diplomats and citizens. To the chagrin of some of our closest friends, we seem to be trapped in an existential crisis of our own making. We fret about who we are

5 Canadian Diplomacy in the Obama Age

and our place in the world. We have an unhealthy fixation with the U.S. that is driven by admiration, envy, respect, self-regard, and fear. To many, we seem to have lowered our sights and ambitions. Much of this is true and is accompanied by a declining constituency for and general lack of public interest in Canadian foreign policy, including at the parliamentary level, with the possible exception of our engagement in Afghanistan. Canadian foreign policy also confronts the twin challenges of local and global engagement. As the late John Holmes (1981) once lamented, geography has inextricably intertwined our fate and fortunes with the U.S. It is a relationship that we cannot take for granted or assume will sail on an even keel. As former Canadian Prime Minister Louis St. Laurent (1947) also said in his famous Duncan and John Gray address, “The relationship between a great and powerful nation and its smaller neighbour, at best is far from simple. It calls for constant and imaginative attention on both sides.” This statement rings just as true today as it did more than 60 years ago – perhaps even more so. However, we are a country that has major interests and relationships with the rest of the world arising from our history and culture, our trade and investment linkages, our institutional memberships, and our increasingly diverse social fabric. Thus, we are invariably drawn to define our national interests more broadly, in global and not just local terms. It is not surprising that we are sometimes torn about where we should concentrate our energies and attention – the world or our immediate neighbourhood. Canada can ill afford to ignore its relationship with the U.S., which requires high levels of attention, care, feeding, and, above all, leadership. But Canada must also reinvigorate its diplomacy to deal with a mounting array of global challenges in an increasingly volatile and unsettled world. In short, we have to learn to play three-dimensional chess. Complexity and multi-tasking are the new reality of contemporary international relations. The notion that a country has the luxury of choosing what issues and problems it deals with is both unrealistic and untenable in our interdependent world. Today, Canada needs a foreign policy that shows we are nimble and effective players on a wide range of stages and on all fronts: bilateral, trilateral, and multilateral. We also need a foreign policy that demonstrates we are prepared to devote time and energy to strengthening our relations with key countries in various corners and regions of the world, including those of the western hemisphere. This will require major new investments in our diplomatic assets and capabilities, which, for too long, have been allowed to languish and decay.

6 Fen Osler Hampson and Paul Heinbecker

Our challenge is not to do “more with less” but to open our wallets and use our diplomatic wits to deal with the multiple challenges we now face on so many fronts.

pressures and priorities In the years since 1945, Canada’s foreign policy has oscillated between two distinct poles or centres of attention. The first is multilateralism, reflected in a commitment to the development and use of international organizations, strengthening of the rule of law, and creation of new international norms. The second dominant pole is continentalism, reflected in the development and enhancement of our relations with our hemispheric partners, especially the U.S. Interestingly, although the former tends to be the source of great pride and national identity for Canadians, the latter is viewed by some as a regrettable, if unavoidable, reality that threatens our uniqueness. Of course, when you clear away the rhetoric, you find that both these poles have played prominent roles in Canada’s international relations over the past 60 years, although some of our leaders have dealt with the tension between them more effectively than others in ways that have been mutually reinforcing. Leading to present times, we can conceive of four general periods in which Canadian foreign policy moved between a multilateral and a continental focus. The post-war years were a high point in Canadian multilateralism and relative power in the world. The 1960s were a period of transition and shifting focus. By the late 1970s and early 1980s, our relationship with the U.S. had become a much higher priority for us, both positively and negatively. The 1990s witnessed a re-emergence of the multilateralist tradition and of a sense of Canada’s place in the world of international policy. The 21st century has seen a shift once again to a more continental focus or orientation, more out of necessity than deliberate (or willful) design.

p o s t- wa r y e a rs The post-war years witnessed a Canada at the height of its relative power in the world. We emerged from the Second World War as the fourth largest military power and with a much-expanded industrial sector. Although our wartime partnership with the U.S. led to new and important economic and strategic agreements, our focus remained much more international. Perhaps as a result of our colonial experience and ties to the British Commonwealth or, perhaps, simply a case of living up to responsibilities presented to us at this unique period in history, Canada was instrumental in the shaping of the post-war world.

7 Canadian Diplomacy in the Obama Age

Three examples from this period highlight the role Canada had carved out for itself: our role in negotiating the General Agreement on Tariffs and Trade (gatt), our part in devising the Colombo Plan, and our key role in the Suez crisis of 1956–57. Canada has always been a state rich in resources and for whom trade was a main source of wealth. In 1939, Canada ranked sixth among the world’s trading nations. Our trade with the U.S. at that time accounted for roughly 66 per cent of our imports and 41 per cent of our exports. In contrast, Britain’s share was 35 per cent of our exports and 15 per cent of our imports. Canada was an eager and active participant in the establishment of the gatt. The gatt could be considered both a treaty and an institution. As a treaty, it set out a code of rules for the conduct of trade; as an institution, it oversaw the application of these trade rules and created a forum for the resolution of trade disputes as well as the negotiation of further reductions in trade barriers. Along with the gatt, Canada was also instrumental in the formation of the International Monetary Fund (imf) and the World Bank, two further institutions that allowed for the continuing growth of international financial markets and trade in the post-war years. Our involvement in the creation of these institutions established Canada’s place as a major player in the evolution of the global political economy of the post-war era. A second example of our multilateralist vocation at that time came in 1950 with our part in drafting the Colombo Plan, the world’s first program of aid for the developing world. This was the first time a Canadian delegation had flown to the other side of the world. In fact, there seemed to be more fanfare surrounding the attempt at circumnavigating the globe than what would ultimately become the basis for aid to the developing world. Along with other states in the British Commonwealth, Canada made long-term commitments to monetary aid and to the creation and maintenance of a foreign aid apparatus. Whereas security, armament, and trade agreements were common in our history, Colombo was a first for recognizing our need as a developed wealthy state to provide aid to governments of poorer developing countries. It touched off a series of new debates and initiatives that continue to this day. A third example that illustrates Canada’s role as an influential power in the post-war years was our involvement in mediating the Suez crisis to avoid a major rift between the U.S. and two key North American Treaty Organization (nato) allies: the United Kingdom and France. Mounting tensions over Egypt’s nationalization of the Suez Canal in July 1956 led to the deployment of British, French, and Israeli troops as well as the strategic bombing of defensive installations in October.

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Egypt responded by sinking 40 mostly European commercial ships in the canal, effectively shutting this important trade artery. When the Soviet Union declared it would come to the aid of Egypt, tensions threatened to escalate into a global confrontation. Pressure on the British, French, and Israelis to withdraw mounted. In this context, then Canadian secretary of state for external affairs, Lester Pearson, who had earlier served as president of the un General Assembly at the time, helped mediate the dispute while also promoting the idea of creating a un emergency peacekeeping force to act as a buffer between the warring parties. This force enabled the British, French, and Israelis to withdraw more expediently and without risk of a potentially perilous incident. As Pearson (1973, 244) recalled in his memoirs, “We considered what the un might and should do to resolve the crisis which could spread beyond the Suez, which threatened to destroy Anglo– American cooperation, to split the Commonwealth and brand our two mother countries, Britain and France as aggressors.” Beyond these three noteworthy examples, Canada also worked with its key allies to negotiate and create a number of other institutions in the post-war era. Chief among these were the un Charter, nato, the Universal Declaration of Human Rights, and the International Civil Aviation Organization. We also played a key role as military observers in Kashmir in 1948 and defenders of collective security in Korea in 1950–53. This era of Canadian foreign policy represented a high point in our multilateral or internationalist tradition and continues to serve as a source of great pride for Canadians.

1960s The 1960s represented an era of transition for Canadian foreign policy. Our opportunity for influence had greatly diminished as Western Europe regained its strength and reclaimed its position and the Cold War reduced the amount of room Canada had to manoeuvre. Further, in part due to Canadian calls for increased membership, the un had swollen to include many new voices, thus further diluting our own. Amid these international changes, domestic pressures also served to temper our internationalist zeal. A growing separatist movement in Quebec gave rise to questions about Canadian identity and distracted our attention from the world. Economic pressures were also shifting our focus back to our own continent. Our relationship with the U.S. had been cemented in the two world wars, and post-war economic prosperity had made both countries rich. Companies with cross-border interests flourished and expanded productive capacities in each country. Our economies became much more closely linked.

9 Canadian Diplomacy in the Obama Age

Symbolic of this growing continental orientation was the negotiation of the 1965 Auto Pact. The Auto Pact signaled a growing understanding of the capacity for economic expansion that the unique U.S.–Canada relationship offered. The Auto Pact eliminated tariffs on cars, trucks, and a wide range of automotive parts and products. It greatly expanded the productive sector as U.S. manufacturers took advantage of the opportunity to invest in Canada and, with Canadians, to build the North American automobile industry. As a result of the domestic pressures and opportunities for expanded economic partnership with the U.S., government energies were seemingly much more profitably expended at home than abroad. Although the 1960s witnessed a transition toward a greater focus on relations with the U.S., there was a continuation of the multilateralist spirit of the post-war era. Our engagement in nato and un initiatives continued to expand. Our armed forces swelled to a peace-time high of over 126 000 troops in 1962 as we continued to participate in every un peacekeeping mission, a practice we continued up to and including the Mulroney era. Ultimately, however, the 1960s, especially relative to the post-war era, represented a time of transition in Canadian foreign policy priorities.

1970s and 1980s The 1970s began with a new foreign policy paper: Foreign policy for Canadians (ssea 1970). Prime Minister Trudeau sought a foreign policy more narrowly focused on Canadian national interests. He believed that Canada had overextended itself in the post-war years and had to limit the scope of its ambitions. In defence policy, he believed in assigning greater priority to our own continent while downgrading our commitments to nato. In the context of the early 1970s, the idea of closer relations with the U.S. was not overwhelmingly popular. Increasing U.S. investment and ownership in Canada was a focus of widespread concern and debate. Further, there was escalating fear that continued integration with the U.S. would ultimately lead to a loss of political autonomy. In response, the Trudeau government charted a course in the direction of the socalled “third option,” which sought to move Canada closer to Europe and the rest of the world and which was undertaken in partial reaction to the “Nixon shocks” of 1971 when the U.S. took itself off the gold standard, imposed extra tariffs on imports, and refused Canada an exemption to these new tariffs. The Foreign Investment Review Agency was established during this period as was Canada’s new National Energy Program, which was directed at strengthening the federal presence

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in the exploitation of Canada’s oil and gas reserves. Both initiatives were highly controversial and were subsequently terminated by the government of Prime Minister Brian Mulroney. Trudeau also actively promoted greater engagement with the developing world by increasing official development assistance (oda), establishing the Canadian International Development Agency (cida) (1970), and formally recognizing China (1970). However, during this period Canada’s international capacities withered on several key fronts. This era saw a shrinking budget for the Canadian foreign service, leading to cuts in staff and growing discontent over opportunities for advancement. Decreased funding for the armed forces meant that troops had to be withdrawn from our nato commitments in Europe. In this period, a marked decline occurred in overall troop levels from the 1962 high of 126 000 to 98 000 in 1970 and 80 000 in 1983. Finally, although oda rose to an historic high in 1975 at 0.53 per cent of gross national product (gnp), it plummeted soon after as years of deficit spending and mounting levels of debt took their toll on federal coffers. Ironically, during the Trudeau era, our continental ties deepened. The 1973 oil price shocks (resulting from the decision of Arab oil producers to suspend shipments to the U.S. because of U.S. military support to Israel following the Yom Kippur War) increased Canada’s role as the U.S.’s main energy provider. The success of the Auto Pact from an economic perspective gave rise to further calls for similar sectoral free trade agreements as did the U.S.–Canada defence production sharing agreements. The most obvious indication of Canada’s growing continental orientation came after the election of a Conservative government under Prime Minister Brian Mulroney in 1984. Mulroney was able to establish close friendships with President Ronald Reagan and his successor in the White House, George H.W. Bush, in stark contrast with the somewhat frosty personal relations Trudeau had with presidents Richard Nixon and Ronald Reagan (although it should be noted that Trudeau did have good relations with presidents Gerald Ford and Jimmy Carter). Prime Minister Mulroney and President Reagan agreed on numerous security and economic issues that had longed plagued relations between the two countries. Canada also reinvested in its military by purchasing new equipment in response to U.S. concerns that Canada was getting a “free ride” on U.S. defence capabilities. This spirit of continentalism achieved its pinnacle with the 1987 Free Trade Agreement (fta) and the subsequent negotiation and signing of the North American Free Trade Agreement (nafta) in 1993. Unlike the Auto Pact, which was a sectoral trade agreement, the fta and

11 Canadian Diplomacy in the Obama Age

nafta witnessed the removal of tariff barriers and trade restrictions in nearly every sector of the economy. Although the consequences of these deals continue to be debated today, it is undeniable that Canada’s economic prosperity flourished as a direct consequence of our free trade agreement with the U.S. There is a general consensus among economists that Canada, and to a lesser extent the U.S., would have been much poorer without them. The negotiation of the Canada–U.S. fta, followed by nafta, which included Mexico, represented the height of the continental focus of this era in Canadian foreign policy, as did the Canada–U.S. pact to curb acid rain. These achievements overshadowed Mulroney’s many other accomplishments on the world stage, including Canada’s lead in the Western nations’ response to the 1984–85 famine in Ethiopia; Mulroney’s courageous role in supporting majority rule and the end of apartheid in South Africa, and the lead he took in developing children’s rights at the un; his support for the international coalition during the 1991 Gulf War; the critical role he played in convincing President George H.W. Bush to secure the support of the un Security Council before launching the invasion of Kuwait and to support German unification over the objections of the British and French; his leadership on global warming; and his championship of the biodiversity treaty and other key environmental agreements at the 1992 un Conference on Environment and Development. As Allan Gotlieb (2004, 22), a former Canadian ambassador to the U.S. and under-secretary of state for external affairs, observed, “It is fair to conclude that, under Mulroney, ... [t]here were few strains between the polar attractions of the national interest and an activist global role. In rooting national interest in North American soil, in Canada–U.S. friendship, and in enthusiastically engaging the U.S. on international issues, Canada’s global role was enhanced.” An independent, non-partisan survey of leading international opinionmakers outside Canada (Greenhill 2005, 4–5) reached a similar conclusion: Most [interviewees] identified only one to three examples [where Canada made a difference in the past 15 years]. These examples tended to be clustered in two periods: the Brian Mulroney period until about 1992, and the years when Foreign Affairs was under Lloyd Axworthy. Foreign observers see Canada as having been very effective in building and leveraging strong relationships with the U.S. during the Mulroney years. As one U.S. observer summarized, “Mulroney was influential.” This effectiveness was enhanced by strong (if not always harmonious) working relationships between the two countries at the

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ministerial and administrative levels. While Canada, as one American put it, “declared itself a friend,” it aggressively pursued its own agenda both internationally (environment, South Africa) and in bilateral negotiations (acid rain, declaration of full northern sovereignty). The Canadian government is seen to have leveraged its relationships very effectively in pursuit of Canadian interests in bilateral negotiations. “We got taken to the cleaners on acid rain,” said another American who was very close to the file, “but Mulroney got no credit because he sang with the president. Mulroney believed in personal diplomacy and developed equally close relations with German Chancellor Helmut Kohl, French President François Mitterrand, and Russian President Boris Yeltsin.

1990s In 1993, with the election of a new Liberal government under Prime Minister Jean Chrétien, a new era began. Some believed that the previous Conservative government had been overly preoccupied with our continental relations and that a balance with multilateralism had to be re-established. Much in the way such calls had been made in Trudeau’s time with the “third option” approach, the implementation of such multilateralist aspirations got off to an inauspicious start. The global recession of the early 1990s, coupled with the growing fiscal imbalance of the 1970s and 1980s, had put Canada’s financial house in disarray. To remedy this imbalance, the Chrétien government made deep cuts in many areas of government expenditure, including further decreases to both the foreign affairs and foreign aid budgets, as well as deep cuts to the armed forces and the cancellation of some outstanding military equipment purchases. In spite of or, possibly, as a result of these cuts, a new approach to multilateralism gradually began to take root. Minister of Foreign Affairs Lloyd Axworthy expressed his desire to have a foreign policy that managed to do more with less. He, along with those under his charge, helped bring the concept of human security to the forefront of Canadian foreign policy and indeed to the forefront of the international agenda. With a human security focus, Canadian foreign policy in this era advanced several issues in cooperation with a diverse group of states in the international community. The Ottawa Convention on the Prohibition of Anti-personnel Landmines typified the Liberal government’s agenda as Canada spearheaded a coalition of states, ngo s, and other prominent international actors that ultimately drafted a treaty now ratified by 155 countries.

13 Canadian Diplomacy in the Obama Age

The deliberations leading to the creation of the International Criminal Court are a further example of Canada’s approach to multilateralism in this era. Canada was chief among a coalition of states known as the “like-minded group” who pushed for an international consensus on the creation of the court. Prominent Canadian diplomats and jurists continue to be involved in the development and operation of this international institution. A third example can be seen in Canada’s leadership of the debates over the responsibility to protect (R2P). Seen by many as central to the concept of human security, the R2P position is that, in cases of largescale loss of life where a state cannot or will not protect its own population from violence or is, itself, using violence on its own people, the international community has a responsibility to protect the well-being of those in jeopardy. Canada funded research and a commission that studied and popularized the notion of R2P internationally. Although Canadian trade in this era continued to be dominated by the U.S., the political desire for a more diversified trade pattern resurfaced. Prime Minister Chrétien personally led what were dubbed “Team Canada” trade missions, because they included provincial premiers, to many countries in the Asian market. Assembling political, governmental, and business leaders from across Canada, these missions were directed at encouraging new investments and business deals throughout Asia.

th e p r e s e n t d a y Since the attacks of 11 September 2001, the U.S. has again loomed large in Canada’s foreign policy priorities under a rapid succession of Liberal- and Conservative-led minority governments, and its national security concerns have led to a “thickening” of the Canada–U.S. border. In the 1970s, some feared that Canada would be swallowed up by its much bigger neighbour. Today, our fears are altogether different. We worry about being shut out of the most important market for our goods and services as the U.S. clamps downs on its borders in the aftermath of 9/11, and trade protectionism once again rears its ugly head during the worst economic recession the U.S. (and the world) has experienced in almost 80 years. The compass in our relationship has swung a full 180 degrees. Maintaining the high volume of trade between our two countries – approaching two billion dollars a day – while simultaneously increasing border security has created insuperable administrative as well as political challenges. To put things in perspective, some 30 000 trucks carry goods across the border every day, in addition to planes, railcars, ships, and

14 Fen Osler Hampson and Paul Heinbecker

pipelines carrying millions of tons of freight. Further, about 100 000 passenger vehicles cross the Canadian–U.S. border on a daily basis. With the massive number of variables in play, to say nothing of the existing bureaucratic frameworks, reconciling open trade with tight security is a major preoccupation and an ongoing concern. In 2001, an attempt to address this challenge was seen in the Smart Border Declaration negotiated by Canada’s foreign minister at the time, John Manley. The smart border initiative touched off wide-reaching policy discussions based on four pillars: collaboration on identifying security risks, reviewing cargo manifests, managing refugees, and coordinating visas while expediting low-risk travelers • adoption of compatible standards of practice to secure goods at production and distribution centres, thus minimizing delays at the border • joint investment in technological solutions to ease border congestion • greater coordination between intelligence communities and enforcement agencies on both sides of the border •

From this declaration and subsequent discussions, broader and potentially deeper integration began in 2005 under the short-lived Liberal minority government of Paul Martin with the announcement of the Security and Prosperity Partnership (spp). A trilateral initiative also including Mexico, the spp was driven by a collection of issue-based working groups that sought to bring about greater integration of standards and practices in a wide range of policy areas related to economics, security, industry, and even ecology. Among the more significant initiatives was the introduction of “biometric identifiers” for travel documents and “data exchanges” on high-risk travelers. However, most of the initiatives were modest in design and execution, and the overall enterprise generally lacked a coherent vision or sense of direction. At the 2009 summit of North American leaders in Guadalajara, Mexico, the spp was not even mentioned. In January 2006, Canadians elected a new government, a Conservative minority led by Prime Minister Steven Harper. In early 2008, they went to the polls again to re-elect a Conservative minority. The Harper government gave its full support to the ongoing un-sponsored, natoled effort in Afghanistan, with some 2500 troops stationed in the hazardous southern region of Kandahar. The decision to deploy combat troops to Afghanistan had been made by Paul Martin in a bid to shore up U.S. relations, which had deteriorated under his predecessor because of Canada’s decision to stay out of the war in Iraq. Nonetheless, in 2008, confronted with growing domestic opposition as a result of

15 Canadian Diplomacy in the Obama Age

mounting casualties, the government (with the approval of the Liberal opposition party) committed to withdraw Canada’s combat forces from Afghanistan in 2011. Under Harper, the tone of the relationship with the U.S. has changed. As a recent, major study (Canada–U.S. Project 2009) noted, relations are now “what can best be characterized as ‘correct.’” But, as that same study argued, “in the global and bilateral context in which Canadians now find themselves, ‘correct’ will not get the job done. Canada needs productive relations, inspired by a bold and confident leadership determined to make the best of Canada’s unique position next door to the United States and Canadians’ long-standing – and mutually beneficial – economic and security relations with their southern neighbours. The rewards of commitment are clear; the price of neglect is incalculable” (Canada–U.S. Project 2009, 1). Politically contentious issues, such as missile defence and the Bush administration’s war in Iraq, which saw Canada and the U.S. on opposing sides of the debate, have receded with the passage of time and the change in administration from Bush to Barack Obama. But other problems have sprung up in their place, including how to deal with mounting protectionism and the “buy American” provisions in congressional legislation as the U.S. tackles the current economic crisis. Another issue currently cutting across continental and international concerns is the emergence of Canada as an “energy superpower.” With oil and natural gas reserves second only to Saudi Arabia’s, along with vast coal, uranium, and hydroelectric resources, Canada has become a major player in the world’s energy market. This has played to our continental relationship as the U.S. seeks to diminish its dependence on overseas oil and becomes increasingly interested in further developing energy trade with Canada. Our energy reserves also present an important opportunity for Canada to further develop its relations with India and China whose demands for energy continue to grow. A major foreign policy problem is to ensure that Canadian interests in the oil and gas sector are defended in any future climate change agreements and legislation. As new climate change legislation moves through Congress, Canada cannot afford to wait and see how Washington will act. In the new political environment, our greenhouse gas emission reduction policies must not only be real and be seen to be moving in tandem with those of the U.S., but they will also have to deflect growing opposition from environmental groups who seek to block exports from Alberta’s oil sands. Just as Canada confronts key challenges in redefining its relationship with the U.S. and other hemispheric neighbours, there are other challenges that affect global stability and prosperity with major consequences

16 Fen Osler Hampson and Paul Heinbecker

for Canada. The global economy is still in the doldrums, Iran and North Korea are pressing ahead on their nuclear ambitions, Afghanistan and Pakistan are increasingly imperiled by a rising tide of violence and extremism, the reconstruction of Iraq is unfinished business with consequences for regional stability, the Middle East is highly unstable, and many developing countries in this hemisphere and elsewhere are sinking beneath the economic waves as they struggle to cope with the fallout of the global recession and mounting social and political unrest. The global financial crisis, stock and commodity market gyrations, and continuing recession have further corroded the structures and traditions of international economic cooperation laboriously constructed over the last half century. As we look to these and other problems, a key element of our overall foreign policy strategy will be the use of adroit diplomacy and inspired ideas for managing these new global economic and security challenges, much as we employed immediately following the Second World War. Then, as now, we will have to work with our partners to realign the machinery of global governance so that it better reflects the changing distribution of power and influence in the international system. Then, as now, we should engage in helping to resolve problems where we have a clear and compelling interest. For example, there is a need to recalibrate our mission in Afghanistan by strengthening the role of diplomacy and development to ensure that al-Qaeda does not gain a stronger foothold in neighbouring Pakistan where political stability is threatened by a mounting insurgency and religious extremism. Although many of our key allies, including the U.S., have moved quickly to ratchet up their level of diplomatic engagement in the region with special envoys and other key diplomatic initiatives, we have not followed suit. Afghanistan’s neighbours must be more fully engaged in seeking a political resolution to its internal difficulties. There will be no stability in Afghanistan if Pakistan believes that a continuation of the conflict serves its own interests. Although Pakistan cannot order an end to the conflict, it can fan the flames. Canada should be much more visibly engaged in its own diplomatic efforts to forge a durable, political settlement in the region. Along with others, we can help to widen the circle of those who are involved in securing Afghanistan and Pakistan’s future. The Israeli–Palestinian issue is corrosive to international politics generally and to business at the un, in particular. The Obama administration has appointed a seasoned negotiator, former Senator George Mitchell, who was instrumental in ending “the troubles” in Ireland, to spearhead an effort to resolve this problem once and for all. The circumstances are difficult. Palestinians are divided between Fatah and Hamas and the Israelis are reluctant to entertain the idea of a viable

17 Canadian Diplomacy in the Obama Age

Palestinian state. The issues are intractable – notably, Israeli security, the status of Jerusalem, the governance of Old Jerusalem, the rights of refugees to return or be compensated, ongoing construction of Israeli settlements, relations with Syria and Lebanon, etc. – but include some dimensions in which Canada could be helpful if we retain credibility on both sides. We have the expertise and the means to help particularly with the refugee and Jerusalem files, and possibly with future security arrangements. Another area for intensified Canadian diplomacy is nuclear non-proliferation. U.S. Secretary of State Hillary Clinton identified the “the gravest threat” facing the world as “the danger that weapons of mass destruction will fall into the hands of terrorists.” To address this threat, the new administration has signaled that it will negotiate reductions in nuclear stockpiles with Russia. It also aims to strengthen the current Nuclear Non-Proliferation Treaty (npt) regime, revive negotiations on the Fissile Material Cut-off Treaty (fissban), and urge the U.S. Senate to ratify the Comprehensive Test Ban Treaty (ctbt). One of the biggest problems with the current regime is that countries like Iran are trying to remain within the npt by blurring the distinction between possession and non-possession of nuclear weapons capability. Canada is a leading exporter of uranium and a major supplier of nuclear reactor technology. We are also a longstanding champion of nuclear non-proliferation and have been a key supporter of the International Atomic Energy Agency (iaea), the npt, and the development of other nuclear safeguards. We are especially well-positioned to work closely with the Obama administration to strengthen and preserve the integrity and structure of the npt regime to ensure that there are proper firewalls in place for countries that have (or intend to pursue) nuclear energy programs and that the ctbt and fissban, two enduring Canadian objectives, move toward ratification and implementation. It is important that we and other key allies express publicly our like-mindedness so that the sceptics among U.S. officials charged with carrying forward U.S. policies in this area sense international support for them, particularly regarding U.S. disarmament policy. Canadian engagement in this policy area is especially important because the use of nuclear power is going to grow – according to some estimates it may double by 2030. As new markets emerge in unstable corners of the globe, Canada and other providers of peaceful nuclear energy, including the U.S., will have to ensure that they strike the right balance between nuclear exports and preventing nuclear weapons proliferation. Multilateral governance of the nuclear fuel cycle is an important way to reduce proliferation risks with the revived use of nuclear power.

18 Fen Osler Hampson and Paul Heinbecker

The Obama administration has signaled that climate change is a high priority, and significant bills are moving through the U.S. Congress. The major developing country emitters, particularly India and China, are reluctant to entertain solutions to a problem they do not believe they created and possibly jeopardize their economic development. At the same time, China, India, and the rest of the G77 have an interest in avoiding the harm that they will suffer, no matter who is responsible for creating the problem. Further, climate change cannot be avoided without their participation in the solution. As always, the poorest countries risk ending up picking up some of a “tab” they cannot afford for a problem that most of them did not create. Money will, thus, be a major issue if the objectives of mitigation, adaptation, and technology transfer are to be met. Meanwhile the G8 nations agreed at their summit in July to cut their emission of heat-trapping gases 80 per cent by 2050, but failed to reach an accord on shorter-term targets, apparently causing some developing countries to backtrack from a commitment to numerical targets that they had planned to announce. All of this means that Canada has to have its policy and negotiation ducks in a row for a very intense negotiating schedule that is focused on reaching agreement in December but seems destined to continue. Canada did not come close to meeting its Kyoto commitments and is in a weak position to claim leadership on this file. However, we can do our share of the diplomacy by working bilaterally with the U.S., and trilaterally with the U.S. and Mexico, on continental approaches to setting a price on carbon. Indeed, if we want to go on exporting from the tar sands, we are going to have to work with them.

conclusion We live in a time of bewildering financial and economic connectivity and advancing political complexity. Our unipolar world is passing into history, yielding to a multicentric system in which the U.S. seems likely to remain pre-eminent, albeit less predominant, as a global power, particularly with the rise in the years to come of China, India, and other centres of political and economic power and influence. Our international governance systems and institutions, constructed out of the ruins of the Second World War and the Great Depression, have been consistently lagging behind the steepening curve of globalization. The financial and economic cataclysm of 2008, which is forcing us to put out the fire and rewrite the fire code at the same time, has made the search for governance alternatives and innovations urgent while creating new problems in our relations with the U.S.

19 Canadian Diplomacy in the Obama Age

The essays in this volume point to one inescapable conclusion. We must ratchet up the energy, strength, credibility, and ingenuity of our diplomacy on many fronts – the bilateral, trilateral, and the multilateral, the continental and the global. In short, we must grasp the nettle and our diplomacy must rise to the many challenges we now confront.

references Canada–U.S. Project. 2009. From correct to inspired: a blueprint for Canada– U.S. engagement. Ottawa: Carleton University. Gotlieb, Allan. 2004. Romanticism and realism in Canada’s foreign policy. Toronto: C.D. Howe Institute. Available at: . Last accessed 29 Aug. 2009. Greenhill, Robert. 2005. Making a difference? External views on Canada’s international relations. Toronto: Canadian Institute of International Affairs. Available at: . Last accessed 28 Aug. 2009. Holmes, John W. 1981. Life with uncle: the Canadian–American relationship. Toronto: University of Toronto Press. Pearson, Lester B., and J.A. Munro. 1973. Mike: the memoirs of the Rt. Hon. Lester B. Pearson, volume 2, 1948–1957. Toronto: University of Toronto Press. ssea (Secretary of State for External Affairs). 1970. Foreign policy for Canadians. Ottawa: Information Canada. St. Laurent, Rt. Hon. Louis. 1947. The foundations of Canadian policy in world affairs [Duncan & John Gray Memorial Lecture]. In Statements and speeches. Ottawa: Department of External Affairs. Available at: . Last accessed 28 Aug. 2009.

Building a Stronger, Cleaner, and Fairer Global Economy: A Leading Role for Canada angel gurría

“Even damnation is poisoned with rainbows.” I borrow these words from “The old revolution” by Leonard Cohen, first, because I believe that these challenging times contain the seeds of a better era for human progress and, second, because in challenging times like these some nations rise to provide guidance, leadership, and change. Canada is one of those nations. I am confident that this 25th anniversary edition of Canada among nations will reflect the strengths of Canada as a global citizen, a pathfinder, and a world leader. This introductory chapter provides a panoramic view of the current financial and economic crisis, of the need for more inclusive global governance, and of some of the structural challenges that we still face and the ways in which Canada is addressing them, all seen from the perspective and experience of the Organisation for Economic Co-operation and Development (oecd).

th e g r av e s t c r i s i s o f o u r l i v e s We are experiencing the worst economic crisis of our lifetime, and we must all work together to reactivate growth and build a stronger, cleaner, and fairer world economy. During the past year, governments have made remarkable efforts to address the crisis. In fact, the global policy response has been unprecedented. The measures taken throughout the world since fall 2008 have set the basis to stabilize markets and gradually restore confidence in them. The fiscal stimulus packages – an unprecedented injection of

21 A Stronger, Cleaner, and Fairer Global Economy

trillions of dollars – combined with aggressive easing of monetary controls and bold measures to stabilize the financial sector, are having the desired effect. After 18 months of mostly bad news, we are now seeing some positive signs, the so called “green shoots.” These green shoots are real. However, they still look tiny next to the structural problems that are holding down growth. The global economy is still hampered by the presence of illiquid “toxic assets” in the balance sheets of banks in major financial markets. The credit crunch remains a reality. Global industrial production, international trade, and foreign direct investment flows are all expected to show double-digit contraction in 2009. The social and human consequences are dramatic. Unemployment in oecd countries is projected to reach 10 per cent by 2010, swelling the ranks of the unemployed by more than 25 million people – by far the largest and most rapid increase in oecd unemployment in the postwar period. As all other oecd countries, Canada has been directly affected by the crisis, not only because it is close to the epicentre (the United States [U.S.] buys three-quarters of Canadian exports and is the main destination for Canadian foreign direct investment), but also because of the fall in prices of the commodities it exports and a confidence crisis that is affecting investment and household spending. However, compared with other nations, Canada’s economy is proving remarkably resilient. Before the crisis hit, Canada had enjoyed 17 consecutive years of economic growth, in large part as a result of significant structural reforms implemented over the years. A solid and reliable monetary policy framework and many years of fiscal consolidation also contribute to the stability. Canada has a sound, well-regulated banking sector, an important number of firms with new-to-market product innovations (especially among small and medium-sized enterprises), a highly educated population – a substantial part of which is engaged in science and technology occupations – and one of the highest levels of venture capital investment in the hightechnology sector (81 per cent) among the oecd countries (Fig. 1). However, there is no room for complacency. Canada needs to continue moving up the global value chain and remain competitive as other nations catch up. It has to make further progress in improving its research and development capacity (which ranks well below the oecd average) to close the widening productivity gap between it and the U.S. Furthermore, Canada needs to adjust to the largest terms-of-trade shock it has experienced in its modern history. And, as an open and globalized economy, it must also work with other countries to respond to the crisis.

Figure 1 Investment in high-technology sectors as a proportion of total venture capital, 2005 or latest available year* Communi ca ti ons

Informa tion technol ogy

Hea l th/bi otechnol ogy

% 100

Investment in technology %

80

60

40

20

Un Ire it e la n d d St at C es Sw ana it z da er De land nm a Gr rk ee Au ce st Fin ria lan Be d lgi um OE No CD rw a Ko y re Ice a lan Sw d ed Ge e rm n Un a it e J ny ap d Eu K an r o ing pe do a m Ne n U w nio Ze n ala n Fr d an Po ce rt u ga Sp l ain Po lan Sl o d va k R It a ep ly ub Cz Au lic ec st h ra l Re ia Ne pu th blic er la Hu nds ng ar y

0

Note: For European countries, venture capital investment includes investments in early-stage projects, expansion, buy-outs, and others. *For Korea and Japan, 2001; for Iceland, 2002. Source: oecd 2008, 41.

23 A Stronger, Cleaner, and Fairer Global Economy

n e w g l o ba l g ov e r n a n c e : the age of inclusiveness This is not only the gravest crisis of our lifetime, but also the most widespread and synchronized crisis ever. Thus, the only way we can turn the global recession and build a more resilient, fairer, and greener global economy is through a truly global response. The global governance architecture must reflect a changed world reality. The emergence of innovative schemes, such as the Major Economies Meeting, the oecd’s Heiligendamm L’Aquila Process, and the G8 + G5 or the G20, suggests a growing realization that we cannot build a stable global economy without including developing countries in the decision-making process. We need more inclusive and better coordinated international economic organizations. Aware of these crucial needs, the oecd has embarked on a remarkable transformation. It is becoming more global, more inclusive, and more plural. After bringing in Mexico, Korea, and four central European countries in the past 15 years, we have initiated a new round of enlargement, which aims to include Chile, Estonia, Israel, the Russian Federation, and Slovenia as full members in the coming years. And we have started a parallel enhanced engagement strategy to strengthen collaboration with five crucial emerging economies – Brazil, China, India, Indonesia, and South Africa – with a view to their possible membership. We are also working to strengthen the partnership between the G8 and the major emerging economies through the Heiligendamm process. We are multiplying our relations with dozens of other developing countries through well established programs, including the Middle East and North Africa Initiative on Governance and Investment for Development and the Emerging Markets Network, as well as flagship studies, such as our recently launched Latin American Economic Outlook, the existing African Economic Outlook, and the future Southeast Asian Economic Outlook. The oecd is developing a growing relationship with the G20 and supporting it with analytical and technical work in areas such as taxes, competition, investment, corporate governance, exit strategies, investment protectionism, pensions, financial literacy, and labour market policies. We have also embarked on a recent initiative to develop a global charter for sustainable economic activity based on proposals by Germany’s Chancellor Angela Merkel and Italy’s Minister of Finance Giulio Tremonti. At the initiative of the oecd, the International Labour Organization (ilo), the International Monetary Fund, the World Bank, and the World Trade Organization have provided an inventory of possible policy instruments to restore confidence and integrity,

24 Angel Gurría

prevent a recurrence of the present economic and financial crisis, and thwart a backlash against open markets and globalization. Canada has been a strong promoter of these and other efforts to make the oecd a more open and inclusive organization, very much in line with its own strategy of favouring multilateralism in its international relations and making important contributions to a more balanced and inclusive globalization. Canada has been instrumental, for example, in broadening the G7 agenda beyond its economic and financial focus, to include such crucial structural topics as climate change, health, infectious diseases, water, food security, and transnational bribery. Notably, it was Paul Martin, as finance minister of Canada, who raised the need to expand the G7 to include developing countries and who promoted the creation of the G20 in the late 1990s. As minister of finance of Mexico, I supported his successful initiative at that time and later joined him in promoting the creation of an L20 group (20 leaders) through the Centre for International Governance Innovation and the Centre for Global Studies, two Canadian think-tanks. Although less immediately successful, this work was the seed of the recent summits in Washington and London, where the G20 leaders made important decisions to help the world recover from the financial and economic crisis.

addressing structural challenges: t h e b e s t wa y o u t Apart from building more inclusive and effective global economic governance, we need to address the current economic crisis with long-term vision. Canada’s stimulus package, for example, was designed to lock in structural improvements in various policy areas. Thus, its main components include investment in roads, bridges, public transport, clean water, knowledge, health infrastructure, the housing sector, and support and training to citizens most affected by the crisis, as well as to the most affected sectors and communities (e.g., targeted funding for the auto, forestry, agriculture, and manufacturing sectors). More generally, beyond the Canadian context, I would like to underline the importance of at least four structural challenges that must be considered in our recovery strategies and policies: combating global poverty and reducing inequalities, promoting a green recovery to deal more effectively with climate change, keeping markets open for trade and investment, and ending corruption and tax evasion. Combating Global Poverty and Reducing Inequalities Global poverty is our most urgent challenge, and the current crisis is no excuse for reducing our efforts to fight it. If anything, it is a strong

25 A Stronger, Cleaner, and Fairer Global Economy

reason to strengthen these efforts, as the poorest economies of this planet are paying for a crisis they did not create. During the first years of this century, most developing countries were growing at impressive rates, applying responsible macroeconomic policies, and managing to pull millions of people out of poverty. But now their outlook is bleak: the International Labour Organization (ilo) estimates that by the end of 2009, 200 million workers could join the ranks of people living on less than usd 2 per day (ilo 2009), and the number of hungry people in the world may increase by another 104 million, taking the global figure to around 1 billion people (fao 2009). Developing countries’ economies are being affected by declining remittances, the drying up of credit and investment flows, decreasing world trade, and falling commodity prices. The World Bank (2009) estimates that, overall, the financial “shortage” for developing countries could reach usd 700 billion. In 2008, total official development assistance (oda) from members of the oecd’s Development Assistance Committee (dac) rose by 10.2 per cent to usd 120 billion, the highest ever recorded (dac 2008, 1). However, the economic crisis is putting this positive trend in jeopardy. Although, in the past, oda flows have displayed a certain resilience to business-cycle fluctuations in donor countries, the prospects for 2010 and beyond are not encouraging. oda budgets are expected to come under pressure as donor governments struggle to keep public finances under control. This perspective is putting the commitments made at the 2005 G8 summit (i.e., to increase aid from usd 80 billion in 2004 to usd 130 billion in 2010) and the un’s millennium development goals (mdgs) at risk. At least usd 10 billion must still be added to current forward spending plans if donors are to meet their 2010 commitments (dac 2008, 3). Aid cuts at this point would place an additional burden on developing countries that are already facing restricted sources of income and increased poverty, reversing some of the progress made in recent years toward meeting the mdgs. At the oecd, we are making a big effort to measure these risks and help countries avoid a worse scenario by making aid more efficient, looking for best practices in innovative finance, studying and promoting pro-poor growth, and launching an aid pledge inviting dac members to reaffirm their aid commitments. Canada has been a leading contributor to this effort, as well as to the global fight against poverty. It has placed poverty eradication and sustainable development at the core of its development assistance. As a key donor within the international community, it has a long track record of integrated and innovative programming; this has made a real difference in a number of countries, such as Tanzania, where Canada

26 Angel Gurría

has contributed strongly to reduce poverty (cida 2009). Canada’s recent initiatives to double aid to Africa (Treasury Board of Canada Secretariat 2009), to intensify its reconstruction and development activities in Afghanistan, and to create a new development innovation fund are only a few examples that show the scope and significance of its contributions to address this global challenge. Promoting a Green Recovery to Deal More Effectively with Climate Change The current crisis is a unique chance to address environmental challenges. Our recovery plans and programs open an opportunity to relaunch our economies based on green growth and innovation. Recovery plans should aim to achieve low-carbon growth, through adoption of environmental measures that have high multiplier effects in terms of job creation and mobilizing private-sector investment. The crisis can spur a much-needed policy reform that generates both environmental and economic gains, for example, by removing subsidies for fossil-fuel consumption and production. Dealing effectively with climate change and other challenges will require investment in “smart” infrastructure, green information and communication technologies, alternative energy sources, and pollution control. Over the longer term, the pursuit of environmental aims through the use of economic instruments (i.e., green taxes, cap-and-trade) can make policy implementation more cost effective and generate revenues for public budgets. Between 2008 and 2010, the 30 oecd member countries, our five accession candidates, and our five enhanced engagement partners will implement stimulus measures in their economic recovery packages worth trillions of dollars. If an important part of these measures includes incentives for “green” investments in areas such as public transport, energy efficiency, water supply, sanitation systems, and pollution control, then we will be seizing the greatest opportunity of our lives. If, on the contrary, these packages are based on the same wasteful nonrenewable energies, the future of our children will be threatened. Climate change is, beyond a doubt, the most critical medium- and long-term challenge. Without new policy action, global greenhouse gas emissions are expected to increase by 70 per cent by 2050 (oecd 2009a), leading to higher temperatures, droughts and storms, poor crop yields, and damaged infrastructure. Inaction can also significantly reduce economic productivity. Indeed, recent oecd analysis shows that ambitious policy action to address climate change makes economic sense and that delaying action could be costly in both economic and environmental terms.

27 A Stronger, Cleaner, and Fairer Global Economy

The economic crisis provides no room for complacency. At most, it might reduce global emissions slightly and temporarily, after which an upward trend will resume. Delaying action on climate change would only mean larger cuts later. The success of the 2009 United Nations Climate Change Conference in Copenhagen (7–18, December 2009) will be crucial if we are to move the world economy onto a greener development path. This is an area where Canada should take a stronger stance and lead the way, as it produces among the highest emissions per capita in the world (Fig. 2). For many years, successive Canadian governments have struggled to find the best way to fight climate change and move the economy onto a more sustainable development path. But there now seems to be a clearer and stronger disposition to move forward, as perceived in the recent proposal by the Canadian prime minister to introduce a continental cap-and-trade system to control carbon emissions. Achieving post-Kyoto goals, while sustaining energy development, will require much less energy-intensive consumption and production patterns, notably in the Canadian energy sector. Market-based solutions, such as permit trading, as well as better technology will be critical. Prompting firms and consumers alike to take into account the environmental costs of their actions will also provide stronger incentives for energy efficiency and innovation. Consistent action by the federal government, working closely with its provincial and local counterparts, will be critical for success. Keeping Markets Open for Trade and Investment Keeping markets open is an essential condition for recovery and longterm growth. It is crucial to reverse growing unemployment, foster competition, and stimulate the innovation that we need to build a green recovery. Yet, just as the need to maintain open markets is greatest, concerns about the consequences of liberalization and the perception that it may have contributed to the current crisis have been growing. If these concerns result in weakened commitment to multilateralism and rising protectionism, the crisis will become even worse and recovery will be delayed. International trade flows are decreasing sharply. According to the latest estimates (oecd 2009b), these flows are expected to fall by 16 per cent during 2009, before recovering slowly in 2010. This means that one of our most important engines of global growth is sputtering. Still, many countries refuse to make substantial concessions to move forward in multilateral trade negotiations. This does not make sense. The current recession is providing a new platform to revive the Doha

Figure 2 Per capita carbon dioxide emissions* in oecd countries, 2007 Luxembourg

22,3

United States

19,1

Australia

18,7

Canada Finland

17,4 12,2 11,8

Czech Republic Netherlands Ireland

11,1 10,1

Korea

10,1 10,0

Belgium Germany Japan

9,7 9,7

Denmark

9,2 8,7

Greece United Kingdom New Zealand

8,6 8,5 8,4

Austria Poland

8,0

Norway Spain

7,8 7,7 7,5

Iceland Italy Slovak Republic

7,4 6,8

France

5,8 5,6

Switzerland Hungary Portugal

5,4 5,2

Sweden

5,1 4,1

Mexico Turkey

3,6 0

5

10

15

20

25

CO 2 (tonnes per capita) *co 2 emissions were estimated by the International Energy Agency using its energy balances and

a) CO2 emissions are estimated by the IEA using the IEA energy balances and the default default sectoral approach and default emission factors from the revised 1996 Intergovernmental Panel sectoral approach method and default emission factors from the Revised 1996 on Climate Change (ipcc) guidelines. PCC Guidelines Source: oecd/iea 2009.

29 A Stronger, Cleaner, and Fairer Global Economy

Development Agenda. An increase in the share of trade of 1 per cent of gross domestic product raises income levels by 0.9–3 per cent (Love and Latimore 2009). If we want to restart our economies and boost employment, we must open our borders. Remember: closed borders close factories. Keeping markets open for investment is also crucial, particularly long-term investment. From insurance and pension funds to reserves, from sovereign wealth funds to endowment funds, long-term investment can play a very important role in helping reactivate economic growth while addressing key structural challenges like climate change, renewable energies, intelligent buildings and transport networks, water management, food efficiency, aging, and international migration. In the last few decades, Canada has greatly benefited from global investment, both as an origin and destination of flows. This is in large part because Canada’s structural reforms over the last two decades have tended to move the country toward freer trade and investment. Canada ranks 7th in the 2009 index of economic freedom, scoring high in eight out of ten economic freedoms, including trade and investment, as well as freedom from corruption (Heritage Foundation 2009). This trend has to continue. Combating Corruption: The Case of Tax Evasion Another structural challenge this crisis is forcing us to focus on is global corruption. We are confronting a major crisis of confidence. Corporate governance failures in our banks and corporations, combined with failings by our regulatory and supervisory authorities and our rating agencies, have strengthened a feeling of disappointment with globalization and its main actors. In turn, this can breed social mistrust, calls for protectionism, over-regulation, and even xenophobia toward economic migrants. Corruption is the cancer of globalization. It undermines democracy, public policy, and social capital, and it has a disproportionate impact on the poor. More than usd 1 trillion is paid in bribes each year globally, according to the World Bank Institute (World Bank 2004). This is equivalent to nearly 10 times what we channel to developing countries in aid flows. The size and complexity of this challenge demands coordinated action and a global anti-corruption partnership among international organizations, national governments, the corporate sector, and civil society. Combating corruption is crucial to win back people’s confidence. oecd is working to help countries combat corruption and build a more transparent and reliable global economy. We are making important efforts to fight international bribery, public procurement opacity, abusive

30 Angel Gurría

lobbying, and tax evasion. We have recently achieved historic progress in improving the international exchange of information for tax purposes, at a time when governments need all the fiscal resources available. Tax evasion deprives governments of revenues needed for hospitals, schools, and roads, forcing honest taxpayers to pick up the tab. It also prevents them from lowering taxes for all. In an increasingly borderless world, cross-border tax evasion has become a big threat. It undermines the tax base of developing countries, making it harder for them to mobilize their domestic resources. The oecd’s work on harmful tax practices has highlighted the very negative effects of excessive bank secrecy and the lack of transparency and effective exchange of information. In collaboration with non-oecd countries, this has produced a set of standards that has been nearly universally accepted. The oecd’s work on taxes received a lot of attention during the G20 London summit. After almost 12 years of work in this area, in the course of a few weeks, all 84 jurisdictions monitored by the Global Forum on Tax Issues had either already implemented or committed to adopting the international standard of article 26 of the oecd Model Tax Convention on the exchange of tax information (oecd 2003). Canada has one of the largest tax treaty networks in the world – over 80 treaties to date – and it continues to negotiate agreements that eliminate tax barriers to trade, investment, migration, and cultural exchange. As host of the oecd’s Global Forum on Taxation meeting in 2003, it played a key role in laying the foundation for a global level playing field in the area of transparency and exchange of information. It has taken the lead in policy innovation as one of the first countries to introduce rules that provide clear incentives for entering into effective exchange of information – rules that disadvantage those who seek to avoid implementing their commitments to international cooperation. Canada is also a founding member of the Joint International Tax Shelter Information Centre, which set the standard for cooperation among tax authorities. Outside the tax area, Canada held the presidency of the Financial Action Task Force in 2006–07, and has recently withdrawn its reservation to the Recommendation of the oecd Council on Tax Measures for further combating bribery of foreign public officials in international business transactions (oecd 2009c). In the context of these four important structural challenges, the oecd has been helping countries reactivate their economic growth through appropriate policies and international cooperation. Since December 2008, in a truly horizontal effort by all areas of the oecd and with the close involvement of the oecd Council, we developed a strategic response to the financial and economic crisis to assist countries in

31 A Stronger, Cleaner, and Fairer Global Economy

strengthening their financial systems and restoring economic growth with a long-term view (oecd 2009d). In this response, we are reviewing the framework for financial regulation, competition, and corporate governance to build a stronger and more coherent post-crisis system. We are helping countries foster a green and innovation-led recovery, taking stock of our long-standing work on climate change and renewable energies, while providing new analysis on issues, such as the implications of the crisis for financing for innovation. We are also providing new instruments to help keep markets open for trade and investment and using our existing tools to fight cross-border corruption. And we are placing development and the reduction of inequalities at the very centre of these efforts. The 2009 oecd Ministerial Council Meeting (mcm) focused on the theme “The crisis and beyond: building a stronger, cleaner and fairer world economy.” It was an important milestone in oecd’s work on how to move from a policy-driven recovery to self-sustaining growth. The 2009 mcm was attended by ministers from the 30 member countries and, for the first time, from the 10 enhanced engagement and accession countries. A major achievement of the meeting was the adoption of the Declaration on Green Growth, which has, thus far, been endorsed by the governments of all 30 oecd members as well as Chile, Estonia, Israel, and Slovenia. In the words of Korean Prime Minister Han Seung-Soo, who chaired the meeting, the declaration represents “a paradigm shift in policy” toward a stronger, cleaner, and fairer post-crisis economy (oecd 2009e).

l o o k i n g f o r wa r d : it’s about sustainability It is still too early to know what will be the outcome of this crisis. At the oecd, we expect a gradual policy-induced recovery taking hold at different times in different regions. Activity in the major non-oecd countries, particularly China, is likely to firm up first, partly because these economies are not being held back by the need to undertake balance sheet repair work. We also anticipate recovery in the U.S. and Japan later in 2009, driven by strong policy stimulus, a normalization of the inventories cycle, and the bottoming out of residential construction. A recovery in Europe should follow in early 2010. Overall, however, global recovery is likely to be rather weak and fragile. The risk that reality will prove us wrong is smaller today than it was three or six months ago. But these are difficult times indeed to forecast economic growth or the behaviour of markets. Looking to

32 Angel Gurría

the future, however, we should keep two key, long-term dimensions in mind while designing policies for a fast economic recovery: fiscal and environmental sustainability. Many of our emergency measures could pose a threat to long-term growth and fiscal sustainability if not properly unwound. It is thus critical to consider exit strategies now to prevent the emergence of new threats down the road. The need to restore sound public finances after the crisis will present policymakers with tough trade-offs. Considerable expenditure cuts, additional revenue, or a combination of both, will surely be needed, but consolidation measures will have to be designed in ways that do not hamper the recovery and longer-run economic growth. Going forward, the focus will shift from the immediate need to restore economic vitality toward structural policies that make growth sustainable. Innovation will be one of the keys for recovery, not least by putting countries back on a path to sustainable – greener and smarter – growth. Many governments have incorporated measures to strengthen innovation in their short-term stimulus packages. But there is still need for a stronger commitment to the environment. This is an important opportunity to reformulate our production–consumption patterns, our economic culture. The oecd will need strong political support from its members in the way forward on these fronts. Canada, one of the oecd founding members, has consistently provided that support. Through almost 50 years, it has exercised strong leadership and fostered consensus-building in key areas of oecd’s work: from the financial reform of the organization to education, from energy research and technology to environment and development cooperation, from public governance and statistics to cooperation with Latin America. Canada’s active membership is also reflected in its chairmanship of more than 20 oecd committees and working parties (Permanent Delegation of Canada to the oecd 2008). Moreover, Canada’s three levels of government and about 30 government departments and agencies are involved in oecd work.

a l e a d i n g ro l e f o r ca n a da Most certainly, Canada can make a key contribution toward building a stronger, cleaner, and fairer global economy. It is uniquely positioned to provide the global leadership that these challenging times are demanding. Canada is one of the most “well-connected” countries in the world. Very few other nations participate in such a far-reaching network of international organizations with so much conviction and faith in multilateral cooperation. As a recent paper by Tom Keating (n.d., 1)

33 A Stronger, Cleaner, and Fairer Global Economy

suggests, Canada’s commitment to multilateralism has earned it a reputation as an inveterate “joiner,” a reliable and responsible global citizen. This active participation in multilateral organizations is based on wide public support, to such an extent that it has been considered by some as a symbol of Canadian identity. As Stephen Lewis, another exemplary Canadian contributor to a better world has put it, Canadians “have a lasting and visceral commitment to multilateralism which is ingrained and endemic to the Canadian character” (Keating n.d., 1). This experience, this commitment, and the global recognition of this fact place Canada in a privileged position to lead the transformations that our global governance architecture so badly needs. Canada’s upcoming G8 presidency and the G8/G20 summit in Huntsville, Ontario, 25–27 June 2010, will provide unique opportunities to take that lead in addressing each of the structural global challenges mentioned above: reducing global poverty and inequalities, promoting a green recovery, keeping markets open for trade and investment, and combating corruption. The substantial results and the degree of inclusiveness of the previous Canadian presidency of the G8 in 2002 – when important decisions were made to promote sustainable development, to assist highly indebted developing countries, to help Africa address its major challenges, and to forge a global coalition against terrorism – allow us to be optimistic and to expect a path-breaking and results-oriented summit in Huntsville. For many years, Canadian statesmen, diplomats, decision-makers, economists, and academics have been bringing to the table of multilateral negotiations a collection of ideas, proposals, agreements, protocols, and initiatives to establish an international financial and economic system conducive to sustainable development. With its multilateral network and know-how, its experience in adopting difficult reforms, and its growing engagement in promoting an environmentally responsible economic culture, Canada should raise its voice in international fora and drive change, spreading that very Canadian concept of the world as a team. This is a timely moment for Canada to rethink its role in the global architecture. It is the right time to pause and reflect on the many fields where Canada is making a difference, the areas where it can do more, its proven capacity to generate concepts that can improve the world, and the leadership to take them forward. This series, Canada among nations, is a permanent source of inspiration toward a greener global economic recovery and a new, more inclusive globalization. The oecd looks forward to continuing its fruitful cooperation with Canada in rising to these challenges.

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references cida (Canadian International Development Agency). 2009. Tanzania. Gatineau, Que.: cida. Available at: . Last accessed 1 Sept. 2009. dac (Development Assistance Committee). 2008. Development aid at its highest level ever in 2008. Paris, France: Organisation for Economic Co-operation and Development. Available at: . Last accessed 30 Aug. 2009. fao (Food and Agricultural Organization of the United Nations). 2009. 1.02 billion people hungry [news release]. Rome, Italy: fao. Available at: . Last accessed 31 Aug. 2009. Gurría, A. 2009. Shifting towards a green economy: what policies? [blog entry]. Copenhagen, Denmark: cop15; 30 June. Available at: . Last accessed 1 Sept. 2009. Heritage Foundation. 2009. Canada. In 2009 index of economic freedom. Washington DC: Heritage Foundation and New York: Wall Street Journal. Available at: . Last accessed 1 Sept. 2009. ilo (International Labour Organization. 2009. ilo says job losses are increasing due to economic crisis [news release]. ilo, Geneva, Switzerland. Available at: . Last accessed 31 Aug. 2009. Keating, T. n.d. Multilateralism and Canadian foreign policy: a reassessment. Calgary: Canadian Defence and Foreign Affairs Institute. Available at: . Last accessed 1 Sept. 2009. Love, P., and R. Lattimore. International trade: free, fair and open? Paris, France: Organisation for Economic Co-operation and Development. 193 pp. oecd Insights series. oecd (Organisation for Economic Co-operation and Development). 2003. Articles of the model convention with respect to taxes on income and on capital. Paris, France: oecd; 28 Jan. Available at: . Last accessed 1 Sept. 2009. – 2008. Science, technology and industry outlook 2008. Paris, France: oecd Publishing. – 2009a. Integrating climate change adaptation into development cooperation: policy guidance. Paris, France: oecd. – 2009b. oecd economic outlook no. 85. Paris, France: oecd; June.

35 A Stronger, Cleaner, and Fairer Global Economy – 2009c. Recommendation of the oecd Council on Tax Measures for further combating bribery of foreign public officials in international business transactions. Paris, France: oecd; 25 May. Available at: . Last accessed 1 Sept. 2009. – 2009d. oecd strategic response to the financial and economic crisis: contributions to the global effort. Paris, France: oecd. Available at: . Last accessed 1 Sept. 2009. – 2009e. Major world economies aim for “green growth” as the way out of the crisis [news release]. Paris, France: oecd; 25 June. oecd/iea (Organisation for Economic Co-operation and Development/International Energy Agency). 2009. co 2 emissions from fuel combustion. Paris, France: oecd/iea. Permanent Delegation of Canada to the oecd. 2008. Committees and working parties chaired by Canada. Ottawa: Government of Canada. Available at: . Last accessed 1 Sept. 2009. Treasury Board of Canada Secretariat. 2009. Planned spending in the outcome area: global poverty reduction through sustainable development. Ottawa: Treasury Board of Canada; 4 April. World Bank. 2004. The costs of corruption [news release]. Washington dc: World Bank; 8 April. Available at: . Last accessed 1 Sept. 2009. World Bank. 2009. Crisis reveals growing finance gaps for developing countries [news release]. Washington dc: World Bank. Available at: . Last accessed 31 Aug. 2009.

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Bilateral Trilateralism john manley and gordon giffin

The enthusiasm of Canadians for the new administration of Barack Obama, reinforced as it was by the new president’s Ottawa declaration that he loved Canada, remains strong. A recent poll indicates that only 4 per cent of Canadians believe the United States (U.S.) president is doing a poor job. But as Bill Clinton famously observed, “We campaign in poetry and govern in prose.” It will soon be time for the next chapter of serious prose to be written on the future of Canada–U.S. relations in the context of a North American community. The presidency of George W. Bush was bookended by two worldchanging events: the terrorist attacks of 9/11 and the financial and economic meltdown of 2008. These events will inevitably shape the Obama presidency as well. In his first months in office, President Obama has contended with numerous domestic issues of huge significance while simultaneously dealing with an array of international tensions and conflicts. Any of these issues would have been a blockbuster on its own in normal times. It is little surprise, therefore, that apart from an early visit to Ottawa, North American affairs and the Canada–U.S. relationship have been well down the priority list in Washington. In the meantime, Canadian leaders have faced their own challenges as a fractured Parliament struggles in the face of strong economic headwinds and a weakening economy, with a fourth election in five years looming. Notwithstanding distractions in Washington and political turmoil in Ottawa, there is no time to lose in defining objectives for the future agenda in North America. For Canada, the relationship with the U.S.

40 John Manley and Gordon Giffin

is at the centre of its economic interests and defines its defense and security stance in the world. Economically, it is not just a matter of trade, although those statistics are impressive. It is the fact of economic integration: supply chains, just-in-time inventories, energy coordination in a shared environment, and transportation links. These and other aspects of our interrelationship have evolved since and in some ways independent of the North American Free Trade Agreement (nafta). Strategically, as allies and partners in the defence of North America, Canada has often been content to rely on U.S. military dominance as the cornerstone of its ability to defend its own territory. But as a founder of the North Atlantic Treaty Organization (nato) and an active partner in the North American Aerospace Defense Command (norad), Canada’s defence and security establishment has built a tradition of deep cooperation with the U.S. More recently, Canada has played a key role in Afghanistan, paying a heavy price in lives and treasure. There should be no doubt that this defence and intelligence collaboration is an important component of the relationship from the U.S. perspective. In their time, the 1988 Canada–U.S. Free Trade Agreement (fta) and the 1993 nafta treaty were world-leading prototypes of free trade arrangements. nafta created the largest trading block in the world, one that set many standards for progressive multilateral economic development. The first decade of nafta was a time of prosperity and economic progress in North America. But the rest of the world did not stand still. On the contrary, developments in Europe, Asia, and Latin America moved the yardstick while North America’s commercial arrangement was static. The fta and then nafta were steps along a path to efficient and productive economic integration, but they were not the destination. Policymakers lost sight of that fact, and disenchantment grew as reality sometimes fell short of expectations. When disputes arose, such as softwood lumber or subnational government procurement, the public felt that nafta should have prevented the problem. “Enforce nafta” or “strengthen nafta” were consistent refrains on one side of the border or the other. Trade professionals knew that nafta was not comprehensive in its intent nor in its provisions, as all parties needed to compromise to get the agreement that was possible. But for many citizens, that was simply not clear. Some issues subject to dispute simply were not covered and, in some cases, the dispute settlement mechanisms were inadequate for covered issues. We believe that, as we entered the new millennium, the need for the sequel to nafta became more apparent. Other regions of the world

41 Bilateral Trilateralism

had achieved similar or more progressive trading agreements and the nagging inefficiencies resulting from nafta’s limitations were becoming more evident. With the election of George W. Bush, a man who knew Mexico and who had become familiar with Canada through his father, there was an expectation that this new U.S. government would turn its attention to the “neighbourhood,” and we would begin the evolution of our economic integration anew. That was a realistic but short-lived expectation cut tragically short by the events of 9/11. Unfortunately, as the president and Congress turned their attention to other priorities and challenges and as homeland security became an increasing preoccupation of U.S. authorities, the cause of increasing and liberalizing cooperation in North America was set back. Furthermore, the growing unpopularity of the Bush administration in both Canada and Mexico, made it very difficult to pursue meaningful new initiatives with the U.S. to further integrate the three economies. Efforts, such as the Security and Prosperity Partnership instituted in 2005, contained all the right language about resuming progress. This new trilateral initiative was intended to provide a process by which the three countries would define actions and policies to make North America more secure and economically more efficient. Enhancement of global competitiveness and “smart” and secure borders were identified as priorities. In the ensuing years, working groups have laboured, private sector interests have consulted, and leaders have met, but no meaningful advances have been achieved. In short, process has been substituted for progress. However, now we believe the time may be right for bold but pragmatic steps forward. nafta is a 16-year-old policy that does not provide a contemporary framework for the kind of efficiency that the North American economy requires to be competitive. Furthermore, the Obama administration is not the obstacle that its predecessor was in gaining political acceptance in Canada and Mexico. Therefore, the time to act is upon us, and leaders should be as bold as those who brought us the fta and nafta in so acting. In particular, specific outcomes must be defined, not merely a dialogue. So, if the strategy is an improved economic and social partnership in the North American community, what is the best tactic for engaging the parties on this journey? Remembering our history may be instructive in considering how to make progress. The fta provided a model for nafta, enabling a trilateral commercial relationship to be established using the legal and conceptual framework of the earlier bilateral arrangement. nafta has proven beneficial to all parties, but efforts to move forward have yielded little.

42 John Manley and Gordon Giffin

It is our contention that some things can be accomplished between two partners that may be difficult to achieve among three. This is so in the North American context, where common sense and experience show that there are significant differences among the three partners that make discussions about the border, about police and security cooperation, and about energy difficult. A few weeks after the terror attacks in New York, Canada and the United States signed the Smart Border Accord, which applied the principles of risk management to our mutual border. The agreement was intended to enhance the security of both countries by strategically allocating scarce resources while encouraging the free flow of goods. But as a joint report by the U.S. and Canadian chambers of commerce pointed out last year, our limited resources to detect crime and terrorism are now being applied in such a way that they are, in fact, less effective in preventing crime while perversely delaying “just-in-time” shipments of goods to manufacturing facilities across the border. These measures have been compromising economic security in favour of perceived but unproven increases in physical security on a daily basis. While Europe and Asia build economic blocs that are ever broader, more efficient, and multinational, North American borders have become stickier, constituting barriers to trade and obstacles to efficiency for those companies whose businesses are integrated across those borders. As has been observed, Canada and the U.S. (and Mexico) do not so much trade with one another as make things together. This is nowhere more evident than in North America’s highly challenged automotive sector, in which, on average, a vehicle being assembled in North America by General Motors, Ford, or Chrysler crosses one or both U.S. borders six times. At a time when the North American automobile manufacturing sector is seriously challenged by offshore competitors, it is mystifying that governments would, on one hand, choose to make their domestic industry even less competitive by increasing delays, while, on the other hand, doling out massive bailout funds. The onerous burden of border measures on the current production flows between the U.S. and Canada create a North American manufacturing disadvantage when imported vehicles only cross the border once on arrival. On the northern border, U.S. concerns have been primarily focused on security, while the concern in the south has been more concentrated on illegal immigration and drugs. The degree of cooperation between Canadian and U.S. police, security, and intelligence forces is much more highly developed than that with Mexico. This makes trilateral cooperation on border issues very difficult to coordinate and pursue. Although Mexico also signed a border accord with the U.S. following 9/11, it was recognized that border cooperation is in essence a bilateral

43 Bilateral Trilateralism

matter and, although procedures and technology on one border were instructive and could inform progress on the other border, the achievement of meaningful results required a degree of cooperation between police and security forces that was much more highly developed in the north than in the south. In addition, the operational issues are entirely bilateral and specific to one border or the other. The issues of energy cooperation and the environment also require parallel, rather than cooperative, approaches. For many decades, since nationalization of the oil fields, energy policy has been the third rail of Mexican politics, and efforts to liberalize have often been frustrated. Although energy sources in Mexico are largely state-controlled, Canada has long had a mainly privatized approach, subject only to taxes and royalties. Export controls have never been applied and, in the fta, Canada committed to a pro rata supply of energy resources to the U.S. in a time of shortage. The Clean Energy Dialogue now going on between the U.S. and Canada is a timely example of the way our two countries can directly address difficult and contemporary challenges that also have global implications. The election of Barack Obama with a Democratic majority in Congress implies renewed attention to the supply needs of the U.S. in the future, in parallel with increased concern about the environmental effects of energy production and consumption. Not only is Mexico’s reluctance to deal with private investment in the energy sector an obstacle to a three-party approach, but the developing nature of the Mexican economy makes a coordinated approach to environmental issues, particularly climate change, an awkward if not impossible fit. At a minimum, it points to the need to attempt to work through some issues that are already complex and challenging in the context of two developed economies lying in the jurisdiction of two national and at least 60 subnational governments, before attempting to do so in the face of the special needs and political obstacles faced by Mexico. On a broad array of issues, trilateralism makes sense and can be effective, working within or even beside the framework of nafta. The recent outbreak of the H1N1 virus is an example of a situation that calls for trilateral, indeed global cooperation. But the trilateral approach should not impede progress urgently needed between bilateral partners. Canada does not need to be directly involved, it would seem to us, in Mexico–U.S. discussions about immigration matters or trucking. Nor should the now-institutionalized annual trilateral summit interfere with much-needed attention being paid to other bilateral issues. Wise leaders will not disregard the tactics necessary to achieve progress and, in the wake of the international financial crisis and economic

44 John Manley and Gordon Giffin

slowdown, nor will they hesitate to seek solutions that are pragmatic and capable of rapid implementation. But the path forward does not need to be a competition between Canada and Mexico for a seat at the table. The more we debate that dilemma, the more we delay progress. Rather, the strategic goal of an efficient and integrated North American economy providing mutual benefits to the citizens of all three nations is clear. The tactical means of achieving that goal need to be determined and, depending on the particular issue, those means and the schedule for achieving progress may differ on the two borders. As two people who have, in our professional lives, been responsible for aspects of this relationship, it is our contention that a reinvigorated, carefully planned approach based on mutual interest can make important progress on bilateral issues, while respecting nafta as the important commercial arrangements that it is. Within nafta, Mexico can be a valued partner in advancing North America’s economic interests. However, the next steps along the path of progress involve matters well beyond merchandise trade. The assumption made at the time of nafta, that the three parties were at relative parity economically and politically, was in error. The need for development assistance for Mexico, along with the need to develop its political institutions, was and is evident. nafta, or a contemporaneous agreement, should have dealt with those requirements through joint Canada–U.S. efforts. It is evident that such initiatives remain necessary as a predicate for taking some of the steps we advocate for the continent. By no means does this mean leaving Mexico behind. Rather, it means recognizing that Mexico requires time and help to catch up. There can be little doubt, for example, that enhanced economic development in central and southern Mexico would go a long way toward alleviating the migration pressure on the southern U.S. border and possibly some of the impetus behind the illegal drug trade. That kind of progress, which a trade agreement alone cannot facilitate, would make enhanced continental economic integration much simpler. In effect, what we contemplate is a trilateral agenda with bilateral schedules. While jointly working with Mexico to achieve parity, Canada and the U.S. should chart a course that moves beyond nafta. That course would include: a continental security template a continental energy and environment template • a regime that gives legal dignity and recognition to workers, professionals, and goods that originate in North America • a common market or at the least a customs union • •

45 Bilateral Trilateralism

The inefficiencies of a continent where regulatory differences, country of origin, colour of passport, or location of feedlot have legal consequences are illogical and intolerable. The fact that we continue to countenance these and other impediments to our mutual prosperity is bizarre. There will be many difficulties to overcome in advancing further on this path of economic prosperity together, but we should not be delayed by the misplaced assumption that all three countries must take each step in unison.

Canada in Obama’s World* derek burney

In January 2009, Carleton University presented its report, From correct to inspired: a blueprint for Canada–US engagement (Canada–U.S. Project 2008) to the prime minister of Canada, the leader of the opposition, and all members of Parliament.† The report urged the government to revitalize a relationship that is the foundation of Canada’s prosperity and security. Why the need for a plan? The short answer lies in the wisdom of the great American philosopher, Yogi Berra, who once observed, “If you don’t know where you are going, you might wind up somewhere else.” The election of Barack Obama as president and his immense popularity in Canada gives our government considerable latitude to harness this relationship more strategically to Canada’s advantage. The economic recession in 2008–09 has made it even more essential to move matters to a higher level of creativity and commitment. Canadians tend to be a bit complacent about a relationship that affects virtually every aspect of life in this country. In trying to define ourselves as “not American,” we tend to search for differences primarily for the sake of seeming to be different, without relevance either to our distinction as Canadians or to how our interests might best be served. We occasionally indulge in spasms of moral superiority to * This article is based on a speech given to the Carleton University Alumni Association, April 2009. † Derek Burney co-chaired this study along with Fen Hampson, director of the Norman Patterson School of International Affairs, Carleton University.

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offset the significant power disequilibrium and are instinctively wary of “getting too close.” The United States (U.S.), for the most part, is generally indifferent to our neuroses and, regrettably, unmindful of the importance of Canada to its interests. It can be difficult to effectively navigate a mindset like that. The global recession removed any doubt about the need for a sustained and productive relationship with the U.S. As Mark Carney, governor of the Bank of Canada pointed out, Canada’s recovery depends on the U.S. recovery. (That should be self-evident but needs to be underlined.) Suppose, for a moment, that strong economic partnerships with the European Union had reduced our dependence on the U.S. Where would we be now? The Eurozone as a whole has faced a serious recession. In the last quarter of 2008, normally steady Germany saw its gross domestic product (gdp) plunge by more than 8 per cent. The United Kingdom’s gdp fell by close to 6 per cent. Many of the new European Union members in Eastern Europe experienced double-digit declines and needed bailouts from richer members just to survive. Are there better opportunities in Asia? Star performers like South Korea recorded an annual gdp decline of almost 21 per cent; Japan’s was almost 13 per cent. (In February 2009, Japan’s exports were down 49 per cent from the previous year.) Although China has weathered the recession, the reduction in its growth is already causing factories to close and unemployment to rise to 20–30 million. If no country is immune from the global recession, none seems immune from the siren call of protectionism. Despite the solemn pledge to “stand still” from the G20’s Washington meeting in November 2009, the World Bank observed that 17 countries have since adopted some form of protectionist measures. The “buy American” provisions of the original economic stimulus package of the House of Representatives and Senate bills showed the dangerous streak of nativism that runs through Congress. And there are still teeth with the potential to bite Canada in the legislation. Particularly blatant has been U.S. action to curtail Mexican trucking, which prompted predictable “tit for tat” retaliation by Mexico. Canada must remain vigilant too, of the potential for “green protectionism,” such as carbon import taxes – measures intended ostensibly to “protect” the environment but that, in fact, are designed to hobble imports. There can be no more lethal mix than morality wrapped in nationalism. Protectionism is by no means confined to the U.S. As Mark Mardell (2009), the bbc’s Europe editor commented, “The centrifugal forces threaten to tear countries one from another and, in the end, if there is no countervailing force, the whole thing could fly apart.”

48 Derek Burney

We used to rely on a robust set of international institutions to help us manage the challenges of global recession. The International Monetary Fund (imf), the World Bank, the General Agreement on Tariffs and Trade, to name a few, provided productive multilateral forums for Canada and the U.S. to work with others and contribute to prudent management of global issues. The G7 summit was a tightly knit group, focused on practical goals and often gave direction to other institutions. Where are they today? Throughout the gathering storm of the recession, the imf and the World Bank, created to anchor a smoothly functioning international financial and trade system, were essentially missing in action, apart from shoring up the finances of some marginal players. These institutions have insufficient resources and are locked in antique governance structures created 60 years ago that over-empower diminishing European economies at the expense of emerging economies. When the Benelux countries have greater voting power at the imf than China – the world’s second largest economy – you know something is wrong. At the summit level, the G8 has drifted essentially into a social club, with friends, neighbours, and even aging rock stars all joining the annual table. Meanwhile, the World Trade Organization’s Doha “merrygo-round” of trade talks is rapidly fading into obscurity. Attention has now shifted to the G20 – a group actually of about 30 when all the mainly European, institutional strap-hangers are counted. The challenge of trying to herd all of these countries into a constructive action plan is formidable. But this body is a more inclusive club with strong representation from the rapidly rising economies of the developing world. At the G20 London summit in April 2009, key countries, notably China and Japan, pledged increased resources for the imf. What would also strengthen the world’s international financial institutions would be a new level of serious engagement by the U.S. with China, and possibly Germany and Japan as well, that would give real, as opposed to ceremonial, leadership to the global architecture and to global recovery. In today’s highly uncertain world, the most sought after commodity is confidence – confidence that those in power actually know what to do and confidence that what is being done will actually work. Regrettably, there is too little evidence of either. What is needed most is a concerted effort to reduce “toxic excess” across the board in many financial institutions. Necessary, too, are reforms that will improve regulatory oversight – especially where none exists over what are now euphemistically called “shadow banks” – along with measures to stabilize asset values and restore a basis for growth. In short, an environment in which banks will lend, consumers will buy, and investors will invest.

49 Canada in Obama’s World

The recent global economic crisis underscores the importance of more productive, more sustained engagement with the U.S., especially for Canada. We have turned the relationship to our advantage before. The Free Trade Agreement and subsequent North American Free Trade Agreement brought the trading relationship into harmony with our common economic geography. The result was a dramatic increase in mutually beneficial bilateral trade. Sustained efforts over many years to improve our environment also led to the Acid Rain Accord and the Great Lakes Water Quality Agreement. This year, 2009, marks 100 years of pragmatic, joint management of our shared boundary waters. It is juvenile to think that we have to “go along to get along” with the U.S. Neither do we need to elevate every problem in the relationship to a matter of national sovereignty or testosterone. We can disagree without being disagreeable. We are who we are, where we are in the northern half of North America. We should learn to make the most of it. Above all, we should not act as if we have little or nothing of relevance to offer in this relationship. Scripture may teach us to hide our light under a bushel, but we, as Canadians, are not obliged to overdo it! What do we bring to the table? We must never forget that Canada is the largest market for the U.S., absorbing more of its exports than all 27 countries of the European Union and also, incidentally, more than China. Canada is significantly the largest and most reliable supplier of oil, gas, and electricity to the U.S. That is why a dialogue on clean energy makes sense. That is why a coordinated plan on climate change makes sense. That is why efforts by our two governments to chart a common path toward effective reductions in greenhouse gas emissions also make sense. If we each go our own way – with a spaghetti bowl of separate initiatives at national, state, and provincial levels – we will do little for our shared environment and, most likely, undermine our economies along the way. Our manufacturing and agricultural sectors are integrated. In many sectors – beef, auto, steel – it is no longer possible to talk about Canadian and U.S. products as if they were separate. As others have observed, Canada and the U.S. don’t trade things with each other, they make things together. Upward of 70 per cent of cross-border trade is intra-firm trade. Our economies have become so interlinked that “buy America,” or for that matter “buy Canada,” policies would be self-defeating. Canadian banks did not collapse in the recession and financial crisis of 2008–09. There was no housing “bubble” and subsequent collapse of the real estate market. The Canadian medicare system, even with all its problems, achieves superior outcomes at lower costs. As Newsweek observed, “If President Obama is looking for smart government, there

50 Derek Burney

is much he, and all of us, could learn from our quiet – OK, sometimes boring – neighbor to the north” (Zakaria 2009). The immediate task is to work closely together to chart a path out of the deepening economic recession – not by lurching into protectionism but by strengthening the heavily integrated nature of our two economies. Our efforts to stimulate must be synchronized, notably in the auto sector. We have little political choice but to act as one in bolstering this flawed industry. Tough decisions are being made. Tougher ones may still lie ahead. As part of a coherent recovery strategy, Canada and the U.S. also need to come to grips with the increasing congestion along our border. President Obama’s comments on the border were heartening, but his new secretary of homeland security’s more recent remarks, were much less so. Attempts to equate the U.S. northern border with its southern border fly in the face of history and reality. As Prime Minister Stephen Harper asserted, we share U.S. concerns about threats to security. But we need to strike a healthier balance between legitimate concerns and our mutual need for smooth, efficient movement across our border of people, goods, and services. Stimulus funds could be sensibly allocated to new and smarter infrastructure along our border. We should use the new Windsor–Detroit bridge as a pilot project for enlightened inspection procedures. We should also explore harmonizing policies and procedures on things like immigration and refugee policy. To the extent that the U.S. has legitimate concerns about Canadian policies and practices, we need to respond to them. There should also be a serious commitment to harmonize product regulations and standards, where these differ only for the sake of difference. We need to break the bureaucratic, iron rice bowl that glorifies minor differences between us with no measurable public benefit. There should be a “show cause” rule requiring regulators to defend Canadian regulations that differ from those of the U.S. President Barack Obama’s visit to Ottawa in March 2009 and the prime minister’s subsequent visit to the White House in September are an important start to a new relationship, restoring U.S. presidents’ tradition of making Canada their first international port of call. The two leaders have had a constructive discussion and set some clear direction for future collaboration. Key ministers are being tasked with ensuring that effective action follows on the priority issues of economic recovery, energy and the environment, and global security, primarily with respect to Afghanistan. It is also essential that our relationship with the Obama administration extends beyond urgent bilateral issues to the global arena where

51 Canada in Obama’s World

Canadian and U.S. interests intersect. One of the most critical (and topical) areas is the North Atlantic Treaty Organization (nato). Once the centre piece of Western and Canadian security, the alliance is now experiencing a mid-life crisis. nato is uncertain about how to deal with its former foe as it morphs into an unpredictable but potentially dangerous Russian bear. There is no consensus on the best approach. The mission in Afghanistan is an existential threat to the alliance. All members support the nato role, but only a few have committed serious military resources and fewer still have committed these in areas where the need and danger are greatest. As the prime minister pointed out, “nato has taken on a United Nations mission and nato must succeed or I do think the future of nato as we’ve known it is in considerable doubt” (Reuters 2009). We need a serious strategic review of the 21st century purpose of nato. Our involvement and sacrifice give us more credibility than many in helping the U.S. implement a more comprehensive, more effective strategy for Afghanistan. The solution cannot be exclusively military, and I hope we will help reinforce the diplomatic and more heavily civilian approach the U.S. is now adopting to bring greater stability to what is one of, if not the most, dangerous regions on the planet. President Obama’s intention to tackle Afghanistan–Pakistan as one is most welcome and is, in fact, what Canada has been advocating for some time. Managing relations with China presents a complex economic and political challenge. China’s actions are critical to global recovery and the world’s future economic prosperity. But to be more effective, China needs to be integrated more systematically into the global institutions of governance, notably the imf. Power and responsibility go hand in hand and extend beyond narrow self-interest. Geopolitically, as well, it is vitally important that China become a more responsible global stakeholder helping resolve conflicts in Africa and the Middle East. Think Darfur and Iran. China also borders on Afghanistan and, yet, is essentially detached from events in that beleaguered nation. That makes little sense. For those concerned about North Korea, China should be a pivotal player, not a spectator. We should not pretend that Canada can have a decisive voice in U.S. policymaking. But, as the past has demonstrated, sensible advice – support where warranted, constructive criticism where we have a genuine difference of view – can give us opportunities for influence. Recalibrating relations with the U.S. does not mean diluting our focus everywhere else. On the contrary, a more adult relationship with our immediate, often rambunctious neighbour can give us the grounding, the credibility, and the relevance that would elevate our ability to exercise greater global influence. Whether in relations with our own hemisphere or in

52 Derek Burney

dealing with global challenges of conflict, non-proliferation, and poverty or in dealing with China, Canada’s capacity for influence can only be enhanced if we use our proximity to the U.S. as a source of strength, not a liability. Especially with an administration that, at least for now, puts the accent on multilateral consultation. Will the U.S. respond to bold overtures from Canada? Getting attention in Washington is a perennial challenge, and not just for Canada, particularly when the U.S. is more preoccupied than ever with huge domestic challenges. The answer lies in part in the kind of president Obama turns out to be. Will he be a Jimmy Carter quickly overwhelmed by the enormous problems on his desk? Or a Franklin Delano Roosevelt who seizes the reins of presidential leadership, transforms the role of government, and drives the U.S. forward with a new spirit of confidence and a bolder partnership with close allies like Canada? The answer also lies more squarely in the determination and skill of the Canadian government in pursing an agenda of mutual benefit, not only with the administration but with Congress. This will be difficult, time-consuming, and not always gratifying. The ideas will have to come primarily from Canada. In putting them forward, we need a strategic approach, not shunting off individual issues into separate silos, but with a leadership commitment and vision that will drive the relationship over a sustained period. The importance of this relationship to Canada’s national interest also calls for a degree of mature, bipartisan consensus among our major political parties rather than narrow partisan posturing, especially at a time when we have a minority government and when the economic challenge is so great. President Obama has an enormous reservoir of good will from which to draw. He is refreshingly smart, articulate, and cool under pressure – all prime qualities of leadership. (And, he even likes beaver tails!) His election sent a powerful message to the world about U.S. democracy. As his reception in Canada demonstrated, many people want him to be successful. We need him to be successful. He offers a genuine beacon of hope at a time of great pessimism about both politics and the economy. The customary optimism and resilience of U.S. citizens is being tested now as never before, and I believe it is very much in Canada’s interests to do what we can to rekindle those qualities, move bilateral relations to a stronger footing, and help restore the best of the U.S. to the world.

references Canada–U.S. Project. 2009. From correct to inspired: a blueprint for Canada– US engagement. Ottawa: Carleton University.

53 Canada in Obama’s World Mardell, Mark. 2009. eu “big” brought to heel. Mark Madell’s Euroblog, bbc News. Available at: . Last accessed 9 Sept. 2009. Reuters. 2009. Canada pm says Afghan mission major nato test: report. Thomson Reuters, International News; 28 Feb. Available at: . Last accessed 2 Sept. 2009. Zakaria, F. 2009. Worthwhile Canadian initiative. Newsweek, 16 Feb. Available at: . Last accessed 2 Sept. 2009.

Canada–United States Relations michael kergin

At approximately 10:07 am on 11 September 2001, Prime Minister Chrétien telephoned the Canadian ambassador in Washington. After enquiring about the safety of embassy staff, the prime minister observed to the ambassador, “The world will never be the same again.” Although somewhat grandiloquent, the prescience was accurate, concerned as it was with the global context; it was especially acute, however, when applied to the Canada–United States (U.S.) relationship. On that dark day, dozens of commercial aircraft destined for the U.S. had touched down in remote Canadian airports; truck and passenger traffic was backed up 20 km at the Canada–U.S. border; and selfless volunteers from across Canada were driving to Manhattan to participate in a rescue operation of horrendous scale. The early optimism expressed by Mexican President Vicente Fox, originating from initial meetings with the new Texan president, that North America might come together along the lines of the European Union simply evaporated in the smoke arising from “ground zero.” “Security trumps trade” became the mantra of the day, and North Americans became far more conscious of their borders than ever before. For the U.S., the great Canadian Cold War asset – some 14 000 km of early warning and response space over the North Pole in the event of Soviet missile attack – was transformed into a 9000-km liability, as the Canadian border appeared suddenly up front and personal to apprehensive U.S. citizens. A Boston daily newspaper erroneously reported that the World Trade Center highjackers had reached Logan Airport via Nova Scotia; the lie has been propagated ever since.

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By rapidly engaging the U.S. in negotiations to reverse the closing down of the border, Canada exercised a central principle of Canada– U.S. relations: the smaller partner, always the most adversely affected by a mutual problem, must be the first to devise and argue the solution. The Smart Border Accord concluded between Canada and the U.S. in December 2001, three months after 9/11, allowed North American commerce to move again and laid the basis for management of the Canada–U.S. border for the 21st century. Thus, it is worth reiterating the four major principles that governed the Smart Border Accord: Risk management – Both countries would decide what constitutes differing levels of risk, then jointly agree on the specific measures required to deal with each level of risk. • Information technologies – Both countries would develop compatible technologies to identify and monitor cross-border traffic. • Information sharing – Intelligence obtained from within each country, and internationally, would be more closely shared between the partners to apprehend threat before it reaches the border. • Resources – Significant investment in personnel, information technology, and infrastructure would be undertaken to strengthen security on both sides of the border. •

These principles and many of the Smart Border action plans were incorporated into the U.S.–Mexico Border Accord concluded some six months later. By officially adding border security to the North American dynamic in 2002, what had begun with the signing of the North American Free Trade Agreement (nafta) in 1994 – namely three separate bilateral relationships with formal overlaps on trade – now moved North America closer to a trilateral relationship. Accordingly, in March 2005, the Security Prosperity Partnership (spp) was inaugurated amongst the three heads of government: Presidents Bush and Fox and Prime Minister Martin. Over its four-year history, the spp has had a mixed record. It has spawned myriad working groups composed of government officials embracing multitudinous cross-border functions, from trade to transportation and from security to tourism. Strangely, the spp worked with only minimum input from the private-sector groups and businesses most affected by its decisions. The North American Competitiveness Council, created in 2006, represented large business interests, and only partly opened up the spp process. The spp’s future is currently unclear. Certainly without a more transparent method of operation, such as engaging frontline border users,

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subnational jurisdictions, and civil society representatives, its ability to make practical improvements in border management or to speed up cross-border transactions, while enhancing security, will be limited. The weakness of the spp highlights another principle underlying the management of Canada–U.S. relations: the multiplicity of actors affecting or affected by cross-border issues requires, at a minimum, that negotiations – including consultations with subnational jurisdictions and civil society – be conducted with a certain degree of transparency. Reclusion raises suspicion, and suspicion breeds opposition. On 1 June 2009, the entry into effect of the Western Hemisphere Travel Initiative opened a new chapter in the North American border relationship. Of course, people in Canada and the U.S. remain neighbours, friends, and even relatives, but for the first time, they need passports to visit each other (if they haven’t taken the precaution of acquiring some other form of secure documentation). This has represented a rude awakening for most Canadians who expected that the Obama presidency would fundamentally lighten up on the Canada–U.S. border by differentiating between the U.S.’s northern and southern borders. Homeland Security Secretary Napolitano, however, deflated expectations when she described the obvious (if inconvenient) truth that the two borders have legal parity. Canadians took this as implying that, from a security management perspective, the U.S. border with Canada would be treated with the same gun-toting, fence-building aggressiveness that Homeland Security reserved for its southern border. Over the years, many Canadians had been quite content to have a “political” border with the U.S., but were offended that their border should be identified with the illicit movements of people, drugs, and thuggery plaguing the U.S.–Mexican border. The fact is that some of those ills also affect the Canada–U.S. border but, very importantly, to a much lesser degree and with a very different mixture of risk. It is terrorism that worries the U.S. most. From Secretary Napolitano’s perspective, the terrorism threat to U.S. security presented by the wide open spaces of the 9000-km border with Canada is no less real than that arising from the hundreds of thousands of undocumented people annually crossing the relatively shorter (3000-km) Mexican border. Of course, terrorists can hide among the Mexican masses just as they can be lost in the vast expanse bordering Canada. But the threat from Mexico is viewed by the Department of Homeland Security as being of an additional nature; it is a risk posed to U.S. social order, particularly labour and health services. This type of risk is not associated with the northern border.

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To deal with the different risk perceptions, Homeland Security has undertaken to build fences along the U.S. southern border. Significantly, however, it has chosen to deploy Predator drones along the area adjacent to the border with its northern neighbour. This example illustrates well that the basic principles of the 2001 Smart Border Accord remain highly relevant. Managing risk among the three members of the North American community requires various methods with distinctive accompanying advanced technologies. This is what Secretary Napolitano implied when she acknowledged that, although both borders are “real” to the U.S., dealing with their risks will involve disparate approaches, different tools, and, probably, unequal numbers of personnel. Therefore, one border is not “better” or “worse” than the other; the borders are quite simply different. When it comes to border management, one size does not fit all. This all too evident observation illustrates a third principle underlying the conduct of the relationships within the North American space: differentiation. Each of the three separate bilateral relationships has it own historical dynamic, leading to distinctive border pressures. These differences must be acknowledged without engaging in invidious comparisons. By applying security along the borders in a differentiated manner, North America’s comparative advantage and economies of scale can be preserved. A border encumbered by such transaction costs as lengthy wait times, corporate security measures, duplicated inventories, onerous customs, and brokering fees has a significantly adverse impact on our shared prosperity. The cliché that “we make things together” is literally true: a car will cross the Canada-U.S. border approximately six times during its manufacturing cycle. A car made in Korea enters the U.S. once, at Long Beach, California. It does not take a chartered accountant to determine that it is the non-North American manufacturer who has the comparative advantage of reduced transaction costs. The impulse behind the 1989 Canada–U.S. Free Trade Agreement was to insulate the partners from protectionists seeking instant economic gratification by constructing walls sheltering weak producers. With all its faults and failings, nafta, the fta’s trilateral successor, has tripled trade among the partners over the past 15 years. Protectionism would have been much worse if nafta had not existed. Yet, the “thickening” of the border serves protectionists’ interests well. Economic downturns inevitably increase pressure to resort to protectionism in “beggar thy neighbour” policies. As the U.S. copes with the “great recession,” buy America provisions as well as extension of country of origin labeling restrictions for imported agricultural products

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should not come as a great surprise. However, the real danger is that, unless Canada moves aggressively, regulatory restrictions may survive the economic recovery and become entrenched within the U.S. legislative framework. Looking ahead to ease the congealing of the border-trade dynamic, then, three priorities appear to require most urgent attention. First, the principles of the 2001 Smart Border Accord, especially risk management, should be reviewed and updated. The threats arising from each border’s special circumstances must be re-examined, identified, and classified. Have they changed since 9/11? Are they as acute? How specific are they to each border? Following this review, surveillance and enforcement measures might then be tailored specifically to each border as a consequence of bilateral discussion and agreement between the border partners. Border users must be consulted. Second, there should be a joint re-examination of security and transportation infrastructure requirements, not just at the border, but also leading up to the border. Both partners have included infrastructure projects in their stimulus programs. There is no better time than the present to undertake new investments at our common border. Beyond the short-term benefits of regional employment, these investments can improve productivity over the coming years and allow the North American community to compete more effectively in the global economy. Finally, as a related priority, the two governments should meet with their subnational partners to work out reciprocal access agreements for suppliers and contractors bidding on procurement projects funded with government stimulus funds. Both countries have exclusionary legislation, principally at the state and provincial level, preventing “foreign” suppliers from participating in infrastructure projects financed from official stimulus funds. Concluding a mutual and balanced dismantling of procurement barriers would represent a way out of the buy America impasse. Taxpayers would then get the “best bang for their bucks” in improved infrastructure, and governments would benefit from sourcing projects where quality and price are optimal. In addition to the Canada–U.S. border trade agenda, there is a symbiotic energy–environment relationship between the two countries. Roughly a third of all energy imported into the U.S. comes directly from Canada, while a significant amount of Canada’s electrical consumption derives from U.S. power (largely coal) generation. As with the manufacturing sector, this degree of interdependence is neither temporary nor superficial. Any decisions affecting clean air emissions on one side of the border will have immediate policy implications on the other side. Sharing the same air (and water), Canada and the U.S. have a singular capacity to pollute each other. As with their energy relationship, the

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common environment cannot be separated or delinked. Furthermore, the integrated nature of the countries’ manufacturing base will inevitably lead to harmonizing environmental standards in both production and trading of finished goods. Regarding clean air, the Obama administration, backed by a Democratic-controlled Congress, will move eventually toward industrywide capping of greenhouse gas emissions with fixed timetables. Canada will need to negotiate a similar cap-and-trade arrangement, very possibly on a continental basis. Failure to do so is likely to result in punitive or exclusionary tariffs on Canadian products seeking U.S. markets. The 21st century has brought profound changes in the Canada–U.S. relationship. The first eight years have been marked by an overlaying of security at our common border where, for the first time in our history, passports are required for cross-border travel. These eight years have also seen fundamental differences of opinion between the two allies over vital U.S. security issues when Canada declined to participate in the second Gulf War or join in the missile defence program. As we enter the next eight years, opportunities exist for improvement and collaboration. From aggressive climate change legislation to the radical infusion of government funding in the financial and industrial sectors, the U.S. will be greatly transformed under the Obama administration. Adjusting to the changes in its southern neighbour will require nimbleness and flexibility of Canadian leadership. At the same time, traditionally preoccupied by security concerns, the U.S. default will be to tighten border arrangements rather than seek to ease controls. Engaging with the “elephant” during a period of intense introspection in U.S. history, will prove to be one of Canada’s greatest public policy challenges. It will require boldness to get ahead of U.S. doubts over Canada’s competence in securing its share of the North American real estate, even if this means pushing to the perimeter with more restrictive visa and identity controls for visitors entering the Canadian part of the continent. Engagement with the U.S. will also entail making significant investments in cross-border infrastructure and transportation. To be effective, strategic planning should be undertaken at the continental level to enhance productivity regarding the movement of goods throughout North America in the face of increased global competition. Closely associated with the competition agenda is the need to re-examine our regulatory regimes with a view to reducing costly redundancies due to minor technical differences in labeling and product safety. Significant reductions in greenhouse gas emissions – in response to U.S. decisions or because of indigenous Canadian policy choices – will have to be imposed on the economies of both countries in tandem.

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Critical will be Canada’s ability to promote and attract green industries to trade air-quality credits, possibly on a continent-wide basis, against its own emission-intense energy production. The initiative, as always, will have to come from the smaller partner. Otherwise, key areas of Canada’s industrial, environmental, and energy policy will be set in Washington. The initiative must be led by the incumbent at 24 Sussex Drive. But, success, can only be attained if a national consensus can be built around bold proposals. The advent of an administration in Washington that is viewed more benignly may make it easier for Canadians to take the risk. At this time of global recession, Canada and the U.S. cannot afford to pull apart while the rest of the world is pulling together in closer regional economic groupings. The European Union has undertaken a successful “mergers and acquisitions” exercise by welcoming new partners from the former Warsaw Pact countries. The Southern Cone, together with other Latin American nations, is coming together under Mercosur spearheaded by Brazil. The members of the Association of South East Asian Nations (asean) are consolidating their ties with China. Thus, the question for us remains: how much of this ambitious agenda can be achieved trilaterally on a continent-wide basis? Ideally, as much as possible to take advantage of enhanced market size, economies of scale, and the comparative advantage of all three countries as North America competes in the global marketplace. Realistically, however, the rule of differentiation referred to above will limit total integration and suggests that distinct policies must be applied to individual relationships when dealing with security and related economic issues. An apt, if glib, sobriquet for the North American community as it moves forward might be “North America à la carte.” If variable geometry is North America’s destiny, then progress toward the community’s competitive position in the world economy will come with greater certainty through three sets of parallel discussions, rather than through a formal trilateral mechanism.

The United States and Canada th o m a s p i c k e r i n g

At the beginning of the Obama administration, United States (U.S.) foreign policy faces a daunting array of difficult choices. Which are picked up and how they are addressed will affect both U.S. and Canadian interests in North America and well beyond. This chapter addresses the changed backdrop to U.S. – and Canadian – foreign and security policy and the critical and priority issues that need to be discussed. It also includes some thoughts on how Canada might, in its own interests, play a role in affecting U.S. policy choices and implementation. It is a drastic understatement to note that no administration in the United States has come to power with a greater and more diverse series of challenges facing it than that of President Barack Obama in January 2009 – including the third administration of President Franklin Roosevelt in January 1941. Some of the current situation can be adduced to the performance of President Bush and his administration, and some of it represents a natural evolution in complexity and globalization following the immediate post-Cold War period. These influences and the changes from the past will clearly affect the Obama administration’s range of choices and its approach to policy implementation. Let me review those briefly.

th e b a c k d r o p t o t h e o b a m a administration – impact on foreign and security policy Three major issues face any new U.S. administration: military force and how to deploy it; the role and importance of diplomacy; and

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whether policies and choices should be unilaterally implemented or whether greater attention should be paid to multilateral cooperation and institution building. The choices – and mistakes – made by the Bush administration in dealing with these problems have helped to shape the reactions and approaches of the Obama administration. They played a seminal role in the thinking that went into the campaign leading to President Obama’s election and continue to influence decision-making in the first months of the administration. First, let’s look at the use of force. There is little doubt that the Bush administration judged that the overwhelming military potential of the U.S., in both nuclear and conventional terms, could and ought to play a major role in achieving solutions to the problems it faced. First Afghanistan and then Iraq became key issues to be addressed by this method. There was obviously misplaced emphasis on the efficacy of the military instrument and its ability to control or resolve all facets of the problems. Diplomacy, with its value in setting the stage for the use of force as President Bush’s father used it 1990 with Iraq, was ignored, particularly after it moved in 2002–03 into the “too hard” category at the United Nations (un) Security Council. Similarly, little or no strategic attention was paid to the need for a civilian-dominated follow-up to the use of force to deal with governance in a future Iraq, reconstruction and rebuilding, and working on a new regional dimension – all critical elements in a successful policy effort. Finally, the administration seems to have ignored the time-worn dictum that force is used only in selfdefence and then only as a last resort. The opposite of force is not diplomacy; the two operate in the same sphere and influence greatly the impact of each other in achieving critical foreign policy goals. The second question concerns the role and place of diplomacy in U.S. foreign policy. If force is now seen as a bankrupt formula for pursuing security goals, then diplomacy has become a more likely and lively alternative. Of course, no U.S. diplomat would be prepared to say that the U.S. should abandon its military arm or that the presence of significant military force – and indeed economic strength – does not play a serious role in supporting the U.S.’s pursuit of its diplomatic objectives. At the same time, it has become much more apparent that force is best employed when it does not have to be deployed, but instead used to strengthen and bolster diplomacy. As a result, a new and greater interest in diplomacy and strengthening that aspect of U.S. foreign relations has become apparent both inside and outside the new administration. Diplomacy works best when it develops and achieves cooperation. There are two schools of thought on how best to deploy diplomacy, closely related to the two views of force outlined above. The first

63 The United States and Canada

depends heavily on the ability to use military and economic strength to bolster U.S.-framed and developed solutions to world problems. Although “diktat” is a strong word, there are elements of it in this approach. The second involves achieving cooperation and participation through persuasion and leadership. It is fundamentally based on multilateral approaches and exploration of common interests as opposed to unilateral solutions. Over the last decade, the U.S. often fell into the pattern of employing diplomacy on a unilateral basis, complementing its use of force for problem solving. The new administration and the country at large have reacted negatively to this and the search is on for more traditional diplomacy based heavily on finding solutions through consultation, multilateral cooperation, and the development of new multilateral institutions. Although it is still too early to see clearly where all this changed background will lead the new administration, some trends are already appearing: force as a last resort, but still carefully nurtured and available for self-defence; diplomacy to play a major role in understanding the world and providing a basis for interaction with countries and others who will help shape the future; unilateralism as a bankrupt feature of previous policies and multilateralism as a major part of the landscape of the future. The latter trend will certainly involve an evolution of the G20 group to deal with economic and financial issues. Perhaps, down the road, what is needed is a new look at un Security Council reform and how the international community might be persuaded to move on that critical question, as well as a new look at institutional arrangements to buttress the world economic system in light of the prevailing crisis. Canada has long played a role in the G8, conceptualizing a new G20 plus, the Security Council, reform of the un, and the development of international institutions to meet growing world needs on many fronts. Two other points might also help set the stage for outlining six major issues confronting the Obama administration. First, with globalization and greatly improved interaction among states and others, not only do non-governmental actors play a larger role, but also the issues they address are increasingly defined by diplomats in functional as opposed to geographic terms. Thus, although clearly the presence of China is a major consideration for the U.S., so is climate change and the climatechange type of functional issue is playing a larger and growing role in both U.S. policy analysis and strategy. Second, it is time to stop looking at issues in the old narrow “stovepipes” and begin to see their inter-relations. Although climate change is increasingly important, we also need to understand its relation to both energy policy and the environment – air and water pollution, for example.

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This grouping of issues into “baskets” or other logically linked bundles can serve several functions. One is clarity about what constitutes the real scope of the issue, bringing with it the ability to find and use synergies among issues both to find ways to resolve problems and to avoid the common pitfall of unintended consequences through a failure to see the broader relations affected by a proposed solution.

six major foreign and security issues facing the new u.s. administration As we all know, priorities can change over time and reflect a personal sense of the importance of issues rather than an immutable prescription or formula for setting them in order. The issues presented here are in rough order of priority based on the situation in summer 2009. Functional issues dominate this list. Economic Crisis The international economic crisis continues to loom largest on the horizon for nearly all states and for many non-governmental actors. In terms of the traditional stovepipes, this issue clearly involves financial flows, the availability of capital, fiscal deficits, lack of trust in the international economic system, macro-economic policy issues, employment and unemployment, trade and protection, the role of the state in assuring that major producers remain part of the national economy, and, most basic, international cooperation to assure the viability and creation of institutions to balance and regulate the world economy and avoid a repetition of such a major economic collapse. No single issue dominates the discussion and no single point of attack on the problem is sufficient to ensure that it is effectively dealt with. No single state can assure a positive outcome, but many are required to work together to address the various facets of the problem. The crisis has been characterized by many failures in existing systems, from inadequate rating of mortgages to failures to foresee the sources of and problems with a highly leveraged system where the leverage works down as well as upward. So far, the U.S. and the world’s leading states have tended to run behind, catching up with issues, such as bad housing debt, the bank credit crunch, and failing large corporations, as and when these events were happening. The U.S.’s rapidly rising fiscal deficit is now well on the scope of the administration’s economic team. Obama has called attention to the need to cut that growing deficit in half in the next four years of his administration. It is also clear that it will continue to grow for at least

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another year as the U.S. government uses public funds to bail out “too big to fail” firms and infuse more liquidity into the economy. Two important challenges arise here: when to begin to shift from deficit spending for recovery purposes to higher taxes and reduced spending to control and reduce the deficit; and, how to prevent that imposing deficit from undermining confidence in the U.S. economy and the dollar. The former will most likely be addressed with a much tighter federal budget in 2011. The latter is critical to avoid shaking the current underpinnings of the international financial system, lodged as it is in the dollar as the main currency for trade and business and confidence in the U.S. Treasury and its bills as a refuge for investors who wish to assure that they can preserve the value of their assets off into the future. Happily, the U.S. is anything but suicidal and, so far, the decisionmaking process has been transparent and open. Canada and other friends should have confidence that reliance on the U.S. means as much, if not more, to the team in Washington as it does to any outside investor. With increasing signs of having hit bottom in many areas and moving slowly but firmly upward, that confidence should be reinforced. With much still depending on the U.S. – from alliance partner relations to the huge significance of Canada–U.S. trade in both directions, this question is critical for the U.S. and its allies, friends, partners, and, I dare say, its enemies. What can be done by Canada? Full international cooperation in the G20 is the basis for dealing with the problem. Trade, a major perennial issue between Canada and the U.S., remains an important aspect of dealing with the crisis. Canada and the U.S. enjoy record levels of bilateral trade. The tendency in the U.S. is to turn toward protectionism – for domestic political reasons and to deal with sectors of the economy badly hit by unemployment. Traditionally, Canada has been hurt by U.S. trade protectionism. Taking the lead with the U.S. on this issue is one important role Canada can continue to play. Other approaches include providing ideas on the right balance between regulation to avoid recurring crises and assurance that the ability to respond to markets is not frozen by a system of government controls. Arms Control and Disarmament A second major question for the Obama administration concerns weapons of mass destruction, in particular nuclear weapons, arms control and disarmament, ballistic missile defence, non-proliferation, the new effort to work toward zero nuclear weapons around the world, and the dangers of terrorism and the ability of terrorist groups to acquire and

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use weapons of mass destruction. Both President Obama and Russian President Dmitry Medvedev have publicly committed to work toward a world without nuclear weapons. Indeed, one of the primary factors in reversing the recent trend in U.S.–Russia relations has been a shared interest in the reduction of nuclear weapons and delivery vehicles. Talks have recently commenced to deal with the Strategic Arms Reduction Treaty and its replacement. A major related issue is the 2010 Nuclear Non-Proliferation Treaty (npt) Review Conference. To ensure continuing viability of the treaty and commitments to it, the nuclear states recognized under article VI will need to make viable progress toward nuclear disarmament. Deep concern continues that the treaty and the system it has established are in great danger, with North Korea’s second and apparently more successful nuclear weapons test and Iran’s continuing efforts to enrich its nuclear energy resources, ostensibly to provide power to its citizens. If efforts to deal with these problems fail, further rounds of proliferation, particularly in the sensitive Middle East, are likely to occur. Steps to deal with this issue, hopefully before the review conference, could include U.S. ratification of the Comprehensive Test Ban Treaty and a start by the U.S. and Russia on a verifiable Fissile Material Cut-off Treaty. Beyond these steps, there is an urgent need to bring into place an international nuclear fuel regime that would ensure that states observing their non-proliferation obligations are not denied access to civil nuclear fuel, while those not in compliance do not have access. This step could well involve the International Atomic Energy Agency (iaea) as the donor of last resort with access to fuel for such purposes, at the same time assuring that competition in the production and sale of fuel prevent monopoly pricing. Over time, the introduction of a regime that made mandatory the multilateralization of all enrichment activities for civil purposes, strict limits and control over enrichment above civil levels for accepted nonweapons purposes, and full adherence to the Additional Protocol of the iaea and additional measures to prevent the establishment of clandestine enrichment facilities for nuclear weapons purposes would go far toward strengthening the npt. Such steps would also help close the npt’s loophole allowing enrichment while also constituting a first step in a cut-off regime. Such efforts ought to be accompanied by an end to all reprocessing of spent fuel to separate plutonium and an agreed program of long-term storage of spent fuel. Canada has had a long interest in disarmament and has played a significant role in many multilateral negotiations over the years. The U.S. will need strong support if it is to deal constructively with the major challenges to non-proliferation. The Six-Party Talks on North Korea

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need to be resumed and talks with Iran started if proliferation is to be headed off. Canada can play a very helpful role in supporting the measures outlined above in international forums where it is present and a significant player, including the Conference on Disarmament at Geneva. Multilateral disarmament progress has been stymied for too long by forums that are tied up in a lowest common denominator approach, where one state alone can often block progress on critical issues. The Extended Middle East The third major arena of challenge for the Obama administration is in the extended Middle East – from the Mediterranean through to the Hindu Kush. This area includes the three “I” countries (Iran, Iraq, and Israel), involves the Arab–Israeli peace process, and Pakistan and Afghanistan in this now even more dangerous arena of conflict. Canada is a highly valued player in Afghanistan where it has borne a heavy share of the burden and committed forces and civilians who have carried more than their share of the weight in dealing with the difficult problems in the Kandahar region. The challenges in the Middle East are multifarious and the solutions difficult. The problems – long term and without active efforts at resolution – are getting worse. In Iraq, while efforts to work on the security situation seem to have borne fruit and helped to reduce violence, significant challenges for diplomacy remain. For example, the future of Iraqi internal governance presents a difficult problem, for Iraqis and the U.S. However, this issue cannot be effectively addressed without involving Iraq’s neighbours, and probably the permanent members of the un Security Council, and others who can have a helpful influence on Iraq and the neighbourhood. It includes assuring majority rule and respect for minority rights, the nature of the future federation in Iraq, and the sharing of oil income among others. Closely related is the question of a future regional settlement in which both Iran and Iraq will need to play important roles. An appropriate forum will be needed to address such questions as arms control and disarmament in the region; security issues including transparency of manoeuvres and local cooperation, perhaps building on the now well-established Gulf Cooperation Council; economic cooperation and trade; and, over time, the construction of institutional arrangements among the parties and players around the gulf. Iran presents major challenges. Deep concern about its nuclear program has raised the need for diplomacy on a more intensive basis. Some have suggested not only opening a direct dialogue with the U.S.

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to address all issues, but also adoption of a multilateral enrichment regime for exclusively civil purposes accompanied by an international inspection system to assure against clandestine replication of permitted facilities. It will take time and patience to determine whether diplomacy can work. The approach outlined would provide Iran with what it claims it wants and needs while constructing a strong firewall against the militarization of Iran’s nuclear program, now widely feared in the international community. The U.S. and Iran have other difficulties. Iran has objected to regime change policies and the potential for the use of force by the U.S. The U.S. has been concerned by Iran’s support of terror groups – lumping Hezbollah and Hamas into that category – as well as by Iran’s opposition to the Middle East peace process and statements about Israel and the holocaust. Both sides could benefit from the settlement of outstanding financial issues left over from the Shah days. Iran’s widely watched elections of June 2009 have left the country in more disarray than we have seen for years. Manipulation of the election results has turned Iran from a country of confidence to one where legitimacy is being widely questioned. Obama has managed, deftly and carefully, to walk the tight line between too much criticism of the election results to please his domestic opposition and some friends and, thereby, set back his chances for a dialogue and too little criticism with the opposite result of raising domestic concern while seeming to appease the hardliners in Tehran. What is not clear is whether Tehran will respond to Obama’s overtures on a new dialogue. If so, will they be willing to discuss not only such areas of common interest as Iraq and Afghanistan, but also the neuralgic and difficult issues of the nuclear program, seeming Iranian support for terrorism, and Middle East peace. These issues coupled with increasingly strong support from the G8 and elsewhere for an end to nuclear enrichment in Iran will complicate an already overstressed U.S. schedule and require increasingly close consultations with friends in the region, Europe, and Canada. In similar deft fashion, Obama himself has avoided iron-hard deadlines regarding Tehran by making clear that, at the end of 2009, he will take another stock of the relationship and its progress as a benchmark along the way. The Arab–Israeli peace process and the long-standing differences between the parties are not susceptible to quick treatment. Suffice it to say that most now know, within some reasonable parameters, how the outstanding issues can be settled, including Jerusalem, refugees, borders, and security. The most significant problems are an Israeli government not yet fully reconciled to a two-state solution nor negotiations with Palestinians, the Palestinian Authority, and a widely

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divided leadership especially between the Palestinian Liberation Organization on the West Bank and Hamas in Gaza. The U.S. will still need to play an important role, and the principle of the bicycle should be respected – if you are not riding forward, you are falling down. At some point, a U.S. plan or proposal will be needed, both to encourage the parties and to help define and determine the outside boundaries of the negotiating arena. Pakistan has now begun to replace Afghanistan as the most vexing problem in its part of the extended Middle East and perhaps beyond. Afghanistan needs a clear plan and careful definition of objectives, which the administration has tried to give it. But it also needs extensive efforts not only to enhance security but also to take advantage of this step to rebuild and stabilize. The administration has made the elimination of the al-Qaeda influence and the Taliban, which supports it, an overall priority. However, Pakistan has become the new refuge and support base for these groups. With a weak government and febrile democracy, together with a strong military inordinately preoccupied by its concern with a threat from India and only beginning to deal with domestic insurgency in places like Swat, it will be nip and tuck for some time before we can see clear results coming from Islamabad. The U.S. administration has assigned rightful priority to all of these issues and appointed experienced and capable special envoys to lead the work. Less clear is whether there is a strategy that understands the interconnectedness of each of these issues and a unified field theory of how all of these efforts can work closely together with mutual support. Canada, with extensive experience in Afghanistan now and with broad peacekeeping experience and diplomatic savvy about the region as a whole, can play a very useful role in encouraging the Obama administration further down the road. The U.S. will need persistence and commitment to move these difficult issues ahead and close friends and allies can be critical at decisive junctures in encouraging the right choices to move the processes forward, even in the face of disputes and differences in Washington. Rivals and Partners A fourth area, similarly defined by geography, takes in the countries that could or might play the role of rival or partner and whose relationship with the U.S. in that context will be heavily influenced by the policies the U.S. selects to deal with them. On the list are China, Russia, India, the European Union, Japan, and Brazil. If you want to add others, I see no objection to doing so if they meet the criterion of being major players internationally in the first half of the 21st century.

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Although in some of these cases the relationship is prospering; Russia is one of the more difficult issues. The pivot of change in U.S.– Russian relations is being built around common interests and a positive agenda, beginning with a number of nuclear disarmament issues, but extending further, one hopes, into possible missile defence cooperation, renewed efforts to restrict conventional forces in Europe, and bringing Russia into the World Trade Organization – all steps that might lead to clearer conversations on mutual objectives in the “near abroad” for both countries as well as further civil nuclear cooperation and the building of stronger business ties. This model is derived from what the U.S. and China have been doing for some years. It is based on the idea that negative issues alone cannot propel the relationship forward. But where there is a common interest in moving ahead on questions of real importance to both sides, they will be more flexible and cooperative regarding the negatives as well. The Russian–U.S. summit in Moscow in early July showed that some of this progress is possible and indeed under way. Centred around the extension of the Start Treaty and the key elements of its verification system, it was announced that further nuclear reductions will be considered along with consultation on ballistic missile defence and a careful study of non-proliferation related to Iran. The two sides also agreed to an institutionalized consultative and cooperative arrangement led by the two presidents and coordinated by the two foreign ministers involving subgroups on intelligence, terrorism, health, science and technology, and other issues. The summit marked a decided shift from a declining relationship to one with a distinct chance for growth and improvement, which should please many, including Canada. The European Union presents a special interest and challenge to the U.S. With a common historical background, both sides are dedicated to the notion that greater European unity will help prevent the devastating conflicts of the past and generate the economic and political power to put Europe in the front rank of world leaders. Until there is a common foreign and security policy, the U.S. will have to deal with the member states as well as with the union as a whole in the appropriate areas. Canada shares many of these interests with the U.S. and some of the problems. As a member of nato but not the European Union, Canada must closely watch the development of the new defence relations with both bodies and help to define what policies it believes will best serve its own interests. Canada has major relations with the countries on the above list and with the U.S., and Canada should be consulting closely on U.S. relations with each of them.

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Developing Country Issues A fifth area of great challenge for the Obama administration is best defined by the congeries of issues related to poverty, growth, and development; food, water, and global health; migration and internal movement of peoples; failed and failing states; crime and narcotics trafficking and use; and, finally, trade. Meeting the un Millennium Development Goals is one way to approach this set of seminal issues. Others involve using research and development policies to harness technology to solutions. Better governance is a singularly important way to effect improvement, and we are all acutely conscious that the growing number of conflicts, internal and external, from Somalia and Darfur to the Solomons and Colombia, all stem in large part from the set of issues outlined above. Without increased commitments from states with the capacity to help, these issues will only grow worse. Canada has been at the forefront of the international community in addressing these issues, and its programs and ideas are of special interest to the U.S. looking ahead for the future. The Obama administration has already increased U.S. assistance funding on the civilian side from about usd 38 billion a year to over usd 51 billion in the 2010 proposed budget. We know much about what we should be doing in these areas. We have been engaged off and on over the past three decades in major efforts. What we need now is sustained, intensive cooperation. We should open the field to new initiatives from the non-governmental sector and encourage the use of good ideas from wherever they emanate and do all we can to engage key decision-making in the countries most concerned with addressing these problems. Canada’s record is a good one here. The U.S. has something to learn and should welcome a close and continuing consultation with Ottawa on these problems. Energy and the Environment A sixth and final set of challenges arises from the close relationship between our growing need for energy resources and the impact of that galloping growth on both climate change and our environment. As pointed out earlier, energy needs take us deeper into higher carbon emissions, not just at home, but also in the growing economies of China and India. Similarly, although new and renewable sources of energy are being developed, they are not yet seen to be viable in meeting our major needs. Restricting carbon emissions through tax programs

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or “cap-and-trade” measures is going to have a significant impact on energy choices and economic options for our countries. Working independently and alone is not a solution. Others must be engaged and be part of the answer or they will forever stay part of the problem. Harmonization of international efforts is critically important. Pollution and related problems are closely allied to energy production but energy is far from the exclusive source of much of what concerns us as we help shape a better environment for our country and planet. Most Canadians live within 100 miles of our common border. Much of what happens on both sides of that border, as we know, often affects us both in ways that have not been helpful. Close cooperation between the U.S. and Canada is an imperative if we are going to solve our shared environmental problems. We have an opportunity to become a pilot model of cooperation to deal with these major problems in areas that will require heavy investment and major commitments to effect significant changes. These challenges present us with new opportunities to turn our growing cross-border cooperation, at all levels, into something even more significant. Canada and the U.S. should jointly lead in showing the rest of the world what such cooperation could mean in meeting goals that will be significant in reducing the impact of climate change and building a better environment along and beyond our common frontier. This is one more opportunity to turn our frontier into something that strongly unites us rather than be a dividing line between us.

conclusion It is never comfortable living next door to an elephant, especially one whose interests often focus more on far away places than on the neighbours around the block. Canada has borne this challenge well in the past. The new U.S. administration opens the door to making that relationship even more viable and interesting. President Obama’s early visit to Ottawa was a signal of interest and intent. Canada clearly has its own interests with the U.S. to look after first and foremost. The early U.S. opening to Canada is a sign of reciprocal interest, and both parties should be soon at work dealing with the problems that vex our relationship or agreeing to put them aside until they can be more rationally and easily addressed. I see few, if any, interests on either side that are so demanding that we see them as a major deal breaker. The second portion of our relationship is how each of us works with the rest of world and how we can help and influence each other in our own interests. A more active diplomacy, that embraces multilateralism, a new engagement in the world, and a sense that we can work together

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and help lead seem to be motivating elements for the Obama administration. In turn, that should be seen in Ottawa as an invitation to build and expand our special relationship and quietly pursue these common interests together wherever possible. Even more important, we should speak to each other about our hopes and aspirations and, indeed, about the good ideas that will allow us to realize them. There has not been a better time since the Second World War for us to work together to these ends, and Canada, with its different vision and its long, valued, and varied experience, can and should become an even closer and more trusted ally and friend in the tough days ahead.

A Mexican Perspective a n d r é s ro z e n t a l

Since 2004, when the Consejo Mexicano de Asuntos Internacionales and the Centro de Investigación y Docencia Económicas began a series of biennial public opinion surveys to gauge Mexican views on international issues, Canada has consistently been at the very top of the list of favourable countries as seen by both a representative sample of Mexicans and by those who make up an informed elite on foreign policy issues (Anonymous 2004, Gonzalez and Minushkin 2006, Gonzalez et al. 2008). This is quite surprising, given that before the advent of the North American Free Trade Agreement (nafta), knowledge about Canada in Mexico was scarce and limited to a handful of political, academic, and business interests. But, over the last 15 years, nafta has brought our two countries closer together than ever before. Since 1994, bilateral trade has increased over 500 per cent, while Canadian investment in Mexico has climbed from under usd 1 billion dollars at the signing of the free trade agreement to well over usd 7 billion at the end of last year. Since 1994, the number of Mexicans visiting Canada has grown to a quarter of a million, while over one million Canadians come to Mexico each year as tourists and some 50 000 have become semi-permanent residents with property stakes in the country. Notwithstanding this increasing friendship, does Canada deserve such a privileged position in the minds of Mexicans? There are many Canadian traits that Mexicans undoubtedly admire: its democratic government, its harmonious federal–provincial relations, its multiethnic society, and its highly developed and prosperous economy. In

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addition, many Mexicans look on the “other” nafta partner as one that has managed to preserve its national and linguistic identities in spite of being such a close neighbour, vital partner, and military ally of the United States (U.S.). Unlike Mexico, with its 30-centuries-old cultures and civilization and a separate national language, Canada works much harder at differentiating itself from the U.S. and keeping as clear a distinction as possible between the two societies, albeit not always between the two economies. However, like Mexico’s, Canada’s relationship with the U.S. is overwhelming, sometimes characterized by conflict, and often tense. A vast portion of our trade, investment, tourism, migration, and other exchanges are with our common neighbour. Our land borders are crossed hundreds of millions of times a year in both directions. Our geographic proximity means that for business, finance, and leisure, the North American subregion comprising the three nations has become a de facto single market even though we are still far from the concept of a community similar to the European model. Politics and history still dominate much of the bilateral and trilateral agenda, and both Canadians and Mexicans continue to be wary of the U.S. and its overpowering influence on our societies and economies. This has been even truer since 9/11, when the security agenda became Washington’s – and therefore the region’s – number one priority, trumping almost every other aspect of the trilateral relationship. Although Ottawa thought that its so-called “special relationship” with Washington would exempt Canada from many of the measures taken under the Bush administration’s policies on homeland security, this has not been the case. The U.S.–Canada border has, in many ways, become similar to the U.S.–Mexico one, with increased budgets and manpower devoted to surveillance, checkpoints, and beefed-up security. Gone are the days when certain portions of Canada’s border with the U.S. did not even have customs or immigration checkpoints. Long lines and waiting times at the Ambassador Bridge and other crossings have become the rule rather than the exception, and the Western Hemisphere Travel Initiative requiring all travellers to the U.S. to carry a valid passport or other recognized biometric identification did not exclude Canadians despite vigorous protestations by the government in Ottawa. Contrary to some thinking in Canada, the U.S. government does not believe its northern border is significantly different from its southern frontier. The new secretary of homeland security, Janet Napolitano (2009), has publicly stated that, under the Obama administration, both will be treated symmetrically. On the trade front, the “buy American” policy applied to U.S. companies that receive public funding has

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already affected Canadian exporters, even more severely than their Mexican counterparts. The idea that Canada has a unique, special relationship with the U.S. that somehow differentiates it from Mexico – and other countries with which Washington has close ties – has done much damage to the concept of an integrated North America and has stymied efforts by those of us who strongly believe in the advantages of building a North American Community (Independent Task Force 2005). Although few Canadians would argue that nafta itself has been a failure – the figures prove otherwise – one continues to hear and read about the mysterious dangers that nafta poses, the threats to Canadian sovereignty, and the fact that Canada is better off dealing with the U.S. alone on most issues, rather than working trilaterally with Mexico. I have yet to be convinced that this is the case and fail to see in which aspects of its bilateral agenda Canada has gotten a “better deal” from Washington than it would have if it had included Mexico. In part, the call to privilege the bilateral over the trilateral results from the absence of a vocal constituency to defend nafta against those who continue to frame it in negative terms, or even to contradict the absurd notion that it is part of a secret plot to create a theoretical North American union that would undermine Canadian independence. Even the Canadian business community, which undoubtedly has benefited significantly from the increased trade and investment flows that the single market represents, has been relatively silent on the positive aspects of nafta, preferring to defend the exclusive U.S.–Canada relationship as key to Canada’s future. From a Mexican perspective, this unfortunate Canadian effort to differentiate itself from us has inevitably had a negative effect on our own bilateral relationship, as well as on those aspects of the threeway partnership that could be strengthened and built on to the benefit of both countries. There is no question that certain issues and concerns that are exclusive to each bilateral agenda should remain there, but if an unreasonable emphasis is placed on those exceptions over the advantages of working as a trilateral partnership whenever possible, little or no progress will be made in making North America more robust and competitive vis-à-vis other groups of nations such as the European Union, the Association of Southeast Asian Nations (asean), and the Union of South American Nations (unasur). Although these other unions constantly build on their comparative advantages and common agendas, many in North America appear to take satisfaction in emphasizing our differences and undermining the construction of an integrated region that would clearly be beneficial to all three countries.

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This criticism also holds true for Canada’s relationship with the rest of Latin America and the Caribbean, where successive recent governments in Ottawa have been searching for an agenda beyond the free trade agreements signed with Chile, Colombia, Costa Rica, and Peru. So far they have been unable to articulate a clear objective-oriented policy, preferring to engage in a constant intellectual redefinition exercise, rather than in concrete strategies and commitments. The lack of trilateral institutions and the reluctance of all three North American partners to create any has also contributed to the problem. Because the European model of a Brussels-type bureaucracy was rejected out of hand by all three governments while nafta was being negotiated, no institutions were established to push the threeway agenda and, as a result, there is no locomotive to pull the train. Infrequent meetings of senior officials and the only-recently institutionalized annual summit of leaders are the only high-level occasions at which the trilateral agenda is even addressed. When the North American Competitiveness Council (nacc) was set up in 2006 as part of the Security and Prosperity Partnership (spp)* to institutionalize the business community’s involvement in furthering the North American agenda, the idea was to make sure that governments looked to the private sector to tell them what needed to be done to further enhance the region’s competitiveness. The nacc’s mandate was to provide governments with recommendations on broad issues, such as border facilitation and regulation, as well as the competitiveness of key sectors including automotive, transportation, manufacturing, and services as a way to work toward a more integrated North American economic and security region, but opposition to the idea in both the U.S. and Canada focused on the fact that it granted the corporate sector a formal role that had been denied to the public, citizens’ organizations, labour, and legislators. Also, media commentators, such as Lou Dobbs and Bill O’Reilly on cnn and Fox News, constantly vilified the spp as a disguised attempt to force the U.S. into a union with Canada and Mexico. Canadian analyst Maude Barlow has also been a constant critic of nafta and the spp using similar arguments. In any case, the nacc no longer appears to be among the current priorities of the Calderón, Harper, or Obama administrations. Many of the spp recommendations to Ottawa, Washington, and * The Security and Prosperity Partnership for North America was launched in March, 2005 as a trilateral effort to increase security and enhance prosperity among the U.S., Canada, and Mexico through greater cooperation and information sharing. It is premised on the premise that the security and economic prosperity of the three countries are mutually reinforcing.

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Mexico City back in 2005, together with the competitiveness proposals agreed to in February 2007, have never been implemented. As a long-time observer and admirer of Canada, I have been bewildered by some of the country’s most recent stated foreign policy objectives, priorities, and actions. From the time Prime Minister Trudeau’s government marked an important shift in Canada’s role in international politics, relations with previously untapped global regions such as Latin America had been seen as vital to Canada’s future political and economic interests. As he stated, “We have to take greater account of the ties which bind us to other nations in this hemisphere – in the Caribbean, Latin America – and of their economic needs. We have to explore relations with Latin America, where more than 400 million people will live by the turn of the century and where we have substantial interests” (Stevenson 2000, 114). As a result, successive Canadian governments began the shift from a previous, almost exclusive, trans-Atlantic focus (including the U.S.) and started looking south toward the rest of the hemisphere. Prime Minister Mulroney’s decision to join the Organization of American States (oas) in 1990, together with serious Canadian diplomacy efforts to strengthen democracy in the region, end some of Central America’s interminable civil wars, participate in peacekeeping operations, and promote greater respect for human rights, all became hallmarks of Canada’s policy toward the region. Considerable resources were expended in furthering these objectives and the country’s standing in the region grew as a result. Today this all seems to be history. As Robert Greenhill’s (2005) External Voices Project so aptly found, “[Canada’s] international performance and, to a certain extent, international reputation have fallen over the last 15 years.” In the last four years, since the results of Greenhill’s interviews were published, the situation has probably worsened. Although Canada is still an active member of the oas and contributes substantially to the United Nations Stabilization Mission in Haiti, foreign policy priorities have shifted to other regions and issues. Afghanistan, the Arctic, China, and India are at the forefront of current Canadian diplomacy, while Latin America and the Caribbean – often seen today more as a region of conflict and crime than of opportunity – seem to have dropped off the radar screen. Negative issues of poverty, illegal migration, drug trafficking, and organized crime are those mostly favoured by Canadian media when referring to Latin America, while apparent “new” opportunities in other parts of the world generate more excitement and are said to offer greater potential for furthering the country’s interests abroad. My view is that this reshaped foreign policy misses an important point: Canada inevitably still belongs to this hemisphere and will be

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unavoidably affected by what happens here, both now and in the future. There can be no reasonable justification for the argument I have sometimes heard from Canadians, that such issues as poverty alleviation, illegal immigration, the fight against organised crime, and socioeconomic development failures in the region are further today from Canada’s interests than closer and stronger relations with the U.S. According to those voices, that is where Canada should be investing its foreign policy resources, rather than in the countries of Latin America and the Caribbean, or in building the trilateral relationship with Mexico. In a Globe and Mail article on 1 May, Robert Pastor and I made the case for a trilateral approach to common issues on the bilateral agendas (Rozental and Pastor 2009). John Manley and Gordon Giffin (2009) responded four days later with a stinging attack on our premise that working with Mexico on the common agenda makes eminent sense for Canada and furthers its foreign policy interests. Three weeks later, an editorial in The Ottawa Citizen (Dark et al. 2009) supported Pastor’s and my views, and urged the Harper government to demonstrate a clear interest in Mexico–U.S. border issues, join the North American Development Bank, put forward climate change solutions that explicitly include Mexico, and treat calls for renewed bilateralism carefully; the approach put forward by Manley and Giffin could only exacerbate the asymmetric power relations that Canada has spent much of the past two decades trying to reduce. So we come back to the question: in view of the realities described above, why does Canada continue to be seen in such a positive light by Mexicans? Is it because Mexico has tried to shift its foreign policy away from concentrating on the North American agenda and wants to look more toward its Latin American neighbours, or is it because Canada is perceived as a neighbour with many affinities and a desire to keep its distance from the U.S.? The answer probably lies somewhere in between, with many in Mexico viewing Canada as a model of development and a good nafta partner, while also believing that Canada – especially Quebec – has Latin characteristics that Mexicans see as a difference from our common partner, even though statistics prove that the U.S. today, with its huge Hispanic population, is much more Latin than Canada. That immigrant population in the U.S. and its growing political influence make the Mexican agenda one of Washington’s most important and, indeed, special relationships. In contrast, the Harper government’s sudden decision in mid-July 2009 to impose visa requirements on all Mexicans visiting Canada (some 250 000 a year according to recent estimates) is a clear indication of the low priority that Mexico is given in Ottawa. Although there is no justification for the growing abuse and fraudulent use of Canada’s

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liberal asylum and refugee policy by people from many countries – including Mexico – the new visa policy will have an immediate negative effect on Mexican perceptions of Canada, as well as on trade, investment, academic exchanges, and tourism. The decision calls into question the Canada–Mexico partnership launched in 2004, which was meant to highlight the fact that both countries “share a dynamic and prosperous relationship, as friends, as North American neighbours and as strategic partners in the Americas and beyond” (Canada 2007). None of this seems to have been taken into account with the visa decision. In 1991, when Mexico and the U.S. decided to initiate a bilateral negotiations toward a free trade agreement, Canada understood that its interests lay in being part of the resulting agreement, rather than remaining with the U.S.–Canada free trade treaty already in existence. Partly because of worries about being left out and partly to improve its own position vis-à-vis trade and investment with the U.S., the Mulroney government did the right thing by insisting on participating in three-way negotiations. Having Canada as a partner was of great benefit to Mexico, because more than 80 per cent of the time Ottawa’s positions coincided with Mexico City’s. More recently, when President Obama espoused reopening nafta during his political campaign, Mexico and Canada joined in opposition to any such attempt and were successful in convincing the new administration that picking apart the treaty was a bad and dangerous idea. Today there are many multilateral issues on which Canada and Mexico can cooperate closely, in addition to the trilateral agenda: Cuba’s role in the hemisphere, growing populism in Latin America, climate change, the United Nations and international governance architecture reform, and the G20 agenda are all topics that concern both of us. If our two countries are able to join forces and work together on these and other areas of common interest, we will be stronger and our voice will be louder and more effective than if we each go our own way. It is time for Canada to rejoin the North American table and use its influence to shape the trilateral agenda, rather than resist it.

references Anonymous. 2004. México y el mundo: global views 2004. Mexico, Mexico: Centro de Investigación y Desarrollo Económicos and Consejo Mexicano de Asuntos Internacionales. English version available at: . Last accessed: 7 Sept. 2009.

81 A Mexican Perspective Canada, Government of. 2007. The Canada–Mexico partnership. Ottawa: Government of Canada. Available at: . Last accessed 7 Oct. 2009. Dark, Michael, Greg Anderson, and Anne McLellan. 2009. Place a call to Mexico City. The Ottawa Citizen, 23 May. Gonzalez, Guadalupe, Ferran Martinez i Coma, and Jorge A. Schiavon Uriegas (editors). 2008. México, las Américas y el mundo. Mexico, Mexico: Centro de Investigación y Desarrollo Económicos and Consejo Mexicano de Asuntos Internacionales. Gonzalez, Guadalupe, and Susan Minushkin (editors). 2006. México y el mundo 2006. Mexico, Mexico: Centro de Investigación y Desarrollo Económicos and Consejo Mexicano de Asuntos Internacionales. Greenhill, Robert. 2005. Making a difference? External views on Canada’s international impact. Toronto: Canadian Institute of International Affairs. 49 pp. Available at: . Last accessed 7 Sept. 2009. Independent Task Force. 2005. Building a North American community. Council on Foreign Relations, New York, ny, usa. Available at: . Last accessed 7 Sept. 2009. Manley, John, and Gordon Giffin. 2009. A table for two, not three: Canada and the U.S. share a special long-standing relationship that doesn’t include Mexico. The Globe and Mail, 5 May. Napolitano, J. 2009. Toward a better border: the United States and Canada. Address to the Brookings Institution, Washington, dc; 25 March. Available at: . Last accessed 28 Aug. 2009. Rozental, Andrés, and Robert Pastor. 2009. A case for the three amigos. The Globe and Mail, 1 May. Stevenson, B.J.R. 2000. Canada, Latin America, and the new internationalism: a foreign policy analysis, 1968–1990. Kingston: McGill–Queen’s University Press.

A North American’s View of the Old nafta and the New North American Agendas ro b e r t a . pa s t o r

The North American Free Trade Agreement (nafta) generated a sunny set of hopes and a raincloud of fears. Mexicans hoped that their country would rise to the first world; Canadians hoped that the agreement would compel the United States (U.S.) to stop imposing duties on softwood lumber and comply with the dispute-settlement mechanism; and Americans hoped that nafta would put an end to undocumented migration from Mexico. Alas, none of the hopes became a reality. Mexico and Canada feared that U.S. investors would purchase their country’s assets, but despite substantial additional foreign investment in both countries, the percentage of assets owned by U.S. firms declined. The U.S. feared that its jobs would march south to Mexico, but the greatest period of trade growth in the U.S. – 1993–2001 – coincided with the largest expansion in job creation. Conversely, job loss increased as the rate of trade growth declined. So the fears did not come true either. Leaving aside hopes and fears, if one judges nafta by the specific goals written in the agreement, it was successful. nafta aimed to dismantle trade and investment barriers, and it accomplished that. Trade has tripled and foreign direct investment has quintupled in North America since 1994. So why has nafta become a veritable piñata for pandering pundits and politicians? The answer, in brief, is that as a continental market expanded, new problems emerged and old ones were exacerbated, but governance did not keep pace. Indeed, the three governments have been asleep at the switch, awakening only after an accident, and then

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returning to sleep before solving the problem. After stumbling badly, the U.S. helped Mexico after the peso crisis of 1994–95, but neither developed an adequate fund nor consultative mechanism for preventing or alleviating the next macro-economic crisis. Indeed, there has been almost no coordination among the three governments on the financial crisis of 2008–09. The 9/11 attacks, drug-trafficking violence, softwood lumber – each of these problems elicited reactions, but not the kinds of policies or institutions that would have strengthened North America. As a result, using the most conventional indicator of integration, North America soared to become a formidable region at the beginning, and then it toppled. From 1990 to 2001, intraregional exports among the three countries of North America as a percentage of their total exports to the world rose from 42 per cent to 56 per cent, almost reaching the level of integration that Europe achieved after five decades. But from 2001 to 2007, intra-regional exports fell to 51 per cent. Similarly, from 1994 to 2001, North America’s share of world gross product climbed from 30 to 35 per cent, then declined to just 27 per cent in 2008, and the European Union moved ahead of North America for the first time since nafta. During most of this period, Canada and Mexico were the two largest exporters to the U.S., but in 2003, China surpassed Mexico and, in 2007, it surpassed Canada. In brief, while North America’s leaders were debating the past, Europe and Asia had their eyes on the future, and they overtook us. All three governments are stuck, debating a 15-year-old agreement while neglecting the ample 21st century continental agenda that sits in front of them awaiting their attention. Why? Where is the leadership?

th r e e p u z z l e s Since nafta came into effect in January 1994, all three governments have settled back into the relationship that had existed before, a dualbilateral relationship – the U.S. and Canada and the U.S. and Mexico. The third leg of the triangle – the relationship between Mexico and Canada – is quite new. Indeed, relations between these two governments were only established in 1944, and trade was negligible before nafta. Since then, trade has grown quickly but from a very low base. By and large, the Mexican–Canadian relationship is the weakest and least defined of the three. That the three governments prefer to maintain their two dysfunctional relationships rather than build on the North American idea is a puzzle. Dual bilateralism reinforces the imbalance in power. For Mexico and Canada, dual bilateralism accentuates their weakness and, for the strongest nation, it assures an annoying and unproductive relationship.

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Asymmetry means that the U.S. can and usually does ignore its two neighbours or the hard trade-offs that characterize so many of the issues. The Canadian prime minister raised the issue of U.S. duties on Canada’s softwood lumber exports at virtually every meeting for nearly a decade, as the Mexican president did with issues like trucking and sugar. The U.S. president’s response was nearly always the same: “We will look into it.” And the U.S. did look into it before deciding not to solve it. The U.S. president did not want to antagonize the lumber industry, or teamsters, or sugar growers, and so he delayed. In a region of growing interdependence, the power to delay is often as consequential as the power to decide, but in the long term, it does not benefit the U.S. to maintain the status quo at the cost of moving forward to improve the competitiveness of the region. It also does nothing for its global leadership if the U.S. fails to comply with an agreement with its neighbours. Still, U.S. policy is hardly the only reason why North America is stuck. Why have Canada and Mexico failed to see the similarity of their problems and sought to cooperate to solve them? The answer lies in the riddle of three puzzles – each one associated with a member state and each one masking a unique challenge: Why has Canada, the world’s leader in multilateralism and humanism, been uninterested in creating multilateral institutions in North America and ungenerous when it comes to its poorest neighbour? • Why has Mexico, the weakest and poorest of the three, been the boldest in proposing continental initiatives even when it would pay the highest price? • Why is the strongest North American state the most defensive, parochial, and fearful of losing its sovereignty to its weaker neighbours? •

th e c a n a d i a n p u z z l e More than its neighbours, Canada deserves credit for creating the new North America. When Mexico proposed a free trade agreement to the U.S., Canada asked to be included. The other two agreed, and “North America” was born. However, Canada’s motive was not a grand vision; it was defensive. It wanted to preserve the gains that it had achieved in the Canada–U.S. Free Trade Agreement. Canada has justly earned the reputation of a committed multilateralist, except in North America. Its soldiers have participated in many peacekeeping operations; its diplomats have staffed the United Nations and the international courts; its leaders have articulated the global strategies of “human security” and the “right to protect”; its governments have negotiated treaties on the International Criminal Court and

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on landmines. Despite these achievements, Canadians have not proposed a single multilateral initiative in the one region – North America – that matters most to it. Worse, it has rejected every opportunity to pursue a North American approach to shared problems. Although Canada deserves more credit than its neighbours for starting the North American engine, it also deserves most of the blame for stopping that train and steering it onto bilateral tracks. At a conference in Washington, several leaders recounted the celebrated Canadian “veto.” Jim Kolbe, former Republican congressman from Arizona, recalled: “I chaired the U.S.–Mexican Inter-Parliamentary Group for years, and I tried to get Canadians to join us, but the Canadians always opposed the idea” (comment at the Woodrow Wilson International Center for Scholars, Washington, DC, 2 June 2008). Raul Rodriguez, the first president of the North American Development Bank (nadbank), said that Mexican President Vicente Fox asked Jean Chrétien to join the nadbank in 2004, but he also rejected the idea (comment at the Woodrow Wilson International Center for Scholars, Washington, DC, 2 June 2008). Soon after the 9/11 attack on the U.S., Jorge Castañeda, Mexico’s foreign minister, approached his Canadian counterpart, John Manley, to propose a North American “smart border” agreement, but again, Canada declined in favour of a bilateral agreement with the U.S. (interview with Andrés Rozental, 28 April 2009). Mexico then pursued an agreement with the U.S. that was almost the same as Canada’s. If the agreements were so “smart,” there would have been one rather than two. Canada is also one of the most generous countries, providing usd 4.7 billion in aid in 2008 or roughly twice as much as the U.S. as a proportion of gross national income (oecd 2009). It focuses its aid on 20 countries, but Mexico is not one of them (cida 2009, 34). Indeed, Canada gave usd 5 million to Mexico in 2007, a third of what it provided to Ukraine (cida 2009, 39 and 41). What explains this discrepancy? Some have suggested that Canadians fear being tainted by association with Mexico and its drug-trafficking, violence, and immigration problems. Others believe that its “special relationship” with the U.S. gives it an advantage that it would lose if it allied with Mexico (Manley and Giffin 2009). Still, others, such as Thomas D’Aquino, the former chief executive officer of Canadian Chief Executives, maintain that bilateralism and trilateralism can work in tandem by applying the principle “three can talk and two can do” (interview, Ottawa, 27 Oct. 2008). If effectiveness is the criterion, Canada’s bilateral strategy has not done well. If two can walk faster than three, why did it take so long for the U.S. to reach an agreement on softwood lumber, and is that agreement

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fair and durable? Working by itself, Canada failed on softwood lumber, national labeling, and “buy American” provisions. Canada has made no discernable progress in managing the border better with the U.S. and, therefore, felt insulted when Janet Napolitano (2009), the secretary of homeland security, suggested that the U.S. wanted to treat its two neighbours and its two borders equally. Canada also did not persuade the Obama administration to pursue a North American strategy on the declining auto industry or the financial crisis. Canada betrayed its multilateralist reputation for a bilateral strategy that is not working. Its challenge is to construct a North American institution that could propose strategies for addressing the full range of North American issues. A joint approach with Mexico that focused on compliance and addressed lumber and trucking would have had a far greater chance of success than each country focusing on its own problem. Canada is actually in the catbird seat, because if it coordinates a North American strategy with Mexico, it is probable that the U.S. will not only give it the attention it deserves, but the chances of acceptance also rise substantially. There is no guarantee that a trilateral approach will be any more effective than a bilateral one, although it cannot be less effective. Canadian leaders did a “full court press” to get the U.S. Congress to grant Canada an exception to the “buy American” provisions in the economic recovery bill passed at the beginning of the Obama administration, but they failed miserably. If Canada had joined Mexico and sought a “North American exemption,” its chances would have improved substantially. There are about 30 members in the congressional Hispanic caucus, including two senators of each party, who closely monitor developments on Mexico and Latin America. They have come to the immediate defence of Mexico in the usd 1.4 billion Mérida Initiative. Had they joined with Canada to pursue common interests and a shared goal, they might well have succeeded. If Canada were to join Mexico in identifying the many credentials, customs forms, and costs of crossing the post-9/11 border and proposing a leaner and more collaborative approach, it might well have succeeded. If Canada and Mexico were to develop a generic proposal for dealing with the pricing of products that have public involvement, e.g., softwood lumber and medicines, a solution might have been found. If Canada were to join with Mexico and the U.S. in accepting the international definition of “refugee” – a person with a well-founded fear of persecution if he/she returned to his/her home country – then Canada would not have needed to require an immigration visa of Mexicans. As soon as one shifts one’s vision toward a North American approach, new ideas emerge. They will not necessarily lead to solutions, but they stand a better chance than the bilateral approach.

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th e m e x i c a n p u z z l e In the early years of nafta, soon after the first genuinely democratic presidential election, Mexico’s new president, Vicente Fox, made a flurry of new proposals, including a customs union, freer movement of labour, a cohesion fund, and a North American commission. His counterparts in the U.S. and Canada rejected all of these proposals in favour of an alphabet soup of vacuous initiatives. The more interesting question was why Fox proposed ideas that would have been far more difficult and costly for Mexico to implement than for the U.S. and Canada. Notably, a customs union would require Mexico to reduce its tariffs, which were much higher than those of the U.S. and Canada, to the lowest level. Mexican firms would have suffered deeply from the additional competition. The answer is that Mexicans were in a hurry to join the club of advanced countries, and its technocratic leadership understood that the best way to develop the country was to open the economy to global competition. Beginning in the mid-1980s, Mexico embarked on a comprehensive set of reforms that shook the old economy to its roots, but permitted it to shift from a sharp dependence on oil to one that relied on manufacturing exports. But by the late 1990s, when a second generation of reforms – fiscal, labour, energy – were needed, Mexico was undergoing an even more profound transition toward a democratic system. In 1997, the governing party – the Partido Revolucionario Institucional – lost its majority in Congress for the first time in its history, and, in 2000, it lost the presidency. The president and the elite understood the reforms that were needed, but a fragmented political system made them harder to achieve. Elected by a slim margin in 2006, President Felipe Calderón decided not to revive Fox’s grand proposal for a customs union, among others. This might have been because of the difficulty of securing a majority of Congress to favour such initiatives or it might have been because Mexico accepted the fact that its two neighbours had no appetite for such proposals. Mexico’s challenge is to blaze a path out of the developing world into the first world. Like Canada, Mexico cannot succeed on its own. It will require a coordinated approach.

th e u . s . p u z z l e The most perplexing puzzle of all is that of the U.S. nafta generated a stiff debate in 1993, but the issue seemed to fade away soon after the agreement was approved. nafta re-emerged as a controversial issue during the presidency of George W. Bush when he proposed a rather innocuous inter-bureaucratic mechanism called the Security and Prosperity Partnership. Led by two conservative cable-channel anchors, Lou

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Dobbs of cnn and Bill O’Reilly of Fox News, the new assault on nafta came from an unexpected direction – a fear that the U.S. under Bush was abandoning its sovereign rights by surreptitiously creating a North American union. How could the world’s sole superpower fear domination by its two weaker neighbours? The puzzle is even harder to unscramble because surveys suggest that public opinion favours more cooperation within North America. Instead of being angry or frightened by their neighbours, people in the U.S. view both Mexicans and Canadians very positively. The explanation is that, although most people may have a positive view of North America, their voices are drowned out by the 15–20 per cent of the public who are fearful. This nationalistic group feels a loss of control as the forces of globalization or regionalization grow and their jobs and livelihoods are threatened by out-sourcing, trade, and immigration. These concerns grow when the economy declines. In the U.S. political system, “single interest” groups with a wide constituency base or substantial funds can skew policy. This conservative critique intimidated President Bush and Congress and prevented them from considering new and imaginative ways to collaborate with their neighbours. The U.S.’s challenge is to provide a new kind of leadership for the world, but the path to success must begin with a demonstration of deep respect for its neighbours. As in the other two challenges, this one will require a new spirit of collaboration.

th e c h a l l e n g e , a v i s i o n , and a north american strategy The three puzzles – those of Canada, the bilateralist; Mexico, the bold; and the U.S., the fearful – create three challenges. Canada’s mission is to design multilateral (actually trilateral) institutions. Mexico must undertake economic reforms to promote competitiveness and work with its neighbours to best use additional funds to narrow the development gap. And the U.S. should redefine its leadership style by adjusting its interests to take account of the concerns of its two North American partners. All three challenges are difficult, which explains why they have been out of reach. The only way the three nations will pursue and achieve these goals is if they begin with a shared, bold vision of North America’s future. That vision should be based on the simple principle of interdependence: if one nation prospers, all will; if one nation declines, all three will be affected. Therefore, it is in the interests of all three to assist one another in meeting each challenge while building a sense of community.

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In meetings that U.S. President Barack Obama had with Mexican President Felipe Calderón on 12 January 2009 and with Prime Minister Stephen Harper on 19 February 2009, the three leaders sketched two agendas that are quite similar. The issues are security, the economy, and energy and climate change. History suggests that the governments will probably pursue these issues bilaterally with an occasional, rhetorical reference to North America. Success is more likely if they approach them as North American issues. The most immediate security issues relate to border management. The Canadian government has preferred the bilateral approach because it contends that the two borders are very different and that it can solve problems faster dealing only with the U.S. Despite eight years of bilateral discussions, the U.S.–Canada border is no better than it was before 9/11, and there is substantial evidence that the situation is more difficult. The same applies to the U.S.–Mexico border. The truth is that both borders are dysfunctional for similar reasons – inadequate infrastructure, additional security requirements imposed by the U.S. government, and a fragmented approach by agencies within and between the three governments. All three countries need to design a single approach with similar rules and requirements and jointlytrained personnel to manage the borders. Canada and Mexico would benefit from a single set of rules, and the U.S. would benefit from not having to repeat the same exercise twice. What kind of rules? First, instead of having multiple “fast” cards, the three governments could agree to a single North American pass or passport that would be cleared by all three countries and allow the individual to use the fast lane at both borders. Second, instead of three sets of customs forms and officials, they would agree to one set of forms and a single team that would include individuals from all three governments. Fourth, instead of having different standards for the weight, length, and height of trucks, there would be a single standard. Fifth, instead of cabotage – that restricts trucks from picking up cargo at different sites – they could agree to allow certified North American trucks to deposit or retrieve cargo anywhere in the three countries. The U.S. Congress is more likely to approve a new system if its two neighbours join in proposing a fair scheme. In Congress, Canada is appreciated as a friendly trading partner, but as former Canadian ambassador to the U.S., Allan Gottlieb (1991), explained in his memoir, Canada has a hard time getting Washington’s attention. Mexico does not have that problem for two reasons: crises and constituencies, both of which Canada lacks. Mexico’s issues – drug-related violence and immigration – are high on the list of U.S. concerns, and the Mexican– American community is the largest and one of the fastest-growing

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immigrant communities in the U.S. Both political parties are competing for the new Mexican-American voters. Therefore, it is logical for Canada to join with Mexico to secure the constructive attention of the U.S. Congress. The same pattern applies to other issues. To narrow the development gap between Mexico and its northern neighbours, it would help if all three designed a roadmap and agreed on what each would contribute. To address the dual problem of energy security and climate change, it would be desirable for the three countries to design a unified cap-andtrade system and ask the North American Commission for Environmental Cooperation to measure the problems and the progress. Although most prefer a global system, if the three governments of North America found a functional and effective formula for undertaking and testing it at a regional level, then that could be the model. In brief, why should the three governments pursue their interests trilaterally rather than bilaterally? First, a trilateral approach is more likely to yield an outcome that is based on fairness and rules than one based on the extraordinary imbalance of power. Moreover, Canada and Mexico are more likely to feel as if they have a stake in the region’s future if an agreement reflects fairness and includes rules binding on all. Second, each country brings a different perspective to these and other international issues – that of a superpower, a middle power, and developing country. To the extent that resulting policies integrate those different views, they are likely to have wide influence in the world. Third, if all three governments agree to a single approach to a problem, lobbyists would stop defining the issue and would find themselves on the defensive. Fourth, there has been so little progress on the bilateral track that Canadians need to ask themselves whether an alternative might have more success. The Standing Committee on International Trade of Canada’s House of Commons visited Washington in spring 2009 and raised issues that have been bothering Canada for years: the border, including the Western Hemisphere Travel Initiative; country-of-origin labeling; the black liquor subsidy; and the “buy American” provision in the stimulus package. After their visit, the committee reported to the House of Commons that no progress had been made on any of these issues, and yet their principal recommendation was that the government should continue repeating the same exercise (Richardson 2009). If they had opened their minds to addressing the issues using a reciprocal and trilateral approach, the result could not be worse. The North American Leaders’ Summit in Guadalajara (August 2009) underscored both the promise of North American cooperation

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and the chronic difficulty. The three governments are trained to think in bilateral terms and, thus, our idea of what North America could become is limited. A genuine three-sided dialogue could introduce new ideas to chronic problems, but it could also create a sense of community that would prevent future problems and encourage leaders to approach issues together. With a new sense of community, it would be easier to approach challenges together. In the absence of a sense of community, neither Canada nor the U.S. see the development gap separating Mexico from its northern neighbours as a problem. With a sense of community, the three governments might work to address that problem. North America’s potential cannot be realized without leadership in all three countries and the political will to place an agenda before the three publics that will increase collaboration, improve competitiveness, and enhance the security of the region.

ac k n ow l e d g e m e n t I thank Paul Heinbecker and Andrés Rozental for comments on an earlier draft of this chapter.

references cida (Canadian International Development Agency). 2009. Statistical report on interenational assistance: fiscal year 2006–2007. Ottawa: cida. Available at: . Last accessed 8 Sept. 2009. Gottlieb, Allan. 1991. “I’ll be with you in a minute, Mr. Ambassador”: The education of a Canadian diplomat in Washington. Toronto: University of Toronto Press. Manley, John, and Gordon Giffin. 2009. A table for two, not three: Canada and the U.S. share a special long-standing relationship that doesn’t include Mexico. The Globe and Mail, 5 May. Napolitano, J. 2009. Toward a better border: the United States and Canada. Address to the Brookings Institution, Washington, DC; 25 March. Available at: Last accessed 28 Aug. 2009. oecd (Organisation for Economic Co-operation and Development). 2009. Table 1: Net official development assistance in 2008. Paris, France: oecd. Available at: . Last accessed 8 Sept. 2009.

92 Robert A. Pastor Richardson, Lee. 2009. An examination of selected Canada–US border issues: report of the Standing Committee on International Trade. Ottawa: House of Commons. Available at: . Last accessed 8 Sept. 2009.

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Canada and the Hemisphere: Between the Devil and the Deep Blue Sea jorge heine

The famous phrase, “Poor Mexico, so far from God and so close to the United States” has, for obvious reasons, never been applied to Canada. Given the cultural and developmental similarities between the United States (U.S.) and Canada, being next to the world’s largest economy – which produces one fourth of the world’s products – and, by now its sole superpower, seemed, if anything, an outright blessing for Canada. A ready market for Canadian goods and services, plus the ensuing “security umbrella” – meaning no need for large defence budgets – was, in many ways, an unbeatable combination. It translated into the widespread view that Canada was an ideal country. Its high quality of life combined the best features of Western Europe (elements of a welfare state, national health insurance, no death penalty) with the best of the U.S. (future-oriented, dynamic, a sense of entrepreneurship, a willingness to take risks) in a unique “tossed-salad” (as opposed to a “melting-pot”) – a multicultural, diverse society, open to immigration and innovation. Who needs the Third World when you have the world’s biggest market just across the border? Yet, one need only look at the state of the U.S. automobile industry (much of whose production has been based in Ontario), now largely bankrupt, to realize that the traditional U.S.-centric view of Canada’s interests may need some adjustment. The U.S. is still the largest economy in the world and will continue to be for quite some time. But it is no longer the main driver of economic growth, and many traditional manufacturing areas in the so-called “rust-belt” of its northeast and

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midwest are disappearing before our very eyes. Whole neighbourhoods in cities such as Flint, Michigan, are being razed. The average value of a home in Detroit is usd 18 000. Large parts of Buffalo, New York, look like ghost towns. Moreover, as Allan Gottlieb (2009) perceptively commented, the very model of integrated industrial production between the U.S. and Canada has been called into question by the “hardening” of the U.S. border, which has affected costs. Thus, the notion that Canada can continue to bet all of its future on the dynamism and prosperity of the U.S. is one that many observers find doubtful. The need to diversify Canada’s export markets and sources of investment is apparent. And although some of the biggest markets are in the developed world (Western Europe and Japan), these often tend to be mature and slow-growing. The fastest-growing markets, on the other hand, are to be found in the global south – especially in Asia, but also in Latin America, where many millions of new consumers are being introduced to Western consumer habits. A traditional argument against looking to these growing markets is that Canada’s current trade and investment figures with regions such as Latin America are low (Daudelin 2003, 2007). Yet, that is a circular argument. If, because trade flows are low, they do not deserve promotion or outreach efforts by government or business, they are likely to remain that way. Rather than look at current flows, the approach should be to look at potential ones, in terms of demographics, market profiles, projected future growth, etc. At the same time, given the realities of history and geography, Canada’s relations with these newly emerging powers will be, at least to some extent, affected by “Uncle Sam’s shadow.” This is particularly true for Latin America, that traditional sphere of influence of the U.S. Even though U.S. influence in the region has declined in this decade, it is still a key player there. The classic example of this triangulation is the North American Free Trade Agreement (nafta). Mexico is by far Canada’s most important trading and investment partner in the region. Although no similar relationship is likely to be replicated between Canada and other Latin American countries, the Mexico–Canada–U.S. relation provides a template of sorts. Fifteen years after the establishment of nafta, when one would have thought that this triangulation would be fully incorporated into Canada’s approach to the North American problematique, it should be apparent that is not the case. Significant Canadian voices call for the pre-eminence of the “special relationship” between Canada and the U.S., over any other approach (Manley and Giffin 2009, in response to Rozental and Pastor 2009). Some go so far as to say that Mexico has in some way “contaminated”

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the U.S.–Canadian relationship. However, this would entail going back to pre-1989 times (when Canada did not even consider itself part of the inter-American system, and was not part of the Organization of American States) to resuscitate the privileged U.S.–Canadian relationship. Canadian–Latin American relations cannot be dissociated from the nostalgic undertow that longs for that earlier era. The purpose of this chapter is to examine the state of relations between Canada and Latin America at a time of enormous changes in the hemisphere and, indeed, the world – at a time when the U.S. has elected its first black president and the world economy has undergone its biggest crisis since the Great Depression. Two years ago, in July 2007, Canadian Prime Minister Stephen Harper visited Latin America and the Caribbean and formally launched a foreign policy initiative that identified the region as a high priority for Canada.* What has happened since then? Was this initiative just part of the “ebbs and flows” of Canadian–Latin American relations (to borrow an expression from Torres [2008]), of which it has been said that every 20 years or so – starting with Pierre Elliott Trudeau in 1969, continuing with Brian Mulroney in 1989 and now with Stephen Harper – some major initiative is launched, only to be quickly forgotten or subsumed into other priorities? Will it, this time, be here to stay?

a r e g i o n i n fa s t- f o rwa r d m o d e Before answering those questions, a brief survey of “the state of the region” is necessary to provide the proper context for this Canadian initiative. Five key elements are pertinent in this regard: Economic growth: From 2002 to 2008, Latin America had the best economic performance of the past 30 years, growing by close to 5 per cent annually for six years in a row. Although the 2008 financial crisis hit the region as well, this time it was much better prepared than on other occasions (say, in 1929 or in 1982). All projections indicate that although economic growth will be negative in 2009, it will be less so than in North America or Western Europe, let alone central and eastern Europe (which is, in many ways, the region most affected by the global financial meltdown). • Political cooperation: Summit diplomacy has become established and even routine. The Rio Group, the Ibero-American summits, the newly •

* For a comprehensive overview of Canadian–Latin American relations, see Rochlin [1994]; for an excellent current assessment of Canadian policy toward Latin America, see the special issue of Canadian Foreign Policy [cfp 2008].

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established South American Union of Nations (unasur) have all generated a flexible, variable-geometry type of approach to regional problem-solving that is starting to prove itself. • International markets: Although traditionally focused on North America and Western Europe, over the past two decades Latin American nations have increasingly turned their attention to Asia. Argentina, Brazil, Chile, and Peru have been at the forefront of this shift to Asia, although other countries have also been involved. In 2007, China became Chile’s number one export market, displacing the U.S., although this changed in 2008. Also in 2007, Chile exported more to India than Canada did – usd 2.2 billion. • Diplomatic links: Latin American nations now interact diplomatically with a much wider array of partners and are much more active on global issues than in the past. Mexico has joined the Organisation for Economic Co-operation and Development (oecd); in fact, the oecd’s secretary-general, Angel Gurría, is Mexican. Chile may join the oecd in 2009. Chile, Mexico, and Peru are members of the AsiaPacific Economic Cooperation (apec). Brazil is a founding member of the India–Brazil–South Africa Initiative, and participated in the first formal meeting of the bric group (Brazil, Russia, India, and China) in June 2009. Argentina, Brazil, and Mexico participated at the leaders’ level in the G20 meetings held in Washington in November 2008 and London in April 2009. Brazil opened 32 new embassies between 2003 and 2008, more than any other country during this period. This positive outlook does not mean that Latin America does not have many problems or that it is on the verge of becoming fully developed. It simply means that something has been learned from the policy mistakes of the recent past and that quite a few countries have become much more engaged internationally (Cooper and Heine 2009). There has also been a perceptive decline in U.S. influence, fueled by Washington’s manifest lack of interest in the region after 9/11 and a U.S. foreign policy thrust that evokes little sympathy.

a ca n a d i a n p o l i cy for a changing region It is in this context that Canada’s new hemispheric initiative has been launched. Anchored in the promotion of democratic governance, prosperity, and security, 2008–09 was rich in events signaling these objectives:

99 Canada and the Hemisphere •

•

• • •

the visit to Canada of Chilean President Michelle Bachelet in June 2008, leading to the signature of a flurry of bilateral agreements mostly in the education and technology fields approval of free trade agreements with Colombia and Peru and ongoing negotiations with a number of Central American and Caribbean countries appointment of a minister of state for the Americas, Peter Kent, in late 2008 the Conference of Defence Ministers of the Americas in Banff in September 2008, which explored ways to further cooperate with the oas Prime Minister Harper’s participation in the Fifth Summit of the Americas in Port of Spain in April 2009, during which he held a special meeting with the caricom heads of government, indicating the priority Canada places on the English-speaking Caribbean, are all examples of this (Government of Canada 2009).

The summit process, enthusiastically supported by Ottawa since its inception in 1994, is in many ways emblematic of the importance Canada has placed on multilateral fora in the Americas, something apparent in the oas, and particularly in the latter’s democracy promotion efforts. But the growing links between Canada and Latin America and the Caribbean were also expressed in strong bilateral ties with a number of individual countries. Mexico As part of nafta, Mexico has far more significance for Canada than any other country in the region. One million Canadians visit Mexico every year. Of the cad 46 billion in merchandise trade with the region in 2008, half was with Mexico. Yet, the “hardening” of the U.S. border with Canada since 9/11, something that U.S. Homeland Security Secretary Janet Napolitano underlined during her visit to Canada in mid2009, reminding her Canadian hosts that the U.S.–Canadian border was a “real one,” led Canada to follow the U.S. example and “harden” its own (non-existent) border with Mexico. It began requiring visas of Mexican visitors, thus taking a significant step backward in terms of North American integration (Studer 2009). Brazil The relationship between Canada and Brazil, two of the territorially largest countries in the hemisphere and both large energy producers

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and exporters, has had its ups and downs in the past decades. Many hopes had been pinned on Brazilian President Lula’s state visit to Canada, planned for October 2008, but cancelled due to Canada’s elections. Yet, there is little doubt that economic forces continue to pull the Canadian and the Brazilian economies together. They are among the top ten foreign direct investment-origin countries in their economies. In 2008–09, Canada opened two additional trade offices in Brazil (in Porto Alegre and Recife) and targeted Brazil in its global commerce strategy. Chile Although Chile is farther from Canada than other Latin American countries, the bilateral relationship between them has been surprisingly vigorous. Canada’s free trade agreement with Chile, signed in 1997, was the first with any country in the region (except Mexico) and the first such agreement between a country in the developed North and one in the developing South. Trade between the countries has tripled since then to usd 2.5 billion in 2008, and Canadian companies have led the way in the expansion of Chile’s dynamic mining sector. In 2007, Canada’s ScotiaBank bought Chile’s Banco del Desarrollo for usd 1 billion. Haiti Canada’s ties with Haiti go back a long time, and Canada has played a key role in supporting the United Nations Stabilization Mission in Haiti ever since the ousting of President Jean Bertrand Aristide in February 2004. Canada is among the “big three” in Haiti (along with the U.S. and France) and the second largest donor, having committed usd 555 million for 2006–11, while also working closely with the “abc” countries (Argentina, Brazil, and Chile) who lead the un peacekeeping forces there. Canada has given special priority to strengthening Haiti’s until recently non-existent security apparatus – the judiciary, the police, and the prison system – a key prerequisite for nation-building in the land of Toussaint L’Ouverture.

i n t e r- a m e r i c a n r e l a t i o n s at a c ro s sroa ds Over the past two decades or so, the inter-American agenda has been driven by three issues: free trade and the Free Trade Area of the Americas (ftaa); democracy and democratization; and the so-called “war on drugs.” The ftaa is dead, democracy has established itself relatively

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firmly throughout the hemisphere (except in Cuba and Honduras), and the “war on drugs” has largely been lost, with one thousand tonnes of cocaine produced yearly in the region, of which about half is sold in the U.S. for about usd 60 billion. The time is thus ripe for a major re-assessment of these policies, largely driven from Washington and often endorsed and followed in Ottawa, although with its own specificities and priorities added – a number of studies commissioned by leading U.S. think-tanks have acknowledged as much (Barshefsky et al. 2008, Partnership for the Americas Commission 2008, Sol M. Linowitz Forum 2009). While unanimously recognizing the decline of U.S. influence in the hemisphere, they also call for a down-scaling of expectations and policy objectives, urging the Obama administration to “think small” and focus on a set of limited, manageable issues, rather than on any new grandiose projects for the Americas. This, of course, dovetails nicely with the calls from a number of Canadian scholars who are skeptical about the significance attached to the Americas by Canada in the course of the past two decades. They have argued that Latin America is of no political or economic significance for Canada and should, therefore, be downgraded as a policy priority – although it is unclear from their argument which region in the world (apart from the U.S.) should be preferred instead and on what grounds (Daudelin 2007). Yet, as indicated above, the reasoning behind such arguments is not obvious. Within the global South, Latin America is the region where democracy has gained the strongest foothold; its economic performance in 2002–08 has been the best in the last three decades; trade and investment flows with Canada have been growing systematically, at higher rates than those with many other regions. The region is undergoing a process of massive political and cultural changes (the so-called “populism” of which it is often accused is only a tiny fragment, and often the least significant, of these). Canada, which does not carry the “baggage” that other countries do, can play an important role in these changes and, by doing so, considerably enhance its international influence.

references Barshefsky, Charlene, James T. Hill, and Shannon K. O’Neil. 2008. U.S.–Latin America relations: a new direction for a new reality. Independent Task Force Report no. 60. New York: Council on Foreign Relations. Available at: . Last accessed 10 Sept. 2009.

102 Jorge Heine cfp (Canadian Foreign Policy). 2008. Canada and the Americas: defining reengagement. Canadian Foreign Policy 14(3). Cooper, Andrew F., and Jorge Heine (editors). 2009. Which way Latin America? Hemispheric politics meets globalization. Tokyo: United Nations University Press. Daudelin, Jean. 2003. Foreign policy at the fringe: Canada and Latin America. International Journal, 58(4): 637–67. – 2007. Canada and the Americas: a time for modesty. Behind the Headlines, 64(3). Gottlieb, Allan. 2009. The challenge of incremental decline: proximity, reality, strategy, destiny. The Globe and Mail, 27 June, A-23. Government of Canada. 2009. Canada and the Americas: priorities & progress. Ottawa: Government of Canada. Available at: . Last accessed 10 Sept. 2009. Manley, John, and Gordon Giffin. 2009. Border dispute: northern partners need to lead the way. The Globe and Mail, 5 May. Partnership for the Americas Commission. 2008. Rethinking U.S.–Latin American relations: a hemispheric partnership for a turbulent world. Washington dc: The Brookings Institution. Rochlin, James. 1994. Discovering the Americas: the evolution of Canadian foreign policy towards Latin America. Vancouver: University of British Columbia Press. Rozental, Andrés, and Robert Pastor. 2009. Swine flu: coming together in a time of crisis. The Globe and Mail, 1 May. Sol M. Linowitz Forum. 2009. A second chance: U.S. policy in the Americas. Washington dc: Inter-American Dialogue. Available at: . Last accessed 10 Sept. 2009. Studer, Isabel. 2009. Canadá–México: adiós a la “relación estratégica.” Excelsior, 4 July. Torres, Vladimir. 2008. Canada in the Americas: the ebbs and flows of assuming a significant role. Mimeo. Available at: < http://www.focal.ca/pdf/Torres_ Canada_in_the_Americas_chapter.pdf >. Last accessed 10 Sept. 2009.

Canadian Policy in the Americas: Between Rhetoric and Reality – a Needless Distance john graham

On 17 July 2007, a year and a half into his first term as prime minister, Stephen Harper announced, “Canada is committed to playing a bigger role in the Americas and to doing so for the long term” (Canada 2009, 3). This was not a total surprise, as tentative indications foreshadowing the policy had seeped out of government in the preceding months. However, questions remain about its content, its effectiveness, and whether it deserves a place near the top of Canada’s foreign policy priorities. Skeptics also question the meaning of “long term.” At a time when bipartisan foreign policy has all but disappeared, with the party in power downgrading or discarding its predecessor’s policies because those policies are perceived to bear their opponents’ label, will a Tory priority last only as long as the Tories? There is also a question about the origin of Mr Harper’s Americas policy, for which I have not been able to find a conclusive answer. What is certain is that the Americas priority was already in place when new ministers took up their duties in January 2006. Each minister in a newly elected government is given a letter of appointment prepared by the transition team and approved by the prime minister. In the case of Peter Mackay, then foreign minister in the Conservative government, his priorities were spelled out very simply: the United States (U.S.), Afghanistan, and the Americas. Further down the list came Asia–Pacific. However, Mr MacKay was evidently not permitted to mention any of this out loud, and it was 16 months before the government began to reveal the outlines of its policy of re-engagement.

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The first clear signal came at a dinner at the Pearson Building in April 2007, which was billed as “Canada’s New Partnership in the Americas.” It was attended by senior private-sector ceos, Foreign Minister MacKay, four deputy ministers, the clerk of the Privy Council, the president of the International Development Research Centre, a senior ambassador, soon to come to Ottawa as executive coordinator for the development of the new policy, a representative from academe, and one from civil society. The discussion around the table was in large part about the architecture necessary to make the policy work. While applauding the initiative, several people made the case that the policy would only bear fruit if it included all of the following components: •

• • •

•

•

a high-level focus, including regular visits to the region by the prime minister, ministers, and senior officials. It was emphasized that personal chemistry among heads of government/state was essential to facilitate problem-solving and close relationships – relationships good enough to make picking up the telephone to call a counterpart a natural impulse. It was also acknowledged that it would be difficult to sustain high-level travel by politicians during a minority government significant upgrading of Canadian International Development Agency (cida) activity in the region in the absence of a free trade agreement of the Americas, emphasis on bilateral trade agreements development of much improved professional, academic, and other institutional linkages between Canada and key countries in the region to generate knowledge, rapport, and reciprocal experience among decision-making elites investment to revitalize rusted and undernourished foreign policy machinery that would be necessary to enable Canada to be more successful against its competitors unleashing of public diplomacy so that the Canadian message could be widely and effectively disseminated in target countries.

Discussion on the last three points should have warned us of trouble ahead. Both the development of institutional linkages and the revitalization of foreign policy machinery would require Cabinet decisions to increase investment in the Department of Foreign Affairs and International Trade (dfait) substantially – at a time when the belt around the long-starved department continued to tighten. These arguments were met with the response that such funding was unnecessary. Sufficient resources would be available through the application of “the whole of government” principle to the new priority and, besides, with the private

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sector carrying the ball, some forms of institutional linkage would form naturally. No answer was given on public diplomacy. No one in government at that time or since has successfully challenged the gag rule that limits and inhibits what public servants, members of Parliament (on the government side), and ambassadors can do to get vital messages out about Canadian interests. With foresight we could have added the outlook for bilateral trade agreements to our list of anxieties. These are the ongoing, unresolved issues that underlie the needless distance between the reality of the Americas policy and its rhetoric. They require elaboration. But first I will return to the question about the origins of the new priority. Where did it come from? No special interest in Latin America or the Caribbean was evinced during the Conservative election campaign, nor (to my knowledge) in earlier Harper ruminations on foreign policy. The Canadian Foundation for the Americas (focal) and a few others, such as Professor Ed Dosman of York University and Max Cameron at the University of British Columbia, had been pushing for a revitalized interest in Latin America and the Caribbean. (focal’s advocacy was acknowledged within the transition team.) The argument was for a more realistic perception of Canada’s place in the world to replace one in which slender resources were widely dispersed to feed our G8 pretensions. In the Chrétien and Martin years, Canada attempted to achieve a global profile with a distinctly nonglobal budget. The result is what is now termed “an incremental decline,” where a country, once exhilarated by its international achievements, is performing increasingly below its weight. The most visible evidence of declining leverage is the lack of certainty that we will defeat Portugal for a seat on the Security Council in 2010 – a forum, which with Germany, a “shoe-in” for one of the seats, will be awash with European members. A dozen years ago, with this competition, Canada would have been the shoe-in. Both before and after the 2006 change of government, we took the line that Canada has the potential to make a difference in its own hemisphere – a potential that the country clearly does not have in most other parts of the world. This did not mean neglecting the huge emerging engines of China or India or abandoning a longstanding humanitarian interest in Africa. It was about conferring on Latin America and the Caribbean the priority that geography and self-interest have long suggested. What we were advocating was a redefining of foreign policy based on a reassessment of global interests including a hard look at where Canada would find a cluster of friends with sufficient common interests to exert global leverage. Latin America and the Caribbean do not offer anything like a perfect answer to this challenge, but, on the

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whole, come closer than any other regional grouping – a view buttressed by the fact that we could become a significantly influential member in no other major regional grouping. One obvious premise on which this polemic rests is, of course, that it would be unhealthy and impolitic for us to put all our political and economic eggs in the U.S.’s basket. However, the Americas policy should, of course, continue to reside several rungs below our U.S. policies. A fairly high degree of complementarity is essential, but somehow combined with sufficient distinctiveness to attract our other hemispheric partners and to appeal to the Canadian constituency. Good access, proven expertise, and leverage, in other words credibility on important Latin American and Caribbean files, will help us to achieve that vital status of being taken seriously by the United States. With a few exceptions, the Organization of American States (oas) being one, we are not there yet.

public perceptions To the surprise of many, including those of us toiling in this field, the environment in Canada for a reinvigorated Americas policy was more receptive than expected. In this respect, the Harper government was prescient. An Ipsos Reid Poll commissioned by dfait and conducted in March 2008 revealed that almost four out of five Canadians supported strengthening ties with the region. This support was directed evenly across the three subregions named in the poll: South America (79 per cent); Central America (78 per cent); and the Caribbean (78 per cent). Equally important for those in government shaping policy were the specific answers to questions about the motivation for interest: 80 per cent indicated that helping control narcotics traffic is either “very important” or “somewhat important”; 74 per cent believed that “improving security” for Canadian travellers, as well as for the citizens of the countries in the region, is important; 77 per cent said that increasing exports and trading opportunities is important. Other respondents cited promoting “Canadian values” to the region (68 per cent), Canada’s aid program (65 per cent), and promoting investment in the region by Canadian companies (58 per cent). The Ipsos Reid survey acknowledged that the perceived link with Mexico was even stronger than that expressed for South America, Central America, and the Caribbean. Further comfort for the government was found in an earlier poll (August 2007) by Leger Marketing Omnican Canadian National Polling Data commissioned by focal and the Association of Canadian Studies. The special relevance of this poll is that it provided a correlation between the Ipsos-Reid data where the context was exclusively the

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Americas region and the priority the region was accorded in a global context. To the question, “When it comes to advancing Canada’s national interest, how much of a priority do you give to the following areas of the world?” the answers were as follows (the scores represent ratings of “very” to “somewhat important”): Europe Latin America China India Middle East Caribbean and Haiti Afghanistan

78 per cent 75 per cent 74 per cent 70 per cent 68 per cent 67 per cent 62 per cent

The government will have found a pleasing symmetry between the high score for Latin America and the objectives of the Americas strategy: the advancement of trade and investment, reciprocal security interests, and democratic values. These polls appear to reflect the increasing familiarity of Canadian travellers with the region and the growing size of Latin American and Caribbean diasporas in Canada. In 2007, almost one in ten Canadians traveled to the region – an average increase of 8 per cent over each of the previous three years. The flow in the other direction is equally significant: 11 per cent of immigrants to Canada come from Latin America and the Caribbean, making Spanish the number one language spoken in Canada after the two official languages. The immigrants have formed some 70 diaspora organizations. As yet, these organizations are so diversified by country of origin and by Canadian location that they carry less political muscle than their numbers suggest.

th e p o l i c y : s n a k e s a n d l a d d e r s Trade and Investment Figures on trade and investment helped to validate the Harper government’s Americas policy. Canada’s investment in the Caribbean and Latin America (mining, tourism, technology, banking, and financial services) is almost five times that of our investment in Asia. The government’s 2009 brochure Canada and the Americas: priorities & progress reports that in 2008 Canadian exports to Latin America (excluding Mexico) and the Caribbean increased by 30 per cent over 2007, while the average increase in our exports world-wide was 7.2 per cent. Trade with the region more than doubled between 2004

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and 2008. Mexico has become our third most important trading partner – behind the U.S. and the European Union; it is the fifth largest destination for Canadian exports. Yet, despite Mexico’s importance, there is some ambiguity in government statements about whether the country fits within the framework of the new policy. The dividing line may have been blurred by its membership in nafta. In any event, Mexico warrants a higher profile within this policy framework – all the more so now that relations with our most important regional partner have been stressed by a visa requirement for Mexican citizens. The prime minister has acknowledged and the Mexican government clearly understands that the problem of soaring refugee claims stems from the failure of consecutive Canadian governments to deal with the all too visible holes in its own refugee controls. Free Trade Agreements With the Free Trade Area of the Americas dead, bilateral free trade agreements became a high-profile component of the strategy. An agreement with Panama was signed in August, and an agreement with Peru is virtually consummated. However, much of this program is moving in shoal strewn waters. An agreement with Colombia is not assured of parliamentary approval, although there is hope that reason will prevail, as this agreement (already signed) is a model in scope and attention to labour and human rights issues. The Central American Free Trade Agreement (with El Salvador, Guatemala, Honduras, and Nicaragua) is stalled as Ottawa responds to pressures from Canadian lobby groups (e.g., sugar). And the Dominican Republic and caricom countries are now undecided about the value of agreements with Canada. In 2005, a decision under the Martin government to abort preliminary soundings and some interest from Brazil in a Canada–mercosur agreement rounds out a checkered chronicle. Security Security should be driving this agenda more than it is. The increasing movement of people and cargo from Caribbean and Latin American ports directly to Canada has meant that the Caribbean has become not only a Canadian border, but in real terms also Canada’s most porous border. The issues are drugs, the many faces of organized crime, and to a lesser extent the demands of counter-terrorism. Most non-domestically produced narcotics consumed in Canada are trans-shipped from Latin America through the Caribbean.

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Yet despite a small Caribbean training program based in Jamaica and the fact that, at senior levels, the Department of National Defence (dnd) is widening its focus to include the Caribbean (both Spanish and English speaking), we lag behind the British, the French, and the Dutch in doing much about it. We are unnecessarily vulnerable because we have failed to make adequate military, intelligence, and security investments in collaboration with regional governments at a time when by far the greatest threat to the stability and prosperity of many of our partners in the Americas comes from organized crime and criminal violence. Despite the scale of our exposure, the Canadian Security Intelligence Service has only two regional officers for 34 countries. dnd is beginning to understand the strategic importance of the Caribbean and to attune itself to messages from the Prime Minister’s Office about Canada’s new priorities. But as they say in dnd, you can turn the wheel, but it takes time for a large ship to answer the helm and, with the huge appetite of our Afghan commitments, there are few leftovers for the Americas. The recently announced plan to provide Royal Canadian Mounted Police training for Mexican police officers – as part of a much larger federal commitment of up to cad 10 million a year to combat crime in the Americas – is a much needed step in the right direction. Health A comparable challenge applies to our investment in health and health monitoring in the region. The spread of the H1N1 virus is following a well worn path. Increasingly cognizant of these issues, Health Canada will provide cad 18 million over four years in support of the Pan American Health Organization’s program for hiv/aids, other sexually transmitted diseases, pandemic influenzas, and institutional development. It’s been three years since the Americas became a government priority and two years since the official launch. It is early days, especially if we follow the dnd metaphor about turning the ship, but time enough for an assessment. In brief, nothing has occurred that invalidates the strategy. Indeed, the strategy becomes increasingly central to foreign policy as Canada’s long-term commitment to Afghanistan attenuates. And, as indicated above and below, there is progress on several fronts. Diplomacy The government has appointed a junior minister, former journalist Peter Kent, with the full-time task of advancing the Americas strategy. New to Parliament and to front-line foreign policy, he initially stumbled

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on the Cuban file, but is performing effectively in the complex and increasingly sensitive oas setting. Sound appointments (including Canadians promoted to senior positions within the oas), agile footwork on the Cuban admissions riddle at an exceptionally difficult oas General Assembly, and a strong commitment from cida reinforce a respected and effective Canadian role in the organization. The position of assistant deputy minister for the Americas has been recreated to advise on and administer the policy. Assigned to this job is an extremely capable foreign service officer. dfait has shuffled its meager stock of personnel resources to provide backup for this position, including a regional security office in Panama and a democratic governance “network” based in Lima. Development Aid At the Port of Spain Summit of the Americas in April 2009, Mr Harper announced that Canada would contribute cad 11 billion to the recapitalization of the Inter-American Development Bank. Canada was “ahead of the pack” on this initiative and, thus far, the “pack” has not followed. cida has vigorously re-engaged, almost doubling its spending in the Americas. Especially promising is the decision to re-establish scholarship programs in the region (1600 scholarships over four years). With a small net decline in its overall budget base, like dfait, cida reapportioned funds from other sectors. The lion’s share (approximately cad 550 million over three years) has been assigned to Haiti. A contribution of cad 25 million to the oas and other inter-American partners has promoted Canada to the position of largest donor of voluntary funds in 2008 (just ahead of the U.S.); this, in turn, provides a welcome lift to Canadian leverage in that organization. However, cida’s decision to place more of its funds with multilateral organizations (e.g., oas and caricom) comes at a price: it greatly reduces Canadian flag visibility and, therefore, greatly reduces Canadian bilateral leverage. These disadvantages could be at least partly overcome by the expanded use of the Canada Fund. This is the most versatile development tool available to cida. It is intended for mini-projects, including disaster relief, with authority for expenditure delegated to each high commission and embassy.

th e p o l i c y : c a n i t w o r k ? The policy of re-engagement with the Americas is well out of the gate, but it is unlikely to reach its destination without a major adjustment in the government’s approach to foreign policy. Misconceptions about the importance of foreign policy delivery systems to vital national interests

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began with Pierre Trudeau, became entrenched under Jean Chrétien and Paul Martin, and, more recently, have been exacerbated by Stephen Harper. Such robust initiatives as the International Criminal Court, demining, the “responsibility to protect,” and now the Americas strategy have been advanced, but the machinery necessary to sustain and build Canadian credibility with foreign governments has been allowed to rust. Forget about “punching above our weight,” although thanks to the skill of some individuals this still occurs. In more concrete terms, our current condition means that we are less able to compete with our competitors. This diagnosis does not apply solely to the front lines of foreign policy as usually represented by dfait and cida, but to the need for well coordinated and well resourced “whole of government” operations. Go to the capitals in Latin America and ask the foreign ministry or the office of the president which foreign governments are top in terms of access and influence. In almost all cases, Canada will not be in the top ten, a situation that cannot be laid at the door of the Canadian ambassador. Because public diplomacy has been removed from the Canadian diplomatic toolkit, it is difficult for Canadian representatives to broadcast achievements and the message of serious re-engagement. It is absurd that many key groups in target countries are still largely unaware that their countries have become Canada’s third highest foreign policy priority. No wonder there is little reciprocity of that view. A more general problem is the failure at the political level to understand the importance of relationships of mutual confidence among senior professionals and the value of open dialogue that emerges when shared confidence exists. There are exceptions, but policy development has been stunted by a culture of suspicion. Successive governments have resisted coming to grips with the dynamics and the costs of effective foreign policy. The result has been a decline in image, leverage, and productivity. In 2003, Andrew Cohen wrote that without real resources it is harder for Canada to be taken seriously. Six years later it is much harder. Thomas Friedman (2008) recalls an aphorism by Pentagon planners: “A vision without resources is a hallucination.” A recent survey by the Strategic Council of Canada reports Canadians widespread self-satisfaction with living in the “best” country in the world. The survey underscores the disconnect between how we see ourselves and how others see us. Canada will not achieve its Americas policy objectives without changing the core of its policymaking and without substantial investments. This year at a major conference in Kingston on hemispheric security, a Brazilian general was asked to explain the secret of Brazil’s remarkable growth over the past decade into a much respected and influential

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player on the world stage. The answer was complex, involving growth and good governance. But the key, the general said, was “diplomacy, diplomacy, diplomacy!”

references Canada, Government of. 2009. Canada and the Americas: priorities & progress. Ottawa: Government of Canada. Available at: . Last accessed 10 Sept. 2009. Cohen, Andrew. 2003. While Canada slept: how we lost our place in the world. Toronto: McClelland & Stewart. Friedman, Thomas L. 2008. Hot, flat, and crowded. New York: Farrar, Straus and Giroux.

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Asian Power Shift: Ready or Not? pa u l e v a n s

Big things happen quickly, although they may be long in the making. The current economic crisis highlights the full extent of the global power shift that is underway. Although its outcome is impossible to foretell, the best bet is that Asia will be last in and first out of the crisis, that the competitive position and comparative economic weight of most key Asian economies will be strengthened, and that economic integration within Asia will deepen. The 2001 Goldman Sachs report that launched the brics concept predicted that, within 50 years, the combined gross domestic product (gdp) of the brics would equal that of the members of the G7 (O’Neill 2001). Earlier this year, its author stated that this would occur within 20 years. Now the World Bank predicts that more than 50 per cent of the world’s economic growth over the next five years will be in Asia (Table 1). None of this discounts the major dislocations caused by reductions in North American and European demand for Asian manufactures. The trans-Pacific bargain in which huge Chinese and Asian exports to the United States (U.S.) were matched by equally huge Chinese and Asian investments in U.S. debt is ending. Asia is hurting and the shift to increased domestic consumption will not be easy. But in comparative terms, Asia is hurting less than other regions and is much better positioned for what follows. In 1997, Asia was coping with its own home-brewed economic crisis, China was just beginning to play a proactive role in regional institutions, and India’s economy was just commencing a high-growth

116 Paul Evans Table 1 World Bank forecast annual changes in real gross domestic product Annual change in gdp (per cent) Country or region

2009

2010

2011

China

7.2

7.7

8.5

India

5.1

8.0

8.5

East Asia (developing countries)

5.0

6.6

7.8

United States

−3.0

1.8

2.5

Euro area

−4.5

0.5

1.9

Japan

−6.8

1.0

2.0

Source: World Bank, data and statistics 2009

trajectory. Five years ago, China had emerged as a significant global economic force and was a major player in regional and global institutions ranging from the United Nations to the World Trade Organization. Analysts debated whether it should be invited into the G8. Today’s discussion is about a China–U.S. G2, an emerging “Beijing consensus,” a recent bric summit, and a recent G8 summit diminished by the absence of a Chinese president in a group of which China is not even a formal member. Individually, these are straws in the wind; collectively, they signal the perception of the end of the unipolar moment and a shift toward multipolarity. Whether or not the U.S. is declining, Asia is rising and the world of “one superpower and many great powers,” to borrow the Chinese phrase, is in transition. Asian countries are not just rule takers, they are becoming rule makers as seen in the challenge to the U.S. dollar as the world’s reserve currency. Indian analysts insist that Canada is a declining power clinging to the G8 and Bretton Woods institutions, which are either outdated or in need of complete overhaul. Observers in East Asia frame it a little more subtly in noting that what China sees today is not an international order at all, least of all the international order, but instead the product of the struggles among the major powers coming out of the Second World War. Either way, the international order that Canadians helped construct is facing a huge challenge.

ca n a d i a n r e s p o n s e s Since the early 1980s, there has been a recurrent Asia-Pacific lament that runs along the lines that important things are happening in the economies across the Pacific, that Canadians are too preoccupied with

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the U.S., that other countries are out-competing us in Asia, and that we need to wake up to these new opportunities and align our diplomacy and commercial activities to take advantage of them. The lament hasn’t helped much. Although the volume of Canadian trade with Asia has indeed increased – China is now Canada’s second largest trading partner – faster yet has been the decline of Canada’s relative share of the Asian market. The causes of the continued comparative decline are many, and they have not been reversed during the Harper period. On economic policy, the Conservatives have kept doors open to Asian trade and investment, resisted protectionist pressures, and expanded the number of trade offices in several Asian countries. Most important, they have continued and enlarged a Martin government initiative on the Asia-Pacific gateway, a major effort to increase transport and logistic capacity to better facilitate North American participation in Asian-based supply chains. But it has not been able to conclude a single free trade agreement with an Asian country. Politically, the Harper government has made rhetorical commitments to an expanded relationship with India and taken the significant step of acknowledging India as a nuclear weapons state. Until very recently, it pursued a “cool politics, warm economics” approach to China that effectively chilled the relationship to its coolest point since Tiananmen Square. And it has paid only intermittent and scant attention to other countries in the region and the thickening noodle bowl of emerging multilateral institutions. This has not gone unnoticed in Asia. Senior Asian diplomats, academics, and journalists have asked: “Why hasn’t your prime minister given a major speech on Asia?” “Canada used to have an influence and role in Asia-Pacific comparable to Australia’s. Now it ranks with Spain or Poland.” “Why have you opted out of our region?” “Canada was a leader in building multilateralism in Asia. Now it is invisible and uninterested.” “Why can’t you think strategically and long-term about what is happening in China and Asia?” “Are the Caribbean and South America really a greater priority than Canada’s Asia-Pacific role?” “Isn’t there more to Canada’s priorities in Asia than Afghanistan and interactions with the two ‘emerging markets’ of India and China?” “Is asean completely off the Canadian screen?” The Canadian profile is so low that requests still come in from Asian diplomats and academics to speak with them about Canada’s leadership on the human security agenda and the responsibility to protect, long since axed from the official Ottawa lexicon. Explaining the reasons behind the Conservative approach is complicated, even for sympathetic Asian ears. Theirs is a minority government that needs to focus on domestic priorities. It has strong ideological

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leanings that echo U.S.-style neo-conservatism. Many of its leaders have had very little foreign or foreign policy experience. Unlike earlier Liberal and Progressive Conservative governments, it pulls its main ideas from U.S. sources. And in its philosophy of government, small is good and the function of government is not to build relationships but to facilitate the transactions initiated by the private sector, educational institutions, and the like. Two elements of this explanation inevitably draw questions. On the transactional view of small government, how can it be applied in a region where big governments and government-led relations are ubiquitous? On the values agenda of freedom, democracy, human rights, and the rule of law, is this not a false premise for building ties with India and an insufficient reason for downgrading relations with China? Wouldn’t an interest-based approach be more productive? Conservative predilections collide head-on with cultural differences and shifting power capabilities. Going Forward The paradox is that Canada’s policy engagement with Asia has diminished at the same time that human connections between Canada and Asia are greater than ever before. Levels of immigration to Canada and returns to Asia are high, and large numbers of Canadians are visiting and living in Asia. At a recent meeting in Jakarta attended by 20 officials and academics, 18 had a Blackberry in hand. Human interactions and business transactions are important, but are only part of full-scale engagement. What about the political and strategic dimensions? Since the October 2008 election, some positive signs have been seen in Ottawa. On China, the government seems to be abandoning “cool politics, warm economics” in favour of more constructive management of political relations, caution in rhetoric, and a spate of ministerial visits. There is talk of a prime ministerial visit in the fall, following carefully orchestrated efforts to restore confidence in the eyes of Beijing’s leaders. New resources may be coming for India initiatives in advance of a possible prime ministerial visit in November, 2009, and Ottawa is considering signing asean’s Treaty of Amity and Cooperation, a symbolic step toward getting plugged into East Asian regionalism. These are positive steps. Yet, viewed in the context of the broader economic and political forces in play, they are minimalist and not yet part of an integrated Asia policy. They seem small and slow at a time when the U.S. government has established more than 60 bilateral dialogue groups with China, is raising the strategic economic talks to the status of a

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comprehensive dialogue, and has given several major speeches on U.S.– China relations. President Sarkozy visited China four times in 2008. Kevin Rudd is making headlines for bilateral commercial deals and a wide-gauged proposal for a new Asia-Pacific community. Keeping in step with global Asia is going to demand something bigger and more imaginative from Canada. First, an interest-based China policy is essential. The rise of China is the defining strategic issue of our era. Responding is not just a matter of selling more Canadian products or achieving minimal cordiality. There is no serious alternative to engagement at this point, whatever the nightmares of those preoccupied with the evils of a China envisioned as a “godless totalitarian country with nuclear weapons aimed at us” and on the verge of collapse. But the whole framework of engagement needs to be re-thought and rejuvenated. A return to the “strategic partnership” announced by Paul Martin and Hu Jintao in September 2005 is tempting but now out of reach. This is not just because it is uncertain whether three years of “cool politics” have irrevocably eroded the momentum, reservoir of good will, and contacts that had been established since 1970. It is also because virtually every country in the world is lining up for something similar and putting major political and diplomatic resources into the mix. Beyond repairing relations through high-level political visits and more careful management of our values agenda, we need some signature initiatives. Why not end the aid program and replace it with a major fund for bilateral policy partnerships on a range of global issues? Why not hold a Cabinet committee meeting in China? Why not create a new scholarship program to triple the number of Canadian students studying in China? Political leadership will also entail explaining to the Canadian public why and how to engage a China that is big, complex, and powerful. The explanation needs a geopolitical and economic rationale, as well as a moral one. During the Trudeau period, engagement was promoted as a means to end China’s isolation from the international community and reduce Cold War tensions. In the Mulroney, Chrétien, and Martin periods, it was promoted as a way to open China’s economy and seed the forces that would lead in time to political liberalization. It will take wisdom, knowledge, and political courage to recast a rationale that acknowledges the new balance of power and the unlikelihood of significant short-term change in China’s domestic political institutions. Changing China is less realistic than understanding and adapting to it. Second, treat institution building in Asia as a serious matter. It is easy to be frustrated with the slow-moving and often inchoate progress of trans-Pacific and Asian institutions. The coalitions of the willing and .

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the like-minded, popular during the Bush administration and with the Conservatives in Ottawa (for example the proliferation security initiative and the seven-party process on climate change), are useful additions but not replacements for the inclusive Asian institutions that are a sine qua non of serious engagement in Asia. What has changed in the past five years is that Asia and Asian views of multilateralism now matter more, both regionally and globally. As Canadian politicians obsess about the G8, the big issue is not just whether we will let Asians have a bigger voice in the clubs to which they belong or become, to put it more grandly, responsible stakeholders in the current international order. The issue is increasingly what kind of institutions they want. Regional institutions are the incubators in which new ideas are being formulated and tested. Beneath the dry talk, they both reflect and shape the forces that will define the region for the next generation. In this formative moment, whether Canada should support the idea of an Asia-Pacific G10 within the G20, strengthening the Asia-Pacific Economic Cooperation (apec) secretariat, or Kevin Rudd’s proposal for a new Asia-Pacific community is not a trivial matter. Just as a new approach to China will depend on reshaping Canadian expectations and identity, Canadians need to be prepared for an era in which our institutions are no longer the international institutions, in which our role is comparatively less important, and in which the affirmation of universal values is replaced by a new search for shared ones. Can’t we devise mechanisms to get more of our members of Parliament and political staffers to Asia (and not just to Taiwan) and to participate in regional meetings? How can we ramp up our track-two capacities for shaping regional discussions? For two decades, Canada showed imagination and commitment to building Asia-Pacific multilateralism. Can we be a leader again, or at least get back on the playing field? Third, we need to look at North America in a new way. Although trade volumes are down, China remains the second largest trading partners of Canada, the U.S., and Mexico. Even with the rebalancing of the trans-Pacific economy, within a decade, it may well replace Canada as the U.S.’s largest two-way trading partner. What used to be called trade diversification now takes on clearer meaning as integrative trade. Whatever we do to expand commerce with the U.S., what can we do collaboratively on a North American basis to increase our competitiveness in and with Asia? Part of the answer is an expanded gateway concept that goes beyond port and corridor infrastructure to include airports and better-functioning value chains. In extending a joint perimeter for the defence of North America, how can we collectively push on a continental basis for common

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behind-the-border regulations, phyto-sanitary provisions, and food safety measures across the Pacific? Is it possible to design a continental energy policy with a common approach on investment, sovereign wealth funds and state-owned enterprises, and energy and environmental cooperation? The Conservative reflex to support the U.S. during the Bush years needs to be replaced with a reflex to help it solve major global issues. The current administration in Washington would prefer to see us as a partner and innovator, not merely a follower. Our ability to fulfill this role depends on the quality of our thinking and our ability to act. Putting Asia and North America on the same page of our mental map is a huge undertaking. It will demand political attention, intellectual leadership, and deeper public understanding. The last stab at a comprehensive outline of international conditions and Canadian priorities was the tangled international policy statement of 2005. The good news for the drafters of the next big statement on foreign policy, whether delivered by a Liberal or Conservative prime minister, is that developments of the past four years underline that a changing global balance of power and Asia’s ascent are occurring more quickly than we once imagined. A global economic crisis clarifies the fact that resetting our priorities to focus on Asia is analytically more compelling even if politically and ideologically hard to digest in Conservative Ottawa.

references O’Neill, Jim. 2001. Building better global economic brics. Global economics paper 66. New York: Goldman Sachs. World Bank. 2009. Data and statistics. Available at: http://www.worldbank.org>.

Canada–China Relations: Growing Connectivity and Friction gordon houlden

During the almost 40 years of diplomatic relations between Canada and China, it has not been a common thing for Canadian policy toward China to be the focus of sharp political debate, but this has become the case since the Conservative government was elected in 2006. Even following the Tiananmen violence in 1989, there was broad consensus on the Canadian policy response. But this consensus began to break down in the 1990s, and has not been fully restored. Over the past 40 years, the development of substantive connections between Canada and China has been impressive, but the increasing number of differences between the two states in recent years has strained their ties. Given the complementarity between the economies and the broad implications of China’s far-from-completed rise in global status and power, it is in Canada’s own interest to strengthen its China ties in ways that are consistent with Canadian values.

pre-1970 China, especially its culture and economy, were of great significance to the world long before there was an entity called Canada. But despite early points of contact in the 18th century and the significant impact of Chinese immigration in the 19th century, particularly in association with the building of the transcontinental railway, China played only a bit part in the development of Canadian foreign policy for the greater part of the 20th century. With few exceptions, such as the war with Japan and the Korean conflict, Canadian policy remained focused on Europe and North America.

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1970–78 – diplomatic recognition

a n d c h i n a t u r n e d i n wa r d Since the establishment of relations with China on 13 October 1970, there has been a considerable degree of bipartisan support for strong links with the country. Throughout the first decade of the relationship, China played only a modest role in Canadian trade as it had a largely closed economy. Canada’s world view remained centred on North America and Europe, while, with rare exception, Canada– China relations tended to be the concern of a handful of academics and foreign affairs specialists. In 1970, China’s own economy, in particular its international trade, was modest, and its impact on the international trading system was marginal. This remained the case through the end of the Cultural Revolution in 1976 and until the beginning of the economic reforms led by Deng Xiaoping in 1978. 1978–89 – china opens its doors The fluorescence of Chinese economy that followed the adoption of economic reforms and the opening of China to the outside world began in earnest in 1978. More market-friendly policies, combined with an opening to the West led a wave of Western interest in China, and Canada was well ahead of most. Canada undertook an ambitious program of engagement that included high-level political visits, led by prime ministers Trudeau and Mulroney, the establishment of a policy-focused and innovative Canadian International Development Agency program, and a quickening pace of ministerial visits, both federal and provincial. Provinces and cities were twinned, and a web of agreements and memoranda of understanding between agencies began to be put into place. Immigration from China to Canada began to gather momentum as Chinese export controls were loosened and an immigration section in Canada’s embassy in Beijing was opened in 1983 (it would, over time, grow to be the largest single component of the embassy). The opening of China, a quickening appetite for economic reforms, combined with a thirst for the “hardware” and “software” relevant to the modernization of China generated a wave of popular, corporate, and governmental enthusiasm for China among many Canadians. 1 9 8 9 – 9 3 – ti a n a n m e n and lingering effects But this enthusiasm for things Chinese ended on a sharply negative note with the suppression of the demonstrators in Tiananmen Square

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on 4 June 1989. Several factors combined to heighten the effects of Tiananmen and to magnify its negative impact on bilateral relations with China’s Western partners. The most important factor was perhaps the “cnn effect”; this was the most televised event following the creation of cable news, satellite television, and the 24-hour news cycle. The always unrealistic expectation that China was “becoming just like us,” prevalent in the Western media, was exploded, and a largely negative and even two-dimensional image was put in its place. Canada’s official reaction was also sharp; it included a unanimous motion in the House of Commons, which criticized the suppression of the demonstrators in Tiananmen Square. However, Canada’s own response was measured compared with that of most Western states, and it was focused on the need to maintain links to Beijing and to encourage positive change there. But the damage in terms of China’s public image had been done. Although China’s image in Canada would gradually recover over the coming years and Canada’s relations with Beijing would accelerate under the Liberal government led by Prime Minister Jean Chrétien, the view of China was still contaminated with negative perceptions that have not yet vanished from public and media consciousness. 1993–2006 – “ sa l a d days ” The period from 1993 to 2006 can be described as the “salad days” of Canada–China relations, with multiple “Team Canada” visits, and a far higher profile accorded to the relationship, particularly by then Prime Minister Chrétien. The period also saw the entrenchment of a pattern of frequent high-level visits in both directions. But this period of active growth in the bilateral relationship also saw a rise in the number of complicating factors. A good number of these issues related to what can be broadly described as consular issues. The rise of China made that country, for the first time, a mainstream consideration in Canadian foreign policy and a high-profile target for mass media. China was now a favoured destination for Canadian business and tourism, and a substantial community of Canadians, most with dual citizenship, could be found in China. But this very connectivity between the two nations generated irritants that demanded careful management and carried risks of serious misunderstandings. Although Canadians’ vote in federal elections may not be based on foreign policy, this does not mean that Canadians do not follow the ebb and flow of important relations, such as those between Canada with China. Asia Pacific Foundation polling has revealed that while

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Canadians recognize the importance of China, many remain critical of the country. These attitudes are also reflected in letters to the editors of Canadian newspapers and Internet blogs. The criticisms tend to focus on human rights issues, but also express unease about the prominence of Chinese imports and other concerns. These views, whether fair or unfounded, nonetheless are a brake on the development of bilateral relations between Canada and China to their full potential. Canadians expect their government’s foreign policy to uphold Canadian values, but it is difficult to translate that expectation into concrete actions in the case of China. China’s human rights practices have improved enormously since the establishment of relations. Equally important, China is choosing its own development path and generally does not appreciate lectures from outsiders, although it often welcomes outside expertise, even in such sensitive areas as legal reform. Canadian businesses, particularly large firms with extensive interests in China, expect that the government should manage the relationship with the aim of stability and use high-level contacts in support of Canada’s trade interests. (This is not to suggest that only business leaders in Canada put primary emphasis on the economic benefits of the relationship.) These often diverging views, focused on trade or human rights, are not easily reconciled within a coherent foreign policy, especially when all the major trading nations are courting the Chinese and actively engaging in high-level diplomacy in support of their own exporters. But it need not be impossible to tackle both issues at the same time, and evidence of the success of the United States (U.S.)–China relationship, and Australia’s vibrant ties with China indicate that the stronger the high-level contacts, the better the prospects for resolving individual issues as they arise.

resources The Chinese appetite for raw materials has raised world commodity prices, which is a highly positive development for the Canadian export sector, even when there is no direct purchase of Canadian resources by China. Chinese demand for Canadian agricultural products is also increasing as better informed Chinese consumers, with deeper pockets, demand higher-quality products. China itself possesses substantial natural resources, including enormous reserves of coal and certain minerals; however, as it has emerged as the primary global manufacturer, its appetite for raw materials has multiplied. Although Chinese investments in Canadian resources have increased, this increase has been exceedingly modest and represents

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only a fraction of their investments in other natural resource exporting powerhouses, such as Australia, Brazil, and Russia. There are a variety of likely reasons for this selectivity. One explanation is that China prefers to take direct delivery of raw material, as it does in the case of Australian and Brazilian iron ore. Although China is making modest investments in the Alberta oil patch, without adequate pipeline capacity to send petroleum to our Pacific coast for export, there is little incentive for investment by China. Canadians should see Chinese investment as highly desirable, particularly during the current global recession, which has depressed the price of commodities. Chinese investors, coming from a country with vast labour resources, often seek to import Chinese labour in association with their investments, given its lower cost. However, these proposals raise the risk of conflict with Canadian labour regulations, as well as resistance from Canadian unions. China is also still smarting from the much-publicized failure of state-owned Minmetals to acquire Noranda in 2004. Finally, China is cautious about competing directly for Canadian natural resources, which, apart from those kept for domestic consumption, often flow south to the U.S., China’s foremost strategic partner, with whom it wishes to avoid conflict. With the 2009 collapse of Chinalco’s multibillion dollar investment in Rio Tinto in Australia and amid signs of some resistance in Australia to ambitious Chinese investment, China may now seek further diversification of its resource acquisitions. Given that many large-scale petroleum exporters come with substantial political risk, Canada’s relative stability should increase the appeal of its resources to China. If Canada is now serious about market diversification and given the possible barriers to export of oil sands petroleum to the U.S. under the new administration, it is in Canada’s interests to pursue an alternative outlet for this resource to the west coast, either by pipeline or rail. This would increase options for Canadian energy exports to countries of the Pacific basin, including China, but also other major Asian economies, such as Japan, India, and Korea. 2006–08 – cooling relations The period following the election of the new Conservative government has seen a substantial cooling of the relationship with China. There are a variety of reasons for this development, and we can examine a few of the most prominent. The last high-level visitor from China during the Liberal government of Paul Martin was President Hu Jintao in fall 2005, when the two leaders declared Canada and China to be “strategic partners.”

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The current government has shown some reluctance to highlight this relationship, perhaps in part, because it was established in the last months of the Liberal government or, perhaps, because of doubts about its accuracy. As China assigned the “strategic partner” label, not only to great powers, but also to a number of smaller states, this designation lost some of its original impact. However, the broader problem was that, for the term to have substance, it needed to be made operational. This required regular exchanges at the level of senior officials from a range of federal departments, and this proved to be difficult on both sides. Also lacking was the willingness of senior leaders in both Ottawa and Beijing to highlight the label “strategic partner” in their public comments. One failing of most public commentary on Canadian foreign policy is the impression it gives that every relationship is being managed by Canada, ignoring the role of our partners. This view assigns the responsibility for all successes and failures to the Canadian side. This has never been the case, but it is particularly not true for a major power such as China. Even the U.S., in its relations with China (arguably the most important bilateral relationship on the planet), must interact with a sophisticated partner that has its own well-considered views on how Sino-American relations should be conducted. China was slow to recognize that the election of a minority Conservative government in 2006 would be more than a brief interlude, and that the foreign policy priorities of the new government would not be a carbon copy of its predecessor’s. Linkages of issues, such as “approved travel destination” status, to consular issues over which the Canadian government had no control slowed the development of Chinese tourism to Canada, which would have facilitated mutual understanding and created a group of small Canadian businesses with an economic stake in the Canada–China relationship.

consular issues – “wild cards” Consular issues, particularly those related to the detention of Canadian or Chinese citizens in either country, continue to have serious and long-lasting effects on the bilateral relationship. In the first decade of Canada–China relations, such issues were few, mainly as traffic in both directions was very modest. But with the explosion of immigration from China, the growth of travel, and the growing number of Canadians resident in China, consular issues have proved a challenge. These problems can emerge overnight, involve national sensitivities regarding sovereignty, and resist quick resolution, especially when court systems are engaged.

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Lai Changxing Lai Changxing, a Fujian businessman has been in Canada since 1999, and for most of that time has been engaged in a long, complex, and expensive effort to avoid removal to China. The case has become a major irritant in the bilateral relationship, with the Chinese side accusing Canada of harbouring criminals and having difficulty accepting the fact that the outcomes of the sometimes slow Canadian court system are independent of governmental interference. Huseyincan Celil Canadian citizen, Huseyincan Celil, was arrested in Uzbekistan in 2006 and deported to China at the request of the Chinese government. The context of this issue is also significant. The Arar case, which had played out during the previous Liberal government, had led to a general view, in the media and much of the public, that Canada was not being sufficiently aggressive in standing up for Canadian citizens held abroad. This perception led, in part, to the determination of the new Conservative government to put pressure on China to release Celil, or at least to extend consular assistance. But Celil was of intense interest to China given his involvement in Uighur political activism, which the Chinese charge extended to terrorism. These very different Canadian and Chinese interpretations of the case, sometimes aired in public, have eroded trust between the two governments.

da l a i l a m a The Dalai Lama, a cultural icon in the West and viewed as a traitorous separatist or “splittist” by the Chinese government, has long been a source of tension between the West and China, but these differences were brought to the surface early in the term of the Conservative government with Canada’s granting of honorary citizenship to the Dalai Lama (with unanimous support of the House of Commons). However, it was the subsequent 2007 visit by the Dalai Lama to Ottawa that caused greater damage to the bilateral relationship. The reception of the Dalai Lama by the governor general at Government House and his private meeting with the prime minister in the latter’s House of Commons office created further tension between Ottawa and Beijing. Small gestures, such as the placing of the flag of the Tibetan “government-in-exile” on the prime minister’s desk fuelled the anger of the Chinese side.

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ta i w a n a n d r e d u c e d t e n s i o n s The question of the status of Taiwan was a crucial factor in the negotiations to establish diplomatic relations between Canada and China in 1970, and Canadian contacts with Taiwan remain a matter of great sensitivity for China. Although informal or “unofficial” visits by parliamentarians and Canadian officials to Taiwan predictably draw complaints from Chinese officials, there has actually been a reduction in concern from China since 2006 for two reasons. First, with the Conservative government in power, the Conservative Party is obliged to balance the actions of its members of Parliament against possible damage to Canada’s links with China, particularly the interests of Canadian business in China. Second, the 2008 election of President Ma Yingjiu has substantially reduced cross-straits tensions, and increased China’s tolerance of Taiwan’s informal contacts with the international community.

ro l e o f t h e c h i n e s e - c a n a d i a n community The million-strong community of Chinese-Canadians, with their language skills and links to China, undoubtedly strengthens Canada’s relationship with China, and through their commercial and family ties serves to enrich it. However, they can also complicate its management. Chinese-Canadians, for example, constitute the greater part of the recruits of the Falun Gong movement, which is vigorously opposed by China. Canadians of Chinese ethnic origin have also, at times, been active in Chinese dissident circles, most notably in 1989. ChineseCanadians who possess dual citizenship can also become “consular casualties” when they run afoul of Chinese law. On balance, however, the Canadian-Chinese population is of great benefit and an advantage in relations with China enjoyed by only a few Western states that have the good fortune to have substantial Chinese ethic communities.

ov e r t h e h o r i z o n : t h e f u t u r e o f ca n a da – c h i n a r e l at i o n s It is reasonable to assume that the remarkable rise of Chinese influence since 1978 will not slacken in the foreseeable future and that China’s economic, political, and military rise will continue for at least several more decades. China is already one of the poles of the multipolar world that has emerged from the previous standoff between the former Soviet Union and the U.S.

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China is exerting considerable influence on Canada, principally through trade. The trade balance, heavily in China’s favour, has benefits for Canada through the supply of low-cost industrial inputs and affordable consumer goods to the Canadian economy. Chinese exports also pose a challenge to some parts of the Canadian manufacturing sector, while offering opportunities to Canadian manufacturers who are able to find a viable niche in the highly competitive Chinese market. This combination of Chinese competitive challenge and enhanced opportunities for Canadian exporters will intensify as China’s own manufactures become more innovative and sophisticated and as China’s consumers demand greater diversity and quality. The “physics” of the Canada–China relationship has been altered by the fact that the relative economic and political weight of each state is now markedly different from what it was in 1970. This shift is likely to continue over the next several decades as China increases in national power relative to Canada, weakening the importance of Canada to China, while strengthening the importance of China to Canada. But, while the divergence in relative power alters the character of the relationship and may diminish the importance that the Chinese state assigns to Canada, the modernization of China and the increased access of the Chinese people to the outside world create an opportunity for more substantive interactions as the divergence between Canadian and Chinese society is reduced. Canada’s influence over China, always minor, has further declined with the rise of the latter’s self confidence. China’s economic clout outside Asia has never been stronger. China’s steady modernization of its military and its growing capacity to project its force outside its periphery will mean that China will loom larger in Western security calculations, although the thriving U.S.–China relationship tends to moderate these concerns. There are, and will continue to be, many positive outcomes for Canada that flow directly from China’s success. China is already a major factor in the recovery of the global economy. Canada has no fundamental political, territorial, or historical quarrel with China, nor is one probable. The Canadian and Chinese economies remain remarkably compatible, which will mean that trade volumes are likely to continue to grow. China’s seemingly unlimited appetite for raw materials boosts global mineral prices, which benefits Canada even when there is no direct transaction between the two states. Canadians who regularly complain about their over-reliance on the U.S. market should be pleased to see a modest diversification as China’s economy begins to approach the size of the U.S. economy in the first few decades of this century.

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Fortunately, in 2009, there are clear signs of a revival of the political relationship between the two sides, with multiple visits to China of Canadian ministers of foreign affairs, international trade, transport and infrastructure, and finance and to Canada of Chinese ministers of foreign affairs, justice, and public health. There are excellent prospects for a visit by Prime Minister Harper on the margins of the Singapore Asia-Pacific Economic Cooperation meeting in November 2009 and a return visit by a senior Chinese leader in 2010, which would complete the restoration of a strong bilateral relationship.

Return to Realism and Restart the Relationship mei ping

China attaches great importance to its relations with Canada. Over the years, the two countries have managed to develop an amicable and mutually beneficial relationship, which in the eyes of many serves as a model for countries with different social systems in their dealings with each other. But this relationship is not all plain sailing. Like any other bilateral relationship, there are ups and downs. During my visit to Canada last September, I tried to analyze the major reasons behind the twists and turns our relationship has taken in the past few years and what we should do together to restore and improve it. Since then, there have been encouraging signs of progress and increased efforts on both sides to engage with each other and strengthen traditional ties. This article is not meant to look back to “settle an old account,” but to look forward to the future by providing a few personal observations and concrete proposals for the betterment of this most important bilateral relationship to our respective countries.

tr a d i t i o n a l f r i e n d s h i p b e t w e e n c h i n a a n d ca n a da Although China and Canada are separated by the vast Pacific Ocean, friendly exchanges between our two peoples can be traced back to ancient times. As early as in the 19th century, Vancouver Island was a busy hub of trade between China and North America and

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the route linking Shanghai and Vancouver was dubbed the “Silkroad on the Sea.” A century and a half ago, over 17 000 Chinese labourers left their homeland and sailed across the ocean to Canada. They built, together with local people, the Pacific railroad linking communication lines between the east and the west of Canada. Just over 60 years ago, more than 500 Canadian soldiers sacrificed their lives in Hong Kong in the war against Japanese fascists. The father of Ms. Adrienne Clarkson, former governor general of Canada, also joined the battles against Japanese invaders. In 1938, doctor Norman Bethune, an outstanding surgeon in Canada, traveled thousands of miles to China and sacrificed his life for the liberation cause of Chinese people. About 40 years ago, the Conservative government initiated SinoCanadian wheat trade, despite the great pressure of the embargo imposed by the United States (U.S.) during China’s severe famine in the early 60s. In 1970, Prime Minister Pierre Trudeau made the historic decision to establish diplomatic relations with China, marking a new era in the relationship between the two countries and making Canada one of the first Western countries to recognize the People’s Republic of China. In the following 39 years during both Conservative and Liberal governments, Canada made China a priority in its foreign policies, and the two countries maintained frequent high-level exchanges and developed friendly cooperation on the basis of “five principles of peaceful coexistence.” Their business ties evolved over the years from a single commodity trade to all-round trade and economic cooperation in various areas and at all levels, with increasingly frequent two-way movement of goods, services, and capital. The bilateral trade volume soared from usd 150 million at the time when diplomatic relations were established to some usd 35 billion in 2008. More important, China and Canada have made significant contributions to the stability and prosperity of the Asia-Pacific region and the world at large through cooperation in the United Nations (un), World Trade Organization (wto), Asia-Pacific Economic Cooperation, the asean Regional Forum, and other regional and international organizations, as well as on major regional and international issues, including anti-terrorism, weapons non-proliferation, peacekeeping, and the Korean Peninsula nuclear issue. During President Jiang Zemin’s visit to Canada in November 1997, China and Canada decided to establish a comprehensive partnership for cooperation oriented toward the 21st century. When President Hu Jintao visited Canada in September 2005, the leaders of the two countries reached consensus on establishing a strategic partnership, lifting the bilateral relationship to a new high.

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wh e r e t h e b i l at e r a l r e l at i o n s h i p n ow s ta n d s But the relationship took a sharp downturn after the current Conservative government came to power. In more than three and half years, the Canadian prime minister hasn’t made a single visit to China, which makes him the only exception among developed countries. His absence from last year’s Beijing Olympics was conspicuous and widely viewed as a deliberate move to boycott the world event. Mutual high-level exchanges and official contacts have also declined. According to Chinese figures, the number of ministerial-level visits to Canada in 2007 shrank to merely a quarter those in 2006. Bilateral trade has lost momentum, and friction and lawsuits brought to the wto have risen in great numbers. There has been no major breakthrough in economic cooperation since the completion of the candu nuclear project. Canada is losing ground to countries such as Australia, India, and Brazil in terms of its share of China’s trade. For many years, Canada was China’s 10th largest trade partner. In 2006, India overtook Canada, and last year Canada slid further to 12th in the ranking after being surpassed by Brazil. Charles Burton (2009), a noted sinologist and former diplomat in Beijing, pointed out in his recent article, “Canada’s China policy is falling woefully short of expectations across almost all areas of relationship.” What has gone wrong with this once very warm relationship? People familiar with recent developments conclude that the current coolness is due to a series of erroneous actions taken by the Canadian side in the past few years on issues that have a direct bearing on China’s sovereignty, territorial integrity, and dignity, including the Dalai Lama, Taiwan, and Falun Gong. These actions have not only hurt the feelings of the Chinese people, but also destabilized bilateral relations and, in some cases, shaken the political foundation of this relationship.

issues behind the cooling off As we all know, the one-China policy has been and remains the political foundation of China–Canada relations. Taiwan is an inalienable part of China’s territory. China is not opposed to Canada’s engagement with Taiwan in business and cultural exchanges of non-official nature. However, any official exchange between the two is totally unacceptable. Yet, since 2006, over a dozen groups of Canadian parliamentarians have visited Taiwan and met with the leader of Taiwan separatist authorities. Canada has also allowed a number of senior government officials from Taiwan to visit Canada. This frequency of official exchanges

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between Canada and Taiwan is rare in nearly four decades since establishment of diplomatic relations between Canada and China. It is true that, since Ma Yingjiu took office in Taiwan, cross-straits relations have begun to relax. With the creation of direct links in trade, travel, and postal service, animosity and confrontation are being replaced by reconciliation and cooperation. But despite all this, the oneChina policy remains intact and warrants respect and adherence from the international community, including Canada. Like Taiwan, Tibet constitutes a sensitive issue bearing on China’s core interests. The Dalai Lama is not a purely religious figure, but a political exile long engaged in anti-China and “splittist” activities. In the past few years, he has been trying to “visit” a number of Western countries, including Canada, in an attempt to undermine their relations with China. In spite of China’s repeated representations against this move, the Canadian government allowed him to visit, awarded him so-called “honorary citizenship,” and arranged high-profile meetings with the prime minister and governor general in government buildings with media present. Our bilateral relations suffered as a result. However, compared with Canada, China’s reaction to Germany and France was much harsher and less reserved, with cancellation of huge business contracts in the former case and suspension of a scheduled China– European Union summit when France was the rotating president. Lai Changxing is a notorious criminal suspect and the most wanted man in China. Canada is a country ruled by law and has repeatedly claimed that “it won’t turn Canada into an asylum of criminals.” However, nearly 10 years have passed since Lai Changxing fled to Canada, and no specific date has been set for his repatriation. In a move that seemed intended to further provoke the Chinese, the Canadian government inexplicably granted a work permit to Lai in January. Falun Gong is a cult and an anti-China political organization. For years, its elements in Canada, under the pretext of human rights, have tried every means to win sympathy from the general public by spreading lies and rumours. They have disturbed visits by Chinese leaders on many occasions, followed and harassed Chinese delegations everywhere; brought false charges against China’s leaders, government officials, and diplomats; and disturbed the normal work of Chinese missions in Canada. These activities are meant to derail the smooth development of China–Canada relations, and their ulterior motives are self-evident. However, in recent years, senior Canadian government officials have sent congratulatory messages on the occasions of the so-called “Falun Gong New Year Gala” and “Falun Gong Day,” quite a few times, praising the “contribution” made by Falun Gong to the common values of Canada, thus tacitly approving and indulging their anti-China activities.

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We in China deem the abovementioned incidents to be a serious departure from Canada’s traditional policy toward China, and these issues need to be taken care of if the bilateral relationship is to develop smoothly.

wh y t h e c u r r e n t a p p roac h i s s h o rt- s i g h t e d a n d o u t o f dat e This situation causes concern and worry among scholars, business people, and career diplomats in both China and Canada. People cannot help wondering how the once most friendly bilateral relationship suddenly turned sour and is in “free-fall.” There are several possible explanations. In distancing itself from the previous government, the current administration failed to inherit the effective positive elements that successfully guided Canada’s traditional policy toward China, and it has yet to formulate its own strategy. Jeffrey Simpson (2008), a renowned columnist with The Global and Mail, observed that the Conservative government’s China policy is naive and based on partisan assumptions that “because the previous Liberal government had ‘done’ China, it should ‘do’ India, a classical case of refusing to give a proceeding government credit for doing something right.” The new arrivals in government have been in opposition for too long. They are out of touch with what has been happening in China and what has been achieved in Sino-Canadian relations. Because of the minority status of the government, people surrounding the leadership are too obsessed with domestic politics to pay enough attention to foreign relations. To their mind, Canada should only take care of its relationship with the U.S. Other countries like China are not important and they need Canada more than Canada needs them. But Paul Evans (2008), a veteran expert on Canada–China relations, argues exactly the opposite, saying, “Canada needs China far more than the reverse.... The current financial crisis underscores the significance of China’s new global role in unmistakable ways. And it underlines the policy problem that the new Harper government will have to handle.” Bob Rae, the Liberal critic on foreign affairs, urged the current leadership to “reach out to China directly and repair the damage he [Harper] and his government have done” (Schiller 2009). Clearly, their voices are not alone in Canada. The Canadian government lacks a strategic view in its dealings with China. It focuses on short-term issues, such as trade disputes and individual human rights cases, while losing sight of the bigger picture,

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things that have a major impact on global issues, such as peace and development, security and environment, where China is ready to cooperate with the rest of the world. Derek Burney (2009), a Canadian veteran diplomat, has this to say: “Canada has different values on human rights and a different system of government from China’s. These differences cannot be ignored but they should not hobble broader engagement in areas of mutual interests.” Comparing the present with the past, we find that the interdependence or mutual need between our two countries which once existed during the Cold War period and immediately after that is diminishing. At that time, Canada needed China to keep a distance from the U.S. and China needed Canada to break the isolation and embargo imposed by the U.S. This is no longer the case. The policymakers in the current administration have overestimated Canada’s influence and seem to believe that Canada matters a lot for China, and China has to swallow a bitter pill to maintain the relationship. As China’s economy grows and its international influence becomes stronger, nationalism (or patriotism) is also on the rise. People, especially the younger generation, have less tolerance of foreign interference in our internal affairs, which is leaving little room for the Chinese government to manoeuvre and limiting its choices in foreign policy matters. In the absence of mutual trust, the value-oriented diplomacy adopted by the current administration has antagonized the Chinese people and caused bilateral relations to deteriorate. Because of its conservative political background, the ruling party is prone to be influenced by the neo-conservative school of thought, which used to be active but has been losing influence these days in the U.S. The neo-conservatives advocated a policy of forging an alliance or union of democratic countries to check and contain China’s development. Fortunately, this has never become a mainstream ideology, nor has it had any real impact on U.S. foreign policy. No one in Canada is acting and speaking like Robert Kagan, an archrepresentative of neo-conservatism or liberal imperialism in the U.S., but his influence, although limited in scope, is there among some Canadian academicians and policy advisers in the Canadian government. Hence, we see repeated groundless accusations aimed at China, regarding Tibet, human rights, and religion issues, and discriminatory restrictions on Chinese companies’ normal business acquisitions in Canada.

coming to terms with reality In the past several months, I have been following with great interest the heated debates across Canada on how to assess and approach

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China–Canada relations. They have attracted such political figures as Jean Chrétien, Joe Clark, Bob Rae, and David Emerson; such scholars as Paul Evans, Jeffrey Simpson, and Yuen Pau Woo; such former diplomats as Charles Burton and Derek Burney; and they have involved influential think-tanks, such as the Canadian International Council, the Asia Pacific Foundation of Canada, the Fraser Institute, the Institute for Research on Public Policy, and so on. Despite their different political affiliations, most of the participants in this debate seem to share the same view: the current government of Canada has yet to change its sophomoric approach and to find a long-term strategy on China and should fully seize the opportunity of China’s development and resume the high-level contacts to enhance political mutual trust. Jim Balsillie, chair of the Centre for International Governance Innovation perhaps said it best, “Canada should push the restart button on relations with China” (Simpson 2008). The negative public opinion of the government’s handling of foreign relations plus two closely related world events may have helped the Conservative leadership change its attitude and return to realism. One is the global financial crisis and the increased need for joint efforts to resist protectionism; the other is the G20 financial summit and the growing influence of China on the world stage. As we all know, Canada, with its abundant natural resources – oil, gas, forestry products, and others – relies heavily on world consumption of its commodities. The recession in the U.S., which buys three quarters of Canada’s exports, has severely hurt the Canadian economy. Last December, Canada recorded a trade deficit of about usd 373 million, its first such trade gap since 1976. In early January of 2009, it was revealed that Canada suffered its worst monthly job losses in more than three decades. On top of that, overall personal bankruptcies jumped by more than 50 per cent to almost 9000. As a recent Fraser Institute Report put it, “The economic recession experienced by our neighbour and largest trading partner shows the necessity for Canada to find expanded markets for its goods and services” (Tiagi and Zhou 2009). Yuen Pau Woo (2008), president and ceo of Asia Pacific Foundation of Canada, drew people’s attention to the findings of a recent opinion poll conducted by his organization: “36% of Canadians believe China holds the most potential for expanded trade and investment, compared to only 26% who chose the U.S. When asked if in 10 years, the influences of China and India in the world will equal that of the U.S., a resounding majority agreed.” Canada has no choice but to jump onto the wagon for it can’t afford to be left behind, bypassed by other countries in the global search for markets and hard currency.

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On top of that, the balance of global power is tilting in China’s favour and the convention of the G20 summit is a clear indication of that trend. China is now an important economic power with the biggest contribution to global economic growth and the largest foreign exchange reserve. All major countries have embraced China as a positive factor with a great deal of weight in the world today. It is widely believed that no world issues can be resolved without its participation. This has become more evident in the current financial crisis. So we have Barack Obama defining Sino-U.S relations as the most important bilateral relations in the world, and Hillary Clinton choosing Asia and China to start her official overseas trip as the new secretary of state and remarking that “differences over human rights should not interfere with cooperation with China on many global issues.” Then, Nicholas Sarkozy wants to clarify his stand on Tibet-related issues in order to have a private meeting with Hu Jintao on the eve of G20 summit in London. And Gordon Brown invites Hu to stand on his right side for a group photo of G20 leaders. The world is undergoing tremendous changes and adjustments. Progress toward a multi-polar world is irreversible, economic globalization is increasing, and countries are more and more interdependent. Keeping the global picture in mind, China and Canada have every reason to restore our traditional friendship, approach our relations from a strategic and long-term perspective, and move forward in our cooperation to benefit both countries and their peoples.

h ow to r e n e w t h e r e l at i o n s h i p What should we be doing to achieve that end? First, politically, we should respect and treat each other as equals, seek common ground, and shelve differences. Ours is a diversified world. Each country has its history, cultural tradition, and level of economic development. To borrow Jim Balsillie’s words: “The politics and cultures of our both countries reflect our different and unique histories and civilization. There is good and bad in both – neither is perfect.” An old Chinese proverb says that we should “enjoy harmony while there is consensus, and show respect where there are differences.” History tells us, when the two sides adhere to these principles, bilateral relations develop in a sound and stable way. Once we depart from them, bilateral relations will be in trouble. Second, in multilateral fora, we should strengthen consultations and coordination, so as to make joint contribution to safeguarding world peace and promoting cooperation between the North and the South. Canada is an important force for peace and development and has been

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playing a significant role in areas such as international peacekeeping, environmental protection, and promotion of sustainable development. We share similar views and positions on many major regional and international issues, such as un reform, combating terrorism and crossborder crimes, the realization of the un’s millennium development goals, expansion of the G8, and so on. Third, we should further expand people-to-people and cultural exchanges. In fact, China has been Canada’s largest source of new immigrants for over ten years. Nearly 1.4 million people of Chinese origin have settled in Canada and more than 55 000 Chinese students are studying there. Mandarin is now the third most spoken language in Canada after English and French. Some 40 “twin” links have been established at the provincial and municipal levels, and the number keeps growing. Cultural exchange is a key channel for in-depth contact between different nations and an important foundation for mutual understanding. Thus, the government departments of our two countries should find new mechanisms to strengthen these exchanges. Next year, there are two major events on the calendars of both countries. China is going to host the World Expo in Shanghai and Canada the Winter Olympics in Vancouver. Canada has the experience of hosting world expos twice – in Montréal in 1967 and Vancouver in 1986 – and China just hosted the Beijing Olympics successfully last year. We can share experiences and learn from each other in organizing these two events, which will bring our two peoples closer and help them know each other better. Fourth, we should further tap potential, expand economic cooperation and trade, and broaden areas of investment. Economic cooperation and trade are important components of China–Canada relations. In recent years, bilateral trade and investment have developed smoothly, but the level of cooperation between us has yet to be upgraded. Our trade volume amounts to merely 1 per cent and 6 per cent for China and Canada, respectively, while Canadian investment in China is barely 1 per cent of the total foreign investment China receives from overseas. We have a long way to go. There are constraints in other areas as well. In the past year or two, Canada has frequently resorted to anti-dumping and countervailing measures against Chinese products. According to Chinese statistics, among the 40 cases of anti-dumping and countervailing investigations initiated by Canada, 13 were targeted at China. These measures have hampered and destabilized bilateral trade. The Canadian side should refrain from using these measures, which run counter to the spirit of free trade. Many people are keen to know when China and Canada will sign the Foreign Investment Promotion Agreement. So far 18 rounds of

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talks have been conducted on this matter and an agreement is expected to be finalized fairly soon. But it’s also high time for Canada to recognize the long overdue market economy status of China. That would provide more incentive for a healthy and mutually beneficial investment relationship. Fifth, we should give full play to existing consultation mechanisms to facilitate mutual trust and cooperation. Currently, there are over 20 consultation and dialogue mechanisms in areas of political and security issues, legislative affairs, trade and economic relations, science and technology, education, and health to name just a few. We should continue to make proper use of them, so that they can yield tangible results. Since late last year, counterpart departments in our two countries have been conducting a series of consultations in Beijing on subjects varying from foreign policy planning to arms control, from the Arctic to Afghanistan. In the past few months, we witnessed another round of talks: the second China–Canada counter-terrorism consultation, the 11th China–Canada Legislative Association meeting in Ottawa, and the 21st meeting of the Joint Economic and Trade Committee in Beijing. Not long ago, the second China–Canada Consultation on Law Enforcement and Judicial Cooperation and the first China–Canada Policy Dialogue on Health took place in Ottawa. It is of common benefit to keep frequent contact on such issues of mutual interest.

th e f u t u r e r e m a i n s b r i g h t As for the future of our bilateral relations, I remain quite optimistic. In October 2008, in a speech at the Canadian International Council, I said, “When this government realizes that it is not in its best interest to let the bilateral relationship drift and fall, when the friendly forces stand up and speak out, our relationship will be back on track.” I believe this remark still holds today. In the past few months, there have been encouraging signs of progress. I am pleased to see that with concerted efforts on both sides, our bilateral relationship has gradually moved back onto the right track. In November 2008, Prime Minister Stephen Harper and President Hu Jintao met twice, once during the G20 financial summit in Washington and again at an Asia-Pacific Economic Cooperation (apec) meeting in Peru. Foreign Minister Lawrence Cannon also met with his counterpart Minister Yang Jiechi for the first time. During these meetings, both sides pledged to improve bilateral ties and strengthen mutually beneficial cooperation to face the new challenges together. More recently, International Trade Minister Stockwell Day, Foreign Minister Lawrence Cannon, Transportation Minister John Baird, and

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Finance Minster Jim Flaherty made successful visits to China in the first eight months of this year. In Beijing, they reached consensus with their Chinese counterparts on a wide range of issues and found specific ways to strengthen the bilateral relationship. Meanwhile, China’s foreign minister, Yang Jiechi, made an official visit to Canada in June. It was the first visit by our foreign minister in 11 years and he was followed by China’s minister of health and the minister of justice. During Minister Day’s April visit, he launched six new Canadian trade offices in Chengdu, Shenzhen, Nanjing, Qingdao, Shenyang, and Wuhan, cities that are home to almost 50 million people. He also announced new initiatives with his Chinese counterpart to strengthen cooperation in science and technology. Minister Cannon’s visit in May was also a success in many ways. He outperformed many of his predecessors by being given an audience with Vice President Xi Jinping. Such arrangements show China’s commitment to good relations. Minister Cannon’s talk with Minister Yang Jiechi was both frank and fruitful. Apart from Beijing where the two sides focused on the political dimension of the relations, he was also well-received in Shanghai, where he met the mayor and marked the 100th anniversary of Canadian commercial representation there. He also announced the appointment of Canadian Commission-General for the Shanghai World Expo 2010, Mark Rowswell, who is better known as Dashan in China. Not long ago, the Canadian government appointed David Mulroney, a veteran diplomat and China expert, as the new Canadian ambassador to China, which many believe is a strong indication that it wants to restart the relationship. Another good sign: according to recent statistics, our bilateral trade totaled usd 34.5 billion in 2008, a jump of 13.8 per cent over the previous year. And we were told that Prime Minister Stephen Harper wishes to visit China at an early date. I am deeply convinced that despite a few irritants in the past few years, this friendship is bound to overcome all obstacles and continue to flourish in the years to come. Our two countries have neither historical issues nor conflicts of fundamental interests. The two economies are highly complementary to each other and enjoy great potential for cooperation. When visiting China a few weeks ago, Foreign Minister Lawrence Cannon declared in Beijing that “a good relationship with China is vital for our prosperity” and Canada wants to build “a frank, friendly, and forward-looking relationship” with China. This is also China’s wish and its consistent policy. After all, to strengthen our bilateral relationship conforms to the trend of the times and reflects the common aspirations of our two peoples.

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references Burney, Derek. 2009. Canada must outgrow its juvenile relationship with China. The Globe and Mail, 11 April. Burton, Charles. 2009. Sino-Canadian relations on slow boat to nowhere (opinion). TheStar.com, 6 March. Available at: . Last accessed 15 Sept. 2009. Evans, Paul. 2008. Getting China just right. The Globe and Mail, 20 Oct. Available at: . Last accessed 15 Sept. 2009. Schiller, Bill. 2009. Why is Ottawa still bungling the China file? TheStar.com, 7 March. Available at: . Last accessed 15 Sept. 2009. Simpson, Jeffrey. 2008. Ottawa should hit the restart button on relations with China. The Globe and Mail, 29 October. Available at: . Last accessed 15 Sept. 2009. Tiagi, Raaj, and Lu Zhou. 2009. Canada’s economic relations with China. Vancouver: The Fraser Institute. Woo, Yuen Pau. 2008. More Asia does not mean less North America. Vancouver: Asia Pacific Foundation of Canada. Available at: . Last accessed 15 Sept. 2009.

Will Canada Be the Next Argentina? kishore mahbubani

Canada is a good country. Indeed, it is a very good country. It contributes significantly to the production of many global goods, such as the International Criminal Court, the Ottawa landmines convention, the responsibility to protect concept, and United Nations (un) peacekeeping forces. Equally important, it does no harm. Most recently, it has also demonstrated that it can be a brave country. Unlike other North Atlantic Treaty Organization (nato) forces in Afghanistan who have asked to be posted in safe areas, Canadian troops have been in the thick of action, and many brave Canadian soldiers have lost their lives. Yet, paradoxically, Canada is also one of the few countries that is an underperformer in the international arena. The gap between its potential and its performance is great. With all its resources, Canada could contribute a lot more if it engaged in long-term strategic thinking. Alas, strategic thinking has never been a Canadian tradition. The main goal of this paper is, therefore, to encourage Canadian public intellectuals to go beyond the bounds of political correctness that is the hallmark of Canadian political thought, to think outside the box, and ask what Canada can do to both protect and enhance its standing on the global stage. Please let me emphasize that I am speaking as a friend of Canada. I studied in Nova Scotia, received an honorary doctorate from Dalhousie University and served as a non-resident Singapore High Commissioner to Canada for over ten years. I also believe that nations, like individuals, languish when they have uncritical lovers or unloving critics. I consider myself a loving critic of Canada.

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As a loving critic, I can see clearly that Canada’s destiny in the 21st century is to move progressively down in the international geopolitical rankings. In 1900, Argentina was one of the ten richest countries in the world. By 2000, it had disappeared from the global radar screen. In 2000, Canada was one of the eight most important industrialized countries. In 2100, will it disappear like Argentina? When I was visiting Ottawa regularly, in the 1980s and 1990s, I was surprised to discover how Canadian thinking on international affairs functioned on autopilot. Since then, the world has been changing significantly. But Canada keeps charting the same course. Washington will always remain Canada’s number one priority. As for over the last 60 years since the Second World War, Canada remains focused on the Atlantic while the centre of gravity of the world’s economy has shifted steadily toward the Pacific. It devotes far more resources to the G8, nato, the Organisation for Economic Co-operation and Development (oecd), the Organization for Security and Co-operation in Europe, and other trans-Atlantic institutions than to trans-Pacific processes. Any objective audit of Canadian bureaucratic processes will show much more attention paid to Europe than to Asia. Yet, there is now little doubt that Goldman Sachs’ famous projection will come true: the four largest economies of the world in 2050 will be China, India, the United States (U.S.), and Japan. Three out of the four largest economies will be Asian. Not a single European economy will be among the top four. The good news is that Canada does have a footprint across the Pacific. It has reasonably good bilateral relations with Japan, China, and India. It also has a nominal relationship with the ten countries of Southeast Asia through the Association of Southeast Asian Nations (asean)–Canada dialogue partnership. A combination of Canada’s prestigious membership in the G8, its fairly significant aid programs, and trans-Pacific trade gives Canadian diplomats reasonable access in key Asian capitals. Canada is also an active participant in such transPacific fora as Asia-Pacific Economic Cooperation (apec) and the asean Regional Forum. But the current Canadian footprint is wide and shallow. If Canada were to withdraw its presence completely from East Asia today, few Asians would notice. I have no doubt that many in Canada realize the importance of key Asian countries like China, India, and Japan, and Canada will try to be active in these countries. But its relative standing in their capitals will progressively diminish as these countries’ standing in the world rises. Realistically, there is little that Canada can do to increase its footprint in these major Asian powers. However, to ensure that its footprint in East Asia is not eroded over the coming decades, Canada should engage in some hard-headed and

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tough-minded thinking. I doubt that Canadian foreign policy officials are ever taught to be “Machiavellian” – it goes against the Canadian psyche – but without hard-headed analysis, Canada will not succeed in enhancing its footprint in East Asia. The first step is to understand what assets Canada has. For example, Canada can be a “free rider” on hard security issues. The nation of Canada never has to worry about a military invasion because the U.S. effectively guarantees Canada’s security. In contrast, Australia, which has a population similar to Canada’s, has to have a “hard” defence policy – just look at its recent defence white paper (Fitzgibbon 2009). Canada is lucky that it does not have to do this. This frees up significant Canadian resources to deploy in non-defence areas – if it gets its priorities right and seizes the right opportunities. For the past three decades, a major geostrategic opportunity has been staring Canada in the face, but no one in power has bothered to capitalize on it. This opportunity is provided by the asean–Canada relationship. When I used to visit Ottawa, I was astonished by Canadian ignorance of asean. Collectively, the ten asean ambassadors in Ottawa could not get a regular appointment with the Canadian foreign minister, even though the combined population of the asean countries was over 500 million and, in the early 1990s, Canada was one of the top ten markets for asean products. It no longer is. Canadian ministers and officials paid far more attention to the European Union (EU) than to asean. In their eyes, in the choice between the asean and EU, there was no contest. The EU was an economic superpower with a combined gross domestic product (gdp) of over usd 18 trillion, while asean was an economic mini-power with a combined gdp of usd 1.4 trillion. This is absolutely correct. However, as I have documented at great length in my book, The new Asian hemisphere: the irresistible shift of global power to the east (Mahbubani 2008), the EU is an economic superpower and a diplomatic mini-power, while the opposite is true of asean. As Ottawa does not engage in long-term strategic thinking, it has not absorbed this significant political reality. There is now no doubt that the greatest shifts of power in human history are taking place in Asia. Such changes have inevitably led to tensions and conflict. Indeed, this is the reason why, in the late 1980s and early 1990s, many U.S. analysts predicted that East Asia would become the cockpit of new geopolitical rivalries, just as Europe was in the 19th century. For instance, Richard Betts (1993–94) wrote, “One of the reasons for optimism about peace in Europe is the apparent satisfaction of the great powers with the status quo,” while in East Asia there is “an ample pool of festering grievances, with more potential for generating conflict than during the Cold War, when bipolarity helped stifle the escalation of parochial disputes.”

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Aaron L. Friedberg (1993–94) wrote, “While civil war and ethnic strife will continue for some time to smolder along Europe’s peripheries, in the long run it is Asia that seems far more likely to be the cockpit of great-power conflict. The half-millennium during which Europe was the world’s primary generator of war (as well as wealth and knowledge) is coming to a close. But, for better or for worse, Europe’s past could be Asia’s future.” Although these predictions were made almost two decades ago, Asian history has so far defied them. Indeed, geopolitical tensions and rivalries have been diminishing rather than rising in East Asia. There are many explanations for this surprising calm, but one clear reason is the role played by asean. asean’s success in transforming the Balkans of Asia (namely Southeast Asia which has far greater political, cultural, and religious diversity than the Balkans of Europe) into one of the most peaceful regions of the world has given it political credibility to provide a platform for all the rising new Asian powers to meet and settle all kinds of bilateral issues. This explains the strategic importance of asean. It contributes significantly to sustaining the geopolitical stability of East Asia. Northeast Asia is far more important in economic terms than Southeast Asia. The combined gdp of the three northeast Asian economic powers, namely China, Japan, and South Korea, is more than usd 10 trillion, far greater that asean’s usd 1.4 trillion. Yet the leaders of China, Japan, and South Korea have not been able to create any common platform on which to meet regularly. Instead, they have relied on asean to provide the structure for such meetings: the asean +3 Meeting and the East Asia Summit. In 1998, when there were rising bilateral tensions between China and Japan, the only venue for the northeast Asian leaders to meet was in Hanoi during the asean +3 Meeting. All the great powers of Asia have recognized the disproportionate importance of asean. In 2000, China proposed a free trade agreement (fta) to asean. Even more remarkable, China negotiated and concluded the trade-in-goods chapter of this fta in record time and even agreed to an early harvest package allowing specified goods from asean immediate duty-free entry to the Chinese market. This move came as a “bolt from the blue” to Japan’s Gaimusho diplomats. Japan raced to catch up with China, proposing its own fta to asean, which was concluded in 2008. However, the Republic of Korea scored a diplomatic success by signing an fta with asean two years before Japan’s. In 2009, Australia and New Zealand also signed agreements with asean, and India is about to follow. Few in Ottawa noticed that the great Asian powers had decided to court asean so fervently, in clear recognition of asean’s growing political importance. Although significant political changes were taking

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place, Ottawa continued to function on autopilot. Instead of devoting more political attention to asean, Ottawa gave it less attention. To be fair, Canada did not decide to do this as a result of independent political judgement, but rather mindlessly followed the thinking of other Western capitals. During the Cold War, asean was seen as a major geopolitical priority for the U.S. in its contest with the Soviet Union. Consequently both the EU and Canada followed the U.S.’s lead in courting asean, which is why Canada established the asean–Canada dialogue partnership in 1977. However, when the Cold War ended, asean was seen by many in Washington as a strategic liability more than an asset and, as usual, Ottawa followed suit. In some respects, Ottawa adopted a “holier than thou” attitude toward asean. Canada was deeply troubled when Myanmar joined asean in 1997. Given Myanmar’s poor human rights record (and this poor record is not in dispute), Canada decided to distance itself, and asean–Canada dialogue meetings did not take place between May 1997 and March 2004. In theory, it is difficult to criticize a country like Canada for taking a moral stand on human rights issues. Yet, it is also a fact that no country puts moral considerations first in formulating its foreign policy. Pragmatic national interests usually trump moral values. Guantanamo, for example, was called the “gulag of our times” by Amnesty International, but neither the EU nor Canada suspended relations with the U.S. because of human rights violations there. Nor did they submit the U.S. to public criticism, as they would have any other state that reintroduced torture. Plain geopolitical common sense dictated the cautious and pragmatic behaviour of Canada. Canada should now apply the same geopolitical common sense to its relations with asean. Myanmar will remain a problem for some time. Indeed, even the asean leaders have begun publicly criticizing its government. For example, when there was a crackdown on Buddhist monks in September 2007, asean issued a strong statement demanding that “the Myanmar government immediately desist from the use of violence against demonstrators” (Yeo 2007). For years, asean has also been calling for the release of Aung San Suu Kyi and other political prisoners. In the case of Myanmar, as in other similar human rights cases, Canada faces the traditional dilemma of doing good or feeling good. It can feel good by publicly criticizing Myanmar and asean. However, this criticism will have no impact and will distance Canada from asean. The more Canada distances itself from asean, the more it will damage Canada’s long-term interests. In contrast, by engaging asean even more energetically, it could significantly enhance its global position by becoming a strong partner of one of the most important regional

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organizations whose global standing and importance is going to increase by leaps and bounds in the coming decades. For Canada’s foreign policy, the simple choice is, therefore, whether to focus on a sunset organization like oecd (which consumes a significant amount of Canadian resources) or a sunrise organization like asean. Plain common sense dictates that Canada should bet on the future, not the past. To do this requires a near total revolution in Ottawa’s thinking. It has to begin deploying far more resources to Asia (in particular to asean) rather than to Europe. It is also vital to emphasize that the window for improving asean– Canada relations may not remain open for much longer. asean has established equal “dialogue” relationships with all its friends, from the U.S. to New Zealand, although the U.S. is far more important than New Zealand. Right now the asean–Canada relationship is closer in political weight to the asean–U.S. end of the scale; however, the trend is not working in Canada’s favour. If Ottawa does not wake up soon and recalibrate the importance of asean, it will soon find the window shut. The real tragedy of the thoughtless Canadian decisions to shun asean is that both Canada and asean play similar roles in the international order. For decades, Canada has made valiant efforts to persuade its superpower neighbour, the U.S., to pay greater attention to international law and support a rules-based global order. asean is now trying to do the same in East Asia. By becoming a model of rules-based regional cooperation, it hopes to provide the catalyst for a larger rulesbased order emerging in East Asia and South Asia. Hence, it is not difficult to conceive of a vibrant partnership between asean and Canada that draws on the inherent strengths of both. Over the next few decades, asean’s importance in the global order will progressively rise while Canada’s importance in relative terms will progressively deteriorate. A partnership could, therefore, easily prove to be a win–win exercise. There is no doubt that asean is ready to step up its partnership with Canada. The big question is whether Ottawa is even aware that a big opportunity is staring it in the face. Even bigger questions are whether Ottawa can recognize that it faces the emergence of a radically different world centred in Asia and whether it can engage in fresh strategic thinking. Now is the time for Ottawa to address such big questions.

references Betts, Richard. 1993–94. Wealth, power and instability: East Asia and the United States after the cold war. International Security, 18(3): 64.

150 Kishore Mahbubani Fitzgibbon, Hon. Joel. 2009. The 2009 defence white paper – the most comprehensive white paper of the modern era. Canberra: Government of Australia. Friedberg, Aaron L. 1993–94. Ripe for rivalry: prospects for peace in a multipolar Asia. International Security, 18(3): 7. Mahbubani, Kishore. 2008. The new Asian hemisphere: the irresistible shift of global power to the east. New York: PublicAffairs. Yeo, George. 2007. Statement by asean chair, Singapore’s Minister of Foreign Affairs George Yeo. New York: asean Secretariat. Available at: . Last accessed 17 Sept. 2009.

Canada and India r a m e s h th a k u r

Canada and India share a Commonwealth heritage of parliamentary democracy and the rule of law, commitment to secularism, and the challenge of unity in diversity through pluralistic power-sharing structures of accommodation. Both countries also have an internationalist outlook with a multilateralist bent that includes a strong belief in the role of the United Nations (un). Considering this, they have had a surprisingly aloof bilateral relationship. Both are engaged in world affairs, yet seem largely disconnected from each other. Canada is among the wealthiest, healthiest, and best educated countries of the world. India fares poorly on economic and human development indices, ranking in the bottom third. Over the past decade, Canada and India have pursued different international agendas. Where their paths have crossed, as often as not they have had to cross metaphorical swords as well. Both are trapped in political constructions of national identity in world affairs, for example, their membership in the North Atlantic Treaty Organization (nato) and the Non-Aligned Movement (nam), which may have passed their use-by dates. If this is true, there may be scope for course corrections and adjustments to contemporary and emerging realities for both countries, and this could bring them closer together. However, although they may come into cooperative alignment on specific issues to their mutual benefit, a return to the harmony of the golden era of the 1950s, when High Commissioner Escott Reid had close access to Prime Minister Jawaharlal Nehru and his inner circle of advisers, is unlikely.

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a f a l s e d aw n After the Second World War, India, the first big country to be decolonized, was a comfortable partner for Canada on many international issues, from the completion of the decolonization agenda to the fashioning of a new Commonwealth as a group of equals, the struggle for racial equality within and among nations, and the state-building and economic development agendas of the newly independent countries. In the un, the two were among the earliest and most frequent contributors to the new activity called peacekeeping. Lester Pearson’s contribution to the evolution of this distinctive un operation was followed by his seminal role in setting the benchmark of 0.7 per cent of rich countries’ gross national product as their official development assistance target. Still, even in these early years, some discordant notes could be heard. In 1956, India’s denunciations of the Anglo-French-Israeli attack on Egypt were far harsher than Canada’s, while it was notably reticent in criticizing the Soviet attack on Hungary. The “common” experience in the Indochina control commissions, which India chaired, graduated a generation of anti-Indian officials in Canada’s foreign service. That sentiment spread among politicians and citizens and was accompanied by a powerful sense of betrayal when India conducted its “peaceful nuclear explosion” in 1974, violating the terms of the agreement under which Canada had provided assistance to its nuclear industry. The test was a remarkable example of India not letting principles get in the way of national interests. By testing to demonstrate technical capacity, it lost international goodwill and provoked tighter export controls on sensitive dual-use technology. By refraining from weaponization to prove continued good character as a disarmament advocate (hence its characterization as “peaceful”), India failed to gain national security benefits to offset the global moral-political costs. Under the nam umbrella, which was hardly equidistant from the two Cold War poles, India tilted markedly toward Moscow. The end of the Cold War and a serious balance-of-payments crisis at the start of the 1990s shook India out of its domestic and foreign-policy lethargy. Yet the worldviews and agendas of Canada and India remained divergent, with contrasting pursuit of human security, national security, and international status.

c a n a d a’ s h u m a n s e c u r i t y v e r s u s i n d i a’ s n a t i o n a l s e c u r i t y During the activist phase of Canadian foreign policy under Foreign Minister Lloyd Axworthy, human security provided the conceptual

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template that bridged such disparate initiatives as the adoption of the Ottawa convention prohibiting anti-personnel landmines in 1997, the adoption of the Rome statute establishing the International Criminal Court in 1998, and the responsibility to protect norm articulated by the Canadian-sponsored but independent international commission in 2001 and adopted unanimously at the un summit of world leaders in 2005. In Canadian minds, India positioned itself on the wrong side of history on all three. For Indians, the Canadian sense of self-righteousness blinded it to divergent worldviews rooted in different historical trajectories and experiences as well as geopolitical circumstances. An important part of the problem in Canadian–Indian relations is that both countries, convinced of the rectitude of their respective positions, are unable to comprehend the other’s opposition as anything but base. India’s geopolitical reality changed with dramatic suddenness when the Cold War ended. For Canada, this was an historic validation of national character and foreign policy. For India it meant a fundamental re-evaluation of ideational identity and required major adjustments to foreign and economic policies, whose dramatic results in turn have caused many outsiders to reorient their India policies. India has been one of the world’s economic success stories over the past decade, second only to China. Both demonstrated resilience in the global financial crisis of 2008–09, with substantial currency reserves in their central banks, limited leverage, and low debt levels that gave them greater flexibility to promote growth and recovery through fiscal policies. In both, growth has been driven by urbanization, rising labour productivity, and growing capital stock. India has several complications and difficulties of which China is free. But it also compares favourably with China in important respects. Its success is rooted in indigenous funds, markets, and enterprise; its growth is relatively greater in the services and mid-value range sectors; it is led by the private sector and entrepreneurs; it has the better legal framework and the institutional underpinnings of a free market; and it has a much younger population, which can better provide the workers and consumers needed to power its own and the world economy as its middle class expands tenfold to 500 million by 2025. Canada and India are among the world’s top 12 economies. In terms of purchasing-power parity, India is the world’s fourth-largest economy. If its economy continues to grow by 6 per cent or more, it will account for over 12 per cent of world economic growth in the next decade or two. Impressive economic growth is not India’s only claim to world attention. Its navy is engaged in anti-piracy operations from the Gulf of

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Aden to the Straits of Malacca. It has successfully launched a lunar probe, and the Indian Space Research Organization operates the world’s second largest fleet of remote-sensing satellites after the United States (U.S.). With the nuclear tests of 1998, India insisted on marching to a tune that the rest of the world finds increasingly discordant. The tests reflected growing frustration at failure of global nuclear disarmament, awareness of a deteriorating security environment with burgeoning nuclear-missile links among Pakistan, China, and North Korea, and anxiety that India’s open-ended nuclear option risked foreclosure with the adoption of the Comprehensive Test Ban Treaty. After worldwide censure of the tests, India made a hard-nosed decision that the only country that mattered in its nuclear diplomacy was the U.S. This strategy was vindicated with the conclusion of the bilateral India–U.S. civil nuclear deal, subsequently endorsed by the Nuclear Suppliers Group of which Canada is a member. Canada was among the last to come on board India’s shiny new nuclear express. Canada and India have found themselves on opposing sides in the Doha (development) round of trade talks. India remains one of the top three contributors to un peace operations, whereas Canada has withdrawn almost completely (but not from nato peace operations). India’s quest for permanent membership on the un Security Council remains elusive. Canada has been among the skeptics of the need for any further additions without singling out India for opposition. That does not lessen India’s keen disappointment. The non-award of the Nobel Peace Prize to Mahatma Gandhi diminished not the man but the prize. Similarly, India’s continuing exclusion from permanent membership diminishes the Security Council not the nation.

from indifference to cooperation, a m i t y, a n d p a r t n e r s h i p ? Changing world dynamics and India’s rising global profile provide an opportunity to reset the bilateral relationship. India adjusted to the end of the Cold War by shedding dirigisme in economic policy, integrating with the international economy, and forging an unexpectedly close relationship with Washington. The triple change provides a sound basis for re-engaging with Canada as liberal parliamentary democracies and market economies with a substantial social security ethos. Both are federal, albeit India is more weighted toward the central government and Canada toward provincial governments. Both are secular, although this means separation of state from church in Canada and non-discrimination in state support for religions in India.

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Both are leading exemplars of unity in diversity, power sharing, and accommodation among different groups of people in an age when identity politics is one of the greatest internal and international security challenges. For Canada, this includes a major influx of immigrants from India, who could prove to be a valuable asset in a networked world. Compared with two million in the U.S., there are one million people of Indian origin in Canada – five times as many per capita. As a group, they are affluent, well-educated, and among the leaders in professional occupations and public life. There is seldom a bad news story involving them of the sort that gets prominent press coverage in the hyperactive Indian media. This success story is a tale worth telling to Canadians and an asset worth exploiting in building relations with India. Over time, this group can be built into powerful constituencies for linking Canada and India in an increasingly networked world order. India has shown growing openness to commercial ties, cultural exchanges, and academic links. Private-sector, cultural, and educational diplomacy can reinforce without supplanting the traditional state-to-state diplomacy. The Indo-Canadian community could also provide the platform for a steep rise in the number of tourists and students from India. But Canada will first have to address the serious problem of an unfriendly visa regime. Most Canadians seem either ignorant of or in denial about the seriousness and depth of the problem. Canada has lagged behind market leader Australia – where the 500 000-strong overseas student industry is worth a staggering aud 15.5 billion in direct income (plus another aud 12 billion in value-added goods and services) – both in attracting foreign students to Canadian universities and in establishing profitable offshore franchises. Half a million Indians study abroad at a cost of about usd 10 billion. Of these, about 95 000 went to Australia in 2008, up from 11 000 in 2002 and 63 000 in 2007. The total number of foreign students in Canadian tertiary colleges and universities in 2007 was a modest 70 000; the number of Indian students in the Canadian tertiary sector is around 4000. Considering our internationally competitive educational institutions and related comparative advantages, these are shockingly low figures: we have only 14 per cent of total international and 5 per cent of Indian students that Australia has. (Note, however, that critics allege that Australia’s claimed economic gains have been inflated by some creative accounting. Also, many Indian students have been exploited by unscrupulous businesses in Australia with the bottom line overriding quality control and prudential regulatory systems.) The paucity of Canadian businesses that have taken advantage of India’s opening and growing market is partly explained by India’s excessive

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regulations, restrictions, red tape, and corruption. India fares poorly in the World Bank’s ease of doing business and Transparency International’s corruption rankings. In the seriously underdeveloped sector of mining, for example, only after complex licensing requirements, property rights, federal-provincial jurisdictions, and nationalist politics are sorted out would Canadian firms get involved in exploration, prospecting, and extraction. In energy, while Canada is a major producer, India has a voracious growing appetite for consumption. In foreign investment, compared with an incoming foreign direct investment (fdi) of cad 19 billion, India has an outgoing fdi of cad 13 billion, including investments in Canada and acquisition of Western firms by Indian ones. This too is a good indicator of India’s rising global profile and changing world role. Canada’s nuclear industry was frustrated by the government’s tardiness in joining the rush to endorse the India–U.S. nuclear deal and sign a memorandum of understanding giving full access to the anticipated multibillion dollar contracts for the planned new nuclear plants to produce clean energy. In January 2009, in an effort to open the door to a lucrative business in reactors and uranium, Trade Minister Stockwell Day led a delegation to India that included three of Canada’s largest nuclear industry companies. During the visit, Day and his Indian counterpart, Commerce and Industry Minister Kamal Nath, announced the initiation of discussions toward a comprehensive economic partnership agreement that could include the elimination of non-agricultural tariffs within ten years; a mechanism to eliminate non-tariff barriers to trade; simplified and transparent customs rules and procedures; opening of financial, service, and procurement markets; effective intellectual property protection and enforcement; and greater cooperation in competition policy. The new agreement could kick-start sparse trade and financial ties. In 2007, Canadian exports to India were cad 1.673 billion (up from cad 305 million in 2000), a mere 0.36 per cent of Canada’s cad 463 billion total exports. Imports from India amounted to cad 1.851 billion (cad 405 million in 2000), worth 0.45 per cent of Canada’s cad 415 billion total imports. In the same year, investment outflows to and inflows from India were cad 207 million and 446 million, respectively. The last figure is explained perhaps by Canada’s considerable business attractions. In 2007, Canada’s gross domestic product (gdp) was usd 1.539 trillion compared with India’s 1.181 trillion; their respective gdp per capita was usd 46 737 and 1051. From 1997 to 2007, Canada had the strongest economic growth among the oecd countries at 3.4 per cent (half India’s 6.8 per cent), the lowest net federal and provincial

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government debt to gdp ratio at 23 per cent (India: 80 per cent), low and stable inflation at just over 2 per cent (India: 5.5 per cent), and an extremely high standard of living. Canada routinely ranks among the world’s top five countries (and often the top) in desirability attributes. It has a strong rule of law with independent, efficient, and effective regulatory systems; a stable financial system; efficient nationwide infrastructure; a world-class educational system from primary to tertiary and research institutions, with the highest proportion of postsecondary education in the oecd; a bountiful natural resource base; a business-friendly competitive environment; and safe, clean cities. Regionally, the scale of India’s recent 15th general election, the peaceful nature and organizational efficiency of the massive exercise, and the astonishing matter-of-fact acceptance of the surprise results by all parties were striking for the rarity of the spectacle in the Middle East, central Asia, southwest and South Asia. Surveying the wreckage of nation- and democracy-building efforts in countries around it, India stands out as an oasis of stability, democratic legitimacy, and economic progress. For all its own challenges, India can be an anchor of stability and a partner for outsiders wishing to consolidate progress in the ring of fragile and troubled states. In particular, India must be part of any lasting solution in Afghanistan. Internationally, India is a frontline state against terrorism. Canada and India could cooperate in identifying the causes, sources, and locales of terrorist networks, including the financial webs that support them; global efforts to articulate and enforce anti-terror norms and un resolutions; and the necessary balances between military and law enforcement action, federal and provincial jurisdictions, and national security versus human rights and civil liberties. Multilaterally, with India agreeing to host the final preparatory meeting for the Doha talks under the auspices of the World Trade Organization, and bearing in mind that India’s own economic interests are best served by a liberal and open international trading order, New Delhi will have a vested interest in ensuring success rather than failure. On arms control, Canada and India may be able to join together in the renewed push by the Obama administration to achieve accelerated progress on outstanding issues like further cuts in U.S.–Russian nuclear arsenals and the Fissile Material Cut-off Treaty. Although Canada played a pioneering role in the very development of un peacekeeping, India has contributed perhaps the largest number of troops (about 80 000 in all), while also suffering the largest number of fatalities in un operations (128, with Canada not far behind at 114). The number of peacekeeping operations keeps increasing and so do

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the accompanying challenges. When Canada returns to un peacekeeping, opportunities will expand for shared international duty in the cause of peace. With the quest for un Security Council expansion and reform stalemated and the G8 proving to be anachronistic in a world of shifting military and economic power, the G20 meeting at the leaders’ level brings Canada and India together in the new premier steering mechanism for global challenges. The Leaders’ G20 brings to fruition a quintessentially bridging initiative by Canada between the global North and South, of which Canada and India are major exemplars. Whether they will cooperate constructively in addressing the challenges of global governance remains to be seen.

India and Canada: Moving Ahead k a n t i baj pa i

In 1946, Canada sent a high commissioner to India – one of the first Canadian diplomatic missions to be established in Asia. This might have inaugurated an enduring, cooperative relationship between two rather substantial liberal powers, but, instead, India and Canada, like India and the United States (U.S.), for the most part have been “estranged democracies” (Kux 1993). Contrary to the general view that the India–Canada relationship started with a golden era, the record shows that there was plenty of misunderstanding and acrimony even in the early years – over strategic orientations during the Cold War, the monitoring of the international settlement in Viet Nam in the 1950s, and the incipient nuclear relationship (Touhey 2007, 735–42). The Indian nuclear test of 1974 was the lowest point in an already deteriorating relationship marked by both indifference and irritation on both sides. The two countries differed in terms of grand strategy during the Cold War. India was non-aligned, but with a tilt toward the Soviet Union, and Canada was aligned with the U.S. as part of the containment of the Soviets. However, perhaps the greatest damage was caused by differences over the nuclear relationship. A common interest in co-operating to build a stable and just world order and in promoting economic development was trumped by an increasing aversion that the two countries felt for each other. The 1990s saw a change for the better, mostly as a function of India’s growing economic power. Canada designated India a “priority” country and initiated a series of high-level meetings and visits (Touhey 2007,

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742–51). However, when New Delhi conducted nuclear tests in 1998, the Canadian reaction was strong, leading once again to a diplomatic freeze. The freeze persisted until Washington opened a strategic dialogue with New Delhi and deepened its links with India, culminating in the nuclear deal of 2008 (Talbott 2004). As India and the U.S. repaired their relationship, Canada once again reached out to India. A lot has evidently changed since 1946. One of the crucial changes is the growth of the Indian community in Canada, which could act as a bridge between the two countries. This community is the tenth largest ethnic group and the second largest non-European group, with perhaps half of its members arriving in Canada over the past 15 years. If more skilled Indians migrate to Canada in the coming years, the extent of cooperation could quicken. Are the two countries in a position to move toward engagement, given new strategic and economic realities as well as deepening social and cultural links via the immigrant community? There are four issues on which the two countries might engage: South Asian security; a rising China; bilateral and global trade; and climate change and energy.

south asian security The combustible mix of Islamic extremism, terrorism, state collapse, and nuclear weapons threaten the security of Afghanistan and Pakistan, as well as neighbouring countries. India and Canada both have a vital interest in ensuring that Afghanistan and Pakistan surmount these challenges. India has played a part in helping in Afghanistan’s reconstruction, both economically and administratively. Canada has contributed mostly by sending troops to Afghanistan to defeat al-Qaeda and the Taliban brand of Islamic extremism and terrorism. Canada should continue to provide troops for Afghanistan, while urging the U.S. to find an exit strategy. Before the exit, however, it should work with the U.S. on a new counterinsurgency strategy that expands the “hearts and minds” component of their efforts. Most important, Canada should help train the new Afghan army and the Afghan police. Canada is probably more adept than the U.S. in terms of police training. Although Indian educators and doctors are better placed to help establish Afghan schools and hospitals, Canada is better positioned in the political domain – working with the army, police, administrators, and politicians on improved practices. Here, an overt Indian effort would only make Islamabad even more nervous. India looms large in the calculations of Pakistan. Pakistan’s support of Islamic extremism and its tolerance of terrorism are related to its fear of India. Ironically, Pakistan’s reliance on extremists and terrorists now threatens its security. Pakistan has a growing nuclear weapons

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program, which is directed principally at India. A series of crises since 1986–87 and war between India and Pakistan in 1999 occurred under the shadow of nuclear weapons. The world is worried, not only about the prospect of nuclear war in the region, but also about the safety of Pakistan’s nuclear weapons, which could pass into extremist hands if there is a political collapse in the country. India, therefore, has to find a way to reassure Pakistan strategically. Of crucial importance, India must resurrect the talks on Kashmir that foundered in 2006–07 and resume the peace process with Kashmiri separatists. India and Pakistan should also consider cooperating on terrorism, particularly intelligence sharing. New Delhi should restart discussions on river-water disputes, Siachen, and delimitation of the Sir Creek boundary. As both countries worry about each other’s influence in Afghanistan, New Delhi may also need to come to an understanding with Islamabad, in consultation with Kabul, on their various objectives and involvement in that troubled country. Canada’s Pakistan policy could complement India’s. Pakistan’s fight against the extremists in Swat in May 2009 is vital for South Asian security. Canada could help with aid to the refugees who have streamed out of the Swat valley to escape the fighting. If the refugees are not properly cared for, domestic support for the Pakistan government’s anti-extremist stand will evaporate. Ottawa must urge Islamabad to rein in terrorist groups operating in Kashmir and in other parts of India. The Indian government showed admirable restraint after the terrorist attack in November 2008, but calls for a more aggressive response will increase if there are further outrages. Although Pakistan is not on the edge of political and administrative collapse, it does need help. After four or five years of robust economic growth under Musharraf, there are dangers ahead for the economy and they are likely to be exacerbated by the refugee problem (World Bank 2009). Canada could be a source of economic succour.

th e r i s e o f c h i n a A rising China is a worry for the international community, even though Beijing is working hard at reassuring the world. For New Delhi, an additional issue is the unresolved border quarrel with China. Talks between the two countries have proceeded for 20 years now, without major advance. These negotiations have been accompanied by confidence-building measures, regular meetings at the highest level, and a rapidly growing trade relationship (in 2009, nearly usd 50 billion). The India–China relationship has never been more stable, but there are worrying signs. In 2008, the Indian government reluctantly

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acknowledged that there had been a spurt of Chinese armed intrusions into India. Beijing also repeatedly contested India’s control of Arunachal Pradesh. India’s new congress-led government, which came to power in May 2009, announced that it would immediately bolster its forces along the border and increase road building in the Himalayas. India is also watchful of China’s naval expansion and its Indian Ocean ambitions. In May 2009, India took delivery of the first Israeli- and Russian-engineered airborne warning and control system (awacs) airplanes to help in reconnaissance and air control missions that could be used against both Pakistani and Chinese forces. In July 2009, it launched its first indigenously built nuclear-powered submarine capable of firing missiles. Tensions and conflict between India and China would be destabilizing for Asia. Ottawa has no cards to play in respect of the bilateral relationship between the two Asian giants, but it does have influence in Asia’s nascent security, diplomatic, and economic institutions, which are a means of engaging a rising China. India came to Asian institutions only in the mid 1990s. It is an observer within the Association of Southeast Asian Nations (asean), it participates in an India–asean summit, it is a member of the asean Regional Forum (arf), and it is negotiating a free trade agreement with asean. The arf, in particular, could be a forum for India–China discussions on their military intentions and capabilities, particularly their maritime strategies, as the two navies grow in ambition and size. Asia needs balance – but balance consistent with the requirements of military stability. India and Canada could do more to consult on and coordinate their policies in Asia. Canada might do more to support India’s membership in the Asia-Pacific Economic Cooperation. The two countries, in conjunction with others, might also work together on the economic development of the states of Indochina – Viet Nam, Cambodia, and Laos – who are newcomers to Southeast Asian and Asian institutions and who lag behind the rest of the region economically. India and Canada could put their negative history in Viet Nam behind them. India has a cultural entrée into the subregion, given the historic Indic influence on these states, and Canada’s “global good citizen” image is an asset. The indirect aim of working in the subregion would be to strengthen it against Chinese influence – which is gaining ground as a function of Beijing’s economic dynamism – without lining up in an explicitly antiChinese “front.”

tr a d e a n d f i n a n c e India and Canada can combine in constructive ways on global trade and finance as well as bilateral economic issues. With India’s liberalization

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and growth, the basis for a more dynamic bilateral economic relationship has finally been established. Since 1995, the international trading regime has been reshaped by the World Trade Organization (wto). The wto covers trade in goods and services, trade-related intellectual property rights, and trade-related investment measures. Over the years, the organization has had to confront several challenges, including the need for phasing in free trade between developed and developing countries, the setting of social standards related to trade, and the growing trend toward regional and bilateral trading deals as a result of the stalemate in wto negotiations. Although New Delhi and Ottawa have been in opposite camps for the most part, India has played a bridging role in negotiations and Canada, as a global good citizen and a contributor to global development efforts, also has an interest in acting as a bridge. Indian and Canadian policymakers could coordinate on selected parts of the wto negotiations, specifically on agricultural issues, especially now that they have worked with each other in the G20, which dealt with the economic meltdown of 2008–09. India has weathered the global economic crisis better than most countries. Because its trade sector is relatively small, the decline in international demand has not affected its economy as badly as it has other countries. Controls on the Indian financial sector have also limited the impact of the liquidity crunch. Canada has been hit much harder by the crisis, given its much greater trade exposure and financial openness. The two countries could work together to ensure that the major economies continue to take the appropriate fiscal measures to provide sufficient liquidity for a recovery and do not lapse into protectionism. Europe has been rather timid in remedying the liquidity crunch and has not matched the U.S. and Chinese response. The U.S. has already announced policies that have a protectionist bent. At some point, the European Union may be tempted to follow suit. Over the years, Indian and Canadian officials have been energetic multilateralists. In the G20, they could very usefully act in concert. India has offered to host the G20 trade ministers’ summit; Canada could endorse this idea and work with India to make it a success. Bilateral trade between India and Canada is worth usd 5 billion annually – a tenth of China’s trade with Canada. There is the potential for considerable expansion undergirded by a free trade agreement. Trade could expand dramatically in areas, such as agriculture, aerospace, apparel, automotive parts, biotechnology, chemicals, energy, information technology, jewelry, minerals, pharmaceuticals, pulp and paper, and textiles. Canada has strengths in infrastructure and mining technologies, both of which are priorities for India. India could serve as a base for Canada to enter South Asian markets; and Canada could be a base for Indian companies trying to gain access to the U.S. and Mexico.

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Trade in services could also be dynamic. Indian comparative advantages, particularly in the it sector and outsourcing, are well known. Investment in each other’s economies is another possibility. Indian companies are beginning to invest in the developed countries; Canada is interested in investing in the retail, banking, and insurance sectors (for more on India–Canada trade and other forms of economic engagement, see Canadian Council et al. 2008). In sum, there are hard commercial interests that might for the first time drive the relationship.

climate change and energy Global energy profligacy has brought the world to the edge of climate change. India’s per capita greenhouse gas emissions are among the lowest anywhere, but, in aggregate, they are high and will continue to increase. Canada’s contribution is only 2 per cent of the world’s emissions, but its per capita emissions are among the highest (Environment Canada 2008, Dowd 2008). Canada has signed the Kyoto Protocol and has passed legislation to give effect to its commitments, but clearly needs to do more. China, India, and the U.S. have not even signed the protocol. The U.S. has stated that it will not agree to emission cuts until China and India and other major developing countries commit to strong emission limits. India argues that, although it has a responsibility to curtail emissions, it will need time, money, and technology to do so. President Barack Obama’s recent promise to strike a climate change deal augurs well for a breakthrough in negotiations. Emissions can be reduced by switching over to alternative technologies such as solar, wind, and biomass energy. India has an interest in doing so and could partner with Canada in developing these technologies. There are other less futuristic options. India and Canada are exploring the possibility of resuming civilian nuclear cooperation, which would include Indian purchase of uranium and up to 25 Canadian reactors. In the area of coal is another area, India has huge reserves and coal is its largest energy source, but this is “dirty” coal that fouls the atmosphere. Canada has made advances in developing “clean coal” technologies that could help India with its most challenging energy problem. India not only relies on coal; about 30 per cent of its energy comes from oil, 70 per cent of which it imports from the gulf (Pardesi et al. 2009). New Delhi is keen to diversify this supply. By 2030, India will be the fourth largest consumer of energy in the world (Klare 2008). If the Indian economy is to grow at the rates it has achieved in the 2000s, it will need a plentiful supply of electricity. Canada’s stupendous oil reserves should be of considerable interest to India. According to estimates, if the Athabasca and other oil sands

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become technologically and commercially viable, Canada will have the second largest reserves after Saudi Arabia (Schorn 2006). India could diversify its oil supplies by buying from Canada and investing in the development of the oil sands. It could also buy hydroelectric technologies from Canada. River waters are a big source of electricity, and South Asia’s rivers are estimated to have greater potential for producing hydroelectricity than all of North America’s rivers combined. Many of those rivers run through India (Chattopadhyay 1983). Canada is the world’s second largest producer of hydroelectricity, with 100 years of experience in hydropower technologies. Canadian companies have developed small hydropower technologies, which should be attractive to a “green” India (Natural Resources Canada 2008, usgs 2009).

conclusion India and Canada have an opportunity to make a new beginning in their relations. The divisive issues of the Cold War period and memories of past interactions have faded, and leaders and functionaries in both countries can be more business like. The improvement in India–U.S. relations and the spurt in Indian economic growth can be catalytic. India and Canada could fashion an agenda of significant cooperation in respect of South Asian and Asian security, trade and the global economy, and climate change, and energy. By 2050, India will have the largest population in the world. Canada’s will be over 40 million. India will be the third largest economy by then, and Canada will be among the biggest. That should make both capitals think.

references Canadian Council of the Chief Executives and Confederation of Indian Industry. 2008. India and Canada: a new era of cooperation. (Report to ministers of the India–Canada ceo Roundtable). Delhi and Ottawa: ceo Council, 2 Sept. Available at: . Last accessed 17 Sept. 2009. Chattopadhyay, Boudhayan. 1983. Harnessing the Himalayan water resources. In M.S. Agwani, Ashwini K. Ray, I.N. Mukherjee, Satish Kumar, and S.D. Muni (editors). South Asia: stability and regional cooperation. Chandigarh: Centre for Research in Rural and Industrial Development, p. 69.

166 Kanti Bajpai Environment Canada. 2008. Annex 2. Canada’s emissions in an international context. In Canada’s greenhouse gas emissions: understanding the trends, 1990–2006. Ottawa: Environment Canada. Available at . Last accessed 13 Oct. 2009. Klare, Michael T. 2008. Rising powers, shrinking planet: the new geopolitics of energy. New York: Metropolitan Books, p. 80. Kux, Dennis. 1993. India and the United States: estranged democracies. Washington, DC: National Defense University. Natural Resources Canada. 2008. Small hydropower. Ottawa: Natural Resources Canada. Available at . Last accessed 10 Oct. 2009 Pardesi, Manjit, and Sumit Ganguly. 2009. India and energy security: a foreign policy priority. In Harsh V. Pant (editor). Indian foreign policy in a unipolar world. New Delhi: Routledge, p. 107. Dowd, Allan. 2008. Canada led G8 in greenhouse gas emissions growth. Reuters UK, 23 April. Available at: . Last accessed 10 Oct. 2009. Schorn, Daniel. 2006. The oil sands of Alberta. 60 Minutes, 22 January. Available at: . Last accessed 19 Sept. 2009. Talbott, Strobe. 2004. Engaging India: diplomacy, democracy, and the bomb. Washington, DC: The Brookings Institution. Touhey, Ryan. 2007. Canada and India at 60: moving beyond history? International Journal, 62(4): 735–51. usgs (United States Geological Survey). 2009. Hydroelectric power water use. Reston, Va.: usgs. Available at: . Last accessed 13 Oct. 2009. World Bank, South Asian Poverty Reduction and Economic Management Unit. 2009. Pakistan: economic update. Washington, DC: World Bank, 20 April. Available at . Last accessed 9 June 2009.

Canada and Japan: Unfulfilled Promise d o n ca m p b e l l

The changing geoeconomic and geopolitical landscape has left both Japan and Canada uncomfortable in their skins and yearning for a world that was but is no more. For each country, the recent world recession has compounded the concerns of drift and the relevance of their place and status in the world, but the seeds were planted long ago. Japan, firmly implanted in the family of Western democracies, has seen itself as modern but not occidental. Because its economic power has not been accompanied by commensurate political power, it is largely faceless on the international scene. The accelerating shift of power to Asia has forced it to focus on its Asian presence and it finds itself in an awkward triangular dance with the United States (U.S.) and China, following the lead and music of others. The relatively comfortable cocoon of the U.S. security blanket remains, but Japan’s own economic clout can no longer to be taken for granted and it is uncertain how to chart its future. An aging and declining population, a perennial lack of political leadership, and a sputtering economy all contribute to its sense of angst. Japan may be a wounded giant, but it remains a giant. It is still the world’s second largest economy, currently larger than China’s and India’s combined. It possesses immense material wealth, and its foreign exchange reserves fuel a significant portion of the U.S. deficit. Its innovative industries, although battered, are in much better shape than those of other countries. Canada, increasingly self-absorbed and uncertain, even of the road ahead, with its primordial relationship with the U.S., no longer plays

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the role on the international scene it once did – both by design and circumstance. Increasingly seen as a regional player and experiencing its own leadership challenges, it is suffering a sense of diminishment. Canada is also awkwardly taking footsteps in Asia, but still lacks any coherent strategy as it proceeds. Its proclamation as an Asian-Pacific nation over the last 15 years has been essentially hollow. Canada’s institutions have proven strong in the face of the current recession, but its economy, the second most trade dependent in the world, has been significantly affected. Both Japan and Canada have defined themselves in terms of their relationship with the U.S. to a greater degree than any other nations. In Japan’s case, it has been a post-war pact accepting a security guarantee, in exchange for foregoing any role in collective security, coupled with freedom to develop an economic machine that inspired envy and fear until some of the cogs started falling apart. In Canada’s case, it has been security and economics, but driven by geography, history, culture, friendship, and largely common interests. These axes will remain and affect the way Canada and Japan view each other. Their relationship and interaction is distinct, but under the shadow of their common ally. The Canada–Japan relationship has been one of unfulfilled promise. Eighty years ago the two countries established diplomatic relations and set up legations in Tokyo and Ottawa. For Canada, it was an expression of Prime Minister William Lyon Mackenzie King’s wish to demonstrate autonomy in foreign policy and an indication of the importance of Japan to Canada, in the same league as the United Kingdom, the U.S., and France. Japan was already Canada’s third largest trading partner and immigration issues were prominent. In response, Japan posted as its first envoy Prince Tokogawa, the grandson of the last shogun of Japan. By 1990, Canada, concerned with the lack of direction in the relationship, proposed a review by the two countries of their economic ties. Japan responded by suggesting a much broader approach. This led to the two prime ministers announcing the establishment of the Canada Japan Forum, a non-governmental group of eminent people led, on the Canadian side, by Peter Lougheed. It was mandated to develop proposals for a stronger and more effective bilateral relationship. Two years later, a series of specific recommendations emerged. Twice since then, in 1996 and again in 2003, the forum has been reconstituted and renewed with the same mandate. Its recommendations have covered a broad range of proposals – including politics, diplomacy, economy, the environment, people, and people exchanges. They have called for implementation of measures to cut through the regulatory burdens affecting trade and commerce and

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have suggested that a comprehensive free trade agreement should be an objective for the two countries. They have called for institutionalization of reciprocal visits by our political leaders and more intensive dialogue between officials in the two governments on a broad range of issues. They have called for expansion of the quota for working holiday visas and promotion of exchanges between media outlets and journalists. Each forum has recommended an imperial visit, now achieved, to symbolize the significance of the Canada–Japan relationship. However, implementation of the recommendations made to leaders has been largely lacking. Why is this? A major structural impediment is the way the two nations are governed. Japan’s political system places no premium on leadership. For many years, the bureaucracy has had the upper hand in the famous iron triangle of political, bureaucratic, and business cooperation, consensus, and compromise. Japanese prime ministers come and go with monotonous regularity. The concept that all politics are local or domestic has unequaled expression in Japan. There is little continuity of leaders and even less leadership to engage with Canada on bilateral files or foreign policy ones of common interest. In Canada, there is no natural constituency to drive our political leaders on Japan. Japanese Canadians number less than 100 000, and most are third- or fourth-generation descendants with few ties to Japan. Our business community is largely silent. There is little focus or staying power in much of our foreign policy approach and initiatives. As a result, much depends on the leadership of individuals, not pressure from constituencies. Pierre Trudeau’s fascination with Asia and his interest in Japan led to close relationships with Japanese prime ministers Tanaka and Ohira and led to a flowering of interest in a range of issues including a science and technology agreement. Subsequent Canadian prime ministers have been hot and cold with respect to Japan, but none has shown sustained interest or engagement. After two years of complete inactivity and interest, the current Canadian government is finally showing signs of life in engaging Asia, but is only beginning to realize the key role of Japan in the equation. Commercial exchanges between Canada and Japan have driven the relationship from the very beginning. Even before they established diplomatic relations, they enjoyed a vibrant commerce and this has been a continuing hallmark of the relationship. As Japan emerged from the ashes of the Second World War, focusing on economic growth and transforming itself into the world’s second-largest economy, the economic and trade dimensions of the relationship surged forward. Canada became a major supplier of the natural resources, raw materials, and

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agricultural products that would feed the Japanese economy and people. Japanese trading companies implanted themselves in Canada and established the supply chain and distribution system. As Japan industrialized, Canada became a small but significant market for its increasingly innovative products, from automobiles to consumer electronics. Japan became Canada’s second-largest trading partner, but has recently dropped to third because of the increase in Chinese imports to Canada. By the mid 1990s, trade between Japan and Canada peaked and has been on a plateau since. Canada’s conclusion of a free trade agreement with the U.S., swiftly followed by the North American Free Trade Agreement (nafta), focused Canadian business attention on the already huge but now more accessible market of the U.S. For its part, Japan successfully pursued a policy of security through diversification of supply. Australia, a natural competitor of Canada in many of its products, has achieved significant growth at Canada’s expense. Japanese direct investments in Canada have been significant, ranging from major Japanese automotive plants to numerous investments in the agriculture and natural resource sectors. Canadian direct investment in Japan, although insignificant historically, has been growing, primarily in the insurance, financial services, and software sectors. Japanese companies have played a surprisingly small role in the Canadian energy sector, but there are signs that this may be about to change as Japanese trading companies, traditionally the conduit for natural resource exports, are re-inventing themselves as primarily investment players. Dated perceptions of the difficulties of penetrating the Japanese market have persisted while China and its potential market have attracted the Canadian business community. The Canada–Japan Business Council, a major annual gathering of business leaders, “bit the dust” several years ago. Dated perceptions are not confined to Canada. The Japanese still see Canada as a country of beautiful landscapes, gentler than the U.S. They do not see it as a technologically advanced society. They were among the last to bring Blackberry on board. Japanese officialdom still admires Canada’s traditional role in international affairs. They have seen Canada as a model as they gradually assumed larger roles in international institutions and initiatives within the context of the restraints imposed by their constitution. For example, Japan collaborated closely with Canada as they made their first foray into peacekeeping together in the Golan Heights in 1995. As Canada’s participation in traditional peacekeeping has declined, the potential for cooperation has lessened. Japan is playing an important non-military role in Afghanistan that involves disarmament and reconstruction. As Canada’s role evolves, there may be more opportunities to work together.

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Should we accept the continuing state of unfulfilled promise in our bilateral relations and in our collaboration on the international scene? Canada has more to gain and more to lose, but Japan has significant stakes as well. Our trade relationship needs new momentum. Canada’s penetration of the North American market has peaked, and we need to find more markets. Reviving our Japanese connections both as a destination and as a conduit into Asia is obvious. The issues of food and energy security, always important for a Japan so heavily dependent on external sources, are looming larger again. Canada represents a solution to some of these needs. Although the U.S. will remain our paramount market for oil and gas, the current lack of west coast distribution facilities denies us any alternative markets or bargaining chips. A planned liquefied natural gas terminal represents but a first step. Canada and Japan should seriously consider a bilateral free trade agreement. Canada has been largely on the sidelines since negotiation of the monumental Canada–U.S. Free Trade Agreement and nafta, while bilateral and regional agreements have proliferated over the past decade. Formerly a staunch defender of solely multilateral trade rules, Japan has changed direction with a number of bilateral and regional agreements. Japan is Canada’s second largest market and our third largest trading partner. Our economies are largely complementary. Japanese companies are showing renewed interest in investing in Canada. Awareness in the Japanese and Canadian business communities of opportunities generated by a free trade initiative would be as important as the actual terms of such an agreement. On many of the issues confronting the world today, Canada and Japan share common concerns. Both are non-nuclear states in the G8 and their positions on nuclear disarmament and non-proliferation are similar. Japan has played and will play a significant role in environmental protection and climate change, post-conflict reconstruction, and disaster relief. Reform of the United Nations and Japan’s continuing quest for a permanent seat on the Security Council, which Canada has opposed, needs discussion. Although the two countries have recently announced the start of a dialogue on security, a more structured mechanism is needed for sustained engagement on a broader range of issues. The potential for a more vibrant and mutually rewarding relationship remains. There are no major disagreements between the two countries; they have similar approaches on most of the issues of the day. What’s needed is an injection of energy and vitality on both sides to realize this potential.

In Search of Bilateral, Regional, and Global Synergies sa daa k i n u m ata

In 1974, I interpreted for Prime Minister Kakuei Tanaka when he met Prime Minister Pierre Trudeau at 24 Sussex Drive. Canada was then beginning to look to Asia as part of the third option in its foreign policy. Japan looked up to Canada for its moderating influence on the world scene, especially in peacekeeping and other United Nations (un) activities. Canadians saw Japan as an increasingly powerful economic presence, and trade was the main focus of our relationship. Today, Canada has become a truly multicultural society, and its strength is derived from its natural, cultural, and social diversity. Its international engagement is also multifaceted, straddling the western hemisphere, the Atlantic, and the Pacific, the Anglophone and the Francophone worlds, and stretching to the Middle East and Africa, not the least because of the arrival of immigrants from diverse parts of the world. Japan has become much more than a mere economic presence in Asia. Having established itself as a political, economic, and security stabilizer in Asia, it seeks to play a more proactive role in the world. Thus the canvass on which we chart the future of the Japan–Canada relationship has become much bigger than before. I would like to see this canvass filled with bilateral, regional, and global synergies.

m i d d l e - p ow e r d i p l o m acy The 2007 bbc World Service poll on the influence of the 12 main countries in the world placed Japan and Canada at the top, with 54% of respondents ascribing to both a mainly positive influence, primarily due to “soft” power. What does this imply?

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Neither Japan nor Canada presumes to be a big power that throws its weight around. Both countries are searching for the right niches in which they can be proactive as catalysts. Yoshihide Soeya (2005) suggests that Japan should pursue middle-power diplomacy as Canada does, in the sense of not presuming to be a unilateralist big power, but seeking to play its own role amid the rivalry of superpowers. Thus, there exist concrete areas in which Japan and Canada can learn from each other, and contribute, as positive facilitators, to the international common good.

nature-centric versus econo-centric images The Japanese image of Canada tends to be nature centric. Many Japanese are fascinated by the natural beauty of the Canadian Rockies, Niagara Falls, Prince Edward Island (the story of Anne of Green Gables has captured the imagination of many Japanese women), and northern lights. Canada is consistently among Japanese people’s top four or five favourite countries to visit. According to the Japan National Tourist Organization, about 400 000 Japanese visit Canada annually, compared with 157 000 Canadians who visit Japan each year. On a cultural level, many Japanese view Canada as a sibling of the United States (U.S.), placing Canadians somewhere between the Americans and the British. They do not know much about the complexity of Canada’s relationship with the U.S., nor about French Canada, bilingualism, and Canada’s unique multi-ethnic and multicultural society. They find Canadians friendly and peaceful, but perhaps feel a bit closer to Australians geographically and psychologically. Besides finding it exotic, Canadians tend to view Japan as econocentric, based on the Japanese cars and electronic products seen in abundance in Canada. Canadians may have heard of Japan’s economic miracle of the 1980s, but they know little about the “lost decade” since the bursting of the economic bubble in the early 1990s, when the nation was beset with harsh structural adjustments, an aging population, a declining birth rate, and other social issues. They may still have an outdated image of Japan as a closed market. As Canadians have become captivated by the emerging Asian giants, namely China and India, their attention seems to have shifted away from Japan.

fo r g i n g a n i n n ovat i v e e c o n o m i c pa rt n e rs h i p The current “once-in-a century” global financial and economic crisis provides an opportunity for Japan and Canada to lift their sights

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beyond the bilateral framework and work together in the context of the G20 and the G8, which Canada will be hosting in 2010. Although severely hit because of its export-dependent economy, Japan can share with others the “lessons learned” from its own painful experience with toxic debts during its lost decade. Today, Japanese banks are well capitalized and well regulated. Canada has held up well, due largely to its sound and stable banking sector. Thus, both countries have something to offer the world as we work toward sound prudential regulations. We also have a common stake in fending off protectionist pressures, especially from the U.S., and ensuring that the world will not repeat the mistake of beggar-thy-neighbour policies. Canada is an important supplier of energy and food to Japan. It is rich in crude oil (including the oil sands, the second largest reserves in the world), uranium (supplying 28 per cent of Japan’s imports), natural gas (the third largest producer), and coking coal. Canada supplies large shares of Japan’s imports of wheat (24 per cent), pork (21 per cent) and rapeseed (canola, 95 per cent). Japan, for its part, exports manufactured products, such as cars and electronic products, to Canada. This pattern of economic partnership flourished from the 1950s through the 1980s; however, it has faded since the 1990s. Japanese economic growth slowed following the bursting of the bubble, whereas the dynamic growth of intraregional trade in both North America and East Asia outpaced the expansion of trans-Pacific commerce. This sense of decline prompted the two governments to explore ways for further promotion of bilateral trade and investment. A main issue is the possibility of a Japan–Canada free trade agreement (fta), which the two governments are to revisit at a later opportunity. To reach the ultimate objective of a comprehensive fta, we need to overcome the obstacle posed by the composition of Japan–Canada trade, where nearly a quarter of Canada’s exports to Japan comprise sensitive agricultural and forestry products. The challenge is two-fold: Canada must engage in vigorous sales efforts for its manufacturing and high-technology sectors, and Japan must effect further structural adjustment in its agricultural sector. In the meantime, one idea worth exploring may be a broad-ranging and forward-looking economic integration agreement, designed to improve the business environments in Japan and Canada and lower the cost of doing business. Short of market access, it can encompass such areas as regulatory reform, mutual recognition and harmonization of standards and certification, and patents and intellectual property rights. If we could conclude a state-of-the-art economic integration agreement between Canada and Japan, it could serve as a model for agreements with other countries, establishing best practices for the next generation of trade agreements.

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Another key task is to identify and strengthen our synergies in innovation. We should try to harness Japan’s strength in high-technology hardware, such as advanced materials, hybrid engines, robotics, and digital technologies with Canada’s expertise in information and software. Strengthening synergies in energy technology is particularly relevant to our efforts to cope with the daunting challenge of global warming. Potential for cooperation may lie in Canada’s cutting-edge development of carbon dioxide capture and storage and bioethanol and Japan’s large-scale investments in fuel battery and solar energy generation. Another encouraging sign is that Japan and Canada successfully conducted joint experiments on the production of methane hydrates in northwest Canada from 2006 to 2008. In terms of supply chains, Canada serves as a gateway to North America for Japan. According to the Japanese Automobile Manufacturing Association, Japanese automobile manufacturing plants in Ontario, together with their parts manufacturers and dealers, employ more than 70 000 Canadians and export the bulk of their Japanesebrand cars to the big U.S. market. Similarly, there are compelling reasons for Canada to be interested in Japan as a gateway to the AsiaPacific region. Japan’s trade with East Asia accounts for nearly half of its total trade, and tens of thousands of Japanese firms are operating in East Asian countries. They are said to be creating 10 million jobs in China. Japan, thus, welcomes the Asia-Pacific gateway and corridor initiative currently promoted by Canada. As Japan hosts the AsiaPacific Economic Cooperation meeting and Canada hosts the G8 meeting in 2010, we should consult closely on how we can achieve a win–win form of regional cooperation that will enable Canada’s active engagement as an Asian-Pacific nation.

sy n e r g i e s f o r g l o b a l p e a c e and security It is not easy for the Japanese to understand what Fen Hampson called “Canada’s pull between the two poles” in his talk at the Japan Institute of International Affairs in Tokyo on 30 March 2007; the poles he was referring to are multilateralism (an idealistic commitment to the development and strengthening of international institutions) and continentalism (a realistic emphasis on the development and enhancement of Canada’s relationships with its hemispheric partners, especially the U.S.). But the Japanese see Canada as a part of the broad alliance of nations committed to the shared values of freedom, democracy, human rights, and the rule of law. They also look to Canada as a role model that has effectively wielded its influence on the world scene, especially in peacekeeping and other un activities. Thus many internationally

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conscious Japanese would be disappointed to see Canada waiver in its pursuit of this active multilateral role in the world. Canadians, for their part, may be somewhat at a loss to understand what kind of role Japan will play in working toward international peace and security in the future. This has been the subject of recurring debates among Japanese, including the “normal country” debate in the 1990s, involving pacifism, “entrapment” versus “abandonment” by the U.S., Asia-centrism, and autonomy versus internationalism. Japan’s foreign and security policy, too, is being pulled between at least two poles – idealistic multilateralism (faith in the un) and realistic bilateralism (alliance with the U.S.). One constant factor in all this is that Japan has been a stabilizing influence in Asia – as a country that foreswore its militarist past and contributes to the peace and stability of the region through its alliance with the U.S.; as the oldest and most mature democracy in Asia; and as the most advanced market economy in Asia. On this basis, Japan seeks to play a more proactive role for global peace and security, striking the right balance between idealism and realism. There are possibilities for Japan–Canada synergies in the following areas. Peacekeeping/Peace-building One of Japan’s foreign policy priorities is the “consolidation of peace” in strife-torn areas and failed states beset with such problems as refugees, internally displaced persons, and genocide. The aim is to tackle the entire process from resolution of conflict to recovery, reintegration, and reconstruction from a long-term and comprehensive viewpoint. Canada, for its part, has been a world leader in peace-support operations. Starting with operational cooperation on the Golan Heights in the 1990s, Canada has played a pivotal role in helping Japan develop and enhance its international peacekeeping and peace-support capabilities. To Japan, Afghanistan and Pakistan present the daunting nexus of peace-building and anti-terrorist challenges. Japan highly appreciates the tremendous sacrifices made by Canada in its military efforts to help stabilize Afghanistan. For its part, Japan has been actively promoting the disarmament, demobilization, and reintegration of former Afghan soldiers and the disbandment of illegal armed militiamen programs and has made financial contributions amounting to usd 2 billion, of which 1.5 billion has been disbursed for reconstruction efforts in Afghanistan. As the situation in Pakistan has deteriorated, Japan has pledged usd 2 billion to that country over the next two years as well. We will need to search actively for potential areas for further cooperation in these regions.

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Terrorism/Piracy Japanese Maritime Self-Defense Force vessels refueled Canadian and other naval vessels engaged in Operation Enduring Freedom in the Indian Ocean. Recently both Japan and Canada have sent vessels to participate in the efforts to combat piracy off the coast of Somalia. Nuclear Disarmament and Non-proliferation President Barack Obama’s call for a world without nuclear weapons, in his Prague speech, has given new momentum to the efforts toward nuclear disarmament and non-proliferation on which Japan and Canada have worked together in the multilateral context. North Korea’s nuclear testing last May, following its launch of a missile in April, not only poses a grave threat to Japan’s security, but also seriously undermines the peace and security of northeast Asia and the international community. Japan and Canada must act in concert with the international community to urge North Korea to take concrete action toward the resolution of outstanding issues of concern, including nuclear and missile issues and the abduction of Japanese and other nationals. Human Security Both Japan and Canada have separately embraced the concept of human security. Despite some definitional differences, both countries have come to recognize the importance of such substantive issues as postconflict reconstruction, terrorism, proliferation of weapons of mass destruction, disaster relief and early warning systems, environmental degradation, poverty, infectious diseases, and malnutrition. In May 2009, the two foreign ministers signed a memorandum on standard operating procedures that will expedite approvals necessary for Canadian military aircraft engaged in humanitarian and disaster relief missions to make use of Japanese airports and other facilities. This is a welcome step, and we should act on further possibilities for cooperation. United Nations Reform Given its history of active involvement in the un and its concern about the effective functioning of the organization in cases, such as Rwanda and Darfur, Canada has long valued the importance of a solid, active and vocal contribution within un’s decision-making process. For Japan, the composition of the un Security Council, with its five permanent members since 1945, does not reflect the realities of the 21st century.

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Japan’s aspiration to take part in the core-decision making process as a permanent member of the council remains an important pending issue between our two governments. We should together seek a solution that can garner the widest possible political acceptance by member states so as to achieve meaningful reform of the Security Council.

conclusions This year marks the maturation of the Japan–Canada friendship. Their majesties the emperor and empress of Japan are paying a state visit to Canada in July. Canada celebrates the 80th anniversary of the opening in Japan of its first diplomatic mission in Asia, following last year’s 80th anniversary of the opening of the Japanese diplomatic mission in Canada. Japan and Canada are not just natural partners; they can go beyond friendship to mutual empathy as they tackle common challenges. Japan is up front in grappling with the acute challenges of an aging and dwindling workforce. Canadians have a wealth of experience in accepting people from different parts of the world in their midst. We have a lot to learn from each other. We should step up our efforts to fill the canvass of the Japan–Canada relationship with bilateral, regional, and global synergies. As the world is beset with financial and economic turmoil, as well as uncertainties regarding Afghanistan, Pakistan, and North Korea, the Japanese people should realize anew that they have in Canada a valuable partner with whom they can work comfortably. For their part, Canadians should pay more attention to the dynamism of East Asia and realize that, as a dependable stabilizer with the most mature democracy and the most advanced market economy in Asia, Japan is the partner that Canada can count on most in the region.

reference Yoshihide Soeya. 2005. Nihon no “midoru paw a ” gaiko [Japan’s “middle power” diplomacy]. Tokyo: Chikuma Shobo.

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Canada and Africa: Where Has Canada Gone? john schram

“Where has Canada gone?” demanded a respected Ghanaian politician not long ago. “Where is Canada?” other Africans echo. Is Canada, seen so long by so many as a reliable and trusted friend, abandoning its investment in Africa? There may be persuasive – and disconcerting – grounds for thinking so. Not only Africans are concerned. Many Canadians, too, miss the easy warmth that long characterized our relations with our African counterparts. Many have invested substantially in Africa over the past 50 years, both themselves and their resources. They despair now that the prime minister has publicly appeared to downgrade the very ties they have laboured to build. They ask why so few African countries are included in the Canadian International Development Agency’s (cida’s) list of bilateral focus partners. Some argue that Africa must remain at the heart of Canadian policy because it is poor and the scene and source of conflict; others, perhaps more visionary but less voluble, feel that Canada has forsaken the continent just when our African partnerships are on the verge of reaping returns. Both groups are puzzled by what seems to be a drifting away when we need African friends to drive home our global economic and policy interests. In Africa, as in Canada, the heady days when Brian Mulroney and Joe Clark pitted Canadians against South African apartheid have been forgotten. Jean Chrétien’s lead in making Africa a focal point of the 2002 G8 Kananaskis summit, Canada’s strong support for the New Partnership for Africa’s Development, and the G8 action plan have receded into the past. Lloyd Axworthy’s persistence and commitment to

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United Nations (un) and multilateral action on “blood diamonds,” Angola, the Uganda Lord’s Resistance Army and Sudan’s north–south conflict are still appreciated abroad, but in Canada they are ignored as politically naive reflections of fuzzy Liberal government policy. The Canadian Senate’s 2007 report on aid to Africa prescribed a “new roadmap for sub-Saharan Africa.” Intended, perhaps, to shock and boost Canadian resolve, it has left everyone with the sense that all our concern for Africa over five decades has been a waste. Africa has not helped its own case with Canadians nor among many Africans. Vision and hope are hard to evoke when Canadians are barraged with accounts of African disasters. Canadian media can hardly be blamed for reporting the all-too-real failures: the kidnapping of Canadians who have devoted their careers to Africa; the continuing man-made disaster in Darfur and the antics of a president indicted for genocide in Sudan; election violence in Kenya; Mugabe’s stranglehold on Zimbabwe; pirates and Islamic fundamentalism in Somalia; and Libya’s President Gadhafi as president of the Africa Union. Meanwhile, Ghana’s successful election and the development and political achievements of Tanzania, Mozambique, and Mali are scarcely noted. Thus, perhaps, it should be no surprise that Canada’s Conservative government sees less for Canada in Africa than its Liberal predecessors. Insiders suggest that the prime minister himself finds Africa of little interest. He has not taken comfortably to the informal camaraderie of Commonwealth and Francophonie meetings, where African leaders offer brotherly embraces, laugh readily, and count on personal rapport to get their messages across. Some observers suggest that Canada’s current lack of global presence is not peculiar to its relationship with Africa, but rather a reflection of a minority government with an insular right wing, little knowledge of or interest in any but the major United States (U.S.)–Canadian concerns, and an aversion to the potentially costly demands inherent in a broad international vision such as the Liberals tried to sell in their now-obviated 2005 international policy statement. Among current and former top officials, many think this is no bad thing. They insist stoutly that the government is right in sticking internationally to Canada’s all-encompassing ties with the U.S., that we are indeed fighting an all-consuming war in Afghanistan. Issues, such as Africa, in the face of the current economic crisis, are thus merely tiersmondiste – choices we make if we must and then only after considered cost–benefit analysis. However, a significant number of government and academic observers argue that Canada does not have the luxury of isolating itself from such global policy choices. Canadian national and international interests demand a global vision, an understanding of regions and events, a

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series of partnerships and policies that ensure Canadians can nurture, control, and respond wherever our interests are at stake. What do Canadians think of this? Do they really care if Africa is forgotten? As one foreign affairs policy insider retorts, prime ministers respond to what they sense Canadians want; if Canadians appear less interested in Africa, their government in Ottawa will reflect this. Two years after the 2002 G8 summit, 32 per cent of Canadians thought Africa should be the most important priority for Canada – second only to the Americas at 34 per cent. But in 2008, although the relative rank of these regions remained the same, Africa had slipped from 32 per cent to 19 per cent while the Americas, maintaining their number one status, had jumped from 34 per cent to 47 per cent, and Asia was closing in with 16 per cent from its former 11 per cent. In fact, Canada is still very much present in Africa, although it seems extraordinarily difficult to prove it. The cida web site offers little concrete information; officials from cida and the Department of Foreign Affairs and International Trade (dfait) are reluctant to be quoted about what Canada is doing in Africa, and Canadian heads of mission in Africa can scarcely speak to the media without headquarters’ approval. Both Canadians and Africans can thus be forgiven for knowing little about what Canada is doing in Africa. A pity, for Canada is still very much there. It is true that Prime Minister Harper’s government may be cad 700 million short in meeting Paul Martin’s promise to double our aid to Africa by 2008–09. There is longstanding embarrassment that Canada is still above only Japan and the U.S. in the proportion of its gross national income invested in development. Our contribution is far from what is expected or needed for most African countries to achieve the millennium development goals and parsimonious beside the relative generosity of our Nordic and Dutch friends. Lester Pearson’s widely accepted development assistance target of 0.7 per cent of gross national product remains a chimera. But the cad 2.1 billion in development assistance that Canada did contribute in 2008 is nonetheless substantial. And we received grudging credit for it at the G8 summit at L’Aquila. What’s more (if words count), we joined our partners there in promising a new, comprehensive, “whole-of-country” approach – one that will fulfill existing official development assistance commitments in trade and aid, but will also work for more innovative financing arrangements for health, more (and more open) trade, achievement of the millennium development goals, the alleviation of the effects of climate change, and the encouragement of good governance. We agreed to double our investment in food security, increasing funding by cad 600 million to reach cad 1.18 billion over three years. However, these

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commitments – and our current record – may disappoint those who believe Canada should do more, that neither Africans nor Canadians should be left asking: “Where has Canada gone?” Instead, the question should be: “Is Canada’s African investment paying off?” An answer will be demanded soon. When Canada hosts the 2010 G8 summit in Muskoka, both we and our partners will be subjected to greater hard-nosed scrutiny on our African commitments than at any time since Prime Minister Chrétien put Africa on the G8 agenda. In the meantime, over half our overall assistance will now go to what should be visible, effective, traditional bilateral development assistant projects and programs in 20 focus countries world-wide. Seven of them will be in Africa. Canada’s emergency and humanitarian assistance, channeled through non-governmental organizations and multilateral organizations, such as the Global Fund to Fight aids and the World Food Programme, remains as effective as it is considerable, although, by its nature, it is not easily identifiable as “Canadian.” Although most Canadians seem not to know it, Canada does have a cida and a military advisory and materiel presence in Sudan and in Darfur, and we will spend cad 400 million on Sudan this year to support the Africa Union, peace-building initiatives including peacekeepers and peace-making and to provide humanitarian assistance to those caught up in the Sudan conflicts. We have supported the International Criminal Court in bringing African human rights offenders to justice. We can claim a useful, active role in the Sierra Leone peace process. We are the co-chairs of the Friends of the African Great Lakes group. cida and the International Development Research Centre (idrc) are active with civil society in hard-to-reach places – not least of which is Zimbabwe – and they support education and health throughout Africa. On both national and regional levels, cida is justifiably proud of its concentration on innovative programs to boost the private sector, preserve the environment, and promote gender equality. African parliamentarians praise the encouragement they have received through Canada’s Parliamentary Centre. Senior civil servants acknowledge useful Canadian governance advice from provincial, federal, and private professional teams and praise the policy exchanges they have shared through Canada’s highly respected idrc. Contrary to common perception, Canada has significant trade with African countries. The trade people at dfait say that, in 2008, Canadian merchandise exports to Africa stood at cad 2.27 billion (compared with cad 2.4 billion with India and cad 2.6 billion with Brazil). In 2007, the Export Development Corporation supported over cad 882 million worth of business by assisting 233 Canadian companies in 29 African countries. Government officials boast that Canada is the

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largest non-African investor in African mining, and they note that Canada is currently negotiating investment protection agreements with eight sub-Saharan African countries. Canadian academics, professionals, and student interns are still very much a part of the local scene in African institutions, businesses, ngo s, and local communities. Our churches and service clubs continue their work there. In the other direction, Canada has benefited immensely from a well-educated, often highly professional African diaspora communities that have now blended effectively into Canadian society. Some of these communities, especially those centred in Toronto and Montréal, wield considerable political and social clout. With all this going on, how and why have Canadians given the impression that we are no longer interested in Africa, that we have suddenly transferred our affections and investment to Latin America? Officials have a reassuring explanation for it. “The wrapping has changed,” they say, “but not the contents.” Maybe so. But if people do not know what Canadians are doing in Africa, with Africans, then are we not losing both the content and the message? Is it wise, or even necessary, to run that risk? Of course, Canada must be consumed with Afghanistan. Equally, we must focus on our ties with the U.S., on our role in the North Atlantic Treaty Organization (nato), and on our joint economic rescue plans with other G8 partners and the European Union. And we must look vigorously and coherently to the Americas – and to China and India. But that does not mean that, in reality or perception, we should publicly imply that we are giving up existing investment and credibility to move on elsewhere, leaving our African investment dividends for China or India to collect. If Africans are asking, “Where has Canada gone?” we should be concerned. Why? For reasons that include, but go well beyond, Canadians’ traditional concern for humanity and for helping Africa “get it right.” As successive governments since 11 September 2001 have said, it is true that every weak or failed state is a potential threat to Canadian longterm interests. By this logic, we must be involved in some African situations out of sheer self-preservation. But there are more positive reasons for keeping our “African flag” flying. As the world economy shifts toward emerging markets, more Canadian businesses will need to be part of Africa’s potential. Canadians, therefore, need to be better placed than the competition, as the Chinese and Indians rush into areas once considered Canada’s own: mining, mining equipment, telecommunications, information technology, and consulting. Furthermore, as a G8 player and, perhaps more significantly now, a founding member of the G20 and as a major trading nation and a

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global actor, Canada is concerned with global political and economic stability and a return to growth. Here, Africa is part of both the problem and the solution. African issues are important to the U.S. and Europe, and, although they may have different agendas, if we want to influence Washington, London, Paris, or Berlin, we must take their global concerns seriously. Similarly, we know we depend on 53 African Union countries for votes for our 2010 Security Council candidature, and for other un and multilateral positions. We want all the international support and clout we can get for our objectives in security, the rule of law, the environment, and revamping of the global economic and trading structure. To achieve these Canadian goals, we need to be understood and supported by African countries, such as Ghana, Tanzania, Mali, Botswana, and South Africa. Of course, arguing that Africa remains a significant Canadian interest brings challenges and costs. We need some new ideas about how to recreate and re-fashion our presence and our visibility with Africans. That requires a plan – a vision – of where we want to be with Africa in the next ten years. Government people will say we already have that plan, but the truth is that many senior levels of government are not knowledgeable about or particularly comfortable with our established role in Africa or what should be made of it. Top dfait, cida, and Department of National Defence officials have no time and fewer resources to devote to a long-term vision for Canada and Africa. (Perhaps our officials should consider consciously pursuing much closer exchanges with our Canadian universities and private think-tanks to provide the essential measured, in-depth analysis.) When we act within such a vision, we will want to build on our proven strengths and reputation. In diplomacy, this will mean getting out, speaking out, trusting our ministers and heads of mission abroad, and using them to communicate effectively both our objectives and what we are doing to achieve them. It will mean stressing dialogue and international influence rather than blunt confrontation. It will mean sustaining sophisticated, mature personal and government partnerships to elicit support from – and offer support to — African countries on regional and international environmental, health, and trade goals. It will mean using our unique connections in the Commonwealth and the Francophonie with our traditional dexterity, grasp, and influence. In security, we will want to emphasize training and advice. We will want to broaden our work in the context of nato and the un to back up African forces. In confronting humanitarian disasters, we will want to carry on working with like-minded partners within the un and, above all, with Africans.

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In development, we will want to continue to support civil society in working with African professionals, business people, and academics on governance. We should boost our existing programs for building capacity, not least among African trade negotiators, but also with parliamentarians, the judiciary, senior civil servants, the non-state media, and top business people. We ought to push ahead with Canadian support for community-level initiatives on gender, income, education, and health, and on encouraging practical ways for people to pull themselves permanently out of poverty. As well as focusing on specific countries, we will want to emphasize support for development and trade sectors where Canada can make a difference – where we have both expertise and resources. And Canadians and Africans alike will have to recognize the policy reality: that Canada’s resources will remain limited and, thus, must be used wisely. The rewards of balancing today’s challenges with building for the future will be worth the effort for both Canada and Africa. If, indeed, Canada seems now to have “gone” from Africa, it is time we got back into the African world again – as quickly, substantially, and visibly as our own broad interests demand.

The Canada–Africa Relationship and Where It Should Be Headed: An African Perspective kwesi botchwey

In African circles, there is a widely shared perception that Canada’s relations with Africa have been somewhat on the wane in recent years. This perception is rooted as much in sentiment as in fact. The continent’s development issues do not seem to enjoy quite the same enthusiastic and passionate support of Canadian political leadership in the global arena as they once did. Even more important, Canada’s current development assistance budget is not particularly generous compared with other members of the Development Assistance Committee and certainly not in relation to Africa’s overall aid requirements. Notably, in an unmistakable retreat from the spirit of Kananaskis (in 2002), Canada is not meeting its commitment to double aid to Africa. This view must be tempered, of course, by the acknowledgement that the Canadian aid budget is substantial in absolute terms and is well managed by the Canadian International Development Agency (cida), whose professional standing and commitment are well regarded in Africa. Intellectual and professional exchanges remain vigorous and relations between Canadian and African civil society organizations have strengthened significantly. Thanks to what we may call “the weight of tradition,” Canada continues to be helpfully active in peacekeeping work in support of the African Union (in Sudan and Darfur, no less). Last, and an important point, Canadian exports to Africa in 2008 were just marginally lower than exports to the emerging market giants, Brazil and India. However, there has been a lessening of interest in Africa, in part, the result of shifts in the Canadian domestic political landscape and, lately, the global economic and financial crisis. Indeed, there is a noticeable

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general lessening of Canada’s visibility in the global arena. The AfroCanadian relationship appears to be waning just at a time, when, in spite of the continent’s well-known problems, there is a noticeable upturn in its economic performance. Its political and governance conditions are also improving, despite continuing crises in flashpoints, such as Zimbabwe and Darfur, which those intent on finding pretexts for disengagement can readily cite. At the beginning of last year, an independent high-level panel was established by the African Development Bank (AfDB) – and co-chaired, significantly, by former Canadian Prime Minister Paul Martin – to reflect on Africa’s future. Noting the region’s decade-long run of fairly robust growth with improved macroeconomic conditions and a halting of the increase in the number of poor people for the first time in a quarter of a century, the panel felt able to proclaim, “We believe that Africa can transform itself into a stable, integrated and prospering continent of competitive, diversified and growing economies.” Alas, the upturn in the region’s economic performance will be badly affected by the global financial crisis and economic slowdown, with the AfDB’s 2009 African Economic Outlook forecasting a fall in growth from a pre-crisis projection of 5.7 per cent to 2.8 per cent in 2009. Still, a recovery is expected in 2010 with growth expected to resume at about 4.5 per cent. Where should Afro-Canadian relations be heading? What should drive the agenda for the future? Well, first, one must start from a recognition of the important changes that have taken place in the global economic situation, the balance of forces in the global economy in recent years, and their impact on the African market. With the emergence and growing economic power of the new “Southern giants,” especially China, India, and Brazil and their rapidly expanding economic relations with Africa, there is, everywhere – in trade, investment, and in diplomacy – a lot more competition than there was not so long ago when Africa was the preserve of the “traditional donors.” In mining especially, where Canadian private-sector interests are particularly strong, the competition with China and India is unlikely to be slowed by the ringing of alarm bells about Chinese “exploitation” or a lowering of the African “governance bar.” Thus, as John Schram rightly points out in his contribution to this publication, this is hardly the time for a Canadian retreat, even from the standpoint of Canada’s narrow national (commercial) self-interest., to say nothing of the moral case for poverty reduction in the region. Second, and again from the standpoint of Canada’s self-interest, it is important to see relations with Africa in a rather long-term perspective. Based on current trends, Africa’s population is projected to reach more than 1.5 billion by 2030, making it as populous as India or China. This will no doubt bring its own daunting challenges in terms of education,

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health, and rapid growth in urban populations. But it will bring positive benefits as well. There is no reason to imagine that Africa will not continue to benefit from accelerating long-term global growth, from the pace of technology dissemination worldwide, and from the rapid expansion of global investment. Third, and most important from the African point of view, Canada’s Africa policy must be driven by the imperatives of the long-term challenges that the region must address to be able to achieve its potential. The AfDB high-level panel summed these up admirably in seven areas: • •

• •

• • •

reducing widespread and persistent poverty addressing the challenges of extreme economic fragmentation through integration and a boosting of the region’s share of world trade, especially intra-African trade strengthening the integrity and capacity of states enhancing African competitiveness through, among other things, enhanced investment in skills, technology, and infrastructure, particularly aimed at reducing the cost of energy to African enterprises managing the challenges of rapid population growth through higher and sustained levels of employment-generating growth managing the continent’s natural resources meeting the challenges of climate change

Helping the continent meet these challenges has many implications for Canada’s long-term Africa policy. Let me comment briefly on a few such areas: the development assistance budget, private-sector investment and promotion, and capacity building especially in trade negotiations. The Development Assistance Budget There is an urgent need for Canada to scale up its aid budget, at the very least to meet its G8 commitments and better still to reach a proportion of gnp closer to that achieved by leading Development Assistance Committee countries. The speedy disbursement of increased aid targeted at countries with good policy environments and a sensible balance between general budget support and capacity building will be particularly rewarding. Private-Sector Investment and Promotion It is widely recognized that the cost of energy – on average, six times the cost to firms in China – and the high rate of power outages are

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major constraints on the competitiveness of African enterprises. Creative private–public-sector partnerships designed to relieve this constraint through select bilateral programs could, therefore, be particularly productive. Capacity Building, Especially in Trade Negotiations There is little doubt that Africa can benefit greatly from improved capacity to negotiate competently and to fully achieve the potential offered by the international trade regime, even as the region joins other international democratic forces in advocating reforms of the current regime. An enhanced focus on capacity building for trade negotiation in Canada’s economic relations with Africa will be rewarding. In this connection, cida’s support of the work of the International Lawyers and Economists Against Poverty, a largely Canadian-sponsored ngo, is especially commendable and can usefully be expanded, given the organization’s pioneering and increasingly effective role in building African capacity in trade negotiations. It is a pity that Canada appears to be retreating from the African development experience just when conditions appear to be more favourable. But it is a powerful commentary on the underlying gravamen of Afro-Canadian relations that, in spite of this, Canada remains a trusted and natural ally in the perception of African policymakers, intellectuals, and African civil society generally. I had the privilege of managing economic relations with Canada for 13 years as Ghana’s minister of finance and economic planning from the early 1980s to the mid-1990s. Thus, I recall, first hand, the closeness and solidarity that I and my policymaking colleagues and political leaders felt with our Canadian counterparts in those days. It is time to revive that spirit. It sits better with Canada’s “natural” image and is moreover in our supreme mutual interest.

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asia and the middle east

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Canada and the Middle East pa t r i c k m a r t i n

What people heard coming from Ottawa on 4 June this year was the sound of silence, of one hand clapping in response to the groundbreaking speech to the Muslim World delivered by United States (U.S.) President Barack Obama in Cairo that day. In a few short minutes, Mr Obama redirected U.S. foreign policy, issued a challenge to current and potential partners, and announced that the U.S. was back in business as a helpful fixer in the Middle East. Would Canada be back? That was the question on the minds of many as they considered Canadian Middle East policy in the previous five years. Was Canada in a position to issue a statement that Israeli settlement construction in the West Bank must be categorically ended? Would Canada denounce the culture of checkpoints in the Palestinian territories that created an era of humiliation and powerlessness? Will Canada speak out against the demolition of Palestinian homes in Jerusalem? Mr Obama had issued all three declarations but, based on Canada’s current practices, the Canadian answers were “no,” “not likely,” and “are you kidding?” Whereas the U.S. president could extend his hand to both Iran and the Islamic resistance movement, Hamas, such options fly in the face of Canadian policy. Although Canada’s fundamental principles concerning its dealings with the Middle East have not changed for decades, the policy and practices for implementing those principles certainly have changed. And that implementation, with its pro-Israel leaning, could have profound effects on Canada’s ability to manoeuvre as it enters a new era in Middle East diplomacy.

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Historically, Canada was unabashedly pro-Israel from 1947 to the mid 1980s. Lester Pearson served an important role in the 1947 United Nations (un) committee that recommended the partition of Palestine into an Arab state and a Jewish state. Canada was among the first countries to make its surplus military equipment available to the young Israeli state in its early years. At that time, public attitude toward Israel was shaped largely by biblical references and the horrors of the holocaust. The 1956 Suez crisis might have earned Israel criticism in Washington, but the involvement of Canada’s two parent states, Britain and France, on the one side, and its nearest neighbour, the U.S., on the other, led Canada to seek out the classic middle ground in helping to find a peaceful solution. Israel got a free ride from Ottawa. Up to and including the 1967 Six Day War and the 1973 Yom Kippur War, Canadians and their foreign service remained sympathetic to an undersized Israeli state fighting for survival. Israel’s triumphs in those two wars and the desire to implement un resolutions intended to end the conflict altered Canada’s official approach to the Arab–Israeli situation. However, public anger over the 1973 Arab oil embargo and the advent of airline hijackings and other acts of terror carried out by the Palestine Liberation Organization (and by those operating in support of it) discouraged any dramatic shift by Ottawa toward support of the Palestinian cause. It was only after the 1979 peace treaty between Israel and Egypt that Canadian attitudes and those of their foreign policymakers really began to shift. Until that point, Israel’s public relations campaign, waged from Israel and from organizations inside Canada, had succeeded in portraying Israel and Israelis as the victims in the Arab–Israeli conflict as well as more Western, more democratic, more skilled at self-defence, and more law abiding. In effect, Canadians had viewed Israel as another Western country. Following the peace treaty, however, the unexpected growth in Israeli settlements in the occupied Palestinian territories, which flew in the face of Israel’s understanding with Egypt; the seemingly small matter of refusing to relinquish a tiny piece of Sinai, the resort area of Taba, as called for in the treaty; and the 1982 invasion of Lebanon all appeared to Canadians as illegal under international law and not at all the behaviour of a law-abiding Western country. Ironically, it fell to Joe Clark, in the mid-1980s, to chart a new course in the Middle East. He was the man who had once said his Progressive Conservative government would move Canada’s embassy in Israel from Tel Aviv to Jerusalem. But, given a free hand by Prime Minister Brian Mulroney, Mr Clark, as foreign minister, ushered in a

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more balanced approach to the Arab–Israeli conflict, one that would be the norm for two decades. During that time, Canada continued to express its unwavering support for the security of the state of Israel, but made it clear that Palestinian interests also needed to be taken into account. Mr Clark spoke out in favour of a Palestinian “homeland” in the West Bank and Gaza Strip, an official Canadian principle for some years before, but he did so in Jerusalem at a 1986 dinner hosted by Israel’s foreign minister, Yitzhak Shamir, who retorted that the Palestinians already “have a state that belongs to them: ... Jordan.” Canada’s message had been delivered. In the wake of the first gulf war that responded to Iraq’s 1990 invasion of Kuwait, Mr Clark was among the first to say that it was the appropriate time to address the issue of a Palestinian homeland that lay “at the heart of the Middle East conflict.” It helped in shifting Canadian policy practices that the 1980s were years relatively free of terrorism. In fact, the genius of the Palestinians’ first intifada, from 1987 to 1992, in contrast with the earlier terrorism carried out in their name, was to show a relatively unarmed people as victims of heavy-handed Israeli forces. It was the first time that Canadians became truly receptive to the Palestinian narrative: the story of the naqba, the catastrophe of Palestinian losses in what most Canadians had thought of as Israel’s 1948–49 “war of independence.” Even when Hamas began its suicide bombings in the mid-1990s, the Palestinian narrative had taken root and remained part of the public’s consciousness. However, the policy paradigm shifted again in the mid-2000s, back to an overtly pro-Israel approach. It started during the 2003–06 government of Paul Martin. After Mr Martin’s predecessor, Jean Chrétien, had angered the George W. Bush administration by refusing to join the coalition invading Iraq earlier in 2003, it was believed that Canada needed to win favour with Washington. One of the means chosen was to change its voting pattern at the un and not vote against the U.S. in certain un resolutions that criticized Israel. Coming in the wake of the 9/11 attacks in 2001 and the subsequent “war on terror,” as well as the advent in 2000–04 of a far more violent Palestinian intifada and a new wave of terrorist attacks on Israel, the policy shift denoted by those un votes was imperceptible to the public and there was little opposition. The election of the Stephen Harper government in January 2006 took the policy shift further. In the early days of his administration, Mr Harper announced that Canada would curtail its dealings with the Palestinian Authority in the wake of Hamas’s election to the Palestinian

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Legislative Council only a couple of days after Mr Harper’s election. Canada became the first country to take this action. The defining moment in the new Canadian approach to the Arab–Israeli conflict came in July that same year, when Mr Harper declared Canada’s unequivocal support for Israel’s devastating bombing campaign against Hezbollah in Lebanon, a campaign that left a tremendous amount of Lebanese infrastructure in shambles, Canadians and others frantically trying to flee the assault, and more than 1000 Lebanese, mostly civilians, dead. Angry Lebanese said they were shocked that Canada had deserted them. Since then, Canadian policy in the region has continued this trend. At the un, Canada’s votes maintain the new bias toward Israel and, in January, Canada became the first country to pull out of the un’s Durban Review Conference against racism, stating it believed Israel would be an unwarranted target at the April conference. Also in January this year, Canada, alone, refused to support or even to abstain from a motion at the un Human Rights Council that was critical of Israel’s overwhelming military campaign then taking place against Hamas in Gaza. A Canadian spokesperson said the vote against the measure was taken because the resolution did not “clearly recognize” that Hamas rockets triggered the Israeli assault. “First and foremost,” the spokesman said, “Hamas rockets must stop.” Israel’s actions, particularly its bombing and shelling, left about 1300 people in Gaza dead. Only 13 Israelis perished: four from “friendly fire” and three, including the only civilian fatality, from a mortar shell fired on an Israeli military camp near the Gaza border. Regardless of the casus belli of that conflict, it was a military action that shocked many in the region. And a Canadian policy that, seemingly, holds Hamas and Israeli rockets equivalent is a policy that is winning Canada only one friend in the Middle East and losing it the trust of many others. It’s not that Canada’s policies have been or need to be neutral. On the contrary, in the words of Michael Bell, a former Canadian ambassador to Egypt, Jordan, Israel, and the Palestinian territories, Canadian policies have been and should be “fair-minded,” that is, promoting Canadian values of tolerance, democracy, and the rule of law. These days, that is not being said about Canada’s policies. On the current and salient matter of halting Israeli settlement construction in the West Bank, for example, Ottawa is silent. Yet, historically, Canada has described this construction as illegal under international law. The same applies to the hardships placed on Palestinians by the construction of the “separation barrier” and by multiple checkpoints and home demolitions in the occupied territories.

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Senior Palestinian officials and advisers ask what happened to Canada’s characteristic support for the rule of law, as in human rights law and international law. In 2008–09, the only law they saw Canada supporting was law and order, through programs to train Palestinian judges, police, and the national security force (a kind of gendarmes). Although such support is needed and wanted, it seems clear to suspicious Palestinians that Canada has chosen to carry out only the kind of programs that please security-conscious Israel as well. If Canada’s goal is to assist in stabilizing the region, it needs to be trusted by all sides. The Obama era is ushering in new opportunities for peacemaking, and, although the grand design looks as if it will be determined by the big players, there’s much a Canadian government could do to support the peace process: funding research and development; funding and promoting trust-building dialogue projects; being an honest broker in resolving disputes, such as the future status of the old city of Jerusalem; and, perhaps most important, promoting democracy and civil society and facilitating a resolution to the refugee issue. All these activities are consistent with Canadian values, make use of Canadian experience, and fit Canada’s budget. But how, ask Palestinians, can Canada promote democracy and the development of civil society, for example, if it doesn’t respect the decision the people arrive at in a fair and open election? Although Canada developed expertise in the issue of refugees while serving as gavel holder for the Refugee Working Group, a committee created at the 1991 Madrid conference, not everyone is comfortable with the idea of its return to that role. Can Canada climb out of this hole it seems to have dug for itself? Yes, but it will require a concerted action by the government. There are several options Canada could pursue that would make a difference. One would be to support a Palestinian national unity government, should Fatah and Hamas agree on one. Continuing to punish the Palestinian people by punishing Hamas will not be viewed favourably, and Canada’s support for such a unity government would make an impression on Israel. Even many senior, experienced Israelis believe that a final agreement cannot be reached without involving Hamas. Another option would be for Canada to alter its recent voting pattern at the un to take Palestinian interests into greater consideration. A third would be to stop the one-sided cheerleading over Israeli actions, such as the assault on Hamas in Gaza and on Hezbollah in Lebanon – backing the right of self-defence to be sure, but with force that is proportional to the threat. A fourth option would be to return to a policy that places greater emphasis on the rule of law. This would lead Canada to join in criticism of

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the construction of settlements, the blockade of Gaza, and the maintenance of hardships in the West Bank, i.e., excessive checkpoints, the separation barrier, and home demolitions. Some or all of these steps would be noticed and welcomed by Palestinians and by Arab states and would reposition Canadian policy along its former lines. On the horizon, there are some tough issues that will test Canada’s resolve. The first is the “Jewish state” debate. Although the 1947 un resolution called for the partitioning of Palestine into a Jewish and an Arab state, the Israeli state that emerged in 1949 after a year-long war was not entirely Jewish. Today, about 20 per cent of Israel’s 7 million citizens are non-Jews; most of them are Arab, of whom the majority are Muslim. As well, with Israel’s capture of areas that the un intended to be part of the Arab state, many Arab residents fled, thereby creating the refugee problem. Israeli Prime Minister Benjamin Netanyahu has called on his Palestinian interlocutors to recognize Israel as a Jewish state, making it a condition for Israel endorsing a two-state solution to the Israeli– Palestinian conflict. Palestinians have declined to do so, arguing that it might harm the status of the 1.4 million Arab-Israelis and that it slams the door on any Palestinian refugees’ claim to a right to return to the homes that, since 1948, have been in Israel. What will Canada’s position be? The second issue that will soon ripen is that of the settlement blocs that Israel claims must remain part of any final-status agreement with the Palestinian Authority. A large majority of Israeli West Bank settlers live in four settlement blocs: Modiin Illit, Maale Adumim, Beitar Illit, and Gush Etzion. At the time of the Oslo accords in the 1990s, Palestinian negotiators agreed to the idea that large concentrations of Israeli settlers, such as these, would be able to remain part of Israel provided an area of Israeli territory of similar quality and size would be ceded to the Palestinian state in exchange. In the past 15 years, however, these blocs have swollen, as settler communities took advantage of this time to expand their territories by linkages with outlying settlements and outposts. If allowed to expand to the extent these settlement blocs seek, the result will distort the shape, if not the size, of a future Palestinian state, isolating Palestinian communities such as Bethlehem. Where will Canada stand when the debate over how much of the settlements Israel should retain goes public? The third issue that may test Canada’s policies is a worldwide “boycott, divestment, and sanctions” campaign against Israel that is gathering steam. Based on campaigns that proved effective in forcing South

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Africa to abandon its apartheid policies, this campaign seeks to force Israel to comply with international law and international principles of human rights. By this, the organizers mean they want Israeli practices in the occupied territories to change, that settlements must not be constructed on occupied land, that the separation barrier must be removed from nonIsraeli land, that Palestinian homes must not be demolished, and that the Gaza Strip must be allowed reasonable passage for imports and exports as well as human transit. Although initially scoffed at, this nonviolent movement is achieving considerable support, and, although Canada once scoffed at boycotts of South Africa, eventually it joined the efforts to oppose that country’s practices. How will Canada choose to behave if the boycott, divestment, and sanctions campaign attracts a critical mass of Canadian supporters? Finally, although far from certain, there is the possibility that Israel may take unilateral military action against Iran if the Netanyahu administration believes that the Islamic republic is on the verge of completing a nuclear weapon. While the U.S., France, and others have warned Israel against taking such a precipitous course, what position will Canada take? As the Obama era of peacemaking moves forward, these are the kinds of issues Canada must confront. Saddled with a policy that has recently favoured one side over another in the Arab–Israeli conflict, Ottawa may find its room to manoeuvre limited and its opportunities to play meaningful and rewarding roles few and far between.

Canada and Afghanistan: Regaining the Muscle-Memory of Leadership arif lalani* “We like to talk about Canada’s role in the world. Well, we have a meaningful one in Afghanistan.” (Manley 2008)

On 7 October 2001, Canada went to war for the first time in 50 years. Few noticed. On that day, United States (U.S.) and British air forces launched the campaign against the Taliban in Afghanistan, with the logistical support of German, French, Australian, and Canadian assets. Almost 10 years later, few Canadians will forget the sacrifice and contribution that Canada has made. The Afghanistan mission is the most comprehensive investment of Canadian resources since the Korean War. Canada has lost more soldiers as a proportion of its deployed forces than any of the 40 or so other countries involved: 125 soldiers and 1 diplomat have died in the line of duty. Afghanistan is Canada’s largest recipient of development and reconstruction assistance: over cad 1.9 billion between 2001 and 2011. The cost of the military deployment will be over cad 10 billion, and the civilian component of the embassy is Canada’s fifth largest in the world. But Canadians, allies, and even Afghans continue to ask: Why has Canada invested so much to fight a war in a distant land that has a culture that few of them understand? What difference has Canada made? What does it mean for Canada in the region and for its broader international interests? These are fair questions to which I offer a practitioner’s perspective. Many have said plenty about all that has not been achieved. Without denying their case, I wish to focus on the Canadian contribution, its impact, and the lessons for Canada. * The views expressed in this paper are the author’s alone and do not necessarily represent those of the Government of Canada.

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wh y ca n a da w e n t Much has been made of Canada’s motives in entering Afghanistan and the pressures that might have been placed on successive governments by foreign friends to deepen our involvement and venture to more dangerous parts of Afghanistan. The accounts of how Canada went from logistical support in 2001 to holding some of the most dangerous territory in Afghanistan – Kandahar – differ depending on which observer is recounting the story. I have followed the Afghan file for Canada since 9/11, when I was stationed in Washington and responsible for what was, until then, a small humanitarian file and later as a policymaker in Ottawa. From my vantage point, Canada’s growing involvement in Afghanistan had very little to do with balancing participation between Iraq and Afghanistan. For starters, Canada decided, decisively, to contribute to the Afghanistan mission in 2001, two years before any discussion of an invasion of Iraq took place. Canada’s decisions to move from Kandahar (its initial deployment in 2002), to Kabul, and then back to Kandahar were based, I would argue, on a mix of bureaucratic, military, political, and national security interests. The same is likely true for every other Canadian peacekeeping mission or military deployment. The details will be debated for some time. However, it is worth reminding ourselves of the broader implications of the wide coalition of countries that went to Afghanistan. The events of 9/11 confirmed that we can no longer continue to enjoy peace and relative prosperity in the West without regard for development and governance in places like Afghanistan. It was a massive failure of governance that created the safe haven for extremists who orchestrated an attack against North America; that denied Afghans virtually all aspects of dignified human life; and that isolated its people not just from the West but also from Islam during the period of Taliban rule. The threat from the Taliban in Afghanistan was tragically felt at home, the evidence against the Taliban in Afghanistan was clear, and international consensus was strong.

th e c a n a d i a n c o n t r i b u t i o n The Canadian contribution was swift, significant, and consistent with its multilateralist tradition. Canada dispatched air and sea units to support the air campaign of the U.S. and the United Kingdom, as part of the initial effort to oust the Taliban; it later confirmed that its elite Joint Task Force Two special forces had also operated with allied forces since the early days of the campaign.

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In successive years, Canada remained one of the largest military contributors to the Afghan effort, ranking consistently as the third or fourth largest troop contributor in Afghanistan. From 2002 to 2005, Canadian Forces personnel served in Afghanistan, first in Kandahar and then in Kabul, providing security for the capital. Major-General Leslie was deputy commander of the International Security Assistance Force (isaf) and, from February to August 2004, Canadian General Rick Hillier was the isaf’s commander in Kabul (at a time when Canada was the largest contributor to the isaf mission). In addition, General Hillier deployed a strategic advisory team, composed of some of the brightest officers in the corps, to assist Afghan ministries with generic strategic planning at a time when the size and speed of the Canadian civilian component was not on the same “war-footing.” General Hillier’s leadership and charisma not only won praise from military leaders, but also strengthened Canada’s profile and that of the military contribution. In 2005, Canada chose to lead a provincial reconstruction team (prt) in Kandahar City. For nearly two years, Canada held some of the toughest “real estate” anywhere in the world, virtually on its own. In the east, U.S. and other forces held 11 provinces with 20 000 troops. Next door, to the west in Helmand, close to 7000 British troops held the ground. In Kandahar, 2500 soldiers and eventually 100 civilians (from the Department of Foreign Affairs and International Trade, the Canadian International Development Agency [cida], the Royal Canadian Mounted Police, Corrections Canada, and other government agencies) struggled to strengthen Afghan governance and implement development projects under extremely dangerous circumstances. The annual budget of cida’s development program grew from cad 10 million before 2001 to over cad 100 million by 2006. The total commitment from 2001 to 2011 will be close to cad 2 billion, keeping Canada among the top three donors to Afghanistan. Contrary to popular reporting, cida’s management of the development program has been a model for others, with one of the best disbursement rates of any national development agency operating in Afghanistan. On the diplomatic side, the first Canadian embassy in Kabul opened in September 2003. Unlike most of our Western allies, Canada started from scratch. Its first resident ambassador, Christopher Alexander, opened up shop in a make-shift house cum chancery in 2003, with some officers and a team of Canadian military personnel providing security. Successive rotations saw the embassy contingent strengthened. When I was there in 2007, the civilian component was the fifth largest of all Canadian embassies and included over 50 civilians in Kandahar at the prt and with the battle group.

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c a n a d a’ s i m p a c t ? Canada has been among the largest donors in terms of local and regional security, education, and basic development, and it has been instrumental in determining the direction of efforts in these areas. Over the past two years, there was a concerted effort – coordinated in Ottawa and driven and implemented on the ground through the Canadian embassy and military forces – to create influence commensurate with the contribution. Military Training Canada was among the first to adopt the concept of mentoring and training the Afghan army as a priority. The so-called omlts (operational mentor and liaison teams) have been responsible for training five brigades in Kandahar. Canadian financial assistance allowed further training of 50 000 members of the Afghan National Army. Canada also equipped the army with modern field weapons and uniforms and other equipment. Police Reform Canada is a leading contributor to the Law and Order Trust Fund, which administers the training and salaries of Afghan police. Its support – over cad 80 million – helps ensure that police officers are paid regularly, building the morale of the police force and boosting officer retention. Education Canada is the single largest bilateral donor to the Afghanistan’s education ministry, investing more than cad 90 million in the country’s education sector; of that, cad 38 million is directed to Kandahar. In Kandahar, over 50 new schools are being built to educate (and therefore empower) tens of thousands of children, including girls. Economic Development Canada’s contribution to the Micro-Finance Support Facility, which provides small loans, mostly to women, was almost single-handed. Canada was the single largest contributor, providing approximately $282 million in small loans to more than 440 000 Afghans, two-thirds of them women.

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Regional Security Canada was the first country to provide public and private support for the Afghan–Pakistani reconciliation project, which resulted from the meeting, or peace loya jirga, between presidents Karzai and Musharraf in 2007. Through quiet diplomacy in Kabul, Islamabad, and third countries, Canadian diplomats brought together both sides in Dubai to discuss concrete actions that would improve security and the flow of legitimate trade on the border. The so-called “Dubai process,” was readily supported by the G8 foreign ministers at their 2007 meeting in Potsdam. Long before “Af-Pak” was the new label for the conflict, Canada was (perhaps too) quietly working on laying the foundations for a regional approach. Diplomatic Leadership These efforts to secure regional stability were supported, and in some cases made possible, by direct Canadian diplomacy in Kabul, Kandahar, and elsewhere. Canadian ambassadors, military leaders, and their teams cultivated key relationships in Afghanistan. Because of the size of Canada’s development and defence contribution, it was not uncommon for me to see President Karzai on a regular basis, often for long discussions on a range of security and other issues. The same was true for key ministers, such as those in charge of defence, education, interior, energy, and national security. Canadian diplomats led the way in forging common positions on regional security, police reform, human rights, and detainee treatment. All the while, Canada remained one of the strongest institutional supporters of the un mission. The special representative of the secretarygeneral, Kai Eide, would consult regularly, at length, and in confidence, with the Canadian ambassador. Far from our traditional and valuable role of sitting at the multilateral table, Canada exercised senior level and influential bilateral diplomacy in Afghanistan. Much of it, however, necessarily out of the public’s eye. The results of that coordinated effort are very visible on the ground. The Afghan economy has been growing by about 10 per cent annually for the past five years; per-capita incomes have doubled. More than five million refugees have returned to Afghanistan since 2002. Some six million children, a third of them girls, are in school. Because of its truly leading contribution to these issues, Canada can rightly claim a significant share of the credit for the success. Canada also provided leadership in a different way – by introducing and championing the notion of policy coherence through its

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“3D” approach. Other countries have adopted similar approaches, which involve the coordination of defence, development, and diplomatic resources toward a shared objective. The Netherlands champions the 3D approach as its own, the British pursue a “joined-up” approach, and even the U.S., through President Obama’s review, have acknowledged the balance required between civilian and military efforts to wage a successful counter-insurgency campaign in Afghanistan. Quite apart from the domestic importance of 3D, it has had a real impact on the way prts and the relationship between un and nato operations functioned. Canadians applied the 3D logic to the international operation, successfully advocating a more coordinated international effort following the 3D logic. Policy Leadership Perhaps the greatest and least acknowledged leadership Canada has demonstrated apart from its military and development contribution is in terms of strategic policy. In June 2008, before the headlines reporting growing violence became so consistently alarming, the Canadian government conducted its own review of the mission and presented the first quarterly report to Parliament. Informed by those of us on the ground, it was sober, direct, and public. It said that security in Afghanistan had deteriorated and would likely grow worse. The report laid out clear priorities to address the worsening situation: building up Afghan security forces; strengthening Afghan governance institutions, addressing Af-Pak security issues; and supporting Afghan-led political reconciliation. These priorities were based on a hard-headed assessment – that the international effort should focus on those areas of comparative advantage to help transform Afghanistan from a failed to a viable state. Long-term development could then be lead by Afghans with international assistance. These priorities, established by Canada, are now being echoed by a number of other international actors in Afghanistan. If President Obama’s policy review of Afghanistan sounds familiar to Canadians, it should. The priorities and even the language (e.g., benchmarking success), can be found in the 2008 report to Parliament (Canada 2008). So, although it is fair for Canadians and others to ask whether Canada has had any impact in Afghanistan and whether the sacrifice and investment have been worth it, the evidence is clear. Canada can rightly claim responsibility, along with Afghanistan and other leaders, for many of the key successes in Afghanistan to date. It is also reasonable to expect that these achievements might be overshadowed by what remains to be done. The news out of Afghanistan

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continues to be disturbing. In 2008–09, the Taliban launched more attacks, more boldly, and killed more civilians than at any time since 2001. However, those of us on the ground also saw more civilians at work, more children (particularly girls) going to school, and more development taking place than at any time in Afghanistan’s history. Keeping the news in perspective is important. Setbacks threaten progress but they don’t automatically negate it.

lessons from afghanistan? Contrary to what many pundits have claimed, Canada’s contribution has been consequential for Afghans, for our international partners, and for Canada. But if Canadians seemed not to notice, it is perhaps because almost a decade of minority governments has seen the public policy discourse, as former Prime Minister Joe Clark (2009) put it, “disproportionately about grievances, scandals, details and deficits.” Our friends in Afghanistan and around the globe saw a different Canada – one putting its men and women and its considerable financial resources behind its principles. It was an unfamiliar role for them to observe – Canada regaining the muscle memory of leadership. Just as Canada came out of the Second World War a profoundly changed nation, I believe Canada’s experience in Afghanistan will transform both countries. Canada will have demonstrated unprecedented leadership and learned a few lessons about its exercise. First, leadership is not easy. The loss of life, the heightened security threat, sometimes unpopular or strong diplomacy, and the cost of deploying personnel, both military and civilian, is a heavy burden to bear. In the capital, managing such a huge deployment and expenditure is difficult; the 3Ds often functioned as equal and sometimes competing players. Getting from 3D to what I call, “1C” – a single, coherent strategy – required political and senior official attention. Yet, successive Canadian governments, in the face of the media and public scrutiny, have stayed the course on Afghanistan and remained frank on the objectives and costs. Although these may not have been communicated well all the time, they have been clear to those of us implementing the policy. Canadians, to their credit, have proved themselves to be remarkably resilient in their support. Second, leadership in today’s interconnected world cannot be easily avoided. Prime Minister Harper put it best in a 2009 speech to Canadians in Kandahar: “As part of the family of civilized nations, we have a national obligation to do our part to contribute to our peace and security” (Harper 2009). This is perhaps the best lesson of Afghanistan. Canada went there not for others or only on moral grounds. Canada

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had and will continue to have an interest and a responsibility to provide for its own security. Canadian security is linked, more than ever, to the development and stability of places like Afghanistan, regions like the broader Middle East, and elsewhere. Finally, Canada’s capacity demands that it be a leader among nations. Some may argue that Canada’s investment in other parts of the world ought to be modest, “doing our share” as a helpful fixer. But what exactly is the share that a country – one of the richest in the world, a member of the nato alliance, and one with an effective domestic pluralistic model of governance – such as Canada, should accept? Canadians and others will ask whether we were right to invest so heavily in Afghanistan and why. But the fact is we did and we ended up as leaders. Others will rightly ask whether Canada will continue this leadership elsewhere, as required, in its own interests. Canada has proven it has the capabilities and standing that few others have around the world. In the words of the Manley panel, “These are times for capable countries to take a stand” (Manley 2008).

ac k n ow l e d g e m e n t The author would like to thank Gordon C. Hawkins, PhD candidate at the Munk Centre for International Studies, University of Toronto, for his invaluable assistance.

references Canada, Government of. 2008. Canada’s engagement in Afghanistan: setting a course to 2011. Ottawa: Government of Canada. Available at: . Last accessed 14 Oct. 2009. Clark, Joe. 2009. Remarks by the Right Honourable Joe Clark. Ottawa: Rideau Institute. Available at: . Last accessed 13 Sept. 2009. Harper, Stephen. 2009. Prime minister’s address in Kandahar. Ottawa: Office of the Prime Minister. Available at: . Last accessed 13 Sept. 2009. Manley, John. 2008. Independent panel on Canada’s future role in Afghanistan. Ottawa: Minister of Public Works and Government Services. Cat. no. FR5-20/ 1-2008. Available at: . Last accessed 13 Sept. 2009.

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Europe’s Perception of Canada, or Lack Thereof marie bernard-meunier

Common history and shared values are not enough to put and keep Canada on the European radar screen. To the question, “How do Europeans see Canada?” the short answer is, “They don’t see it.” They know that the country is big, that the winters are cold, and that Canadians are good at ice hockey and, thanks to the likes of Leonard Cohen and Céline Dion, quite good at singing, but they do not get passionate over anything Canadian, except the seal hunt. When we say Europe, we mean, in most instances, the European Union (eu) as it was when Canada made its first attempt at building a relationship with it more than 30 years ago and as it is now, i.e., much larger, with member countries from central and eastern Europe, with Germany at the centre, geographically and otherwise, and with the United Kingdom still nurturing its ambivalence toward the very idea of European integration. Trudeau’s “third option” was aimed at reducing Canada’s dependence on the United States (U.S.) by developing stronger economic ties with other partners. In 1976, a formal agreement with Europe was successfully negotiated and signed, but it never produced the expected results. Since then, many more attempts have been made to achieve better and closer cooperation with Europe, always at Canada’s initiative, mostly with the same disappointing results. Why is that? Europe was never really interested. It was too busy dealing with itself. Its own integration and its own successive waves of enlargement consumed most, if not all, of its energy. Besides, Canada was too small a market, too complicated a country (with its federal structure), and

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too much in the shadow of the U.S., which meant both hard to see and hardly worth talking to. Why hear from Canada things that are said with more authority in Washington? Europeans never believed, either, that Canada’s interest in a stronger relationship with Europe was real. Members of the European Parliament often talked rather disparagingly of Canada’s narrow eu agenda, dominated by trade access issues and focused on the infamous 3 Fs (fish, fur, and forest).When asked why they would sign a trade agreement with Mexico and refuse to negotiate one with Canada, leading members of the European Commission replied that Mexico wanted it so much more. It may well have been true. There was always, at best, an ambivalence within the trade policy community in Ottawa over the idea of a trade agreement with Europe. The basic view was that time not spent on getting the Canada–U.S. relationship right was time wasted. However, the argument put forward was always that bilateral trade agreements weakened the multilateral trading system – a concern broadly shared by the Europeans and often used by both sides, with the same amount of bad faith, to delay forever the opening of negotiations. Part of Canada’s problem was also that, unlike Mexico, it had no champion within the eu. In fact, after the “fish war,” Mexico’s champion, Spain, was Canada’s staunchest opponent in the eu. As a halfhearted European itself, the United Kingdom could hardly play the role of champion for Canada, and France saw no reason to do so either. (The Quebec issue still dominated and skewed the France–Canada bilateral relationship.) Germany did not volunteer, nor was it asked, to be Canada’s champion. There was no organized lobby for Canada in Europe, nor any lobby for Europe in Canada. Membership in the G7 did not help. Imposed as it was by the U.S., Canada’s presence in that club was only reluctantly accepted by the Europeans. In the late 1990s, Canada became both more visible and more popular in Europe. The reunification of Germany and open access to central and Eastern Europe created opportunities that Canadian companies were quick to recognize. Major new investments were made by such companies as Bombardier, Alcan, Nortel, cae, Power Corporation, and Magna. Some of them took advantage of the significant financial incentives to invest in former East Germany. Others, such as McCain, invested heavily in Europe to the point of doing 75 per cent of their business in that region. Not only did Canada become more visible, but the image of the country also changed for the better. High technology was now part of the Canadian trademark. In 1999, European and Canadian business representatives acknowledged the importance of these developments and chose to create a permanent forum for the

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promotion of closer economic ties between Europe and Canada – the eu–Canada Roundtable. The role Canadian artists have played in raising Canada’s profile in Europe should never be overlooked or underestimated. Particularly in countries like the United Kingdom, France, Germany, Belgium, and The Netherlands, Canadian writers, playwrights, musicians, film makers, dance companies, and visual artists have acquired a great reputation for being creative, audacious, and excellent at using new technologies and for leading the way with such cutting-edge productions as those of Robert Lepage or Le Cirque du Soleil – light-years away from moose, mountains, and mounties. Canada became more interesting in other respects as well. An appetite for made-in-Canada solutions began to develop. Canada’s stellar performance in eliminating its budget deficits made a strong impression on European governments wrestling with similar problems. Canadian practices in the selection and integration of its immigrants generated considerable interest as did Canada’s education systems when, in comparative studies by the Organisation for Economic Co-operation and Development, Canadian students kept ranking behind Finland but ahead of everyone else in Europe. In foreign policy, Canada moved out of the shadow of the U.S. The landmines treaty, the creation of the International Criminal Court, and the “responsibility to protect” commission all gave Canada opportunities to shine in the eyes of Europeans. They welcomed Canada’s longawaited decision to ratify the Kyoto Protocol and were amazed when Canada decided not take part in the war in Iraq. A surprise indeed to most Europeans, and a pleasant one for France and Germany, who had also decided to stay out of Iraq. However, that period of relative euphoria in Canada–eu relations gave way to a one of doubt. It was argued that the time for a deal with Europe had passed. Immigrants to Canada now came mostly from Asia, and they had no particular connection to Europe. The centre of prosperity within Canada was moving west, further and further away from Europe. Emerging economies had become the focus of attention for Canadians as well as for Europeans. Furthermore, the election of a Conservative government in Ottawa did little to endear Canada to the Europeans. They were quick to interpret the close relationship with George W. Bush, the critical if not negative attitude towards the un, the less-balanced views on the Middle East, and total disregard for commitments made under the Kyoto Protocol as a return of Canada to its natural position of alignment with the U.S. Yet, the growing apart that many feared or expected did not materialize. On the contrary, fighting side by side in Afghanistan kept the North

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Atlantic Treaty Organization (nato) family together and the stalemate in the Doha round of trade talks led both Europe and Canada to consider alternatives. If trade liberalization could not be achieved multilaterally, perhaps it could be achieved bilaterally. If trade negotiations with developing countries, including the fast-developing ones, proved too difficult, the other option was to look at partners in the developed world and explore with them the means of achieving more sustained growth. New issues, such as secure energy supplies and access to much soughtafter natural resources, gave Europeans a new agenda with Canada. After all, wasn’t Canada just like Russia, but without the problems! Other issues, such as environmental and security challenges in the Arctic, high unemployment rates in Europe, and labour shortages in Canada, suggested that the potential for a mutually beneficial partnership was there. The assumption was that Canada–eu trade and investment could be increased substantially and bring benefits estimated at cad 13 billion a year for Canada and cad 18 billion a year for Europe. Under those circumstances, the idea of a comprehensive trade and investment agreement between Canada and the eu was bound to resurrected, and it was – this time by Quebec Premier Jean Charest. His province is home to many of the large corporations investing in Europe, and Quebec has stronger cultural links with Europe than any other part of Canada. Charest caught the attention of European leaders by addressing head on the issue that had plagued all earlier attempts at negotiating an agreement. Europeans had been reluctant to negotiate with Ottawa only to discover that provinces could jeopardize implementation of an agreement. Charest was able to enlist the support of all Canadian provinces, except Newfoundland and Labrador, and the ban on seal products enacted by the European Parliament in May will not help bring it on board. This time, Canada found effective supporters within the eu. No effort was spared to get the support of Germany and both the prime minister of Canada and the premier of Quebec were able to take advantage of their close relations with French President Sarkozy. A first major step was taken at the Canada–eu summit in Berlin in 2007, and confirmation came at the Quebec summit in 2008. Actual negotiations began on 6 May 2009 are expected to be completed by 2011. The agreement is meant to remove all remaining tariff and non-tariff barriers, although no one expects that will happen with respect to all agricultural products. More important perhaps, for both trade and investment, the agreement will tackle regulatory issues. Full regulatory harmonization does not exist either within Canada or within the eu, but bilateral negotiations will hopefully move the issue forward in both jurisdictions.

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Although the economic crisis could have derailed the process again, it had the opposite effect. European countries and Canada were anxious to show that protectionist tendencies must be and can be resisted, and a specific trade liberalization objective helps drive that point home. Both partners are equally anxious to mitigate the severe decline in their exports to the U.S. The crisis also gave Europeans a new opportunity to look at made-in-Canada solutions. The remarkable performance of Canadian banks throughout the worst of the financial crisis led Europeans to take a fresh look at regulatory schemes in Canada. It is no coincidence that, at the G20 meeting in London, Canada was asked to chair the working group on financial regulation. What does the future hold? When Europeans do business with Canada they never lose sight of the U.S. – nor does Canada when it does business with Europe. At the end of the day, all is judged according to its likely impact on the most significant bilateral relationship, that of Canada with the U.S. The future of Canada–eu cooperation, therefore, can only be discussed in the broader context of the future of the transatlantic relationship. The end of the Cold War led to an obvious weakening of that relationship. Suddenly, European countries felt less dependent on the U.S. for their security, and some were even keen to see Europe develop its own defence and security policy. That changed when several countries from the former Soviet bloc joined the eu. A strong transatlantic link was still vital to them; however, in Washington by then, Europe had ceased to be the centre of attention it had been for decades. The “continental drift” picked up speed under George W. Bush, but it would be rather unfair to make him bear all of the responsibility. Europe’s inability to “get its act together” did not help either. But before anyone could decide whether we were all witnessing the emergence of a “hyperpower” or a multipolar world, history moved on. We may now be at the dawn of a new era in transatlantic relations. With the election of Obama, progress on that front, as on so many other fronts, seems possible. The change in style and substance is huge and ideological differences between Europe and the U.S. are no longer what they used to be. Neoliberalism has been in fashion long enough to move Europe to the right, and the current economic crisis has moved the U.S. to the left. Nevertheless, the road ahead will be difficult. The challenges to be faced are many, and concerted action will be as important as it will be hard to achieve. How much American leadership will be needed? How much of it will be accepted? Can Europeans hope for a more “balanced” transatlantic relationship if they remain disunited and if they are not prepared to increase their financial and military contributions?

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Will Obama be able to prove quickly enough that his kind of leadership can make a difference? If there is to be a new era in transatlantic relations, what role, if any, would Europeans expect Canada to play? In their search for a partnership with the U.S. in the management of world crises, Europeans are unlikely to turn to Canada, unless the country can clearly demonstrate its added value. Taken together or taken separately, Europe and the U.S. do not need Canada nearly as much as Canada needs them. That being said, Europeans do recognize that Canada has earned the right to speak on a number of issues such as nato, the un, Afghanistan, Cuba, and the Arctic. Canada’s presence in the G8 and in the G20 will ensure that it has a forum in which to express its views and have them heard by European leaders. Beyond that, it is for Canada to decide how much time and effort it is prepared to invest in the strengthening of its bilateral relations with key European partners. On the economic front, Europeans are also looking for a stronger partnership with the U.S. Like the agreement with Mexico some years ago, the Canada–eu trade and investment agreement may be seen as a stepping stone toward a North American–eu agreement. For Canada, this would probably be an ideal scenario, because it would provide a broader and more comfortable framework in which to manage its very uneven trade relationship with the U.S. As for Canada’s ability to contribute to the strengthening of the U.S.– relationship, one has to be both very modest and very cautious. Canada is, in many ways, closer to Europe than the U.S. will ever be and closer to the U.S. than Europe can ever hope to be, but that does not mean that there is a bridging role that Canada, and Canada alone, can play. The recent experience of Tony Blair is there to show that selfappointed go-betweens run the risk of drowning somewhere in the middle of the Atlantic. On specific issues, Canada may well be able to identify points of convergence between Europe and the U.S., but big players across the Atlantic hardly need a Canadian interpreter. For Canada, the best means of ensuring that Europe takes notice of its existence is to stay out of the shadow of the U.S., find things to say that have not already been said by someone else, and learn how to manage assets and resources far more strategically.

Canada and France: Past, Present, and Future c l au d e l av e r d u r e

If Canadians wish to see their country as an influential player on the world stage and want it to have a unique role, which might be much more important than the one its relatively small population would justify, Canada definitely needs the understanding and support of a number of powerful friends and allies. A few undisputable names come to mind: the United States (U.S.), our super-powerful neighbour and very close friend; France and the United Kingdom, our historical relatives and allies; and countries that share our vision and values and with whom we have developed close ties through history and membership in various international organizations and summits, i.e., the United Nations (un), more specifically its Security Council; the North Atlantic Treaty Organization (nato); the G8; the Francophonie; the Commonwealth; the Organization of American States; the Association of Southeast Asian Nations, etc. There is no doubt that our relationship with France has become one of our most indispensible and profitable ones and that it will always be unique, complex, and challenging. That said, one should never conclude that relations with the U.S., the United Kingdom, Japan, Russia, and Mexico, to name but a few, are much simpler and less challenging. To ensure the continuity and development of a strong relationship with France, key players on both sides of the Atlantic have to refer, first, to some aspects of the history and recent past of that relationship, as well as to the personality of the two peoples. As is often the case, the role of the leaders is a major consideration, and this may be even more important in the relationship between Canada and France.

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Wherever you are in Canada and whoever you talk to, the words “France” and “French” provoke a variety of strong emotions. “Canada” and “Canadians” (including “Québec” and “Québécois”) also elicit various reactions in France. In any major bilateral relation, images, prejudices, complexes, and incidents can explain a number of phenomena and develop into positive or negative attitudes. Again, one is inclined to conclude that the Canada–France relation is a “special” example of a complex situation. In 2004 and 2008, Canada and France commemorated the 400th anniversary of the French presence in Canada, particularly that of Champlain, in Acadia and the city of Québec. La Nouvelle-France had become a reality; so did the beginning of a Canada–France relationship. The recent celebrations gave rise to various emotions in and outside Quebec, and simple references to the Plains of Abraham seemed, at times, to start new battles! Paul McCartney nearly became a casualty! The fact that Canadian historians tend to interpret our history in different ways has always been at the heart of our “complexity” in the eyes of our French friends. Indeed, Canada is part of the colonial history of France; complexes of inferiority, superiority, guilt, etc., have become part of our fibre. When our country was still in its infancy, France was a major power playing in the big leagues. The remarkable role of our military in the First and Second World Wars, as well as in the liberation of France in 1918 and in 1944 – one has only to mention Vimy, Dieppe, or Juno Beach – have become a source of pride and assertiveness for Canadians. But these same Canadians, both French-speaking and Englishspeaking, have not been able to get rid of their complexes toward the French (we were the colonized) nor put aside their feelings when dealing with a great power. While we were developing our own international personality and showing the world that we intended to promote our ways and our values, we still found it difficult to be heard as a mid-size power. Even when we wanted to demonstrate our generosity in Africa, we discovered that the ex-colonial powers, such as France, would not welcome us with open arms, mainly because of “trade considerations.” Africa was reserved territory. In such circumstances, a bilateral relation could not easily become a balanced relation! This was also the time in our relationship when President De Gaulle chose to intervene in our domestic affairs and shock a large percentage of Canadians, especially veterans. This, of course, was much more than a simple incident. Our own leaders, including many in and from Quebec, worked hard at managing the situation and turning the page. Others, on both sides of the Atlantic, wanted this to become the beginning of

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something new that would eventually include an independent Quebec. One thing is certain: the famous Ottawa–Quebec–Paris triangle was born, and trust tended to become something of the past for many. Forty years later, the word “France” is, in the minds of many Canadians, associated with Quebec separation. Numerous French speeches and statements have tried to correct this image, but a number of incidents over the years have achieved the opposite. Nevertheless, in the eyes of a large majority of Canadian and French people, the “cool war” which may have lasted 10–20 years, has ended. In fact, the last 30 years have seen a major development in the Canada–France relationship, one might even say “a major change for the better.” Realism has been the key word and, as is often the case in international relations, leaders have played a key role. Prime Ministers Mulroney and Chrétien managed to turn things around, with the complicity, we should never forget, of Presidents Mitterrand and Chirac. While recognizing the complexity of the relation, Canadian and French leaders agreed that a triangle would always exist, and some would say should exist, but there would be no interference in the affairs of a best friend. Results of referendums would be for Québécois to decide. It was recognized that France had major interests in Canada, from coast to coast, and that Canada was becoming a major political and economic partner. Two French-speaking Québécois prime ministers of Canada, Mulroney and Chrétien, were determined to “explain” their country and its complexities to their counterparts. This also became a time for developing a partnership between equals: superiority and inferiority complexes were slowly, but definitely, put aside. We became real allies, major economic and trade partners, and agreed to cooperate on the world stage. France concluded that it did not have to make a choice between Canada and Quebec, and Ottawa recognized that France could have a special relationship with Quebec. Statements and speeches became an art: both friends have become better and better at them. Although this does not mean that, from time to time, a missionary of the sovereignty movement or a reporter will not try to stir the pot! Both parties agree that a sound and dynamic relation will produce important results for both people. There is much to learn from each other in the management of contemporary challenges: the modernization of public administration and finances, the banking system, economic development, justice, health, immigration, integration, etc. While realizing that we have different political cultures, we have become keen on the development of comparative studies. When facing the necessity of major reforms in numerous areas, many French politicians, including President Sarkozy, business people, and experts have come to the

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conclusion that Canada is a great example of know-how and success. Canada is perceived as a results-oriented North American state that practises a European-type social justice system. In Paris, the Canadian statistics (i.e., growth, budgetary surplus, unemployment, etc.) for the decade that followed the drastic financial review of 1993–95, became the envy of those who were trying to turn things around in France. At the same time, Canadian immigration and justice systems are seen as original and productive. As one French minister once said, “Canada is a treasure box full of solutions.” Canada and France have become major economic partners as well. Investments on both sides of the Atlantic have seen remarkable development: France is the fourth major investor in Canada with a stock of cad 18.5 billion. Both countries contribute significantly to the creation of jobs for their partners. Some 400 French companies operating in Canada employ more than 100 000 Canadians. Canada sees France as a preferred partner for penetrating markets of the European Union; France sees Canada as a preferred road into the area covered by the North American Free Trade Agreement. Over time, players have learned to trust each other, to understand the two systems, and to rid themselves of most prejudices. Bilateral trade in 2008 was over cad 9 billion. On the world stage, partnership has also become the key word. While not evolving in the same leagues to start with, the two countries have become close allies, mainly because of the vision and values they share. At the un, in nato, at the G8, in La Francophonie, we work together and, most often, we succeed together. On a number of issues and over the years, Canada has made numerous original and important proposals; in most cases (if not all), French support – heavy and powerful – has been key to our success. Our troops have worked closely together on many fronts. We have also both refused to take part in initiatives we disagreed with. We should note, as well, that our relation has been decentralized. All Canadian provinces and territories have become important players; up to seven premiers visited Paris in 2006–07 alone. On the French side, regions, departments, and municipalities have established productive links with Canadian counterparts. Exchanges between the two societies increase substantially each year. Every year, more than 10 000 young people benefit from the mobility agreement signed in 2003. As mentioned, leaders have played a major role in the elimination of prejudices and complexes and in the search for better understanding. Success is to be shared by many. The vision comes from the top: governors general, prime ministers, presidents, ministers, premiers, mayors, etc. Meetings and telephone conversations are frequent. Visits are professionally scheduled and structured. Opportunities for meetings

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at summits and international conferences are well planned. Parliamentary associations and groups play a significant role. Consultations between senior officials are very much on the increase and are proving to be most productive. Cooperation among the military, police, and intelligence services has become routine. Hundreds of university agreements and intense cooperation between research centres contribute fully to the excellence of the relationship. Culture will always be a major element of the relation between the two countries and their people. All in all, the two societies tend to see each other’s interests as complementary, and the common goal is to do more and more, better and better. In 2003, President Chirac said, “Notre relation n’a jamais été meilleure.” If it has never been better, the goal is to always put the bar higher. What is the future of the Canada–France relationship? Again, one has to recognize that it is both similar to other bilateral relations and unique because of the history and the character of the two peoples. It will always be a profitable relationship as long as our vision and values coincide, as long as new priorities do not replace sound and traditional ones, as long as our leaders have a positive attitude toward each other. Will an economic crisis put our major investments at risk and lead to bankruptcy or cuts in jobs that would seriously affect the reputation of our business leaders and the trust between our two peoples? Will the multilateral system undergo some important transformation that would make our partnership at the un (changes to the Security Council) or the G8 (G20) less strategic? Will there be more instances in which we would end up on opposite sides? Could the uniqueness of our relationship make it more vulnerable? Is the relationship, as it exists today, including the famous triangle, strong enough to survive a lack of real chemistry between future leaders, or the sovereignty of Quebec making headlines again, or statements on the seal hunt or Saint-Pierre-et-Miquelon? Most would agree that when national interests are important and leaders are realistic and refuse to entertain old prejudices, the positive developments of the last 30 years will assure both countries of a strong partnership for years to come. Any Canadian or French government “transition book” should confirm that France is a modern high-tech country that produces much more than wine, cheese, and perfume. It is a major investor abroad, including in Canada, the chosen land for huge foreign investments, a country that has fewer strike days than Canada, a country that is more productive than Canada while working 35 hours a week in a number of sectors! Canada, for its part, has a remarkable education system, produces some of the best university graduates in the world, and has

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developed a unique multicultural society that lives in peace and offers an opportunity to everyone. Canada has a European history and a North American way of doing things. Canada is extremely rich in natural resources but is, as well, a very industrialized and innovative country. There is no doubt that, in the coming years, all Canadian prime ministers and governments will have as one of their major priorities the further development of a solid political and economic relationship with the eu, the development and sale of such indispensable resources as oil, gas, uranium, etc., and the promotion of Canadian universal values around the world. These most important goals cannot be achieved without the complicity and partnership of a few close and influential friends and allies. France should definitely be one of them. France has always been, is, and will be a major pillar of the eu. It is a key player and its president and ministers can and very often wish to be our interpreters and promoters within the eu. Of course, once again, this means that our leaders maintain a close rapport with their French counterparts. It also means that, whenever possible, Canada will agree and even support essential European positions. And it means that consultations with France will happen on a daily basis and at all levels. France is a major investor in our country. Canada should work hard at ensuring that additional investments continue to flow, for example, in the tar sands. France is an important customer for our uranium; we should ensure that this remains the case. France is very much interested in our nuclear energy programs and in the equipment of our forces; we should be open to frank and constructive discussions with some of their major enterprises. Finally, Canada needs a powerful partner and friend if we wish to contribute to the development of Africa, if we wish to contribute to a solution in the Middle East or in Afghanistan, and if we wish to promote democracy and human rights. Again, Canadian prime ministers will need to appreciate that all of that cannot be achieved without the French ally. Similarly, France will always see Canada as an important and unique partner.

Challenges and Opportunities in the European Union–Canada Relationship: A View from Berlin k a r s t e n d. vo i g t *

Canada and Europe have been closely linked in many ways ever since Canada was established, first as a colony and then as an independent state on the North American continent. By nature, they not only share a common history, but also common values and a similar view of the world. Some observers argue that this may be nice, but not sufficient to make them relevant to each other in today’s world. They point out that Europeans have a vaguely positive view of Canada, but do not know much about the country, and Canadians see Europe as a distant relative, who is less important than the neighbour they deal with on a daily basis. I believe that those observers have a point. Common values become hollow when they do not translate into common interests and common projects of relevance. And partners tend to take each other for granted once they start looking for new opportunities. But, for me, the Canadian–European relationship is not really such a case. I see it as an example of a promising – if often underappreciated – partnership of like-minded countries that work together on many counts. They provide security in the Euro-Atlantic space and help stabilize Afghanistan as partners in the North Atlantic Treaty Organization, they advocate human rights wherever such rights are violated around the globe, and they have begun to intensify economic cooperation by launching formal negotiations on a comprehensive economic partnership agreement. However, Canada and Europe can cooperate more * This article reflects the opinions of the author and not necessarily those of the German foreign office.

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closely in many other, less traditional fields of foreign policy, where they have particular competence and shared interests, such as protection of the world climate, development of clean energy resources, and a response to the international financial and economic crisis. It is true that Canadians focus very much on the area covered by the North American Free Trade Agreement and increasingly also on the Asia-Pacific region, while Europeans have their mind set on internal European Union (eu) affairs and the larger European context including Russia, the Balkans, and the Caucasus. The relations of both countries to the United States (U.S.) absorb a large amount of their attention. In my opinion, this is normal, because the U.S. remains Canada’s as well as the eu’s most important partner, economically and politically. This does not mean that Canada and the eu are not important to each other or that they can only have closer relations with each other at the cost of their regional partnerships. Ultimately, Canada–eu relations form a vital part of overall transatlantic relations. Both are closely linked with the U.S., but are also related to each other. In their positions and strategies on most current issues, Canada and Europe are closer to each other than to almost any other partner in the world, sometimes even including the U.S. Yet, they need to make use of the full potential of this unison. I believe they can achieve this by developing a common and future-oriented agenda of topics that are important to both of them and on which they can work out solutions that also matter to the rest of the world. This agenda should be as diverse as the challenges that confront both societies. In my mind, it should clearly not be dominated by symbolic debates about sealskins and the like. Let’s first have a look at the comprehensive economic partnership agreement launched at the eu– Canada summit in May 2009. The fact that negotiations have been formally started is an enormous achievement, taking into account the difficulties within the Canadian federal framework, failed attempts in the past, and current protectionist tendencies in parts of the world. It sends a clear message to world leaders that now is the time to strengthen free trade and, therefore, it may give a positive thrust to the stalled negotiations of the Doha round. There is still room for improvement in almost all layers of the economic relations between the eu and Canada – in trade, investment, public procurement, regulatory cooperation, and workers’ mobility. I believe Canada will profit from the intended partnership agreement by diversifying its international trade relations, thus decreasing its dependence on the U.S. market. The eu will gain even more open access to the attractive Canadian market. The business communities in both the eu and in Canada strongly endorse this project and, in all likelihood, the consequences for both societies will be overwhelmingly positive.

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Second, climate and energy issues will certainly be on top of the European–Canadian agenda in the future. Canada already is a world player in these issues, and the eu should not miss this opportunity. As yet, few Europeans know about Canada’s vast oil sands and renewable energy sources. On the other hand, Canada might be interested in the experiences of European countries, such as Germany, in harnessing solar and wind power, distributing it effectively, and preventing the waste of energy. Canada and Europe have a joint responsibility: we are both major per capita polluters, but we also have the technical and economic means to offer possible solutions. For instance, we must both improve our energy efficiency, develop renewable energy, and find methods for efficient carbon capture and storage. We should also agree on binding international co 2 reduction goals. We need the cooperation of important rising powers, such as China and India. But Europe, Canada, and the U.S. should lead, not follow, on this essential topic for all mankind. Otherwise no one will go forward. It is regrettable that so far Canada does not participate in the International Renewable Energy Agency, and Canada and the eu do not fully agree on co 2 reduction goals. But I trust that over time, an agreement that suits both sides will be found. The new administration in Washington has created a very positive momentum in the international debate on climate change. I hope that Canada, the U.S., and the eu will be able to find a common approach at this year’s Copenhagen climate summit. Our citizens expect their governments to deliver results. It is high time that Canada and the eu make use of what they can offer each other. At the eu–Canada summit in Berlin in 2007, they agreed on a high-level energy dialogue and, at the 2009 summit, they decided to include climate change and energy as topics for the economic partnership agreement. European and Canadian universities and scientific institutions already work on these issues intensively and exchange their results. Over time, this cooperation should be enhanced and lead to practical benefits for both societies. I believe that the Canadian–European dialogue should also include Arctic issues in the future. Currently, Canada does not support an observer status for the eu Commission in the Arctic Council. I hope this will change. The Arctic region plays an enormous role, not only for the countries in the region, but for the future of our entire planet, and the eu is clearly a stakeholder in this debate. Another issue of high topicality and relevance for Canada and the eu is the current international financial and economic crisis. Europeans admire the fact that Canada is much less affected by the crisis than many of their own countries and the U.S. Obviously, the Canadian financial market was not prone to quick and unsustainable profits and

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already has effective regulatory frameworks in place. I see similarities between Canada and most countries in the eu, particularly Germany, in that they try to solve the crisis by enforcing regulation in hitherto unsupervised markets and not simply by devising ever-bigger stimulus packages. As G8 and G20 powers, Germany and Canada both have a special responsibility for the stability of the world financial system and should strive for sustainable measures that are not likely to trigger further financial imbalances in the future. Moreover, as competitive export nations, both have a strong interest in preventing protectionism, which would hurt both economies. Furthermore, Canada and the eu – collectively or as individual countries – should intensify their cooperation to stabilize or (ideally) prevent regional conflicts in the world. Canada and eu countries, such as Germany, have engaged in Afghanistan over the last years, and much has been argued about the differences in their approach. For instance, Germany decided to focus its military and civilian engagement in the north, while Canada has deployed troops in the more volatile and dangerous south. However, Germany has not limited the duration of its engagement, while Canada plans to pull out its troops by 2011. At the end of the day, I believe that our aim is the same. We want Afghanistan to have a peaceful future, to fight terrorism effectively, and to safeguard democratic rights as much as possible under the circumstances. Instead of arguing with each other, we should point to the fact that Canada and Germany already work together very closely in projects on the ground. For instance, both countries fund the construction of a faculty for the Afghan border police in Kabul. This will help establish functioning border management and, therefore, indirectly address such problems as drug trafficking and cross-border insurgency. In my opinion, we should have many more of such joint projects. They offer practical and effective help to the Afghan authorities, and they are plausible to our sceptical domestic constituencies. Unfortunately, there is never a shortage of regional conflicts and crises in the world and all of them deserve the attention of the world community. The eu and Canada are not world powers and will not be able to engage militarily everywhere it may be desirable. But both have a very strong record in nation building, development, and the promotion of human rights. We should do this work together wherever possible, and not think too much in our national categories. If Canada or European nations alone do not have the power and the means to make a difference in a conflict area, together they may. And if they both work together with the U.S., all the better. Canada also has a strong record in arms control and disarmament. The Ottawa Convention banning anti-personnel landmines is a milestone

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in the advancement of human security. Support for international arms control and non-proliferation is an important topic for both Canada and the eu, and it contributes strongly to the prevention of future conflicts. Canada, Germany, and the eu as a whole should also push these topics in the international arena. As powers without nuclear weapons, they possess a special credibility in this regard. With the new administration of President Obama in the U.S., they now have a partner in Washington who is resolved to make progress on these issues. Finally, human rights are central to both Canadian and the European foreign policy. Sometimes, we disagree on specific issues, for instance recently on the method used in the international fight against the death penalty. But in the final analysis, Canada and the eu both want the death penalty to end. Canada and Europe share the same values of human dignity and similar lifestyles. We should actively advertise these values, our commitment to democracy and open, tolerant societies, while respecting different cultures and traditions, including successful integration of foreigners into our own societies. Canada has a long and successful history of integration. The eu can learn a lot from this, even if we take into account the fact that immigration profiles for European countries are very different from those of Canada and the U.S. Once again, we should share our experiences and problems and learn from each other’s best practices.

Between Friends: Can Canada and Russia Open a New Chapter in Their Relations? d i m i t r y ry u r i k o v and jeremy kinsman

d e a r m i t ya : When we worked together in Moscow 15 years ago, you were at President Yeltsin’s side in a vast historic endeavour: wrenching Russia from totalitarianism toward democracy. In ending the Cold War and becoming a partner in the international quest for peace and security, your leaders chose a course that changed our lives as well as yours. Some History I realize that Canada is not among Russia’s principal preoccupations. Among other things, you have 16 countries on your borders including several with which you have troubling issues. So, I don’t expect you to have the history of the Canada–Russia relationship at your fingertips. But our countries do go back a way, Dmitry, and it’s not about hockey. It’s about sharing the northern hemisphere as the two greatest land masses on the planet. You may not have been thinking about us a lot during the Cold War, but as the country between the ussr and the United States (U.S.), we thought a lot about you. That situation gave most Canadians a dual habit of thought: we were less ideological than our southern neighbour and your superpower rival; and we always counted Russian engagement essential to the resolution of major global issues of peace and security. Canada established diplomatic relations with the ussr 67 years ago in the darkest night of the struggle with Germany. Cooperating in

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conflict took obvious precedence over residual ideological differences following the Bolshevik revolution. Of course, relations between Russia and the West lurched backward after the Second World War. Whether it was due to unjustified assumptions about ussr actions in Eastern Europe and elsewhere, the growing fear of the ussr at that time had been shared by almost all in the West, including Canadians. Canada was a creative protagonist in the construction of collective security via the North Atlantic Treaty Organization (nato), which the time’s attitudes held to be an essential safeguard against what was seen as the Soviet Union’s clear threat. But Canadians had less of the ideological antipathy to communism that was common in the U.S. The communist party had never been outlawed in Canada and, as John Holmes (1981) wrote, “The Canadian attitude to Soviet policy and Soviet intentions was less categorical ... less convinced that the Communist International was a monolith ... and less inclined to attribute all revolutionary activity, especially in Asia, to Moscow’s direction.” Prime Minister Lester Pearson was an experienced realist in a pluralistic world. Having bristled at the extraterritorial application of U.S. McCarthyism to loyal Canadians, he expressed profound misgivings over the U.S. military escalation in Viet Nam. His successor, Pierre Trudeau, carried skepticism over to what he considered unhelpfully rigid nato policy on the Soviet Union. To Trudeau – alluding to Harold Laski – the opposing systems of “capitalism and communism required an intellectual bridge to avoid a catastrophic age of [nuclear] terror” (Head and Trudeau 1995, 177). Trudeau’s overarching preoccupation with the dangers of miscalculation risking nuclear war and his consciousness of the vast human costs the ussr paid in defeating Hitler often made him sound almost alone among Western leaders in the degree of sympathy he expressed for the psychological side of the ussr in the Cold War. According to Trudeau, “Canada and the Canadians want very much to be able to look to the north, as they have long looked to the south, and see friends in either direction” (Head and Trudeau 1995). The Canadian prime minister was distressed that he had to face criticism in Washington for this seemingly even and open-handed attitude. In retirement, he told me it should have been obvious he was not inclined to neutrality in terms of what kind of society he preferred. The civil libertarian in Trudeau would never have abided an authoritarian system. His biographer, Richard Gwyn (1980), underlined that “Sovereignty of the individual is the alpha and omega of Trudeau’s political thinking.” Trudeau had left office by the time the historic new trends of glasnost and perestroika emerged, first under Gorbachev (influenced in no

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small way by Alexander Yakovlev who had formed much of his thinking as long-time ussr ambassador in Canada where his relationship with Trudeau was uniquely close) and then under Yeltsin. But Trudeau’s successors were eagerly attracted by the wave of change in Moscow. Our commitment at the very top defined the relationship. Brian Mulroney and your boss, Boris Yeltsin, had a personal partnership of quality, as had been the case earlier with President Gorbachev. Then, Jean Chrétien, another leader who had risen “against the grain” on the basis of clear and simple values, struck an equally warm empathy with Boris Nikolayevich. Foreign Minister Molotov’s grandson has written that nostalgia for close relations between the U.S. and the ussr obscures the fact that the periods of good relations were in his view only two: March and April 1917 and August to November 1991, when unprecedented cooperation occurred following the invasion of Iraq by Saddam Hussein (quoted in personal correspondence from Ambassador Ralph Lysyshyn). But in my view, that sparse assessment does not apply to the much less central but also less competitive relationship with Canada. Our relations with Yeltsin’s Russia were specific. I always felt that Canada’s help and friendship were appreciated at face value, as being specifically Canadian. I have never known another place or time with such ease of entrée or candor from top officials. We were on the same wavelength. For our part, we knew the ending of the Cold War was primarily due to decisions made in Moscow and that the world owed you a large debt in that regard. In our Canadian minds, there had never been a question of anybody having “won” the Cold War. Indeed, our mutual U.S. friends, President Bush and James Baker, went out of their way to avoid triumphalism or signs that might convey to Russians a sense of loss. Our mission was to be supportive. We knew that Russia’s fate would be entirely in Russian hands, but Canadians wished to help. The stakes were high for all of us after all. The late mayor of St. Petersburg, Anatoly Sobchak, pointed out just before the failed putsch against President Gorbachev that in your transition “from a totalitarian system to a democratic one, the forces of dictatorship and democracy live side by side” (personal notes, jk, 1991). We had no doubt on whose side we were on. We could see that the costs and difficulties of the unprecedented transition you were experiencing risked becoming unacceptable to many in Russia. At the time of the 1993 “White House” insurrection crisis, Foreign Minister Andrei Kosyrev had summoned G7 ambassadors for a private chat to solidify support for President Yeltsin’s democracy project, underlining that if things went badly, future Russian governments would be less willing to work with us. “You will never see another Russian government as

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pro-West as this one” he warned (personal notes, jk, October 1993). Indeed, it was the high-water mark in Russia’s open and non-competitive relationship with the west. The contraction that the economy of Russia experienced every year from 1991 to 1998 was a bitter experience. Your friends and partners from the “West” tried to explain back home the enormity of the changes involved in the transition from a totalitarian society, and successfully urged that we help Russia cope with the devastating costs. But we underestimated the challenges you faced. There was no precedent for a developed country, a superpower, turning its whole society, the ownership of its vast state assets, as well as the behavioural characteristics expected of citizens, upside down, transforming almost everything into its near opposite. As Tony Judt (2005) has written, “The transition from capitalism to socialism has been thoroughly planned for 100 years, but no one has done the reverse.” There was no blueprint, certainly not for the state’s fire sale of productive assets and resources. I once heard privatization Minister Anatoly Chubais say on the radio that Russia had to do its economic transformation “Canadian style” (Radio Moscow 1995, personal notes, JK, 1995). When I asked him what in the world he had meant, he explained it was a hockey metaphor. In our self-appointed extended rivalry for mastery of the hockey universe, we had demonstrated contrasting styles. The Soviet team controlled the puck until a possibly decisive shooting opening could be painstakingly created. The Canadian style was to throw the puck to the end of the ice and chase whatever opportunity might emerge from the melee! “How can we de-control an economy and society in a controlled way?” the minister asked. We certainly had no idea. With no concept of the social costs of their theories, expensive Western bankers and bureaucrats came in floods to describe the wonders of the market economy and its modus operandi “state side,” as if transition was just a matter of changing a process, such as installing new software, without taking account of the fact that it required infrastructure and dramatic adjustments in behaviour that could only take hold over time. The acumen of Western financial circles has since been exposed as partly delusional, with ancillary costs to equally overextended new Russian financiers. Politically, many in the West behaved as if free elections were the beall and end-all of democracy, disregarding the absence in Russia, then, of an apt institutional framework in law, of civil society, of the individual habit of personal accountability, or of a discriminating electorate. Again, few of us had much inkling of the existential issues emerging for Russians, what it is to be Russian. Still, we did our practical best to help. Over 18 years, Canada spent cad 360 million on over 300 more-or-less helpful projects meant to smooth the Soviet and

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then Russian transition to democratic governance, assisting public administration reform, legal and judicial change, and the emergence of civil society, while bringing countless numbers of Russian and Canadian parliamentarians, scholars, engineers, and officials together. At the 2002 G8 summit in Kananaskis, Alberta, we helped initiate the global partnership to assist Russian efforts to destroy chemical weapons and close or secure and protect nuclear sites, committing over cad 1 billion over 10 years. Above all, perhaps, there was the political will to integrate Russia into multilateral institutions. At the nato Foreign Ministers’ Council in June 1990, I had drafted – with my German counterpart Dieter Kastrup on the instructions of our ministers Clark and Genscher – the “message from Turnberry” that extended nato’s hand of friendship and cooperation to the ussr (nato 1990). I’ll never forget the thrill at the London G7 summit of 1991 when Gorbachev appeared among us, after Canada proposed his invitation. But a putsch was brewing in Moscow, leading indirectly to the breakup of the ussr. I’ll not forget either the December day that year at the nato Partnership Council in Brussels, when, after repeated exits to talk with Moscow, the Soviet ambassador informed us he had been instructed to remove the ussr nameplate from the table. Vladimir Putin has called that the most tragic day in history. I hope that he does not mean that literally, but is thinking rather of the difficulty in having to accept a fracturing of one’s national selfconcept in seeming contradiction of its historic accomplishments. Russians express grievance over their sense of diminishment at the hands of a West that seems deaf to Russian interests, citing nato expansion and a variety of allegedly unilateral actions, such as nato’s air campaign against Milosovic’s Serbia over Kosovo, a campaign whose successful conclusion needed Viktor Chernomyrdin’s helpful mediation. The whole experience drained much of the pool of good will toward Western partners. I concur, Dmitry, that in trying to support Russia’s transition, we in the West could have done better. Western counsel was often shallow and self-satisfied. We paid too little heed to Russian views in foreign affairs. nato expansion was undoubtedly a provocation to Russians, but should not be seen as a cause of grievance. Whatever the expectations in 1989, it became a matter of justice of sorts to permit such countries as Czechoslovakia, Poland, and Hungary to re-integrate with the Western European family from which they had been forcefully separated in a divided Europe. It was an overriding purpose of Canadian foreign policy for 20 years to integrate Russia more closely as well, one that became more compelling

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when the elected Boris Yeltsin prevailed against the anti-democratic putsch in August 1991. You will remember how Jean Chrétien worked hard with Boris Nikolayevich to ensure Russia’s participation as a member at the 1995 Halifax summit, thereby inaugurating the G8. I greatly regret that the sense of partnership has seemed to desert us in recent years. New leaders have narrowed their agendas and have played the nationalist card on both sides over the Arctic, through what should be obsolete ideological filters from another era. The logic of forming a bridge becomes even more compelling today, especially as Prime Minister Putin has as his particular mission the restoration of Russian influence in the world. As Vice-President Biden said about Russia–U.S. relations (at the Munich Conference on Security Policy), it’s time to push the “reset” button. Understanding Russian Governance Today Of course, it is easier to reset when we share the same political values. We have our own sense of disappointment. We respect the obvious competence with which Vladimir Putin stabilized much of Russia’s situation, but deplore the way in which the Putin administration diminished the democratic content of Russian life from the brave but turbulent days of massive change under Boris Nikolayevich – the smothering of independent television media and the harassing and hobbling of sincere Russian ngo s. I know that in the hierarchy of needs, your fellow citizens have learned after the chaos of transition to rank stability, security, and predictability at the top and that many who remember the dark days of totalitarian oppression judge that the rediscovery after three generations of the rights of private life for now offers adequate additional reward. We understood André Illianarov when he said, Russia “needs a time of calming down.” But we regret that, these days, it is seen as negative for political candidates to present themselves primarily as “democrats.” I have too much respect for Russian intellectual and political history, for the Decembrists, the students of the 1860s, or the liberals of 1905 to credit remarks such as those attributed to Voloshin that “Russia isn’t ready for democracy.” From Russia, we hear the voices of human rights defenders, democratic activists, and members of civil society eager to improve transparency and fairness in governance. As you know, it is existentially natural for democrats wherever they are, to heed the voices of fellow democrats. This is especially so when they come from a people whose cultural accomplishments have so contributed to our own enrichment.

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All this is to say that Canadians of good will strain sympathetically to understand what it means to be Russian. So, I put the questions to you, my friend. What does it mean to be Russian today? What do you expect? What do you expect of us? What does Russia want? Will the answers help us understand what can be done to repair Canada–Russia relations?

dear jeremy: I join your travel in time. Each of us in his own capacity was involved in Russian affairs in a unique epoch. However, my own vision of the epoch has changed. You were right to start with history. You raise good questions about the meaning of being a Russian today, Russian expectations about themselves and the world, and about what Russia wants. The replies are strictly my own. History and Notions Reforms, human rights, market economy, free enterprise, democracy, totalitarianism – the notions were so lively in the 1990s, but are absent in today’s parlance. Some of the notions became a reality and are taken for granted; some are considered in bad taste to mention. The latter notion – democracy – is not so colloquial today. Not because Russians are against democracy, but because, first, the practice of democracy – elections, free speech, marches, and pickets, etc. – are a routine part of Russian life. Also, the word “democracy” was thoroughly compromised in the 90s. There was nothing democratic about the economic reforms. They were conducted in a lousy and absolutely antidemocratic way. Let’s call a spade a spade: beginning with the fall of the Soviet Union, the processes of the 90s were a revolution, a liberal bloodless revolution, although there was bloodletting on the way. As in every revolution, the image was provided by open-hearted idealists, possessors of beautiful slogans; as in any revolution, many of them later regretted their enthusiasm. In revolutions, slogans and deeds differ dramatically. A revolution, Jeremy, is a werewolf that looks nice until the true nature of the beast comes out, and woe to the naive! By the end of the 90s the “democratic reformers” were often labeled “neobolsheviks” for arrogant revolutionary ways of rule. They never cared about real people – the talk was about assets, privatization, property relations, banking, and currency rates. For them, the Russian people were an inevitable unfortunate detail, an irritant factor in the business of property transitions.

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The results of the liberal revolution? The real economy and finances fell in the 90s, comparable to Russia’s losses in the Second World War. In 2009, with all the past benefits from oil revenues, stabilization, and government support to the industries, Russia has still to match the gross domestic product (gdp) of the ussr in 1990! It was a true catastrophe, and that’s what Putin meant when he spoke about the fall of the Soviet Union being a tragedy. High hopes and expectations of promised prosperity in two years time turned swiftly into a deep slump in living standards for an overwhelming majority of Russians. By 2000, there had been 7 million premature deaths of healthy people well below the age of retirement. Bereft of savings, they passed away from raging unemployment, six months or a year arrears in salaries, the crush of medical care, hunger, maladies, and, on the top of that, hopelessness and despair. The human toll of the reforms is close to that of the 1917 Bolshevik revolution and most cruel civil war of 1918–21. But you may ask, was it all that bad? Was there no bright side? Of course, there was. The revolution was ambivalent. Russia today is visibly different from what it was 15 and even 10 years ago. Moscow has changed beyond recognition – architecture, tidiness, business and job opportunities, services, life-style, mood, and, most important, the mentality and behaviour of people. It’s now one of the most robust consumerist megapolises of the world, mirrored in other Russian cities. At the beginning of 2008, the Russian economy looked buoyant – money from abroad was flowing in, market rules worked, and the business climate, although far from ideal, encouraged Russian and foreign investors to start new projects in the country. Even as of June 2009, Moscow and large and medium-sized Russian cities do not appear to be much affected by crisis. Restaurants and cafés are full, expensive cars and boutiques still exist, and retailers’ advertising is more aggressive (and more tasteless!) than usual. It looks quite different from Soviet times and the unholy 90s. Is it the work of the “invisible hand” of the market economy? Has the liberal democratic revolution succeeded in spite of everything? In many ways, yes. Private enterprise and private ownership are now the basis around which everything evolves, based on laws, rules, procedures, practices, and public acceptance for a number of years. Formally, business infrastructure and technologies in Russia are roughly in line with international standards (although practices may differ). In the minds of Russians, even at times of crisis, it’s the only thinkable way to operate – for small, medium, or large private business or profession. After work, animated discussions about how to solve a company’s problem or start up a new project are usual among colleagues on their way home; this was unimaginable during the Soviet years when people would discuss

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anything but their office or work affairs. People talk about business and work very hard because they feel they can improve their living in real terms, if they succeed in selling or producing. With all its barriers and setbacks, private enterprise in Russia provides a strong motivation and stirs creativity, especially among younger people. The change is deep. Now let’s consider what made the change possible. As in the first years of the ussr but in the opposite direction, a wholly new system of production and distribution was imposed as an operational everyday reality. Whatever the quality of reforms, reformers did establish on paper a framework for a market economy that provided a basis for action. Indeed, private enterprise became a normal way of earning and living. The political climate was important. Authorities needed to support the new Russian statehood. Political and civil freedoms – speech, travel, political activity, etc. – may have changed little in real terms, but served as an outlet for emotions. In offering knowledge and training, the governments of Europe and North America opened frontiers and free contacts with the world that helped shape Russian change. However, in grosso, the involvement was rather fragmented and scattered. Was it fear of creating too strong a competitor that persuaded promoters of economic and political freedom to focus sharply on joining the privatization of Russian mineral deposits and fungible industries? In my view, the main tribute goes to the Russian people. Survivors of another long-lasting revolutionary experiment, they made a historic choice not to rebel (they had every reason to do so and there were people willing), but decided instead to get out of the mess peacefully, using the slogans and rules of liberal framework – it was compromised, but there was nothing wrong with it in principle. As in the case of the slogans of the February and October 1917 Russian revolutions, it sounded good! Dozens of millions of people of all trades, including scientists and professors started mastering private businesses, mostly small to start with. Leaving behind a whole life, they sold food or hosiery at bazaars in the winter chill, delivered goods, took construction jobs or repaired shoes, registered their own private firms, and tried their hand at farming. No one taught them the ways of private enterprise: amid universal chaos and lack of government support and foresight, they learned laws, bookkeeping, and accounting by trial and error, without municipal or private courses, often making mistakes and losing money. Today, the self-made small and medium business sector employs about a third of the labour force and accounts for 15–18 per cent of gdp. The oil factor, of course, was essential. After 2000, oil revenues financed much new construction and provided business and job

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opportunities allowing passage to a different society. But this was secondary to the epic passage of Russians to survival and modest prosperity through the force of their own efforts (the oligarchs are a different subject), some tragedies, failures, and success, all of which need more time for evaluation by our scholars, writers, and citizens. What Does Russia Want? It’s a grandiose question, and I’m not up to it. I’d rather speculate about what I don’t want to happen to Russia and what I’d like to see for the country. Primo, as the current crisis unwinds, Russia, as others, faces problems. I hope we survive the crisis without a tectonic shock and emerge a renewed state. It would be unwise, though, not to consider the worstcase scenario, as seen by some experts. Their script runs as follows. If the crisis becomes very deep, domestic conditions may reach the “red level.” Needless to say, domestic conditions in a country rarely deteriorate on their own. There are always people and political techniques that create events, fire up passions, and bring discontent to the level necessary to ensure a goal – a concession, a change of person, or a regime change. In the case of Russia, this scenario is not likely, but the stakes are very high. With the help of the media and modern techniques of popular mobilization (as in Serbia, Ukraine, Georgia, Moldova) a crisis may be generated to encourage prompt reaction by the international community, which is seriously concerned about the condition of law and order in a state with nuclear weapons – a condition supposedly threatening world security and calling for international action. The international detail of the scenario may also involve a “generated crisis” (Joe Biden’s term for events of the kind) near Russian borders, somewhere in the Caucasus or central or southwest Asia, which may add to the trouble. The final stage of the script is the breakup of Russia, as visioned at different times by Professor Zbigniew Brzezinsky, the grand master of chessboard, Alexander Parvus, the purser and organizer of the Bolsheviks’ return to Russia in spring 1917, and the famous Decembrist rebels of 1825 who made the partition of Russia a point of their agenda. Today, the scenario seems paranoical and unthinkable, but in September 1991 who could predict the fall of the ussr in just three months? The script of the day will be hard to foresee, but there are unmistakable signs that some people are working to make it true. I do not mean governments. Things like that are done otherwise, as, for example, the warm-up in New York Times headlines: “How to break up

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Russia – an instruction,” “Russia’s breakup will start from the North,” etc. Both Putin and Dmitry Medvedev have made casual references to the issue. Secundo, if this scenario doesn’t exist, remains unused, or fails, Russia has a good chance of overcoming the troublesome inborn dark side of change – in my view, the most important part of the Russian agenda. Realists always warned strongly about heavy social, moral, and spiritual costs and consequences of rash reforms – corruption, crime, depopulation, defiant social inequality, low morals and ethics, consumerism, etc. The prophecies were then ignored, but now there is a difficult and unpleasant house-cleaning job for our top people, Medvedev to begin with. To do the job, Russia needs years of peace and justice – at home and internationally. That’s what I wish for Russia. Is it asking too much? Russia–Canada Russia and Canada are in many ways positioned as if they were meant to be close to each other – and not only geographically. The two countries’ ties are growing and progressing in all areas, the atmosphere, as I see, is warm, and they are well-disposed toward each other. I hope my impression as an observer is correct. Canada was never and is not now underestimated in Russia, Jeremy. Your country is rich, resourceful, enjoys an important geopolitical position, and is a G8 member. Bilateral trade and investments may not be impressive, but there are solid business networks in many fields. Quite a few good friends of Canada are working at Russian federal and regional government institutions. In addition to official business, a stable network of Russian and Canadian ngo s is busy with their specific agendas. There are regional programs of cooperation and contacts are intensive. We realize that Canada is not the U.S. and that it looks at Russia with its own eyes. We share the same values; let us not work to undermine each other. I don’t think there will be problems for us in the Arctic. Russia is well aware of the importance of partnership and law-based research on the continental shelves in the area and does not conspire to lay hands on the legitimate resources of others. I’m sure there will be no irritants in Russia–Canada relations as there were in the Danish–Canadian dispute over a small island near Greenland. It would be funny to consider episodes such as seabed diving with national emblems or Russian military jets flying close to Canada’s air frontiers, as symptoms of the Bear’s growing bellicosity: patrolling the sacred airspace of the Baltic states, nato countries’ jets flying daily as close as possible to Russian

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borders, nothing happens and nobody is excited. The Russian media paid little attention to the nato flights, preferring to present the nato military presence in the Baltics in another dimension – through scuffles over local girls between nato pilots and local guys in Lithuanian bars. I confirm that contacts between Yeltsin and Mulroney were friendly. Good chemistry appeared between the two men at their very first encounter and “Boris–Brian” communication was natural, not simply official chumminess and shoulder-tapping. It was genuinely interesting for them to speak to each other, and they were frank. Had Mulroney remained prime minister for longer, the relationship might have developed to the level of the Yeltsin–Kohl friendship, although Mulroney’s successor, Jean Chrétien, was a friend as well. What can be done to tap further reserves of mutual benefits and friendship? To develop bilateral relations means, first of all, to work out a couple of good project ideas. This time of crisis may not be best for projects – or to the contrary. However, people of vision propose things that seem irrelevant and unrealistic at the moment, and if those people have the resolve to finalize the project, they receive praise from the very people who tried to stop them. You mentioned, Jeremy, a sizable Canadian contribution to development and education programs in Russia: cad 360 million. I would point specifically at a program for exchanges on governance in the northern territories. In Russia, the program centred on the Siberian federal district, and there were exchanges in business, culture, ecology, etc. In Denmark, I initiated something both similar and different – municipal exchanges of mayors and heads of departments of regional administrations. The project worked, was considered useful, and involved creativity on both sides. The practical benefits of such exchanges need no comment. I’m sure the Russian–Canadian project had the same kind of inspiration. Why not think of something of the kind, bilateral or on larger scale, Jeremy? It may seem a small, local sort of idea, not for the summitry, but it will be a much more real thing than many a communiqué or strategic paper. Sorry to say, but unlike you, Jeremy, I’m mostly utilitarian. Maybe, as Russians say, it’s better to have a blue tit in hand than to see a crane in the skies?

d e a r d m i t ry: Thank you. It is true Canada and Russia can do much together as resource-based economies and as northern societies. As northern countries, let’s turn our backs on the melodramatic, patriotic, and exaggerated talk about Russian flags and accusations

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of imaginary incursions of Canadian air space in the high Arctic. We could usefully both turn to a speech President Gorbachev gave in 1989 in Murmansk, which outlined a vision for global peace based on international cooperation to be achieved through collaboration on science in the Arctic. Indeed, there have been productive official talks about presenting (along with Denmark) to the United Nations a joint proposal for settling territorial claims on the Arctic seabed. That is the way to go – not some 19th century format of competing claims. I hope we can do this. We all celebrate the much-improved economic opportunities for Russians today. Your future economic vocation is linked primarily to Europe, despite tensions over gas supply. We should share a vision: North Americans working with you and the Europeans in a wider transatlantic, rules-based common economic space that would include our special northern partnership. In world affairs, Russia counts again, but the question is whether Russia will count as an enabler of joint action in favour of peace and security or more as a revived rival with the U.S., even after President Obama has reached out to Russia. There is worry over the confrontational approach to neighbours. Neonationalists seem tempted to believe Russia can just follow its own course, building a few like-minded partnerships with, for example, other developing economies such as Brazil, India, or China. But I hope your own brighter hopes for international peace and justice have wide support at home. Such hopes rely on working with a wider circle of friends, and I hope Canada will be foremost among them. That would be a fitting synthesis of our best intentions from what the new Russia began in our time together.

references Gwyn, Richard. 1980. The northern magus. Toronto: McClelland & Stewart. Head, Ivan, and Pierre Elliott Trudeau. 1995. The Canadian way: shaping Canada’s foreign policy, 1968–1986. Toronto: McClelland & Stewart. Holmes, John. 1981. Life with uncle: the Canadian–American relationship. Toronto: University of Toronto Press. Judt, Tony. 2005. Postwar: a history of Europe since 1945. Toronto: Penguin Books. nato (North American Treaty Organization). 1990. Message from Turnberry. Available at: . Last accessed 24 Sept. 2009.

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Rethinking the Arctic: A New Agenda for Canada and the United States donald mcrae

Canada’s aspiration to have the land and the waters of the north affirmed as an integral part of Canada has a long and, in some respects, checkered history. Generally expressed in terms of Canadian “Arctic sovereignty,” it has manifested itself in a claim to land, ice, and waters of Canada’s Arctic archipelago and at times in a claim to waters of the Arctic Ocean extending up to the North Pole. An early expression of the claim was in terms of the “sector” theory. Attributed to a statement of Senator Pascal Poirier in 1911, it provided a basis for claiming as Canadian the area – land and water – bounded by sector lines extending from the east and west boundaries of Canada to the North Pole. As the century progressed, the character of the claim tended to change. It became clear that the land – the islands of the Canadian archipelago – were not in dispute. With the exception of a small island in the Kennedy Channel between Greenland and Ellesmere Island, known as Hans Island and claimed by both Canada and Denmark, no country disputes Canada’s sovereignty over the land. Thus, Canada’s Arctic sovereignty aspirations became focused on the waters and the permanently frozen ice. Until the voyage of the SS Manhattan in 1969, the issue had been a slightly theoretical one. Writing in 1963, Ivan Head had surveyed the Canadian claim and saw no need for positive action by Canada to assert its sovereignty: “The passage of time enures to the benefit of the Canadian claim” (Head 1962–63). However, the Manhattan raised a more direct challenge. It presented the spectre of commercial shipping

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through the Northwest Passage – particularly oil tankers, with the threat of massive and disastrous pollution of the Arctic – without Canadian authorization and control. In some respects, the challenge came at an inopportune time. It was the early days in the negotiations that led to the 1982 United Nations Convention on the Law of the Sea, and the United States (U.S.) and the United Kingdom, supported by the Soviet Union, were advocating free passage through international straits, a claim that would likely clash with a Canadian position of control over the waters of the Northwest Passage. Avoiding a formal sovereignty claim over the waters, Canada asserted instead a claim to regulate and control shipping in the waters within 100 nautical miles of its Arctic coasts for the purposes of ensuring compliance with environmental standards. The 1970 Arctic Waters Pollution Prevention Act was protested by the U.S. and some European states, but, over time and with effective diplomacy, Canada gained acceptance of the idea that Arctic states could exercise greater authority in “ice-covered areas” than in other ocean areas because of the special hazards posed to navigation and the consequences of marine accidents in Arctic areas. Indeed, recognition of the right of Arctic states to take such measures was embodied in article 234 of the 1982 Law of the Sea Convention. Shortly after the conclusion of the 1982 convention, a new challenge to Canada’s Arctic aspirations arose. This was the voyage through the Northwest Passage of the U.S. coastguard icebreaker, Polar Sea. Although Canada and the U.S. were able to find a diplomatic way for Canada to provide consent for the voyage without the U.S. specifically asking for it, it was clear that any remaining doubts about Canada’s claim to sovereignty over the waters of the Northwest Passage had to be resolved. This led to Canada’s drawing of “straight baselines” around the islands its Arctic archipelago as a definitive assertion that the waters behind the baselines – the waters of the Northwest Passage – were internal waters of Canada. They were part of the sovereign territory of Canada. Canada and the U.S. also concluded the 1988 Arctic Cooperation Agreement under which U.S. government vessels were to go through the Northwest Passage only with the consent of Canada, which in practice was not to be withheld (Clark and Schultz 1988). The result of all these actions was that Canada had done everything that was possible to secure a legal basis for its claim to sovereignty over the waters of the Northwest Passage. The U.S. and some of the countries of the European Union still maintained that those waters constituted an international strait and, thus, Canada’s rights as a coastal state were more limited than Canada claimed (and protested Canada’s straight baselines on that basis), but that position has been

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more rhetorical than substantive. The 1988 agreement has meant that, in practice, the U.S. would not challenge Canada through icebreaker voyages and, apart from lodging protests, no country has attempted to make any formal legal challenge to Canada by going to the International Court of Justice, something that they are perfectly free to do. In the absence of any such challenge, Canada is at liberty to proceed on the basis of its legal position, that the waters of the Northwest Passage are the internal wasters of Canada. Indeed, the content of Canada’s regulations for shipping in Arctic waters is not contested by other states and, increasingly, there is a concordance between Canada’s standards for shipping and the internationally recognized standards that Canada would have to follow if the Northwest Passage was regarded as an international strait. Thus, the practical consequences of the legal differences between Canada and the U.S. over the Northwest Passage are minimal. In sum, Canada’s sovereignty over the lands of the Arctic is not subject to any threat. Sovereignty over Canada’s Arctic lands cannot be lost any more than Canada’s sovereignty over any other land territory can be lost. Of course, if Canada ignored for many years the fact that a part of its land territory was being occupied by a foreign power, then it would be subject to the claim that it had abandoned sovereignty. But such claims against states are unheard of it modern times. Equally, except for the difference with the U.S. and some other states over whether the waters of the Northwest Passage constitute an international strait, Canada’s authority over the waters of the Canadian Arctic archipelago and out to 200 nautical miles beyond is not disputed. All of this has an important consequence for Canada’s Arctic policy. Although claims that Canada must “assert” its sovereignty over the Arctic and “use it or lose it” may have political value in mounting domestic support for allocating more resources to the Arctic region, they are not descriptively meaningful statements about the nature of Canadian sovereignty over either Arctic lands or waters any more than they would be meaningful if used in respect of any other part of Canada.

th e n e w c h a l l e n g e s The articulation over time of Canada’s Arctic rights took place within a relatively stable and predictable environmental framework. The ice shelves remained permanently frozen, the sea ice receded in the summer and returned in winter, and shipping in Arctic waters was sporadic and minimal. In recent years, much of this has changed. The rapidly shrinking ice has meant that the waters of the Arctic are becoming ice free and might become so year round. Although this may apply to the waters of the

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Arctic Ocean earlier than to those of the Northwest Passage, the question for the latter appears to be when, not whether it will happen. There are three important consequences. First, future shipping in Arctic waters is now much more likely than ever before. Second, exploitation of resources in Arctic areas, both on land and beneath the seabed, is becoming a realistic proposition. Third, both of these developments pose a substantial threat to the fauna and flora of the Arctic and to the traditional lifestyle of the region’s indigenous peoples. Added to this is the emergence of an Arctic consciousness around the world, particularly among non-Arctic states in Europe.

s h i p p i n g i n a rc t i c wa t e rs Increased shipping in the Arctic could call into question Canada’s claim that its waters are the internal waters of Canada. Elsewhere, vessels enter Canada’s internal waters only with Canada’s knowledge and consent; if shipping transits the waters of the Northwest Passage without such knowledge or consent, Canada’s claim that these are internal waters is less credible. Further, the potential for shipping in the Arctic is not limited to commercial shipping; thus, there are strategic implications of changes in the Arctic environment. Therefore, Canada must ensure that it is in a position to monitor shipping in the Northwest Passage, to be able to arrest vessels that do not comply with Canadian law, and to take action to enforce its laws against those vessels. Canada has a legal regime in place for this. What is needed is the practical capacity for monitoring and surveillance, and vessels suitable to the Arctic environment that can arrest and enforce with respect to foreign shipping. Any such action by Canada in respect of a foreign vessel might lead to protests by other states and a legal challenge to Canada’s authority over the waters of the Northwest Passage before the International Court of Justice. Thus, Canada has to be prepared for such an eventuality.

resource exploration and exploitation Resource exploration on Canada’s mainland has been proceeding northward for many years. The challenges now come with the potential for exploration and exploitation in the islands and the waters of the Arctic. Some estimate that the oil and gas reserves of the Arctic are in the order of 25 per cent of the world’s remaining reserves. The Arctic’s resources are not limited to hydrocarbon deposits. Gas hydrates, estimated to contain twice the carbon of all fossil fuels on earth, are found in vast quantities in the Arctic.

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Resource exploitation on the Arctic islands is a domestic issue of environmental management with implications for the rights and interests of indigenous peoples. Resource exploitation on the seabed of the Arctic Ocean raises questions of international law. In accordance with the 1982 Law of the Sea Convention, coastal states are entitled to the resources of the continental shelf out to the 200-nautical mile limit of the exclusive economic zone (eez) or beyond that limit if the continental shelf extends further. Within 10 years of becoming party to the Law of the Sea Convention, a state must submit to the United Nations’ Commission on the Limits of the Continental Shelf the coordinates of the outer limits of its shelf. Canada has until 2013 to make such a submission. In fact, all Arctic states – Canada, U.S., Russia, Norway, and Denmark (Greenland) – are in the process of determining the limits of their continental shelves. Although not a party to the Law of the Sea Convention, the U.S. appears to be preparing to become a party. Indeed, the Russian federation was engaged in the process of gathering scientific data that will allow it to define the outer limit of its continental shelf jurisdiction in the Arctic Ocean when, in summer 2007, it planted the Russian flag at the North Pole. The determination of continental shelf limits in the Arctic raises the potential for disputes among Arctic states. At issue in particular is a feature of the seabed known as the Lomonosov Ridge, which runs from Russia almost across the North Pole to Greenland and Canada. If the ridge proves to be an extension of the landmasses of Canada, Greenland, and Russia, all will be entitled to extend their continental shelf rights along the ridge, and boundaries will have to be determined between them. There is a similar issue with respect to the Alpha-Mendeleev Ridge between Russia and Canada. Determination of the limits of the continental shelf is complicated scientifically, and it may be necessary, ultimately, for the Arctic basin states to work collectively on this issue. There are rules of international law for determining boundaries on the continental shelf between states, but they are not easy to apply, and frequently such disputes end up before international courts or arbitral tribunals. Currently, Canada has unresolved Arctic boundaries in its 200-nautical mile eez with the U.S. in the Beaufort Sea and with Denmark in small areas off Greenland. There is potential for a future boundary dispute with Russia with respect to the Lomonosov and Alpha-Mendeleev ridges.

environmental and human consequences Increased shipping and resource exploitation, added to the effect on habitat of the warming of the Arctic region, may have major environmental

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consequences for Arctic areas and the peoples who live there. Once again, there will be a need for Canada to ensure that it is ready to exercise its powers to legislate and enforce environmental regulations in Arctic areas. At the same time, indigenous peoples are making claims to share in the benefits of resource development in the Arctic and to participate in the management of those resources, including more extensive claims to self-determination. The evolution of “home rule” in Greenland is reverberating throughout indigenous communities in the north. The legal regime for the management of the marine environment and protection from marine pollution in Arctic areas follows the various zones of land and maritime jurisdiction. With respect to the land and internal waters of its Arctic regions, Canada has the same authority over environmental regulation and control that it has elsewhere in the country. With respect to the territorial sea, the 200-nautical mile eez, and the continental shelf beyond the outer limit of the eez, its authority is less constrained. In terms of regulation of shipping under article 234 of the 1982 Law of the Sea Convention, Arctic states can apply their own laws up to 200 nautical miles from their coasts, throughout the entire eez. Increased shipping in the Arctic Ocean, together with the potential for offshore hydrocarbon exploration and exploitation will increase the need for cooperation by Arctic states in environmental regulation and protection.

i m p l i c at i o n s f o r ca n a da – u . s . relations in the arctic In the past, Canada–U.S. relations in the Arctic have been dominated by Canada’s Arctic sovereignty claim. Today, however, although this issue may be important symbolically, at least in Canada, it is perhaps the least important of the challenges facing Canada and the U.S. with respect to the Arctic. Both countries face the broader challenge of the management of increased shipping in the Arctic Ocean, not just the Northwest Passage. They also face challenges arising from overlapping claims to the continental shelf and the prospect of overlapping claims with other Arctic states; and they face the environmental consequences of widespread resource exploitation in the Arctic. Thus, Canada has little to gain in pressuring the U.S. to recognize Canadian “sovereignty” over the waters of the Northwest Passage. The U.S. has consistently been unwilling to do this, although, in practice, it has no objection to Canada exercising the authority it claims. That was implicit in President Bush’s Montebello statement in August 2007 – that he supported the investments Canada has made “to exercise its sovereignty” (cbc News 2007).

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What is important for Canada is not symbolic claims to sovereignty – indeed, whenever Canada claims it is “asserting Canadian sovereignty,” it sends a message to the international community that it is uncertain over whether it has sovereignty – but rather acting as the sovereign over the waters of the Canadian Arctic archipelago and managing shipping and resource exploration and exploitation in accordance with standards that achieve Canadian environmental and other policy objectives. None if this requires U.S. approval or acceptance of Canada’s position on sovereignty over the waters of the Northwest Passage. At the bilateral level, pressure for hydrocarbon exploitation in the Beaufort Sea may require resolution of the maritime boundary between Canada and the U.S. in that area. At present, the dispute is over the boundary within the eez. However, with a clearer definition of the outer limits of the extended continental shelf, there may be a need for boundary delimitation beyond the eez. Equally, at the bilateral level, Canadian and U.S. cooperation with respect to security in the north assumes greater importance with the increased likelihood of foreign shipping in Arctic waters, involving increased opportunities for threats to security, avenues for entry or surveillance, and access for people posing immigration challenges and potential terrorist threats. Arctic issues are changing from being matters primarily between Canada and the U.S. to issues that affect all Arctic states. For example, there may be a need to delimit the seabed of the Arctic basin among many of the Arctic states. Beyond this, increased shipping in the Arctic Ocean means a need for coordinated approaches to marine pollution and environmental regulation. Resource exploration also creates environmental challenges on which cooperation among the Arctic states would be beneficial. Heightened interest in the Arctic elsewhere in the world provides an additional challenge for Arctic states. Already there is pressure for the European Union to formulate a coordinated Arctic policy (Airoldi 2008). This has important implications for the future. Is the region to be managed primarily by the Arctic states or will the Arctic basin become an area of international concern for which there will be pressure to establish international regimes whose implementation would be open to all states of the world? At the Nordic Council of Ministers Conference, “Common Concern for the Arctic” held at Ilulissat, Greenland in 2008, in addition to countries of the European Union and Arctic states, both China and Korea participated. China, Japan, and Korea all maintain Arctic research stations in Svarlbad. Current developments suggest that unless the Arctic states take the initiative to manage the region, there will be pressure from outside states

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to be involved. In the 28 May 2008 Ilulissat Declaration, the Arctic basin states (2008) made clear that they did not see the necessity for any new legal regime for the Arctic region, and they outlined the areas in which they envisaged further cooperation. The question for the future is whether this will be enough or whether further initiatives will have to be taken toward cooperative management of Arctic waters, including developing common standards for shipping and cooperation in environmental protection, particularly in relation to resource development. A regional approach nevertheless creates some challenges for Canada in its relationship with the U.S., and much will depend on the approach of the new U.S. administration and its attitude toward working closely with Russia. In some respects, Canada’s interests may be more closely allied with those of Russia than those of the U.S., for example, in terms of continental shelf extension. In the past, the U.S. has not favoured extensive claims in Arctic areas, although there are pressures in Alaska for greater attention to the area (Murkowski 2008).

r e c o m m e n dat i o n s f o r f u t u r e p o l i cy The greatest challenge for Canada is not threats to Arctic sovereignty, but how to manage a vast, thinly populated area in which there is increased likelihood of activity that will require regulation – shipping, resource exploration, and exploitation – and the potential movement of people giving rise to security concerns. In addition, Canada must provide good government to the indigenous peoples of the north. This requires, as Franklyn Griffiths (2008) has said, a move from sovereignty to stewardship. It means acting as the sovereign instead of seeking affirmation of sovereignty. Under such a stewardship approach, some matters have to be handled by Canada alone, others require bilateral cooperation with the U.S., and still others cooperation among all the states of the Arctic basin. Although Canada should avoid providing opportunities for the U.S. to challenge Canadian sovereignty over the waters of the Northwest Passage, it must be prepared to defend its position, including at the International Court of Justice. Canada should support U.S. ratification of the Law of the Sea Convention to ensure that its relationship with the U.S. comes fully under that regime. Canada should be also prepared to resolve the Beaufort Sea boundary, if necessary through arbitration. Also at the bilateral level, Canada–U.S. defence cooperation in the north should be based on the potential for new security issues that can arise from increased Arctic activity, particularly in light of the probable increase in shipping in both the Northwest Passage and the Arctic Ocean.

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Canada should also undertake a major new initiative to engage the U.S. in a regional approach to the management of Arctic issues involving all the Arctic basin states. This requires fomenting an “Arctic partnership” with those states to provide overall environmental management of Arctic areas beyond national jurisdiction and coordination of management and objectives regarding the areas within national jurisdiction. The partnership should be concerned with all aspects of shipping in Arctic waters of Arctic resources including both fisheries and hydrocarbon exploitation and any new resource, such as gas hydrates. It should also be designed to engage the indigenous peoples of the north in any regional approach to Arctic issues. Regional action of this kind does not require the formation of any new international body. Nor does not require turning the Arctic Council into a decision-making body, although it can draw on existing institutions such as the Arctic Council for exchange of information, informal consultation, and the generation of proposals and new ideas. Nor does an Arctic partnership involve internationalization of what would otherwise be national. The Antarctic treaty is not a model for Arctic collaboration. Rather, the proposed Arctic partnership involves collaboration by the Arctic states to ensure that they present a coordinated front on Arctic management and that rule-making in international bodies, such as the International Maritime Organization, is carried out on the basis of measures initiated by or approved by the Arctic states. The partnership is to ensure that Arctic states exercise the primary responsibility for and control over the development of international regimes affecting the Arctic area. Such coordinated action by the Arctic states will also pre-empt any attempt by non-Arctic states to establish a special regime for the Arctic based on universal participation. Engaging the U.S. in such an approach will be challenging. Concerns about the re-emergence of Russia, about entanglement with international institutions, and about the implications that regional management of ocean areas would have for other areas of the world will all affect U.S. thinking on this issue. Yet the time is opportune. Interest in future resource needs and a growing acknowledgment in the U.S. of the importance of the Arctic region make this a policy issue in which the new administration may have to look for creative approaches. At the same time, it is unlikely that the Arctic will or should be a top priority in Canada’s relations with the new U.S. administration. Yet, it is an important component of an issue that is a high priority: climate change. In that context, Canada might find it more fruitful to engage the U.S. on the Arctic. Moreover, including the Arctic in the context of a climate change agenda creates an opportunity for refocusing Canada–U.S. discussions away from a preoccupation with sovereignty.

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Ironically, opposition to this within Canada may be significant as it might be perceived as an abandonment of Canadian sovereignty. The notion that Canadian sovereignty in the Arctic is fragile and that there is a threat that it will be “lost,” particularly as a result of action by the U.S., appears to be hardwired into any public discussion of the issue in Canada. Any new Arctic strategy will thus require effective advocacy and diplomacy at both the domestic and international levels.

references Airoldi, Adele. 2008. The European Union and the Arctic. Copenhagen: Nordic Council of Ministers. Available at: . Last accessed 26 Sept 2009. Arctic basin states. 2008. The Ilulissat Declaration. Website of the Rule of Law Committee for the Oceans. Available at: . Last accessed 26 Sept. 2009. cbc News. 2007. North American leaders end summit with pact on import safety. Toronto: cbc News, 21 August. Available at: . Last accessed 26 Sept. 2009. Clark, Joe, and George P. Schultz. 1988. Agreement between the government of Canada and the government of the United States of America on Arctic cooperation (Canada Treaty Series 1988/29). Ottawa: Queeen’s Printer. Available at: . Last accessed 25 Sept. 2009. Griffiths, Franklyn. 2008. Canadian Arctic sovereignty: time to take yes for an answer on the Northwest Passage. In Abele, Frances, Thomas J. Courchene, F. Leslie Seidle, and France St-Hilaire (editors). Northern exposure: peoples, powers and prospects for Canada’s north. Montréal: Institute for Research on Public Policy. Available at: . Last accessed 26 Sept. 2009. Head, Ivan. 1962–63. Canadian claim to territorial sovereignty in the Arctic regions. McGill Law Journal, 9:200–26. Murkowski, Lisa (Senator for Alaska). 2008. Speech at the csis-Arctic Forum, 23 July 2008. Washington: Centre for Strategic and International Studies. Available at: . Last accessed 26 Sept. 2009.

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Canada among [the United] Nations: A Personal Reflection l a k h da r b r a h i m i

Until I started working for the United Nations (un), in 1993, Canada was, for me, first and foremost two names, two statesmen: Lester Pearson and Pierre Trudeau, prime ministers who personified Canada and projected a particularly positive image of the country and its people, an image that most Canadians and most people in the rest of the world approved of. To me, Canada was a very large, very thinly populated, and very rich country, with a long, white winter and a short but lovely summer, a mature democratic system of government, and a capitalist economy slightly softened by a few social (but definitely not socialist) features. Canada was given to frightening itself from time to time with threats of secession, but it was usually content to live with the benefits and tensions of its two national languages. During the Second World War, Canadians had fought gallantly in Europe and Asia alongside their allies, Britain and the United States (U.S.). As an Algerian in the 1950s and early 60s, fully engaged in the long, hard, and costly struggle of our people for independence, I saw Canada mainly as a member of the North Atlantic Treaty Organization (nato), dutifully supporting its ally, France, and voting against us in the un, but without much zeal and perhaps even, at times, reluctantly. Like many, I became aware of Lester Pearson’s international role when, as president of the un General Assembly during the Suez Crisis in 1956, he not only solved a particularly acute crisis that might otherwise have led to a much wider conflict, but he also saved a few powerful governments and statesmen a lot of embarrassment. Following the tripartite (Israeli–British–French) aggression against Egypt, he engineered the

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creation of an international separation force to allow the Israelis to withdraw from the Sinai Peninsula, and the Suez Canal to reopen to international navigation. That creative diplomatic initiative earned him a well-deserved Nobel Peace Prize. For me, what was most significant about the Suez crisis was that it mobilized the entire Asian and African world, plus a large constituency of progressive people in the West and, of course, the communist world against Britain and France whose action in Suez was seen as a 19th century colonial adventure. The process further exposed France’s colonial enterprise in Algeria and attracted more sympathy and support to our struggle. It was only later that I fully understood the historic importance of modern international peacekeeping that Lester Pearson had launched in the Sinai Peninsula. Pierre Trudeau succeeded Lester Pearson as prime minister at a time when the Non-Aligned Movement was at its zenith. I had the impression that sympathy for the remaining liberation movements in Africa had grown considerably in Canada, even if the government could not fully reflect Canadians’ sentiments because of residual loyalty to nato members Britain and France and, more generally a feeling in the West that the liberation movements were dominated, or at least influenced, by the Soviet Union, China, or both. Pierre Trudeau appeared to realize earlier than most that nonalignment was not “immoral,” as John Foster Dulles said it was, just the position of countries that saw no interest for their own people in joining either the Western bloc led by the U.S. or the Eastern bloc led by the Soviet Union or in taking sides in the rift that developed about that time between Moscow and Beijing. I remember that Pierre Trudeau made a successful visit to Algeria, which, at the time, was a leading member of the Non-Aligned Movement and an outspoken supporter of the African liberation movements. Algerian leaders found that the Canadian prime minister had a clear vision of what the role of his country should be: an independent voice, open to dialogue with all, proud of its own system of government and its social and economic choices, faithful to its allies but never too shy to voice its doubts and even disagreement when the Canadian national interest was at stake or an issue of principle arose. Trudeau also gave us the impression that he understood liberation movements even if he would not, at that time, express Canada’s support for them in the same manner that Algeria and the members of the Non-Aligned Movement did. But I don’t think that the generals in Portugal, Ian Smith in Rhodesia, or the apartheid regime in South Africa had any doubt as to where Canada’s real convictions lay.

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Canada distinguished itself from the U.S. and other Western allies, such as Britain and Australia, in its opposition to the war in Viet Nam, which was at its most devastating in the late 1960s and early 70s. We also admired the courage of Canada in providing refuge and protection to young U.S. citizens refusing to fight in a war they considered unjustified and unjust. In 2003, Prime Minister Jean Chrétien would follow the example of his illustrious predecessor and firmly reject the expectations of Washington (and London) that Ottawa would participate in, or at least support, the invasion and occupation of Iraq. Understanding of, sympathy for, and, later, even support to African liberation movements, respect for and cooperation with non-aligned countries, opposition to the Viet Nam War – these were foreign policy choices that made us see Canada as closer to European countries, especially the Nordic countries, than to the U.S. and Britain. Pierre Trudeau seemed closer to Olaf Palme, the Swedish prime minister, than to Richard Nixon, Harold Wilson, or Ted Heath. Further, as aid to underdeveloped countries became important, Canada was regarded as one of the consistently active and generous members of the developed world. All this made it easy for Third World countries to work with Canada in and outside the un. Indeed, it also made members of the Canadian business community welcome in developing countries, making it that much easier for them to compete and to obtain mining and other concessions in Africa, Asia, and Latin America. Parallel to that, Canada became a major contributor to peacekeeping, which was to develop further than even Lester Pearson ever imagined and culminate in a Nobel Peace Prize for the United Nations Peacekeeping Forces. Fast forward to the end of the Cold War, when I started undertaking missions on behalf of the un. World peace seemed within reach, and the un was going, at long last, to live up to the dreams of its founders and the expectations of its members. Whether the crisis provoked by Saddam Hussein’s invasion of Kuwait and the Gulf War in 1991 was the last conflict of the Cold War era or the first of the postCold War period, it was remarkable to see Moscow voting for Western-sponsored resolutions in the un Security Council and refusing to supply new weapons or ammunition to the Iraqi army, which had been entirely equipped by the Soviet Union. The Soviet Union itself would soon collapse and disappear, and with it the Warsaw Pact. The Cold War ended in the total victory of the U.S. and its allies over the Soviet Union. Communist ideology was a thing of the past, except in a handful of countries: China, Viet Nam, Cuba, North Korea, and Laos.

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Also a thing of the past was the mantra, familiar throughout the Cold War period, of “peaceful coexistence between different political and social systems of government.” One system had been defeated and accepted defeat. The other had won and the new ideal was going to be, for all of humanity, a democratic form of government of the triumphant West – preferably the U.S. model – and a market economy. The world was a totally different place: perhaps not “the end of history,” but certainly a time of unrestrained optimism. Even the dramatic eruption of the violence that accompanied the breakup of Yugoslavia did not seriously dent that optimism – not at first, anyway. Namibia, an intractable colonial problem, was solved with the un very much in the lead. In South African, the apartheid regime started its slow and, for them, painful meltdown – Canada had promoted international sanctions in the face of the opposition of Margaret Thatcher and Ronald Reagan – and the new democratic, non-racial Republic of South Africa emerged under the leadership of Nelson Mandela, undoubtedly a giant among men in our time. Cambodia started on the long, slow road to recovery from the hell of the “killing fields.” I had a hand in ending the more than 15-year-long civil war in Lebanon. At the un, a new department had been created to manage the growing number of peacekeeping operations. It was natural that, in this department, the key job of military adviser to the secretary-general would go to a Canadian, General Maurice Baril. Many other Canadian officers and diplomats would contribute to building the department and running peacekeeping missions around the world. When I was given responsibility to lead the United Nations Mission in Haiti (unmih) in September 1994, I turned naturally to Canadians, notably police commissioner Neil Pouliot and Colonel John Foulton, to lead the preparatory work and implement it. Canada provided the third largest contingent to unmih (after the U.S. and Pakistan) and was well represented within the joint un–Organization of American States (oas) human rights mission. Ottawa, one of the most generous donors, took its job in Haiti on behalf of the international community very seriously. Working with the Canadian embassy in Port-au-Prince, Canada’s permanent mission in New York and senior officials in Ottawa was invariably easy and productive. At the time, unmih seemed a total success, which was most welcome to mission members and to the un as a whole after the embarrassing failure in Somalia and the horrors of the former Yugoslavia and Rwanda. Later, however, much of the progress in Haiti unraveled and the international community was called in a second and third time. Haiti still desperately needs assistance – and Canada is still there, helping.

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The genocide in Rwanda has been the subject of much debate. The controversy over how, exactly, the horror unfolded is unlikely to fade away any time soon. Much has been written on the subject, including a report commissioned by Secretary-General Kofi Annan who, at the time of the tragedy, was under-secretary-general for peacekeeping. During that fateful period, Canadian General Roméo Dallaire was commander of the un force, abandoned by the Security Council in the face of genocide. Much has been said about what he did or failed to do. General Dallaire himself has spoken and written extensively, movingly, and convincingly on the subject. Shortly after, another terrible tragedy happened, this time in Bosnia, more specifically at Srebrenica, where thousands of women, children, and men were slaughtered. There again, Kofi Annan commissioned a report, subsequently, to try to establish facts and draw painful lessons. As far as I am concerned, the responsibility of the Security Council was as flagrant as it was terrible: the most powerful organ of the un and the entire international system had officially, publicly, and solemnly declared Srebrenica to be a “safe haven” and invited people who felt threatened to seek refuge and protection there. People trusted the un Security Council, which stood by as those people were literally slaughtered like sheep. By 1997–98, the quick succession of setbacks or outright failures in Somalia, Rwanda, Srebrenica, Burundi, Angola, Zaire (soon to regain its original name, Democratic Republic of Congo), the horrors of the former Yugoslavia, the Ethiopia–Eritrea war, south Sudan, Afghanistan, all raised serious questions about un peacekeeping. Voices were heard in New York asking whether it was not only the Cold War that had prevented the world organization from performing well, and whether it had really been a good idea to create a department of peacekeeping at all. Canadian diplomats were definitely not among those who wanted to put an end to un peacekeeping, but Canada did join the camp of developed countries that stopped providing troops to un peacekeeping operations. Few were more aware of, or more concerned over, the fact that peacekeeping was the subject of so much doubt than Secretary-General Kofi Annan. It was on his watch as under-secretary-general for peacekeeping that the tragedies in Rwanda and Srebrenica occurred. In February 2000, he asked me to chair an independent panel to review the entire issue of peace operations and submit practical recommendations on how best to improve un performance. Louise Fréchette was then deputy secretary-general of the un. She had been Canada’s ambassador to the un when I joined the organization and we had cooperated closely. She had returned to Canada where she held top positions in the

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ministries of defence and finance and, thus, was ideally qualified to take on the newly created number two position in the entire un system when Kofi Annan offered it to her. Much was expected of her, and she and her secretariat delivered. I was fortunate that she was the point person in the secretariat for our panel. Madame Fréchette was not the only Canadian diplomat who helped us. The Canadian mission to the un was particularly effective in helping secure the essential support of key member states for our conclusions and recommendations. As a result, our report did not join piles of others gathering dust on the shelves of the organization. Together with a few like-minded delegations, they helped us substantively and tactically convince the General Assembly’s peacekeeping committee that our ideas merited its support. They worked diligently to get most of our recommendations through the fearsome budget committee of the General Assembly; and they were also instrumental in getting the report endorsed at the Millennium Summit of September 2000. Nor was the help received from them limited to the work of the panel on peace operations. Indeed, all the Canadian permanent representatives and ambassadors who served during my time at the un and their deputies and other senior staff were always been forthcoming. Some of them – Bob Fowler, Paul Heinbecker, and Michel Duval, among others – became and remain personal friends. The combined effect of our report (now generally known as the “Brahimi report” [Brahimi 2000]) and the initial successes of two small but high-profile peace operations – in Kosovo and East Timor – brought un peacekeeping back into good repute. During the last ten years, there have been some 18 missions around the world and almost 100 000 military and police personnel have been deployed, along with civilian staff. The turn of the century witnessed an innovative period in Canadian diplomacy, culminating in a landmark treaty against landmines, action against the National Union for the Total Independence of Angola on “blood diamonds,” the launch of the International Criminal Court, and the adoption by the un of the “responsibility to protect” (R2P). I confess to a little uneasiness on R2P because we still speak of the responsibility of those who are capable of providing protection to do so and not of the right of those who need protection to get it. But it is welcome progress. Lessons learned are important, but lessons remembered are, perhaps, even more important. Peacekeeping experts have been sounding the alarm that the un is overstretched and a catastrophe is waiting to happen, again. The lessons of the 1990s are being forgotten or ignored: mandates are given by the Security Council and accepted by

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the secretary-general in the full knowledge that they are not achievable. Missions are blatantly under-resourced; member states pay lip service to peacekeeping, absent-mindedly welcoming the establishment of new missions but providing little in terms of real, consistent, and sustained political support. Nor do the countries with the most influence and interest in a particular conflict zone speak with one voice or cooperate effectively to end fighting or implement an agreement. A related, major problem is that developed countries, including Canada, which have the best equipped and best trained armies, have simply stopped contributing troops to un peacekeeping missions. I am not sure I fully understand the real reasons why. The failures of the 1990s have certainly much to do with it, but there is more. A senior British diplomat told me that “the un does not perform to the high standards our and other Western troops are now accustomed to.” The obvious answer to this argument is, why don’t member states, especially the richest, those with the best experience, the best equipped, and the best trained armies, see to it that the un, their organization, is raised to the level of their own national standards? The U.S. apart, Western countries have so cut their military budgets that they do not have much to offer anymore. In 2002, when I was the senior un representative in Afghanistan, we wanted to bring international military strength from the 5000 we had to a maximum of 15 000. We would have been happy with only another 5000 so that the force could expand out of Kabul. Yet no government was willing to cooperate. The same British diplomat quoted a moment ago told me, “We are overstretched already and simply cannot contribute more troops to Afghanistan.” Somehow, however, less than a year later, Britain managed to find 40 000 troops to participate in the illegal war on Iraq. In 2006, all Western countries strongly supported the transformation of the African Union peacekeeping mission in Darfur into a “hybrid” un–African Union mission with 26 000 troops instead of the 7000 the Africans had been able to deploy. To this day, the new mission has not been able to reach its full capacity and no Western country contributes any troops beyond a few staff officers or very small specialized units. Currently, no country is willing to provide the handful of attack helicopters the un–African Union mission in Darfur needs. Canada has been exceptionally generous, providing the mission with armoured personnel carriers, air transport, technical staff, and substantial financial resources (altogether, over cad 600 million). In Afghanistan, Canada has been heavily committed militarily since 2005 under nato, not un, command. Looking at developments in Afghanistan from afar, as I do these days, and as the insurgency worsens and civilian casualties mount, I sometimes wonder if the force

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should not have been transformed as early as 2003 from a Security Council-authorized multinational force led by nato into a full-fledged un peacekeeping mission. This in no way diminishes the admiration one has for Canada for accepting such a big share of the international burden in Afghanistan – quite the opposite. The remarkable work Canadian troops are doing in Kandahar, the valuable economic and humanitarian assistance it is providing, and the participation of Canada in the debate over how the many problems in Afghanistan (and now Pakistan) and the region as a whole can be more effectively addressed are very much in line with Canada’s internationalist tradition. That tradition is precisely why so much is expected of Canada and its diplomats. Canada’s voice is heard with much attention and respect in the un’s peacekeeping committee, in the Security Council and the General Assembly, and among the senior staff of the Secretariat. If the un secretary-general responds to growing talk of the need for another review of the organization’s peace missions, Canada would be a natural leader. Perhaps Canada could also take a lead in raising un peacekeeping operational standards to more satisfactory levels. The Canadian people can look back with satisfaction on these past 50 years as responsible and influential members of the international community, the un, the Commonwealth, the Francophonie, nato, the oas, the G7/G8, and now the G20. As they proudly remember the legacy of so many of their remarkable men and women – Lester Pearson and Pierre Trudeau prominent among them – they can also look forward to the future in the full knowledge that people around the world trust Canada and its people to continue to bring their unique, rich, creative contribution to the common effort to build a better world for all.

reference Brahimi, Lakhdar. 2000. Report of the panel on United Nations peace operations. New York: United Nations. Available at: . Last accessed 10 Oct. 2009.

Canada at the United Nations: A Shadow of Its Former Self louise fréchette

“What’s happening to Canada?” That is the question that greets Canadians visiting the United Nations (un) nowadays. It used to be said that the un was inscribed in Canada’s genetic code, so evident was our country’s commitment to the institution. Nowadays, our presence is only dimly felt. At the time this article was written, we were busy lobbying to get elected to the Security Council. Although victory was seen as the most likely outcome, it was clear that Canada had a much tougher row to hoe than the last time it was a candidate and the possibility of defeat could not be ruled out entirely. Why do we seem to have lost the pre-eminent place we used to occupy in the world body? How much of this apparent slide in relative prestige and influence is due to factors outside our control? To what extent are our policy choices responsible for this state of affairs? Can we, should we pay greater attention to the un and to what end?

institution builder Many countries accord high priority to the un in their foreign policy, but few have been as consistent, diligent, and effective in their support of the organization as Canada. Canadians take pride, with reason, in the role played by Lester B. Pearson in the creation of the first un peacekeeping force in 1956. Outsiders might dispute our claim to be the “inventor” of the peacekeeping concept – after all, achievements in multilateral institutions are rarely the result of a single country’s efforts – but they unhesitatingly recognize

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our country’s contribution to the edification of the international system of norms and institutions that play a central role in the management of world affairs today. Canadian fingerprints can be found everywhere: in the Universal Declaration of Human Rights and in the Law of the Sea Treaty, in the Nuclear Non-Proliferation Treaty and in the un charter itself. We helped with the birth of the Food and Agricultural Organization, the World Health Organization, the un Environmental Programme, and many more. As an elected member of the Security Council, a responsibility we have assumed five times since 1948, we earned great respect for our contribution as a knowledgeable, creative, and constructive, but also independent, player. And we were, of course, a major contributor of troops to un peacekeeping missions throughout the Cold War. When I arrived at the Canadian mission in January 1992, Canada was competing with Finland for the honour of being number one on the monthly list issued by the un Secretariat. The early 1990s marked the high point of Canadian involvement in un peacekeeping. We were quick to sign up for the new missions in Cambodia, Somalia, the former Yugoslavia, Haiti, and Rwanda, stretching our limited military resources to their absolute limit. Canada was also in the forefront of efforts to strengthen the un Secretariat’s capacity to implement the more complex and dangerous mandates it received from the Security Council. Numerous Canadian military officers spent time at un headquarters in New York, on loan from the Canadian Forces, to help set up logistics, procurement, and command and control systems appropriate for the new peacekeeping era. Canada was also an active participant in the series of world conferences held during the same period. In particular, we fielded a large and dynamic delegation to the Earth Summit in Rio de Janeiro in 1992. The Canadian imprint in the environment area was greatly in evidence with the designation of Maurice Strong as Secretary-General of the Conference and the appointment, shortly after Rio, of Elizabeth Dowdeswell, another Canadian, at the head of the un Environment Programme.

losing steam Canada’s profile in the un started to fade around the time of the Millennium Summit. The campaign to ban landmines, which culminated in the conclusion of an international treaty in 1997, is arguably the last example of a major initiative that fully engaged our political leaders and resonated with ordinary Canadians. It was viewed within the un as a major step forward in international humanitarian law, and Canada’s reputation was enhanced as a result.

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In 1999, the decision to set up the International Commission on Intervention and State Sovereignty, in the wake of the Kosovo episode, was also in keeping with Canada’s traditional interest in strengthening the rule of law in international relations. Convinced of the humanitarian imperative to act against Serbia’s gross abuses of the human rights of its Kosovar citizens, the Canadian government had supported the decision of the North Atlantic Treaty Organization (nato) to carry out aerial bombings against Serb targets, but was deeply concerned about the lack of Security Council authorization. It hoped the commission would help lay the foundation of a new international norm in matters of intervention. The commission did exactly that when it put forward the concept of the “responsibility to protect.” However, by then the initiative had lost steam in Ottawa. Thanks to the negotiating skills of Ambassador Allan Rock and last minute telephone calls from Prime Minister Martin to a few key leaders, a reference to the responsibility to protect was eventually included in the 2005 un summit’s final document, but the issue had stopped attracting much attention or interest in Canada, as had much else that had formed the core of our “human security” agenda. Our tenure in the Security Council in 1999–2000 upheld the tradition of creative and independent Canadian involvement. We made a particularly valuable contribution on the issue of “blood diamonds,” taking advantage of our chairmanship of the sanctions committee on Angola to advance bold proposals on the enforcement of sanctions. However, our performance on the council owed more to the persistence of the ambassador, Robert Fowler, than to a deep commitment by the government of the day. Indeed, we saw few manifestations of sustained interest in the issue of illegal exploitation of natural resources in conflict zones once we had left the council. The adoption of the Rome Statute which gave birth to the International Criminal Court should also have given Canada a sense of accomplishment, because of the role it had played in its creation, but the event barely registered. The pivotal role played by our compatriot Philippe Kirsch at the Rome conference was more celebrated outside Canada than within our borders, and few Canadians know that Philippe was not only elected to the tribunal but also became its first president. Many other interesting things were taking place in the un around the same time, but Canada’s role in most of them was muted, a sympathetic but not fully engaged player. The adoption of the millennium development goals at the 2000 summit spurred a formidable mobilization of governments, non-governmental organizations (ngo s), artists, foundations, and private-sector leaders around the world. From my un vantage point, I could see no signs that Canadians and their governments were connecting with this sudden and welcome focus on the fate of the world’s poorest.

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Canada did promise to increase its development assistance and it kept its promise. Yet, it was not seen as a leader on development issues, not so much because the level of our official development assistance (oda) was and still is stuck in the bottom third of the Organisation for Economic Co-operation and Development donors (admittedly, this does not help), but because we seemed to have so little to say on issues of international aid policy. This was sadly evident in the marginal role played by successive Canadian ministers in the so-called Utstein group, which was launched in 1999 by the development ministers of Norway, the Netherlands, Germany, and the United Kingdom. An all-female group at the origin, this team of super-dynamic personalities led the development community in a profound rethinking of the goals and means of international development assistance and promoted an ambitious reform agenda for the World Bank and un operational agencies. Our poor showing within the group was due in large part to the fact that our successive foreign affairs ministers rarely had any background in development on taking office and never stayed in their post long enough to catch up with their deeply knowledgeable and passionate European counterparts. Even when we adopted forward positions, we seemed unable to project leadership or capitalize on our actions. The increase in oda mentioned is a case in point. So was our early support for easing patent restrictions to allow wider access to hiv/aids drugs by poorer countries. This could have allowed us to play a more prominent role in the fight against the disease than we actually did. We were also strangely absent from crucial discussions in the un of the many political, humanitarian, and development issues that required attention in the early days of the nato mission to Afghanistan. The size of our military contribution should have guaranteed us a privileged place at the table. Yet, Canada was not perceived as an important political player on Afghanistan at the un. This state of affairs was symptomatic of the diplomatic and political strategy vacuum within which our decision to deploy troops was made, a vacuum that has plagued the mission for too long. The picture of Canada that emerges at the un circa 2000 is of a country whose foreign policy seems to be drifting and whose views weigh less and less in the life of the organization. Our numbers in un peacekeeping missions have shrunk dramatically as we have concentrated our military efforts on nato-led missions, first in the former Yugoslavia and then in Afghanistan. Well-trained diplomats continue to do their job professionally and, when they are particularly skillful, they continue to have a real impact

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on the day-to-day work of the un. Ministers and senior officials dutifully address un meetings and pay calls on the secretary-general. They are shown the kind of respect that any G8 country can expect to receive, but they rarely make their mark as “movers and shakers.” Our domestic political situation accounts in part for the loss of focus that developed toward the end of the Chrétien government and subsists to this day. Foreign policy made with an eye on the next election is unlikely to include long-term goals. Our prolonged political uncertainty has also taken a toll on the cultivation of friendly rapports between our political leaders and their foreign counterparts. For some time now, prime ministers and ministers have been too preoccupied on the home front to spend much time abroad, and Ottawa has rarely been on the travel itinerary of foreign dignitaries.

from neglect to reticence With the election of the Harper government, the problem was compounded by a severe shortage of experience on the front bench and a distinct lack of familiarity with the world of international relations. The new government’s foreign policy priorities – few in number and sketchily defined – seemed to respond both to genuine ideological differences with the Liberal party and an intense desire to appear to be different. On both counts, the un and peacekeeping in particular were bound to drop down the list of priorities. The Harper government’s view of the un has never been fully articulated (as much else in its foreign policy). It may be too much to speak of hostility – Stephen Harper is not John Bolton – but there is a distinct reticence toward the organization. The government is happy to invoke the un mandate under which Canadian troops operate in Afghanistan, but that is about as far as it goes. Prime Minister Harper has shown no particular interest in the life of the organization. The un comes across in many official pronouncements as a distant organization about which we sit in judgement rather than a club for which we are jointly responsible along with the other member states. What’s wrong with that position, you might well ask. Hasn’t the un failed miserably to curb violence in Darfur? Isn’t the Human Rights Council shielding some of the worst human rights abusers on the planet? Isn’t un management gravely deficient when not downright corrupt? The answer to all these questions may be yes, but they also present a very partial view of the un. Yes, the un has been weak on Darfur, but it is doing a good job in Liberia, as it has in numerous other conflicted countries in the past two decades. Yes, the Human Rights Council is a

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shame, but many other un bodies are acting very competently to come to the assistance of the poor and vulnerable and the High Commissioner for Human Rights is a powerful champion of the human rights cause, with access and influence in places that remain inaccessible to individual countries and ngo s. Yes, un management leaves a lot to be desired, but it still manages to maintain over 100 000 people deployed in 20 peace missions for less than usd 7 billion a year, a bargain compared with the sums that we and other nato countries are investing in the mission in Afghanistan alone. But, in many ways, such arguments obscure the more fundamental reason for taking an interest in the un. The un charter is the only universally accepted set of rules and principles governing relations among states, particularly as concerns the use of force. The un is also the custodian of a vast body of international agreements that underpin practically every aspect of international relations, and it is the prime forum for organizing cooperation on a global basis. This framework is admittedly imperfect. un norms have been breached too many times to count, as is bound to happen in any rulebased system that is not backed by real enforcement capacity. But it provides the only rule book we have and, until we find a better one, we should think twice before letting it “whither on the vine.” Defensive alliances such as nato; multilateral cooperation fora such as the Commonwealth, the Organization of American States, and the Asia-Pacific Economic Cooperation; and groupings such as the G8 and the G20 are useful in their own sphere and can supplement the un, but they cannot replace it altogether because none of them can set rules for the entire international community and none of them can command the kind of cooperation that is needed to tackle truly global problems. Canadian governments of all stripes have always considered that our interests can be best protected by strong international norms and a well-functioning un. This has never meant that we would eschew bilateral or regional cooperation, nor does it preclude establishing privileged relations with groups of countries that share our values and pursue goals compatible with ours. And indeed, in the last 60 years, we have woven a rich network of relationships that we have used skillfully to advance our interests, including those within the un.

a c a n a d i a n a g e n d a f o r t h e un At this juncture, there is a rich list of issues awaiting Canada at the un. With the arrival of Barack Obama in the White House, there is real potential for agreement among member states after years of paralyzing polarization in the wake of the war in Iraq. Five issues in

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particular could form the core of a Canadian agenda in the un over the next few years. Climate Change The first, of course, is climate change. There is no need to insist on the significance of this issue for our collective future on this planet. Our problem with carbon emissions is very real and not easy to solve, but it is inexcusable for Canada to have become, at least in the eyes of others, an obstacle to progress on a post-Kyoto agreement. Our “made-in-Canada, made-for-Canada” approach to climate change is simply incompatible with an effective international strategy. If all countries were to follow our example, there would be no hope at all of making a dent in the volume of co 2 emissions. As the United States starts to shift its position, we know we will need to change ours as well. It is high time that we show some initiative and seek to identify avenues that will take account of our own national circumstances while responding to the minimum requirements of other major players. Nuclear Non-proliferation and Disarmament A review conference of the Nuclear Non-Proliferation Treaty is scheduled to take place in 2010, at a time when new challenges from North Korea and Iran are threatening its integrity. For the first time in a decade or more, there is renewed interest in Washington in pursuing gradual nuclear disarmament, a key provision of the treaty, thus setting the stage for a more productive conference than the one held in 2005. Nuclear issues should rank very high on the list of Canada’s foreign policy priorities. As a responsible member of the world community, as the world’s largest supplier of uranium, and as an exporter of nuclear technology, we have every interest in ensuring that the world does not end up with a non-proliferation treaty in tatters and nothing to replace it. Generations of Canadian diplomats have, with great skill and creativity, promoted nuclear non-proliferation and disarmament, a goal endorsed by every Canadian government from the very beginning of the nuclear age. The world is in dire need of fresh thinking on these matters. If there is one issue worthy of reviving our “helpful fixer” tradition, surely this is it. Conflict Resolution and Peacekeeping As a former deputy minister of national defence, I understand fully the pressure on our armed forces to support our commitment in Afghanistan,

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which, I have no doubt, leaves precious little for anything else. But as some resources are freed up with the end of our military mission in Afghanistan in 2011, we should be willing to offer some support to the un. It is in Canadian interests to help maintain the un’s role in conflict resolution, as it is often the only institution that has both the legitimacy and expertise to take action in many situations. Currently, more soldiers, police officers, and civilian staff are deployed in peacekeeping missions than ever before in the un’s history. They are serving in countries that should not be allowed to sink deeper into instability or where high levels of violence and abuse needed to be stopped. Most of these missions are not up to the task that has been entrusted to them because of lack of capacity in vital areas, such as command and control, communications or logistics, and lack of appropriate equipment. Canada and other Western countries’ participation in these missions would help them become more effective. Agricultural Development and Food Security This fourth area that offers potential for Canadian leadership is one that the government has wisely chosen as a priority under its new Canadian International Development Agency strategy. This would be an excellent opportunity for Canada to reclaim a respectable place on development issues, which, let us never forget, is the number one preoccupation of the vast majority of un member states. All experts predict serious problems of food availability and affordability for many developing countries at a time when their economy suffers the consequences of the current financial and economic turmoil. un Governance Finally, Canada should engage more positively than is has so far in the issue of un governance. Recent events have proved the wisdom of recognizing the growing importance of emerging countries in the management of the world economy. Canada’s foresight in promoting the G20 idea has been amply vindicated. A way must be found to extend the same recognition to key emerging countries – India and Brazil in particular – in the political realm. The ability of the un to manage world crises depends to a large extent on the perceived legitimacy of its interventions. So long as the community of nations recognizes itself in the un, so long as it sees its decisions as the expression of the common will, the organization has a potential for effectiveness that no other organization can match.

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The current composition of the Security Council is no longer representative of the world’s reality at the beginning of the 21st century, and this is increasingly being used as a reason to ignore its decisions and challenge its interventions. Canada, along with other middle powers, has openly opposed the addition of permanent seats to the Security Council. There are indeed good reasons to have reservations about the reform proposals currently on the table, but failure to recognize the growing influence of key developing countries, in one way or another, will carry dire consequences for the organization. It is worth investing some energy in the search for a governance reform formula for the Security Council (which might entail changes to the General Assembly as well) that could command broad support within the un membership and help align the organization with the new geopolitical realities.

ac t i v e p l ay e r ag a i n Our policy toward the un cannot be separated from our foreign policy as a whole. The perception that member states have of us and the influence we can have over un decisions depend as much on what we do outside the organization as what we do in it. Every position and initiative we take is analyzed and interpreted. When we move closer to the United States on sensitive issues, such as the Middle East, this registers powerfully with the international community. When we seem to write off an entire continent where we have traditionally had strong ties, that too registers, and not only with African countries. When we announce a new focus on Latin America, then fail to give it much content beyond trade, that is not lost on the objects of our new affection. When we come across as a “one-note” foreign policy country – Afghanistan, Afghanistan, Afghanistan – we signal our disengagement from the broader agenda of problems plaguing our planet. The un, or multilateralism in general, is not a religion, and active support does not mean blind adherence and unquestioned commitment. No country is expected to leave its national interests and values at the door and none does, believe me. The countries that are the most successful in the un are those that have achieved a high degree of coherence in their foreign policy and are able to articulate a clear vision of the kind of world they want to leave to future generations. As a nation, we need to forge such a vision. We need to form a clear opinion on the major issues facing the international community. Small countries cannot afford to pursue more than one goal at a time, but Canada is not a small country, not by any measure, and we have never been perceived as one. We have more assets to deploy that the vast majority of countries on this earth. In the past, we have proved

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ourselves capable of great creativity in tackling thorny issues. It is not to have an inflated opinion of ourselves to think that we have something to contribute to the solution of the great problems of our time, and the un is at the centre of most of these debates. But we have to want to do so and then apply our considerable talent and resources to the task.

“The Old Order Changeth”: Canada and Economic Summitry n i c h o l as bay n e and gordon smith*

Lord Tennyson observed, “The old order changeth, yielding place to new.” The question for 2010 is what the “new order” will look like. Decisions of the Canadian government may have much to do with determining the outcome.

ca n a da a n d t h e g 7/ g 8 s u m m i t The G7 summit was created in 1975 in response to a severe economic crisis, comparable to today’s credit crunch and recession. Canada was not a founding member, but was added in 1976 to improve the balance. The United States (U.S.) and Japan wanted Canada there, to correct the European dominance, but its presence also helped the Europeans to justify their four country seats. From then on, for almost two decades, the membership remained stable at seven plus the European Community (one seat for the commission and one for the presidency, if not already a member in its own right). Canada had an economic weight and international presence that justified its membership and that other aspirants, such as Australia, the Netherlands, and later Spain, could not match. So, although Canada was the smallest member of the G7, its inclusion was never under threat. Russia’s arrival in 1998, to make G7 into G8, did not change this. Canada has, therefore, enjoyed an undisputed seat at this exclusive top table for over 30 years. * Nicholas Bayne contributed the sections on Canada’s role in the G7 and G8; Gordon Smith wrote the section on the G20.

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The other members take Canada seriously and recognize its capacity to innovate and to strike deals. This can be seen most clearly on the occasions when Canada held the summit chair. In 1981, Pierre Trudeau was inhibited because Ronald Reagan was new in office, while Brian Mulroney suffered in 1989 from Reagan being a “lame duck” president. Even so, Trudeau’s Montebello Summit created the “quad” of trade ministers (U.S., European Union, Japan, and Canada), which acted as a ginger group to the world trading system over the next two decades. Mulroney’s Toronto Summit struck the first deal to relieve the debt problems of poor countries, which became an abiding concern of the summit leaders. For the Halifax Summit in 1995, Jean Chrétien proposed that the leaders consider reform of the International Monetary Fund (imf). This was highly innovative, as the summit had not addressed this issue constructively for 20 years. At first the U.S. and the United Kingdom were strongly opposed, but after the Mexican financial crisis at the start of the year everyone changed their minds. The U.S., who had done most to prop up Mexico, wanted to spread the load of any future rescues. The Europeans wanted a regime that would prevent the U.S. from bouncing them into action, as it had done over Mexico. At the Halifax Summit, a four-point program was agreed to, with the heads of government giving authority to measures prepared by finance ministers. The measures were: stricter imf surveillance, based on better data; enlarged sources of imf finance; closer cooperation in financial regulation; and work toward an international bankruptcy regime. All were endorsed by the full imf membership later in the year, but only the first was fully implemented. Finance ministers decided that international bankruptcy was too difficult and dragged their feet over financial regulation. It took until 1998 to get new imf funds voted by the U.S. Congress, by which time the Asian financial crisis had already broken out. If the Halifax program had been put into effect fully and promptly, both the Asian crisis and today’s credit crunch might have been avoided. In the year before the Halifax Summit, Boris Yeltsin had begun to participate in the summit’s political exchanges, instead of being present just as a guest. Chrétien supported greater Russian involvement, as his memoirs make clear, and introduced a further step in 1995, when Yeltsin took part in some of the economic discussions. This prepared the way for Russia to become a full member and attend the first G8 summit at Birmingham in 1998. As chair of the Kananaskis Summit in 2002, Chrétien finally anchored Russia’s position in the G8 and brokered an agreement that Russia could chair the summit for the first

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time in 2006. (The same agreement specified the G8 Summit chairs for the rest of the decade, ending with Canada in 2010.) Kananaskis was the first summit to be held after the al-Qaeda terrorist attacks on the U.S. Jean Chrétien resisted pressure to focus on terrorism and persuaded his colleagues to make Africa the lead item instead. The year before, the Italian hosts had invited a group of African leaders to the summit as guests. Impressed by the Africans’ readiness to take responsibility for tackling the problems of their continent, the G8 heads of government created a special group of African personal representatives, chaired by Robert Fowler of Canada, to prepare the G8 response to the New Partnership for Africa’s Development (nepad). Over the year, the African personal representatives drew up the G8 Africa Action Plan, which offered support for peace and security, political governance, and wide-ranging economic development. This was adopted at the Kananaskis Summit, to which Chrétien invited African leaders as participants, not just guests. Unlike the financial reforms of the Halifax Summit, the African program agreed to at Kananaskis proved more durable. Although the G8 did not fully honour some of its pledges, notably those on debt relief and trade access, it remained committed to helping Africa. France and the United Kingdom were active alongside Canada, and even the U.S. greatly increased its African aid programs. The African leaders were invited back to participate in five of the next six summits. The process was given a powerful boost at the 2005 Gleneagles Summit, where the British chair, building on the foundations laid by Canada, achieved a major advance on debt relief and agreement on new aid targets. The G8 impetus is now flagging under the pressure of the recession. But a decade of strong economic growth and improved governance has made many African countries better able to make their own decisions. This record shows that Canada, although the smallest member of the G8, can steer the summit agenda and exercise a strong influence over the agreements reached among the members. When Canada held the chair, it persuaded the other members to adopt innovative measures in 1995 and again in 2002. Although it was not able to ensure that the agreements reached on financial reforms were fully implemented by the larger members, such as the U.S. and the Europeans, those adopted in support of nepad proved more durable, and the G8 has remained engaged with African issues throughout the decade. Canada has always been in favour of the G8 reaching out to other powers. In the context of the “new international financial architecture” endorsed by at the summits in 1998 and 1999, Canada strongly

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supported the creation of a group of finance ministers that would include other “systemically important” countries. This led to the emergence of the G20 finance ministers, whose first three meetings, in 1999, 2000, and 2001, were chaired or co-chaired by Paul Martin, Canada’s finance minister. When he moved up to become prime minister, Martin was the first to advocate meetings of the G20 at the summit level. The consequences of that Canadian initiative are explored by Gordon Smith in the second part of this chapter. However, despite Canada’s openness to other countries, the G8 as a whole has not been able to agree on how to interact with them. In particular, the G8 has blown hot and cold over its links to the major emerging market powers, Brazil, China, India, Mexico, and South Africa, who are now essential participants in economic decision-making. France first invited these powers to Evian in 2003, a year after Canada’s initiative in bringing African nations to Kananaskis. As summit chairs, Britain and Germany, tried to integrate the emerging powers more deeply into the summit process and involve them in preparations. This culminated in the Heiligendamm process introduced in 2008. But the U.S., Russia, and Japan showed less interest when they held the chair and prevented the G8 from building a closer relationship. Because of the G8’s failure in this area, it has been overtaken by the G20 Summit as the coordinating body to revive the world economy and restore the international financial system. Canada and the G8 Summit of 2010 Canada will again chair the G8 Summit in June 2010. It will have the responsibility of shaping the future of the G8 and its relation with the G20 summit, which by then will have met three or even four times. It has three options: to wind up the G8 and merge it into the G20, to preserve the G8 as it is, or to look for a middle way. The G20 includes all the key international players, which the G8 manifestly does not. But its experience is, thus far, limited to economic and financial issues. It is already large – 24 countries attended the London Summit in April 2009 – and the numbers are likely to grow under the pressure for it to be representative. Within such a large, cumbersome body, a small steering group may well emerge, but, if so, it is unlikely to include Canada. The G20 may also decide to create a secretariat, for which Canadians could be very acceptable. As it stands, the G8 preserves its traditional attractions of compactness and informality. Leaders can have a real debate round the G8 table in a way they never could in the G20. It can still serve to

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resolve disputes among its members and draw on its network of ministerial and official groups, which often bring in non-G8 countries. However, because it does not engage other powers of growing importance, notably China, it is likely to be of dwindling interest to heads of government. The most promising middle way would be for the G8 to make a much more serious effort to engage the original “outreach five” (O5) – Brazil, China, India, Mexico, and South Africa. This would create a reasonably compact group of 13, half the size of the G20 as it now operates, which could cover as wide a range of issues as the G8 now does. The G8 would have to go far beyond the Heiligendamm process, which involves the O5 only in selected topics. It must admit them on equal terms to the choice of agenda and preparations across the board. Even so, the O5 might wish to preserve a certain independence and this could be reflected in co-chairmanship of future summits. Which option prevails will depend on the views of other G8 members, especially those that will hold the chair after Canada: France, the U.S., the United Kingdom, and Germany. Although France and Germany would probably prefer to preserve the G8 in a modified form, the United Kingdom seems more committed to the G20. The U.S. position may only emerge in the light of President Obama’s own experience of summitry. But whatever is agreed at the Huntsville Summit in 2010, it is vital that the entire G8 subscribes to it.

ca n a da a n d t h e g 20 s u m m i t While 30 years ago there was a certain economic logic, infused with some politics, that could provide a rationale for the G7, such is no longer the case with the G8. The addition of Russia made sense, ten years ago, from a global political point of view – if never from a global economic perspective. But as Russia became, over a few years, a full member of the G8, the ground was shifting in another direction. The G7 was created primarily to deal with the need for international economic coordination and cooperation. By the late 1990s, when the Asian financial crisis exploded, it was clear that a more inclusive approach was needed to bring about an adequate response by the international community. The G7 finance ministers recognized this reality. The Russian finance minister was only invited in toward the end of meetings, hence the reference to G7 as where real power lay. Canada and the U.S. led the creation of the G20 group of finance ministers. Paul Martin has frequently written how all his G7 colleagues realized they were not the right group to address the Asian financial crisis.

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Fast forward to June 2008 and the latest global economic and financial crisis, this time originating in the developed rather than developing world. This crisis is the worst since the depression. Early on, there was a realization that the crisis was too big to be handled solely by finance ministers; heads of government were required as well as a larger number of countries. The G20 already existed at the finance minister level. President George W. Bush, never a fan of summits, even less of big summits, invited G20 heads of government to Washington on 15 November 2008. Necessity demanded that the old order change. This G20 Summit represented a sea change, one that would be impossible to reverse. A second summit was held in London in April 2009, and a third took place in the fall in Pittsburgh. Canada and Korea will co-chair a G20 Summit in June 2010 and Korea will host a further G20 Summit in mid-November. Meanwhile the G8 flounders. Its initial raison d’être has disappeared. If, as some have suggested, the G8 becomes a place for prenegotiation by eight countries, how will the other members of the G20 respond? Presumably by having their own pre-negotiation. If so, the benefit of inclusion resulting from enlargement of summits is largely destroyed, and progress on global solutions for global problems suffers a major setback. It is already clear that leaders understand the links among international economic issues and the first-cousin issues of trade, energy, climate, and development. These all have to be dealt with on a comprehensive basis. There is a need for a “grand bargain,” to quote Prime Minister Gordon Brown speaking before the G20 summit he hosted. Henry Kissinger has also spoken about the need for what he calls, “comprehensive solutions.” The G20 agenda has not yet formally expanded, but chances are that it will. The year 2010 is important for Canada in a number of ways, but in good part because it will host the G8 Summit. Given what is happening in the G20, what will the 2010 G8 Summit do? Should it perpetuate what has been called the Heiligendamm process, an exercise in outreach to include five additional countries (maybe six by then, with the addition of Egypt or some other predominantly Moslem country) on a sort of probation? Will there be a separate process where most of the same leaders discuss climate change? It should come as no surprise that various experts are mulling over various ways to choose members of this global steering group more logically. Some are trying to reduce the size of the group. Canada should take note because these ideas could easily be combined to produce a calculus in which Canada no longer deserves to be a member.

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Other circulating geometry and constituency proposals would have the same effect. Smaller groups are, by definition, more exclusive and probably more manageable in a narrow sense. But it is more important to have a group that is the right size to be effective. Some would argue that it doesn’t matter to Canada whether we are inside or outside the global steering group. That is strange, because the harsh reality of the world is that there are rule makers and rule takers. Rules matter a lot to a country like Canada, which is dependent on its international connections. Better, therefore, that Canada be in the “maker” rather than the “taker” group. The overall challenge facing Canada is to cement its place at the new “high table” – the G20. Given the scale of its attributes and ambitions, this probably means devising a particular Canadian “niche.” There are a number of possibilities. •

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Canada as the “grand master of the new process” – Canada develops and brings forward practical suggestions for making the G20 effective operationally, for managing the G8/G20 transition and for integrating the work of the G20, the imf, the World Bank, and the un, a technical process and not very sexy in public terms, but playing to many of our strengths. Canada as the “US wing-man” – a concerted effort to become President Obama’s best friend and to publicly support whatever reforms the new president wants to make, a role that would probably be easier for Michael Ignatieff than Stephen Harper. Canada as the “acolyte to the G2” (U.S. and China) – requires serious work by Canada to shore up/renew the relationship with the Middle Kingdom, but the basis for this could be easier access to resources for China (which would, in turn, mean hard work with the provinces and the business community). Canada as the “friend of the excluded,” otherwise known as the G172, those un countries not in the G20 – especially relevant as we might be one of them. Canada as the “best friend of the middle powers,” some of which (The Netherlands and Spain) may be feeling left out, unless they succeed in their efforts to be in the room – closely related to the friend of the excluded role. Canada as the “best friend of resource-based countries,” which are global price takers heavily reliant on sensible international rules of trade and investment – also closely related to the friend of the excluded role, but with a developing country twist.

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Canada as the “best friend of the ‘bottom billion,’” the poorest countries, chronically unrepresented at key international meetings except as charity cases –closely related to the friend of the excluded and friend of resource-based countries roles. • Canada as the “understanding, helpful supporter of civil society” input to the new international process – the other side of the friend of the excluded role, this would probably play well domestically (although if we find ourselves excluded, the electorate could turn). •

In most cases these potential roles are not mutually exclusive and, indeed, represent the many facets of a well-integrated national foreign policy. However, this over-simplified list serves to illustrate that the current state of stasis is not inevitable and that options for innovative approaches are readily available. Any Canadian set of initiatives of this sort would, of course, require a level of financial and policy commitment that has not been seen for some time. The price of working toward a seat at the high table will be high, not least in terms of the willingness of the Canadian leadership to focus on a range of activities, many of which may not have an immediate (or public) pay-off. However, the price of inactivity is even higher, both in terms of Canada’s substantive interests and in terms of the less easily definable but nonetheless critical considerations related to Canadians’ view of themselves as meaningful players in the global polity. Such an enlargement would be consistent with Canada’s priority to discuss global commons issues multilaterally, including global public goods and “public bads.” It could, and indeed should, lead to a stronger international architecture, within the United Nations and the international financial machinery. The current global financial crisis has demanded that the old order change. The G8 has lost legitimacy, and a new global steering group is necessary. To create global solutions for global problems there is value in solidifying the G20 and formally expanding its agenda. For Canada to secure continuing membership at the highest level summit table, Canada must find its niche. Canada is equipped to fill many roles; it is a matter of choice. Canada is well suited to promote expansion of the G20 summit and is very familiar with its inner workings (Canada alongside the U.S. created the G20 finance ministers group). Canada could promote expansion by working with Korea in 2010 to merge the G8 and G20. The advantage in raising the group to the leaders’ level G20 is profound. Leaders grasp the complex links among economics, trade, energy, climate, development, and other global challenges and are equipped to implement policy change within their own government.

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As host of the 2010 G8, Canada is in a unique position to push for change and showcase its strengths as a global leader. This is a demanding and costly challenge for Canada, but the end is worth the effort; the cost of doing nothing would be far higher.

Canada and Global Financial Governance eric helleiner and bessma momani

The current global financial crisis is the worst that the world has experienced since the Great Depression of the early 1930s. Not surprisingly, it is generating widespread calls for reforms in global financial governance. Canada is well positioned to contribute to debates and reform initiatives in this area. The country has a longstanding and well deserved reputation as an intellectual leader and important bridge-builder in international financial debates, and it holds an important role in key international financial institutions. Its credibility has also been enhanced by the fact that its banking system has proved to be among the most stable in the world during this crisis.

c a n a d a’ s p a s t c o n t r i b u t i o n s to international financial reform Canada’s reputation as an important contributor to debates on international financial governance was born during the negotiations that led up to the 1944 Bretton Woods conference. Like policymakers today, the Bretton Woods architects sought to rebuild global financial governance in the wake of a major international financial crisis. Their ambitions * Much of the information in the following three paragraphs was gained from interviews that Momani conducted between 16 October 2007 and 29 May 2008 with seven of Canada’s former imf executive directors, one of Canada’s former World Bank executive directors, three Department of Finance staff, two Bank of Canada staff, two imf staff, and American, European, and non-Western imf executive directors on the subject of imf–Canadian relations.

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were bold and included the creation for the first time of public international financial institutions – the International Monetary Fund (imf) and the World Bank – that could support a stable multilateral international financial order. As a small open economy that was heavily dependent on global trade and finance, Canada had a particularly strong interest in supporting this initiative. During the Bretton Woods discussions, Canadian officials played an important bridging role between the competing interests and visions of the two dominant financial powers that led the negotiations: the United States (U.S.) and the United Kingdom. Canada was also one of the few countries to bring forward its own independent proposals for postwar reform alongside those of its two wartime allies. The calibre of Canada’s intellectual contributions – most notably those of Louis Rasminsky, who went on to become the country’s first executive director at the imf – earned widespread respect (Helleiner 2005). During the early postwar years, some questioned Canada’s commitment to the Bretton Woods system when Canada contravened imf rules by floating its currency first in 1950–62, then again in 1970. But Canadian officials argued strenuously that, given their country’s unique financial integration with the U.S., the floating exchange rate provided the best mechanism for them to support the underlying Bretton Woods goals of reconciling expanding multilateral trade with a commitment to autonomy of national monetary policy. When greater mobility of international capital ushered in a more generalized move to a floating exchange rate regime in the early 1970s, the prescience of these arguments became apparent, and many praised Canadian policymakers and economists for their foresight in pioneering the case for floating rates (Helleiner 2005). More recently, Canada made important contributions to the intense debates about international financial reform that took place in the wake of the Mexican crisis of 1994 and the East Asian crisis of 1997–98. When it hosted a G7 summit in Halifax in 1995, the Canadian government placed high on the agenda the role of international capital flows in precipitating the Mexican crisis and the question of how to better use the imf to prevent a repeat of such crises. The imf’s Canadian executive director then played a significant role in questioning the imf’s ill-conceived push to give itself formal jurisdiction to promote capital account liberalization (Abdelal 2007). Canadian officials also encouraged new thinking about the role that internationally legitimated standstills could play in encouraging private creditors to assume more of the burden of adjustment to sovereign debt crises (Martin 1999, Haldane and Kruger 2001). Then Finance Minister Paul Martin also strongly advocated new global financial governance structures that were more inclusive of

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emerging economies at this time. In particular, he took the lead in championing the concept of the G20 meeting of finance ministers, central bank governors, and their deputies, a body which he initially chaired when it was created in 1999. In the wake of the East Asian crisis, Canadian officials also put forward a number of important policy proposals concerning the Bretton Woods institutions in areas, such as organizational transparency, administrative efficiency, policy monitoring initiatives, debt relief for heavily indebted poor countries, and enhanced surveillance.

c a n a d a’ s p o s i t i o n i n i n t e r n a t i o n a l financial institutions Canada’s ability to champion its proposals and ideas in the postwar years has been strengthened by its prominent position in the decisionmaking organs of the key international financial institutions. Most notably, Canada has held a seat on the executive boards of both the imf and the World Bank throughout their history. The 24 executive board seats of each institution are highly sought after by all 184 members. Members pool their assigned quotas and form a group that elects a country to lead as chair. Canada chairs a group that includes Ireland and 11 Caribbean states. Unlike other seats where members’ quotas and votes are more evenly distributed, Canada has more than 60% of its group’s collective quota and, therefore, has a semi-permanent seat on each of the Bretton Woods institutions’ boards. Many constituencies are conflict-ridden, and member states jockey internally for political power or fight to take over the chair and alternatechair positions. In contrast, Canada’s constituency comprises mostly English-speaking developing countries that are too weak to challenge Canadian dominance of the chair position. Ireland, the only other industrial country in the group, is also quite happy with its role as alternate-chair, a number two position that the Irish would not have in a European-led group. This gives Canada a significant amount of concentrated power and legitimacy on the boards. As a country with relatively close cultural and geographic proximity to the U.S. and a language in common, Canada has some advantages in understanding the workings of the imf and the World Bank and in interpreting the Washington political climate in which these institutions operate and manoeuvre. In addition to its membership in the G7 and G20, Canada also plays a role in two influential steering committees: the International Monetary and Financial Committee, which advises the imf on broad systemic issues, and the Development Committee, which similarly advises the World Bank. Canada also enjoys the unique

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advantage of being a member of all of the regional development banks: the African Development Bank, the European Bank for Reconstruction and Development, the Asian Development Bank, and the Inter-American Development Bank. To the U.S., Canadian officials have often been a “useful bridge” within the Bretton Woods institutions (Momani 2008). U.S. policymakers have frequently seen Canada’s role as a helpful interlocutor between them and the conservative European governments that do not want to shore up the funding of the imf and World Bank and that do not want to lend to countries that are financially strapped but are of geostrategic value. Consequently, the U.S. has often looked to Canada for support at the executive boards. Although the Bretton Woods institutions use consensual voting and the U.S. maintains veto power on key decisions at the boards, the U.S. has elicited Canadian support to help create a path of least resistance on potentially divisive proposals. Canada is viewed as a “nice guy” at the board, and Canadian directors are generally skilled at emphasizing agreed positions and helpful in de-emphasizing controversies. Canadian directors have thus been able to put forth proposals with less political haggling than the U.S. directors. Because of Canada’s close relationship with the U.S., executive directors from other countries have sometimes been suspicious that Canadian proposals were actually formulated in Washington. However, executive directors from developing countries have generally held a favourable view of Canada and have often looked to Canada to serve as a counterweight to U.S. power at the imf. The fact that Canada has a constituency of small developing countries has raised others’ expectation that Canada would be a mediator. For this reason, Canadian executive directors have often found it counterproductive or difficult to heed instructions from Ottawa that do not take account of this constituency. Canada’s ability to play the go-between role has been particularly complicated by agreements made by G7 finance ministers outside the imf and the World Bank. At the same time, although Canadian directors have felt constrained by group decisions at the G7, the upside has been that Canada could then often depend on G7 members when it wanted allies to promote its initiatives and ideas. In fact, U.S. directors would at times support Canadian initiatives because “they knew Canada wanted it” (Momani 2008). Canada’s good working relationship with like-minded states has also helped Canada push through its policy proposals. On debt relief and development issues, Canada has tended to agree with the Nordic countries who share a strong welfare tradition. Canada has also worked well with British directors on surveillance and many other issues and shared similar concerns and interests with Australia. In addition, Canada’s role

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within, and support of, the G20 has helped in its relations with the emerging market economies represented on the boards.

ca n a da i n t h e c u r r e n t reform debates If Canada is well positioned to contribute to global financial debates, what role has it been playing in the current crisis? Canadian policymakers continue to take a strong interest in imf reform. At the London summit in April 2009, the G20 leaders committed to boost the funding of the imf by nearly a trillion dollars. Canada committed usd 10 billion at the summit; a smaller sum than the usd 100 billion contributed by each of the U.S., the European Union, and Japan, but by no means trivial. In addition, Canada has kept up its call for enhancing imf surveillance and has proposed the idea of having governments respond to the imf’s bilateral surveillance reports. This suggestion is supported by the United Kingdom and the European Union, more generally, but is less welcomed by the U.S. and China, who have skirted around imf advice on fiscal deficits and currency exchange rates (Bretton Woods Project 2009). Stronger imf surveillance is seen by Canadian policymakers as an important method to help correct global imbalances that Prime Minister Stephen Harper has described as “an underlying cause” of the crisis and that he has urged the G20 to address more explicitly (Simon and Guerrera 2009, Flaherty 2008). Responding to concerns that the imf is losing legitimacy among developing countries, the G20 leaders also promised to enact governance reforms involving the reallocation of quotas and votes and the diversification of imf governance and management. Canada has showed leadership in signaling that it is amenable to reducing its relative quota to give emerging market economies more voice and representation on the board – a move the over-represented Europeans have been staunchly refusing. Finance Minister Jim Flaherty has pushed for using both gross domestic product and trade openness as prime variables in determining quota increases – variables that tend to result in increases in the quotas of emerging market economies (although diminishing the prospective voice of low-income countries). Since the start of the crisis, the G20 leaders’ summits have also devoted enormous attention to reform of international financial regulation. Canada has had a unique opportunity to contribute to these debates because its financial system has been one of the most stable in the world during these financially tumultuous times. Despite Canada’s proximity to the troubled U.S. financial system, no Canadian bank has

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failed or needed a bailout during the crisis. An important reason for this stability is various Canadian regulatory practices, such as tighter mortgage lending rules, higher capital standards, maximum leverage ratios for banks, and more effective supervision. Canada’s record in the crisis has given Canadian policymakers enormous credibility in international regulatory debates, and they have used this to promote certain ideas. The first has been to insist, above all, on the importance of strong national financial regulations. As Flaherty put it in advance of the first G20 summit in November 2008, “Before we examine grand designs for global regulatory regimes, we need to recognise that good regulation begins at home. Effective national regulatory regimes could have prevented this crisis and must be our first line of defence against any future one” (Flaherty 2008). At the same time, Flaherty also recognized the need to strengthen international coordination because “this crisis has demonstrated that even countries with strong financial systems can feel the effects of inadequate regulatory regimes elsewhere” and because “countries may hesitate to impose new requirements on their own institutions if these measures will create a competitive disadvantage” (Flaherty 2008). Canadian officials have pushed for a strengthening of international colleges of supervisors and for mandatory and public imf–World Bank financial sector assessment programs. They have also backed greater representation for emerging economies within international regulatory bodies, most notably the Financial Stability Forum whose membership was expanded in April 2009 to include all G20 countries (and was renamed the Financial Stability Board). Canadian officials have also promoted an expansion of the international regulatory umbrella to include all financial firms, products, and markets that can pose systemic risk. Drawing on the Canadian experience, the benefits of leverage ratios have also been trumpeted. In addition, Canadian policymakers such as Bank of Canada governor, Mark Carney, have been strong advocates of the need for regulators to widen their horizons beyond the micro-prudential focus on individual institutions to a more “macro-prudential” view of system-wide stability. Carney (2008) has also expressed the desire to see the application of fair-value accounting “limited to those securities that trade on exchanges or in continuously open markets.” The G20 reform agenda has largely echoed these various priorities put forward by Canadian officials. As many of the goals were also shared by other countries, it is difficult to judge the extent to which Canadian officials have influenced the international agenda. But it is certainly true that Canadians have been very active participants in current debates on international financial reform. For example, the Department

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of Finance’s Tiff Macklem acted as co-chair of the important G20 Working Group 1 which developed many of the specific international regulatory initiatives endorsed at the April 2009 summit. He was subsequently named chair of one of three new standing committees of the Financial Stability Board (the Standing Committee for Standards Implementation). Other officials, such as Carney, have also been widely acknowledged as leading figures in the detailed regulatory debates occurring within international financial circles.

conclusion Canada’s active involvement in the current debates on global financial reform continues a pattern of policymaking that dates back to the Bretton Woods negotiations. Canada’s high-profile role in international financial policymaking partly reflects the keen interest that Canada, with its small open economy, has in a stable multilateral financial order. It has been made possible by a tradition of high-quality Canadian intellectual contributions in this area as well as Canada’s prominent position in international financial institutions and its reputation for facilitating consensus and bridge-building. During this particular crisis, the stability of the Canadian banking system has further strengthened the country’s ability to contribute to international financial reform, especially in the regulatory realm. Although the current crisis has triggered some important international financial reforms, there is still much more to be done. Canadian policymakers should take advantage of their important place in global financial governance to press hard for further progress, not only on international regulatory reforms, but also on some key issues that remain unresolved on the global financial reform agenda. Particularly important at this moment are the issues of imf governance reform and global imbalances. Both require the bridging of views among industrialized and developing countries, a role that Canada may be uniquely placed to play at this historical juncture. On the former issue, Canada could help nudge the Europeans toward consolidating their representation in the fund to allow for a larger role for developing countries. On the latter issue, Canadian officials could continue to press for a strengthening of imf surveillance that encourages policymakers in large deficit and surplus countries – the U.S. and China in particular – to recognize the systematic implications of their domestic policies. As global imbalances are also linked to the U.S. dollar, Canada could also support discussion of international monetary reform, including the strengthening of special drawing rights as a reserve asset.

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references Abdelal, Rawi. 2007. Capital rules: the construction of global finance. Cambridge: Harvard University Press. Bretton Woods Project. 2009. Country positions for the London summit. London, UK: Bretton Woods Project, 1 April. Available at: . Last accessed 27 Sept. 2009. Carney, Mark. 2008. Towards a more resilient financial system. Financial Times, 1 December. Available at: . Last accessed 27 Sept. 2009. Flaherty, James. 2008. “Boring” Canada’s financial tips for the world. Financial Times, 13 November. Available at: . Last accessed 27 Sept. 2009. Haldane, Andy, and Mark Kruger. 2001. The resolution of international financial crises. Bank of Canada working paper 2001-20. Ottawa: Bank of Canada. Available at . Last accessed 27 Sept. 2009. Helleiner, Eric. 2005. Towards North American monetary union? The politics and history of Canada’s exchange rate regime. Montreal: McGill-Queen’s University Press. Martin, Paul. 1999. International financial architecture reform: completing Bretton Woods. Statement by the Honourable Paul Martin, Minister of Finance for Canada to the Chicago Council on Foreign Relations, 7 June. Ottawa: Department of Finance Canada. Momani, Bessma. 2008. Canada’s role at the imf executive board. Vancouver: Canadian Political Science Association. Available: . Last accessed 10 Oct. 2009. Simon, Bernard, and Francesco Guerrera. 2009. Harper sees greater role for emerging economies. Financial Times, 31 March.

“Trade Policy Is [Still] Foreign Policy,” But It’s Not Sexy* ro b e r t wo l f e

In one of the first major attempts to articulate the intellectual basis for an autonomous Canadian role in the world, a distinguished Queen’s professor told the Canadian Club of Ottawa in 1922, “I think you would find that matters of trade, of commerce – economic questions – bulk very large in foreign policy.” O.D. Skelton later served as undersecretary of state for external affairs for 16 years. What was true in the immediate aftermath of the Great War is still true in the era of globalization, but the world does not hold its breath waiting for Canadian pronouncements on the trading system. Unlike such problems as making enough nuclear isotopes to treat cancer patients, trade is not a sexy topic, unless the issue is selling baby seal pelts in Europe or fighting “buy America” provisions. Important as it is for the government to stand up for Canadian exporters, large and small, the real trade policy work consists of building and maintaining the structure of rules and practices that prevent such restrictive measures. That essential task for Canadian diplomacy is not glamorous. “Worthwhile Canadian initiative,” the title of a column about trade policy, is remembered as one of the world’s most boring newspaper headlines.† Foreign policy is not a popularity contest at home or abroad. It is * The title is from Cooper (1972); the description “sexy” comes from a comment that landed the minister of natural resources in hot water in spring 2009. † The inspiration for the survey to find the most boring headline ever written was a column by Flora Lewis in the New York Times, 10 April 1986, on the Canadian proposal for a free trade agreement. Her title was “Worthwhile Canadian Initiative,” but, in the end, the first prize went to “Debate on the Nature of Reality Continues.”

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about putting what little weight we have into pursuing the policy objectives of Canadians that touch on activities outside Canada, which now include most policy areas.

th e p o l i t i c a l i m p o r t a n c e o f t r a d e Realists have always argued for the primacy of politics, meaning that the so-called “high politics” of military security dominates the “low politics” of economic and social affairs. Functionalists believed in the conquest of the political by the economic. Work on such welfare issues as the joint management of scarce resources, employment, and public health was important, not just for social reform but also as a means to remove the economic causes of war and international insecurity. High politics take their relative position from the engagement of leaders in the discussion of such important matters as Afghanistan, while matters of international economic cooperation can be dealt with by lesser officials, until the financial system comes close to collapse and world trade falls off a cliff. No foreign policy task can be more important for leaders than to get trade flowing again and to ensure that the “great recession” does not do lasting damage to the global order. The decline of global trade during this great recession has been steeper than in a comparable period during the depression of the 1930s. The decline is not primarily due to protectionism, but the political response may yet be protectionist in effect if not in intent. In this context, it is more than ever vital to conclude the current Doha round of World Trade Organization (wto) negotiations, launched in 2001. This round may not result in much new liberalization, although analysts think that a substantial agreement is within reach – one that, in agriculture, might exceed the last round both in improved market access and in limits on domestic support. In non-agricultural market access (nama), or trade in goods, cuts in the rates bound in members’ schedules of commitments – whether or not the cuts would imply new market access by reducing rates actually applied – is well worth having for the certainty alone. In the current context, the world needs to lock in the current level of openness. The Doha round will do that. Canada has a role to play as the world’s fifth largest trader (when internal trade among European Union [eu] members is excluded). But Canadian ministers have been “missing in action” at the wto’s headquarters in Geneva. Canadians were once known as major supporters of the trading system. A Liberal government was a leader in the founding of the General Agreement on Tariffs and Trade (gatt) in 1947, but that party holds no monopoly on economic internationalism. Conservative governments were

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active in the creation of the Organisation for Economic Co-operation and Development (oecd) in the 1960s and in the transformation of the gatt into the wto in the 1990s. Multilateralism in trade is not merely high-minded idealism. In April 2009, a British financial journalist worried that a forthcoming eu–China summit mattered more to the eu than to China. Now think of Canada. If 33 million Canadians have trouble getting the attention of 300 million in the United States (U.S.) despite being the closest neighbour, for many, their largest trading partner, and their largest supplier of energy, imagine what our problems are going to be with China. A vigorous wto will be Canada’s best trade agreement with the world’s dominant manufacturing country, as well as the other 150 plus members.

c a n a d a’ s c u r r e n t r o l e i n t h e wto Aside from the U.S., Canada is not an especially important trading partner for anybody. That makes the wto the country’s principal trade agreement with most of the world at a time when growth in the trade on which our economy depends will come from new markets, not from continued dependence on the declining fortunes of the U.S. The wto is nonetheless a major building block in trade relations with the U.S. Some issues are hard to deal with in any bilateral agreement, especially agriculture and domestic regulation, and Canadians must always worry about having their access to the U.S. market eroded by preferences they give to others. The wto is also the principal means we have of influencing growth and governance in many developing countries, especially given the shifting patterns of development assistance. An open liberal nondiscriminatory trading system is in Canada’s national interest, but Canadians have lost the systemic plot. Or at least politicians can no longer find the script. Most of their activity in recent years has been oriented toward bilateral deals with little commercial importance and no systemic significance. However, Canadian officials remain at the centre of things in Geneva. The previous ambassador chaired the negotiations on trade in goods; the current ambassador chairs the Dispute Settlement Body. A member of Canada’s permanent delegation coordinates the work of the groups of experts from capitals who do most of the work in services negotiations. Canada’s ambassador to the wto is supported by a large staff in Geneva and a substantial number of trade policy professionals in Ottawa, principally in the Department of Foreign Affairs and International Trade (dfait), but also in other departments, notably Agriculture and Agri-Food Canada.

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Canada has been able to make contributions or proposals to the Doha round in a wide range of areas, including trade facilitation, agriculture, market access for non-agricultural goods, services, subsidies, anti-dumping and countervailing duties, and intellectual property – a total of more than 150 proposals. Canada led the effort to prepare quantitative simulation of reductions in domestic support for agriculture and helped a developing country group with analysis of the criteria for designation of “special products.” Officials observe that many aspects of the current negotiating texts began as Canadian ideas and reflect Canadian objectives. Few members have made as substantial an analytic contribution to the negotiations. But ministers have been almost invisible for years. When Pascal Lamy, director-general of the wto, called selected wto ministers to Geneva in July 2008 in an attempt to break the log jam in the Doha round, Canadian ministers were there, but they had little to do. The dynamic of meetings with so many people in the room (each of the more than 30 invited members could have two or more people at the table) is not conducive to real engagement. When the discussions proved sterile, the director-general proposed that he hold “consultations with a smaller group.” This little group of seven “friends of the chair” were the EU, U.S., and China – the big three of world trade – plus representatives of the agriculture clubs – Brazil for the G20, India for the G33, Japan for the G10, and Australia for the Cairns Group. (For a description of the clubs and their role, see Wolfe 2008 and 2010). It was an odd assortment, but they were some of the principal antagonists on the tough issues. Perhaps if they could agree, then other countries would too. However, they could not agree and, at the time of writing, the round remains stalled. The Canadian ambassador attended the G7 meetings, but in his capacity as the nama chairperson. Canadian ministers were once involved in such meetings, but no longer. No trade minister since Pierre Pettigrew (1999–2003) is known in the wto. Canada’s minister was applauded by others in July 2008, not for helpful suggestions, but for his willingness not to waste time on posturing while pointedly asking those huddling in small rooms to get on with it.

wh at h as h a p p e n e d to ca n a d i a n m i n i s t e rs ? The usual story is that ministers are not interested in the wto because Canadian business is not interested, having got everything it wanted in the North American Free Trade Agreement (nafta). That story may explain the attitudes of the Harper government, but not of their

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predecessors. In the early years after nafta came into force and the wto was created, ministers remained engaged with the Quadrilateral Group of Trade Ministers (the Quad included the U.S., eu, Japan, and Canada), and they were active participants in a series of informal ministerial meetings on the global trading system, including one hosted by Canada in 1995. The frequency of such meetings has declined in the last four years, so recent Canadian attendance cannot be compared with the earlier period, but it is noteworthy that Australia’s trade minister has attended many more informal meetings than Canada’s. And at many such meetings, the Canadian representative has been a junior minister or a parliamentary secretary. A minority government keeps Canadian ministers closer to home than some of their counterparts. Agriculture Minister Gerry Ritz missed an important meeting of the Cairns Group of agricultural exporters in Indonesia in June 2009, ostensibly because the Official Opposition would not send a member of Parliament as part of the delegation to mitigate the minister’s absence in the case of a confidence vote in the House of Commons. The Liberals deny the charge. Minority government limits Canadian negotiators’ public room to manoeuvre on sensitive issues, such as supply management, inhibiting any inclination to take an active role. But it is not the issue in itself that has marginalized Canadian ministers. A declining emphasis on the multilateral system is also evident in the public stance of the government. In the 1990s, ministers talked a lot about the wto in speeches and press releases, and they talked about it a great deal more in 2001, the year the Doha round was launched. During the last two years of the Chrétien government, the number of references to the wto was still higher than the 1996 level, but declined substantially in 2004, and the level is now insignificant. In 2008, the minister of international trade issued 32 press releases, but only three made reference to the Doha round of trade talks. The round and the wto are rarely mentioned by the Harper government. References are often either ritualistic reminders that completing the round would be a good thing or invocations of blockages in the wto as a justification for bilateral trade negotiations. The prime minister is a convinced economic liberal, and he is committed to what he calls the government’s “ambitious free trade agenda,” but all the items he enumerates on that agenda are bilateral or regional. He does not mention the trading system or the Doha round. He does not see how mediating institutions contribute to the agenda: supporting “free trade” is fine for Canada, one of the world’s most open economies, but we need to make the system work, and we need to persuade other countries to come along. Similarly, he makes much of the G20 summit’s

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commitment to avoid protectionist responses to the crisis, but monitoring exercises have shown that governments tend to respect their multilateral obligations in crafting such responses, which ought to focus attention on completing the current wto negotiations. Canadians tell pollsters that trade is important, but trade agreements are never top of mind. In election campaigns, trade is rarely the main item in news coverage. If an issue is not on the general radar, interest groups can capture it. After a full day of unedifying debate on agricultural trade policy in November 2005 – the only debate on trade policy in years – the House of Commons gave unanimous approval to a motion instructing negotiators at the forthcoming wto ministerial conference in Hong Kong to seek increased market access abroad for agricultural exporters while ensuring that the protection from imports offered to supply-managed sectors did not change. This schizophrenic instruction has shaped the public stance of negotiators ever since, and limited the ability of Canadian ministers to be full participants in the negotiations by undermining their credibility. Canadians can determine the position their negotiators adopt, but not the results of the negotiation. No one expects Canada to leave the wto if the terms of the Commons resolution are not met. When the only Canadians actively following the negotiations are dairy farmers, ministers have to be awfully careful about what they say in public. When the resulting domestic pronouncements are read by Geneva insiders, however, they produce laughter.

s t r u c t u r a l p r o b l e m s i n o t t aw a The disarray in dfait between 2003 and 2006, when the government of Prime Minister Martin split the department and that of Prime Minister Harper put it back together, had two perverse consequences. First, trade officials and those responsible for other foreign policy issues are now housed in different buildings, separated by a waterfall, with both buildings physically distant from other major government departments. Second, the House of Commons Standing Committee on Foreign Affairs and International Trade (scfait) split into separate committees, and stayed split. The two committees do not talk to each other. All trade-related legislation (including controversial bills such as the implementation of the Canada–Colombia Free Trade Agreement) has been referred exclusively to the House Standing Committee on International Trade. Although that committee has had to deal with foreign policy and human rights issues, its dominant perspective is the impact on trade. At the same time, trade has been removed as an agenda item from the transformed foreign affairs committee.

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Major reports with the scope of scfait’s 1999 study of the future of the wto are no longer possible. That report was not novel. The committee held hearings in the 1980s on the free trade agreement with the U.S., on nafta in the 1990s, and on the 1994 legislation implementing the results of the Uruguay round, the last round of trade negotiations. scfait interpreted its mandate broadly to include international economic policies generally, doing major studies on foreign aid (1987), international debt (1991), reform of the international financial institutions (1995), and the Multilateral Agreement on Investment (1997). The health of the multilateral trading system is crucial to longstanding Canadian foreign policy objectives, but, even in the midst of global economic crisis, we see little public political engagement. scfait’s crossCanada public hearings on the future of the wto a decade ago were literally the last of their kind. The contrast with today is striking. The entire Bretton Woods architecture is under strain. Parliamentary attention? Next to zero. The professional trade policy bureaucrats can only do so much when, at the political level, Canada is marginalizing itself.

wh at o u g h t ca n a da to b e d o i n g on trade? Canada has long had a place in the G8 because of its active role in multilateral diplomacy, plus its economic importance to the U.S., the essential member of the club. The latter is undiminished, but recent Canadian governments have not played a distinguished diplomatic role. That will have to change if the prime minister is to have a successful summit in Muskoka in July 2010. At the time of writing, world leaders had recognized the importance of the Doha round at the G20 and G8 summits, with some prospects for bringing the negotiations to a conclusion in 2010. A final breakthrough might be achievable in Muskoka, but will require new energy in Canadian multilateral trade diplomacy. Trade policy as a diplomatic activity, including Canada’s analytic leadership in the development of new approaches to vexing problems, can be used to justify our claim to a seat at the world’s top tables. The duty to care about our fellow humans does not end at the water’s edge. The duty to strive for peace cannot be limited to a policy domain called “security.” And on a more mundane plane, the striving for a more prosperous Canada cannot be achieved by ignoring the prosperity of other territories in an interdependent world. Trade policy ought to be determined not only by our microeconomic “interests,” but also by the international purposes we seek to achieve. And those purposes are not limited to the outcome of a single negotiation. Attending to the ongoing health of the trading system ensures that a strong wto can

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play its part in a structure of global governance that contributes to the foreign policy objectives of peace and security, the rule of law, and democratic development. Some trade ministers have recognized that trade policy is a useful instrument for the conduct of Canadian foreign policy in a rapidly changing world – as the current government may be rediscovering. The free trade negotiations with Jordan and Colombia certainly had foreign policy objectives. Canada’s real purpose in the recent launch of trade negotiations with the EU (whose commercial results may be limited) is to remind others, and ourselves, that we have an Atlantic role, that we have not moved completely into the U.S. shadow, and that we have interests beyond Asia and the Americas. Europe remains a major power centre in the world and a significant partner for Canada. It is also a signal to the U.S. that other countries are talking about opening markets at a time when their own are becoming more restricted. Problems in the management of international policy are not exclusive to Canada. And trade policy is not alone: development assistance, industrial policy, agricultural and fisheries policy, environmental policy, investment promotion, science and technology policy, structural adjustment, and responding to climate change also have important implications for the conduct of foreign policy and relations. They too demand a “whole of government” approach. The responsible departments should be playing a more active role, but the structural, bureaucratic, political, and intellectual separation of trade and foreign policy is especially problematic. The interdependent causes and consequences of a global economic crisis require an integrated response. Analytic and diplomatic resources should also be devoted to the multilateral trading system, because the real economic gains for Canada from potential bilateral agreements are close to zero.

tr a d e p o l i c y i s f o r e i g n p o l i c y The question at the heart of the Doha Development Agenda, to give the current round of multilateral trade negotiations its formal name, and the question that should concern Canadians is whether the compromise on which the Bretton Woods system is based can finally incorporate the aspirations of developing countries. That compromise between free trade abroad and the welfare state at home is a paradox. Every government is concerned for the livelihood of its citizens, and the trade policy actions of every government risk hurting some other government’s citizens. Sometimes the welfare concerns of governments have to be relaxed in favour of more open markets, especially in a crisis; and sometimes the reverse is true. The trade policy as foreign policy agenda

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includes prickly issues, such as intellectual property rules as they affect medicine and health in developing countries and “aid for trade” or helping developing countries take full advantage of global markets. The agenda also includes a willingness to compromise on difficult issues, such as supply management, as a contribution to an overall package, even if such a compromise offends politically powerful interest groups in sensitive ridings. Ministers will not risk even whispering that the likely outcomes of the Doha round will be manageable for Canadian farmers, even if some adjustment will be needed. But that limits Canadian ability to build support even for its position on supply management. Exerting influence in favour of compromise is hard if others know that you have promised your own domestic interests that you will not compromise. But the paradox is even sharper: the classic formulation of the Bretton Woods compromise does not accommodate normative concerns for sustainable development, because collective responsibility for the planet cuts across both unrestricted international markets and respect for the sovereign right of governments to manage their own welfare state. Less developed countries, in particular, have legitimate concerns about the capacity of billions of people to adjust flexibly to greater engagement in the global economy, but if members are to be properly accountable to each other, and for the planet, then they will need to think of new ways to resolve this paradox. The challenge at the nexus of commercial interests, climate change imperatives that may lead to carbon targets affecting trade openness, and development cooperation is where trade policy fully becomes foreign policy. Here is where a stronger trading system will be in Canada’s long-term interests. Playing such a systemic role will not be easy, but Canadians have the bureaucratic capacity and diplomatic skills to make a difference.

ac k n ow l e d g m e n t s I appreciate the helpful comments of John Curtis, David Elder, and Paul Heinbecker and the able research assistance of Jesse Helmer and Jonathan Preece. The support of the Social Sciences and Humanities Research Council is gratefully acknowledged.

references Cooper, Richard N. 1972–73. Trade policy is foreign policy. Foreign Policy, 9: 18–36.

301 Trade Policy Is [Still] Foreign Policy trb from Washington. 1986. Don’t stop the presses. The New Republic, 2 June: 4 and 41. Wolfe, Robert. 2008. Canada’s adventures in clubland: trade clubs and political influence. In Daudelin, Jean, and Daniel Schwanen (editors). Canada among nations 2007: room for manoeuvre. Montréal and Kingston: McGill-Queen’s University Press: 181–97. Wolfe, Robert. 2010. Sprinting during a marathon: why the wto ministerial failed in July 2008. Journal of World Trade, 44(1).

Canada’s Contribution to Global Economic and Financial Governance cy r u s r u s t o m j e e

Canada has made remarkable, consistent, and widely respected contributions to the resolution of key global financial and economic issues. While at the forefront among nations in its input into international policy formulation and action to eradicate global poverty, it has left a unique legacy in its contribution to several other key global governance challenges. This chapter explores some of the factors driving this contribution, some specifically Canadian, others a conjuncture of circumstance and political determination. Yet Canada’s participation in breaking global deadlocks has yet to run its full course. It is an unfinished agenda, continuously challenged by the repetitiveness, increasing frequency, and depth of global economic and financial crises and regular reversals in progress on poverty reduction. Among myriad challenges calling for collective global action, five, focused on governance reform and poverty alleviation, are briefly explored later in this chapter. They represent particularly acute bastions of defiance of current efforts to build a more inclusive, prosperous, and stable global economy, dampening Canada’s legacy as a pioneer and leader in global governance innovation and, in turn, inviting renewed Canadian strategic focus.

a national contribution to collective action In the area of international financial policy and global financial governance, opportunities for uniquely identified national contributions are

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strikingly limited. The United Nations (un) approaches global decisionmaking from the Westphalian system of one-country one voice. This allows for the integration of all voices into global policy debate, but often mutes opportunities to build a sustainable consensus when some of the unique insights that can break global impasses come forward. The G20 also operates through consensus, using elements of the Westphalian model, recognizing as equal in force each country’s individual contribution, and eschewing decision-making by voting. In contrast, the decision-making rules of the World Bank and the International Monetary Fund (imf) – which make many of the pivotal decisions affecting global financial and economic governance and the quest to eradicate global poverty – are largely based on relative size in the global economy. It is, therefore, puzzling that Canada has achieved the measure of influence it has. With a voting share of less than 3 per cent, Canada has systematically introduced, built consensus on, and seen to conclusion many policy developments at the two institutions: piloting the Financial Sector Assessment Program (fsap); helping to establish and finance the Heavily Indebted Poor Country and subsequent Multilateral Debt Relief initiatives; brokering consensus on the terms of imf financing for large stand-by arrangements; supporting the transformation of both imf and World Bank financing instruments for low-income countries; and playing a leading role in the independent evaluation mechanisms in both institutions. If Canada is widely respected for its valuable role in the Bretton Woods institutions, its contribution to global financial policy and global governance innovation is most clearly recognized in another forum: in its decisive and pioneering role in creating and sustaining the G20 – a forum with no voting arrangements, yet today the world’s preeminent decision-making forum in global financial and economic matters. Despite being one among 19, Canada has built a particularly respected legacy and presence in the G20, most notably in international governance reform. Spearheaded by former Canadian finance minister and subsequently prime minister, Paul Martin, Canada was instrumental in establishing the G20. Martin’s key insight was the vision of an inclusive, mutually reinforcing globalization and its potency, if achieved, as guardian of global financial stability, a defence against slippage in global economic activity, and an agent for dynamic reform of the global financial system. Proposed by Martin to his U.S. counterpart, in the midst of the emerging-market crisis and in the absence of global decision-making institutions with the legitimacy and collective power to make global economic and financial decisions, the G20 was launched in 1999.

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Canada chaired the inaugural meeting, building consensus on critical aspects of the fledgling new international forum’s modus operandi. Rules for managing the G20 were formulated and adopted, including the group rotation process for chairing the forum and its troika management system. The informality and consensual and candid deliberation that have characterized the forum’s operations since inception were styled and promoted by Martin. Canada’s influence increased further in the early years of the G20 and has continued, more recently through Canadian leadership in conceptualizing the G20 as a leaders’ level forum. This initiative, again spearheaded by Martin but this time as Canadian prime minister, would remain a back-burner issue, carefully strategized and nurtured, closely researched by globally recognized Canadian thinktanks and launched in Washington in 2008, almost a decade after the G20’s establishment.

fa c t o r s c o n t r i b u t i n g to ca n a d i a n i n f l u e n c e To the external observer, five factors have driven Canada’s extraordinary influence in the Bretton Woods institutions. Individually, they have been replicated among many of the advanced industrial country members of the imf and World Bank; collectively, they have enabled Canada to make a unique contribution among nations. First, although little recognized for its value, Canadian participation in the bank and the imf as a member and leader of a multicountry constituency,* has set Canada apart from most fellow members of the G7 and offered vital insights into the extraordinary challenges experienced by some of the smallest, most vulnerable, and least resourced economies in the world. It has empowered Canada to promote and support development-oriented policy recommendations relevant to developing country needs and sensitive to human and financial capacity constraints in these countries. Through this experience, Canada has led efforts to establish several international codes and standards, inter alia in fiscal and monetary policy, banking supervision, and insurance. And, while mobilizing financial and technical support for all developing countries, Canada has insisted on holding itself, its fellow constituency members, and all others to the highest international standards of good practice. * The constituency includes Antigua and Barbuda, the Bahamas, Barbados, Belize, Dominica, Grenada, Ireland, Jamaica, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines.

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The second factor is the extraordinarily close relationships, interactions, and policy coordination between the Canadian Department of Finance, the Bank of Canada, Canada’s aid agency, the Canadian International Development Agency (cida), and other agencies and departments of the government of Canada. Each has offered close, substantive policy support. Close inter-agency collaboration has helped Canadian authorities share internally the best of global expertise in domestic policy formulation and has helped coordinate development policy priorities in the direction of Canadian aid. Third, reliance on a network of national research agencies and thinktanks, each actively contributing to the flow of research and policy development, has kept Canada at the forefront of global financial sector and development policy progress. Few other major donor countries have built and harnessed an equivalent resource. The interventions of Canada’s International Development Research Centre, the Centre for International Governance Innovation, academic and research centres such as the University of Victoria and the North-South Institute, among others, have pioneered new approaches to global development policy and international governance. Many of these initiatives later emerged elsewhere, in the bank, the imf, and in the G20, seemingly as conventional wisdom. Fourth, an active policy of cross-utilization of key personnel – a revolving door approach – sees both incoming and retiring Canadian executive directors and other Canadian personnel at both the imf and World Bank emerging from and returning to government, the central bank, and cida, retaining and building on institutional experience and expertise. It is also standard practice to cross-deploy senior personnel within Canadian institutions. Finally, the quality of leadership offered to the Bretton Woods institutions has been high. In the past two decades Canadian imf and World Bank executive directors have built widespread respect for their fairness, loyalty to constituency responsibilities, and eschewal of ideological bias in policy approach. They are often the first port of call for testing the positions of both advanced industrial countries and emerging developing countries. Careful nurturance of this position of trust has fostered a capacity to broker deals, particularly those straddling North–South and G7–non-G7 divides. This capacity has been manifest in many significant decisions made in recent years at the imf – the terms agreed to by the imf’s board during negotiations on the largescale bail-outs of emerging market economies in the late-1990s and the early part of this century, financing terms for the imf’s regular and concessional facilities, amelioration of the imf’s conditionality policy, and the scaling up of bank and imf resources for countries emerging from conflict and those affected by exogenous shocks.

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a n u n f i n i s h e d ag e n da Canada’s contributions at the World Bank, imf, and G20 are significant and laudable, but they remain incomplete. Five key imperatives loom as direct challenges, affronts to the Canadian formulation of an embracing, inclusive form of globalization, a special sensitivity to the acute challenges of global poverty, and an uncompromising insistence on the establishment and maintenance of international benchmarks and standards of best practice to which all nations should aspire. The first is completing imf governance reform. Taken up by the G20 and driven strongly by Canadian effort, reform has focused on a cluster of “voice and vote” issues. Progress has been slow and limited. New and additional imf governance challenges have emerged, inter alia board–management relations, the political oversight mechanism, board structure and size, and the process of selecting the managing director. Having contributed significantly to the G20’s efforts to resolve the first round of imf governance challenges, Canada is well placed to lead discussion in these further areas and to offer innovative suggestions. Second, the governance structure of the World Bank group requires reform. Governance arrangements have failed to keep pace with the bank’s increased role and influence in global economic and social development – in financing, technical cooperation, as a knowledge bank, and as the likely mechanism for delivery of urgently required global public goods. Canada played a crucial role in the early design of the bank’s poverty reduction strategy framework and has maintained consistent support to the bank’s International Development Association. Canada has actively supported innumerable initiatives to adapt and strengthen the relevance of bank group financial support and capacity building for its poorest member countries and is well-placed to initiate new proposals for reform. A third international governance challenge bearing down on Canada is more akin to an obligation than a widely shared collective responsibility: strengthening G20–non-G20 relations. Having helped establish, operate, and subsequently inspire the transformation of the G20, Canada carries a unique responsibility to initiate new and more effective forms of dialogue among the 19 countries of the G20 and the more than 170 countries that are not represented in the G20. Although the G20 – a forum representing approximately 90 per cent of global output, 70 per cent of world trade, and two-thirds of the world’s population – offers a valuable locus for discussing and breaking deadlocks on many global issues, it also raises the prospect of a potential tyranny, by excluding participation of non-members in global decisions that affect their economic and social progress.

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Canada’s role and its capacity to address these challenges are significant. Canada holds membership in the Francophonie, the Commonwealth, the Asia-Pacific Economic Cooperation, the Summit of the Americas, the G8, and of course the G-20. It consequently offers a trusted and respected nexus between the included and excluded, allowing exploration of formal and informal modes of engagement between them. In the face of rapid climate change and escalating environmental degradation, the urgent need for more inclusive and effective global environmental governance arrangements represents a fourth pressing imperative. Yet, unlike the governance challenges at the imf, World Bank, G20, and international financial governance reforms, where unique national contributions can and have been made, global environmental governance remains fractured, with no road map, no clear pathways to progress, and no willing first mover. Although resolution demands collective global leadership, a catalyst is clearly needed. Canadian innovation, and the peculiar relationship of trust it has earned in its contribution to resolving global governance arrangements represent assets demanding strategic consideration and the fashioning of a national strategic approach that can contribute to breaking this global deadlock. Canada’s unfinished agenda goes beyond the country’s active contribution to resolving the four key global governance challenges noted above to embracing a more fundamental global challenge: the need to build the global consensus necessary to eradicate poverty. Although threats to progress are perennial, the current global economic crisis stands in marked distinction to prior crises in its destructive force. Before the current crisis, in many cases with Canadian support, lowincome countries were achieving significant progress in strengthening social safety nets and social service provision, improving macroeconomic policy conduct, opening their economies, liberalizing trade and finance, improving public financial management, building fiscal space, and strengthening financial systems. Collectively, these efforts were contributing to progressive and increasingly discernible gains in poverty reduction. For the poorest countries, the financial crisis in the developed economies seemed of little consequence, a pebble rolling with some speed but far away and with no threat to their steady economic and social progress. Yet, in barely 18 months, the pebble has become a boulder, wreaking economic and social havoc. The crisis has halted trade and private capital flows, eroded remittances, prompted rapid escalations in unemployment, eroded social safety nets, and placed entirely unachievable demands on these countries’ fiscal resources. Key millennium development

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goals have been set back by over a decade and more than 40 million people have suffered irreversible health damage. Recovery will take several years, necessitating resources far beyond those offered by bilateral and multilateral institutions. It will require a collective international effort, first to restart the seemingly virtuous cycle of barely two years ago and, second, to address what are clearly fundamental fault lines in the structures of global economic and financial governance. Who will lead? Clearly not a single nation, but more likely a small, pioneering group of nations, using the necessary combination of vision, political will, and capacity to mobilize and contribute the resources necessary for the effort. Canada’s contribution in bringing G7 and emerging-market economies into a mutually reinforcing relationship offers hope that this second, far more challenging task can be achieved.

conclusion Canada has made a central contribution to global financial policy development, to accelerating the entry of emerging markets into the mainstream of global economic and financial policy development and decision-making, and to addressing the challenges of many of the worlds’ most impoverished economies. Yet many decades of Canadian leadership, vision, political will, and collective national determination now stand in danger of erosion, threatened by the global economic crisis, climate change, continuous threats to global peace and security, and the inability to ensure against the emergence of new health pandemics. With dynamic emerging markets now settled into their G20 role, attention must urgently shift to the issue at the source of these challenges: the deepening of global poverty. Approaching the final quarter of 2009, tentative signals of a resumption in global economic activity offer encouragement to several developed economies most directly affected by the crisis. But they offer little to the poorest, where setbacks have been more permanent and more substantial and where recovery will take far longer. The boulder that started as a pebble is momentarily at rest, poised threateningly in its angle of repose, now a direct challenge to the most vulnerable. Will the recent signs of revival in several G20 economies bring its destructive progress to a halt? Or will the profound challenges confronting developing countries and the onset of new challenges and crises send it further on its journey? An important part of the answer, it is clear, lies with Canada, among nations.

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Nuclear Disarmament: Building a Conducive Environment ernie regehr

Seven decades into the nuclear age, the international community is coming around to an unprecedented level of consensus on nuclear disarmament and non-proliferation. The change really happened in the 1990s. At two notable conferences to review the Nuclear Non-Proliferation Treaty (npt), in 1995 and 2000, participants agreed not only to the indefinite extension of the treaty, but also to an accompanying and lengthy action agenda. When that agenda was stalled for the first eight years of the new millennium, it was not the first time that deeds failed to follow solemn words of promise, but there was then the added obstacle of a United States (U.S.) administration that advertised itself as hostile to the very idea of multilateral arms control and disarmament. That nuclear disarmament is now getting back on track is, therefore, substantially due to Obama-inspired change in Washington, leading in turn to the U.S.–Russia commitment to conclude a new agreement before the end of 2009 on further cuts to strategic offensive nuclear weapons. But another impetus for renewed action on the nuclear agenda is the growing fear that without genuine progress on disarmament, proliferation – that is, the further horizontal spread, either to other states or non-state groups, of weapons and weapons-adaptable nuclear materials and technologies – could spin out of control. The agenda collectively assembled by the 188 signatories of the npt is topped by five key measures: a permanent end to testing; a permanent end to the production of fissile materials for weapons purposes; verifiable and irreversible reductions to existing arsenals; measures

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such as de-alerting to reduce the risk of existing arsenals being used; and programs to deal with the legacy of the Cold War and bring weapons-usable materials, primarily in the former Soviet Union, under effective controls, especially to prevent their diversion to nonstate groups. The latter effort was launched under Canadian leadership at the 2002 G8 summit in Kananaskis as the Global Partnership Against the Spread of Weapons and Materials of Mass Destruction, with Canada pledging an impressive cad 1 billion over 10 years to the cad 20 billion program. There is much more to that agenda, of course, and Canada has earned a credible international reputation, especially evident in the late 1990s and early 2000s, as one of the more activist states in shaping it and encouraging its implementation. Canada is also a member of a nuclear alliance; thus, its support for disarmament has paralleled a history of participation in the development (going back to the Manhattan project) and deployment of nuclear weapons. In fact, when Canada joined the newly-negotiated npt in 1968 as a non-nuclear weapon state, some 250–450 nuclear weapons were deployed with Canadian forces in Canada and Europe (Clearwater 1998*). Put another way, in numbers of warheads, Canada’s arsenal was larger than China’s is today or larger than the current combined arsenals of India, Israel, North Korea, and Pakistan, the only four states that are not party to the npt. Although Canada had divested itself of all nuclear weapons by the early 1980s,† direct participation in nuclear weapons-related operations continued, and remains today, through membership in the North Atlantic Treaty Organization (nato) and the North American Aerospace Defense Command (norad).‡ In 1998, the Standing Committee on Foreign Affairs produced a report that remains the clearest official articulation of the logic and * John Clearwater (1998, 23) is the leader in documenting the history of nuclear weapons in Canada. He concludes that “at the height of the Canadian nuclear deployments, the greatest number of weapons which could have been available to Canada would have been between 250 (low estimate) and 450 (high estimate).” Norris et al. (1999) reported on a Pentagon document received through the Freedom of Information Act entitled: History of the custody and deployment of nuclear weapons: July 1945 through September 1977. One graph shows a peak of just over 300 nuclear weapons in Canada in the late 1960s. Clearwater’s upper estimate is higher because his totals include weapons with Canadian forces in Europe. † It was also under Trudeau’s watch that all the nuclear weapons within Canadian territory and deployed with Canadian forces in Europe were withdrawn – a development that was primarily a function of technological advances in fighter-interceptor aircraft and conventional air-to-air missiles. ‡ Although the norad air defence role declined significantly when the main Soviet threat switched from bombers to intercontinental ballistic missiles, norad was also the primary early warning system.

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utility of a persistent Canadian commitment to the pursuit of a world without nuclear weapons (Graham 1998). In 1999, the government’s response declared that “Canada’s objective has been and remains the complete elimination of nuclear weapons” (dfait 1999). This objective has been maintained, always alongside active support for U.S. and nato nuclear forces, through successive changes in government, and it still enjoys broad public support across a wide political spectrum although the enthusiasm with which it is pursued certainly changes with ministers and governments. The absence of any clear and comprehensive statement on nuclear disarmament by the Harper government is a case in point. Canada’s history and the unique opportunities now available should warrant the reaffirmation, by each new prime minister and foreign minister, of Canada’s commitment to the elimination of all nuclear weapons as a central element of the pursuit of durable international peace and security. Chief among Canadian priorities in pursuit of that goal must obviously be continuing political and financial support for implementing the overall disarmament agenda. Canadian prodding may not be a central driver on such issues as the test ban treaty’s entry into force or the pace of strategic arms reductions, but persistent encouragement of the Obama administration to make good on its ambitious disarmament agenda, which still faces some stiff domestic opposition, must be a primary Canadian responsibility. In addition, there are several items on the broad international agenda that are amenable to Canadian influence (including Canada’s G8 leadership in the run up to the 2010 Muskoka summit), action on which will be essential to building a political and institutional environment conducive to consequential disarmament action.

f i x i n g t h e npt’ s i n s t i t u t i o n a l d e f i c i t Multilateral institution building usually lacks drama and only rarely wins public acclaim, but Canada knows something about good governance and the npt is definitely in need of it. In 1995, the npt became a permanent treaty, which means that its three pillars – the promise by non-nuclear weapon states never to acquire nuclear weapons, the promise by nuclear weapon states to get rid of theirs, and the rights of all signatories to access to nuclear materials and technologies for verifiably peaceful purposes – will be the basic framework for multilateral nuclear disarmament and non-proliferation efforts for a long time to come. Yet, as Canada and the Blix Commission (wmdc 2006, 66), along with others, have been pointing out, the npt is hampered by the absence of an effective institutional infrastructure to manage the treaty and advance implementation. It has no secretariat and there is no

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governance structure under which parties to the treaty can make decisions or take collective action between review conferences, which occur only once every five years. That means treaty members do not have a timely means of responding to cases of serious violation of the treaty or to a state that seeks to withdraw from it. The leadership that Canada has already shown in addressing this governance gap was continued in its submission to the 2009 Preparatory Committee for the 2010 npt Review Conference (Canada 2009). The recommendations are modest, befitting the reality that consensus will not come easily. They include proposals that state parties to the treaty meet annually in a decision-making “general conference,” that a meeting be called within two weeks of any state’s withdrawal notice (Canada 2005), that a standing bureau be created to provide leadership and continuity during and between meetings, and that a permanent administrative office be created to support and facilitate treaty meetings and inter-sessional work. Because not all states welcome a more effective treaty, support for institutional reform still needs to be built – with some of the strongest resistance coming from G8 members, suggesting that group as a focus for action in the coming year. It requires leadership that has the courage of its formal policy declarations, supplemented by a coherent strategy and a diplomatic offensive to gather a credible supporting coalition of likeminded states. A sub-element of institution building is the need to enhance and regularize the role of civil society in the npt review process. The research and public engagement work of disarmament ngo s and think-tanks is widely recognized as an important element of developing the political will to act on the particulars of the disarmament agenda. In 2003, Canada submitted a working paper encouraging a more prominent role for civil society (Canada 2003) and actively pursued support for the initiative. The Harper government has not only given up on advocacy on the matter, but has ended the long-standing practice, including that of earlier Conservative governments, of including civil society representatives in its delegations to npt review conferences. In the face of new expectations for nuclear disarmament, as well as a growing focus on transparency linked to accountability, a strengthened role for civil society deserves reinvigorated attention.

tr a n s p a r e n c y The 1995 agreement to extend the npt indefinitely rested fundamentally on the principle that the permanence of the treaty would be accompanied by increased accountability of all the signatories, but

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especially the countries with nuclear weapons (npt 1995). The overall review process was to be strengthened through, among other things, greater transparency. Thus, the 2000 review conference added, in step 12 of the final document’s “practical steps” to implement the treaty’s disarmament provisions, a call for “regular reports” on progress made in implementing article VI, the disarmament article (npt 2000, 13–15). The nuclear weapon states have resisted the idea that there is actually an obligation involved, and China and Russia are the only ones to have submitted formal reports, which they did in 2005. The principle of mutual accountability has been a long time developing within the npt, and the degree to which the reporting obligation is honoured will reflect the degree to which states, and especially the nuclear weapon states, regard themselves as accountable to other parties to the treaty. Accountability requires reporting that is detailed and systematic, so that it becomes an effective tool with which parties to the treaty can assess each other’s compliance with treaty obligations. Specific and standardized categories of information will have to be provided. For example: • • • • •

the holdings of nuclear weapon states (including warheads, fissile materials, and delivery vehicles) as well as their nuclear doctrines disarmament policies, initiatives, actions, and programs of all states agreements reached and commitments undertaken formal declarations of compliance with particular provisions of the treaty identification of current advocacy and diplomatic priorities

Having already championed npt reporting, Canada is in a strong position to mount a sustained diplomatic effort to promote a culture of transparency in general and a commitment to reporting in particular. Were Canada to win a two-year term on the Security Council, it would be especially well positioned to take this effort to the council’s permanent members and develop ways for them to meet their transparency obligations systematically (Regehr 2009).

multilateral control ov e r t h e f u e l cyc l e Whether the world is facing a nuclear renaissance or “revival,”¶ the demand for nuclear fuel is likely to rise. More important, a growing ¶ The term “revival” is preferred in the Nuclear Energy Futures project of the Centre for International Governance Innovation (see cigi n.d.).

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group of industrialized states will increasingly be drawn to nuclear fuel cycle technologies, that is, uranium enrichment and the reprocessing of spent nuclear fuel to generate plutonium fuel. The attraction, of course, is not only the fuel itself. As long as nuclear weapons continue to play a geopolitical role, enrichment and reprocessing capabilities will be sought because these are technologies that can also be applied to bomb making. That is not to say that all who seek these technologies have concrete plans for weapons development, but for some it will be an option kept in reserve for the day when geopolitical interests are deemed to warrant acting on their latent weapons capabilities. Certainly, the greater the number of states that enrich uranium and reprocess spent fuel, the greater the number of states with the expertise and opportunity to divert nuclear materials to weapons purposes. Therefore, it follows that confining proliferation-sensitive elements of fuel production to a few countries – along with assurances to states that forego these technologies that, if they meet basic safeguard requirements, they will have access to civilian reactor fuel on a non-discriminatory basis – will be central to detecting and preventing diversion. At the same time, efforts to restrict these technologies – to confine them to the nine nuclear weapons states and those with enrichment or reprocessing capabilities (Brazil, Germany, Iran, Japan, and the Netherlands) – are credibly perceived as an attempt to impose one more double standard. Although expanded enrichment and reprocessing cannot be safely left to national prerogatives, neither is it credible to entrench a few select states as the exclusive custodians of nuclear fuel production under their national control. The International Atomic Energy Agency has taken a lead in seeking multilateral solutions, but Canada is certainly in a position to make important contributions to the development of a constructive political and regulatory environment. Canadian uranium production, as well as some emerging interest in uranium enrichment (Jackson and Dormuth 2009), means that Canada itself must work its way through important conflicting interests. On one hand, there is a clear need for multilateral controls that advance a shared interest in non-proliferation; on the other hand, states are reluctant to give up their national prerogatives and their rights under article iv of the treaty, i.e., the right of access to nuclear technologies for peaceful purposes. Ultimately, however, national choices and preferences cannot be unfettered if there is to be any collective brake on the spread of enrichment and reprocessing technologies, which have direct application for building bombs. Canada clearly has a particular stake in the outcome of this debate, and it also has, or certainly should have, the perspective of a state whose multilateral tradition encourages it to privilege the

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common good over the national interest – including any interest in domestic uranium enrichment.

th e nato c o n t r a d i c t i o n The 2000 npt review conference agreed that one concrete step toward disarmament would be for nuclear weapons states to assign “a diminishing role for nuclear weapons in security policies.” A 1998 parliamentary committee report had already recommended that Canada frame its nuclear disarmament efforts around the commitment “to work consistently to reduce the political legitimacy and value of nuclear weapons” (Graham 1998). The committee also noted Canada’s support of nato’s strategic concept, which makes the opposite claim that “the fundamental purpose of the nuclear forces of the Allies is political” (nato 1999, para 62) and that nuclear weapons “remain essential to preserve peace” (nato 1999, para 46). In an admirable recognition that you can’t preach temperance from a bar stool, the government through then Foreign Affairs Minister Lloyd Axworthy took up the committee’s proposal that nato’s strategic concept be reviewed with a view to removing this fundamental contradiction – between the npt and nato, and between Canadian disarmament policy and Canadian-supported nato policy. nato did agree to “consider options” related to confidence building and arms control, but the result was no change in the nato doctrine. It is a change that still needs to be made. nato is facing declining tolerance for non-nuclear weapons states that call for the elimination of nuclear weapons while remaining firmly embedded under a nuclear umbrella, complete with claims that nuclear weapons are essential for their security. In 2009, nato decided to develop a new strategic concept for adoption in 2010 – a chance for Canada to join with likeminded states in bringing nato language and practice into conformity with the prevailing understanding, embodied in the npt, that nuclear weapons pose a grave threat and that disarmament is “essential to preserve peace.” Some non-nuclear weapons states in Europe still retain U.S. nuclear weapons, and Russia has long called for all nuclear weapons to be returned to the countries that own them. At the breakup of the Soviet Union, Russia retrieved Soviet nuclear weapons, for example from the Ukraine and Kazakhstan. By finally doing the same thing, the U.S. and nato would be in a stronger position to challenge Russia to also become more transparent about its tactical nuclear weapons and to bring them into nuclear arms reduction arrangements. Although much of the

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leadership on this will have to come from Europe, Canada has an important prodding and catalytic role to play.

nuclear weapons convention Finally, there is a need to promote preliminary discussions on the focus, scope, verification, and other details of a convention on nuclear weapons that would bring all nuclear disarmament measures under a broad framework agreement. The un secretary-general has encouraged nuclear weapons states to begin work on this, but it requires champions and research well beyond the special interests of countries that currently have nuclear arsenals. The United Kingdom has undertaken research into the verification requirements of such a convention. Canada should actively encourage discussions toward the development of a convention and could bring to those discussions concrete proposals for transparency and verification (Canada once had a dedicated verification unit within foreign affairs), as well as institutional arrangements conducive to effective governance and implementation.

a reinforced sense of urgency Although there is broad consensus around a disarmament agenda, the political will to implement it has yet to be mustered. But increasing hope that it will be is rooted in a widely shared and growing sense of urgency – if the world does not move to much more effective disarmament action now, it will have lost a rare opportunity to convincingly staunch the threat of unparalleled human-made disaster through state or non-state nuclear attack. Because that sense of urgency is now reinforced by one-time “cold warriors,” such as Henry Kissinger and Richard Burt, by current political leaders, such as Gordon Brown and, especially, Barack Obama, and by figures of extraordinary international stature, such as Mikhail Gorbachev and current and former un secretaries-general Ban Ki-Moon and Kofi Anan, it is finally conceivable that the nuclear threat could become one daunting global challenge that the world has the wherewithal to confront. A world facing rapidly advancing climate change and an extraordinary array of additional challenges – energy deficits, burgeoning pollution, acute water shortages, unrelenting hunger, grossly inadequate health services, chronic armed conflict, and economic disruption – should not also continue to burden itself with the genuinely optional threat of nuclear annihilation. Of all the daunting challenges the human community faces, the nuclear threat should be the easiest to end.

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There is no economic downside to eliminating nuclear weapons; there is no environmental price to pay, no negative social fallout to worry about, and world publics prominently support it. The first requirement for Canada is to recognize this moment of opportunity and to elevate disarmament action to a national priority. For the international community, the challenge is to muster the political will and build the institutional environment conducive to making irreversible nuclear disarmament happen.

references Canada. 2003. ngo participation in the npt review process: working paper submitted by Canada (npt/conf.2005/pc.ii/wp.16). Geneva: Preparatory Committee, 6 May. Available at: . Last accessed 3 Oct. 2009. – 2005. Achieving permanence with accountability: working paper submitted by Canada (npt/conf.2005/wp.39). Geneva: Preparatory Committee, 17 May. Available at: . Last accessed 3 Oct. 2009. – 2009. Strengthening the review process of the Treaty on the Non-Proliferation of Nuclear Weapons: working paper submitted by Canada (npt/conf.2010/ pc.iii/wp.8). Geneva: Preparatory Committee, 15 April. Available at: . Last accessed 3 Oct. 2009. cigi (Centre for International Governance Innovation). n.d. Nuclear energy futures: implications and options for global governance. Waterloo, Ont.: cigi. Available at: . Last accessed 3 Oct. 2009. Clearwater, John. 1998. Canadian nuclear weapons: the untold story of Canada’s Cold War arsenal. Toronto: Dunburn Press: 23. dfait (Department of Foreign Affairs and International Trade). 1999. Government response to the recommendations of the Standing Committee on Foreign Affairs and International Trade on Canada’s nuclear disarmament and non-proliferation policy. Ottawa: dfait. Available at: . Last accessed 3 Oct. 2009. Graham, Bill. 1998. Canada and the nuclear challenge: reducing the political value of nuclear weapons for the twenty-first century: report of the Standing Committee on Foreign Affairs and International Trade. Ottawa: Parliament of Canada. Available at: . Last accessed 3 Oct. 2009. Jackson, David P., and Kenneth W. Dormuth. 2009. Uranium enrichment in Canada (Nuclear Energy Futures paper 5). Waterloo: Centre for International Governance Innovation, 3 June. Available at: . Last accessed 3 Oct. 2009. nato (North Atlantic Treaty Organization). 1999. The alliance’s strategic concept. Brussels: nato, 24 April. Available at: . Last accessed 3 Oct. 2009. Norris, Robert S., William M. Arkin, and William Burr. 1999. Where they were. Bulletin of the Atomic Scientists, Nov/Dec: 26–35. npt (Nuclear Non-Proliferation Treaty). 1995. Review and extension conference of the parties to the Treaty on the Non-Proliferation of Nuclear Weapons: final document, Part I (npt/conf.1995/32), Annex, Decision 2. New York: Review Conference, 17 April – 12 May. Available at: http:// www.un.org/Depts/ddar/nptconf/2142.htm>. Last accessed 3 Oct. 2009. – 2000. Review conference of the parties to the Treaty on the Non-Proliferation of Nuclear Weapons: final document, volume I, parts I and II. (npt/ conf.2000/28). New York: Review Conference, 24 April – 19 May. Available at: . Last accessed 3 Oct. 2009. Regehr, Ernie. 2009. The Security Council and nuclear disarmament. In Boulden, Jane, Ramesh Thakur, and Thomas G. Weiss (editors). The United Nations and nuclear orders. Tokyo: United Nations University Press: 31–51. wmdc (Weapons of Mass Destruction Commission). 2006. Weapons of terror: freeing the world of nuclear, biological and chemical arms. Stockholm: wmdc. Available at: . Last accessed 3 Oct. 2009.

Canada’s Role in Arms Control and Disarmament jaya n t h a d h a n a pa l a

Addressing the Press Club in Washington, dc, on 25 March 1969, Pierre Trudeau – perhaps the brightest of the prime ministers of Canada – said, “Living next to you is in some ways like sleeping with an elephant. No matter how friendly and even-tempered is the beast, if I can call it that, one is affected by every twitch and grunt.” Despite the obvious geopolitical disadvantages of being a small country on the northern border of the world’s sole surviving superpower, Canada has succeeded in adopting an independent foreign policy, especially after the Second World War. In the field of arms control and disarmament – so visceral to national security as well as to global security – Canada’s independence has had to be circumscribed by the policies of the United States (U.S.), the North Atlantic Treaty Organization (nato), and the Western world in general, especially on nuclear issues. Therefore, it is not surprising that Canada’s major achievements in disarmament have been in the conventional arms area, where bold initiatives on anti-personnel landmines, cluster munitions, and small arms and light weapons reflect Canada’s consistent concern over international humanitarian law and human security. Thus, Canadian policy on disarmament reveals ambivalence – maintaining solidarity with the U.S. and nato on fundamental security issues, but striking out independently on issues where U.S.–Canada relations and U.S.–nato links can bear the tensions they produce. With Obama as U.S. president and the radical changes being announced in nuclear disarmament and non-proliferation, Canada may now have the opportunity to end this ambivalence.

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conventional weapons: landmines, cluster munitions, small arms Following the “golden age” of Canadian foreign policy under Lester Pearson, when Canada contributed the concept of peacekeeping to the United Nations, the period of Lloyd Axworthy’s tenure as foreign minister of Canada stands out for its many successes. Pierre Trudeau maintained a robustly independent foreign policy, and Brian Mulroney and other prime ministers resisted U.S. pressure on Canada to join its ballistic missile defence system. Of the innovative global governance initiatives and global normbuilding tasks undertaken by Axworthy, of particular relevance to disarmament was the negotiation and conclusion, in 1997, of the antipersonnel mine (apm) convention or the Convention on the Prohibition of the Use, Stockpiling, Production and Transfer of Anti-Personnel Mines and on Their Destruction. In taking this initiative, Canada was responding both to national and human security interests and to civil society concerns over the humanitarian issue of landmines and the deaths and suffering of both combatants and civilians caused by their indiscriminate use. The initiative involved independence from – and, in the end, the non-participation of – some of the major powers, including the U.S., and a circumvention of the established procedures for negotiating disarmament treaties. Recognizing that an outright ban on apm s was not achievable within the amendment processes of the Convention on Certain Conventional Weapons or the Geneva-based Conference on Disarmament, Canada, Norway, and a few other nations were supported by the International Committee of the Red Cross and the International Campaign to Ban Landmines. In October 1996, Canada hosted a conference that set off the “Ottawa process” of negotiating a treaty to ban apm s. The apm convention was finally signed in 1997 and came into force in 1999. Finally, in bringing the apm convention within the ambit of the un, with the secretary-general as the depositary, Canada and the other states behind the Ottawa process showed their respect for the un. A precedent was set for Canada and like-minded countries to act outside the conventional institutions and procedures where major powers and others could not obstruct achievement of their goals. A lastminute effort of the U.S. to seek an exemption for the use of apm s in the Korean theatre in return for its signature was rejected. A broad swath of countries from various regions, including many from the global South, are among the 156 signatories, and the impact of the convention – with its record of reduced use of apm s, reduced production,

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mine clearance, and victim assistance – must, therefore, be hailed as a major success. Countries, such as China, India, Russia, and the U.S., who have remained outside the convention, have also had to improve on their norms regarding apms in the Convention on Certain Conventional Weapons. In 2008 alone, Canada provided over cad 50 million for mine action activities. Similarly, independence of the U.S. and nato, adoption of extra-un procedures, and a response to civil society were seen when Canada joined other countries – albeit not in the driving seat – in concluding a cluster munitions treaty in 2008 through the “Oslo process.” Again a coalition of civil society forces, the International Committee of the Red Cross, and a group of 46 like-minded countries worked together to achieve the ban on this category of weapons, which raised strong humanitarian concerns because of their widespread and indiscriminate targeting and the unexploded “duds” left behind after conflict. Today, 98 countries have signed the Convention on Cluster Munitions. At the same time, Canada continues to work within the traditional disarmament framework of the Convention on Certain Conventional Weapons to negotiate a strong new protocol on cluster munitions. Significantly, the resolution on the cluster munitions convention was adopted in the un General Assembly without a vote. Likewise, Canada was at the forefront of nations seeking un action on the use and proliferation of small arms and light weapons (salw). Supporting the work of two un groups of experts, Canada also helped in the 2001 conference that adopted a program of action to prevent, combat, and eradicate all aspects of illicit trade in salw. Implementation of this program and the follow-up biennial meetings have received Canadian funding and diplomatic support. Although most Western countries favour consensus decisions in disarmament fora (because the non-aligned group have the majority), Canada welcomed the fact that a vote was taken to adopt the outcome document at the 2008 salw meeting, saying, “This is a precedent which the un might wish to invoke more generally in order to advance near-universally agreed objectives” (Grinius 2008). Considering the fact that such votes will find the U.S. and some other nato allies on the opposite side from Canada, this was a bold statement. It would be revolutionary if this procedure were extended to nuclear issues, such as in the Nuclear Non-Proliferation Treaty (npt) review conferences where the U.S. is usually in the minority. Canada has supported the move of the un General Assembly’s First Committee to negotiate a comprehensive, legally binding arms trade treaty that would regulate the import, export, and transfer of conventional arms including salw. An open-ended working group has been

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set up to explore this issue, and Canada has pledged to cooperate with it. On a related issue, illicit brokering, Canada has joined others in calling for effective global action. On transparency in armaments, Canada has had a consistent policy of strongly supporting the un Register of Conventional Arms Transfers and the Standardized Instrument for Reporting Military Expenditure. It is also a supporter of the un’s regional centres for peace and disarmament in Kathmandu, Lima, and Lomé. Canada has taken initiatives in the conventional arms field, notwithstanding its own record as an arms exporter and military spender. According to the Stockholm International Peace Research Institute’s (sipri) arms transfers database, Canada’s arms exports in 2008 were valued at usd 215 million – of the sipri 50 largest arms exporters in the world, Canada ranked 15th in 2008 and 13th in 2007 (sipri 2009a). The sipri database on military expenditure shows that Canada’s military spending was usd 15 940 million in 2008 and usd 14 817 million in 2007, i.e., 1.2 per cent of its 2007 gross domestic product (sipri 2009b).

nuclear weapons: t e n s i o n s b e t w e e n c a n a d a’ s brussels and geneva policies Canada votes with the Non-Aligned Movement (nam) and other countries on some non-nuclear resolutions in the General Assembly. In 2008, an analysis of the voting record on the 13 nuclear-weapons-related resolutions showed that Canada voted yes four times, no three times, and abstained six times (West 2008). Canada voted for the New Agenda Coalition resolution on nuclear disarmament, which the U.S., the United Kingdom, and France opposed; Canada opposed the resolution calling for a convention prohibiting the use of nuclear weapons and abstained on a de-alerting of nuclear weapons (reducing their operational readiness) resolution. This has been the pattern of voting over the years. A 2009 study shows that the coincidence of voting between Canada and the U.S. on arms control resolutions was 46.9 per cent (U.S. Department of State 2009). In some votes that have split nato, Canada has chosen to abstain, citing “international stability” and “the principle of undiminished security for all.” Thus, the exercise of caution in Canadian foreign policy is most evident in the area of nuclear disarmament and non-proliferation. Canada contributed significantly to the Manhattan Project, and its decision not to acquire nuclear weapons capability after the Second World War – like Sweden and several other Western industrialized countries that had the capability – was both principled and pragmatic. It was principled

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because Canada escaped the moral opprobrium of developing and possessing a weapon of mass destruction; it was pragmatic because Canada knew it would enjoy the protection of the U.S. and nato. Canada has stood for a nuclear-weapon-free world, but has been tied to nato since it was inaugurated in 1949. This has produced an odd disconnect between Canadian diplomatic missions dealing with nato in Brussels (which accepts the utility of nuclear weapons for the alliance) and the un disarmament community in Geneva (which works to reduce the role of nuclear weapons pending their complete elimination). The disconnect cannot but be approved by the policymakers in Ottawa. The Cold War rationale for nato has had to change, and Canada is clearly uncomfortable with its peaceful pro-disarmament policies. Article 5 of the nato treaty commits Canada to come to the defence of any of the 28 member countries that suffers an “armed attack,” as defined in article 6 (nato 1949). More seriously, on the use of nuclear weapons, Canada subscribes to the nuclear deterrence policy of nato. nato states that it has reduced its reliance on nuclear forces because of changes in its threat perceptions after the Cold War ended. Yet the alliance’s strategic concept states, Nonetheless, nato will maintain, at the minimum level consistent with the prevailing security environment, adequate sub-strategic forces based in Europe which will provide an essential link with strategic nuclear forces, reinforcing the transatlantic link. These will consist of dual capable aircraft and a small number of United Kingdom Trident warheads. Sub-strategic nuclear weapons will, however, not be deployed in normal circumstances on surface vessels and attack submarines. (nato 1999) Thus, Canada is inextricably linked to nato nuclear policies, which remain a millstone round its neck in disarmament fora. Along with Germany, Canada has called for a review of this policy without success. Caught in this dilemma, Canada has urged the nuclear weapon states to fulfill their disarmament obligations under article vi of the npt. On the non-proliferation front, its policies converged with those of the U.S. Canada was present at the creation of International Atomic Energy Agency and has been a staunch supporter of its three pillars – promoting safeguards and verification, promoting nuclear safety and security, and promoting nuclear science and technology. It was also among the original seven countries who established the Nuclear Suppliers Group in 1975 as a reaction to the Indian nuclear test of 1974. This multinational body was concerned with reducing nuclear proliferation by controlling the export and re-transfer of materials

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that might be used in nuclear weapon development and by improving safeguards on and protection of existing materials. Unable or unwilling to join the New Agenda Coalition, which successfully negotiated the “13 steps” at the 2000 npt Review Conference – including early entry into force of the Comprehensive Nuclear Test Ban Treaty (ctbt); preservation of the Anti-Ballistic Missile Treaty; establishment of a subsidiary body in the Conference on Disarmament for nuclear disarmament, etc. – Canada was not even a member of the nato seven at the 2005 npt Conference, which failed to adopt a final declaration. Yet, Canada has actively sought a role as a mediator. In its statement to the First Committee, it said, “Canada aims to be a ‘bridge-builder’ between Nuclear Weapon-States and non-Nuclear Weapon-States” (Grinius 2008). However, there is little evidence to show that Canada has the confidence of the non-nuclear weapon states that it needs to play this vital and essential role. Non-proliferation of nuclear weapons is a matter of deep concern, especially as Canada found itself the unwitting supplier of material that helped India toward its first nuclear test in 1974. That experience did not prevent Canada from acquiescing in the Indo–U.S. nuclear cooperation agreement when it came before the Nuclear Suppliers Group. However, Canada has expressed deep concern over the nuclear weapon tests of the Democratic People’s Republic of Korea, supporting a peaceful solution to the issue within the six-party talks. Canada has also expressed concern over Iran’s failure to comply with Security Council resolutions. Canada now looks forward to the 2010 npt review conference to find common ground on the various aspects of the npt, identifying the Middle East and South Asia as key factors. The role of a bridge-builder requires credibility, and Canada’s links to the U.S. and nato limit its diplomatic influence with the nam countries in the npt. Nonetheless, Canadian diplomats, such as Ambassador (later Senator) Douglas Roche and Ambassador Christopher Westdal, have played key roles in consensus building at past review conferences. In the negotiation and subsequent efforts at securing the entry into force of the ctbt, Canada has again taken a leading role. In the Conference on Disarmament, Canada can derive satisfaction that, at long last, a program of work has been adopted and this single multilateral negotiating body, on which Canada has served with distinction, can begin long-overdue tasks. The late Canadian Ambassador Gerald E. Shannon has bequeathed his name to the mandate that is likely to govern the proceedings of a working group expected to start negotiating a treaty banning the production of fissile material for nuclear weapons or other nuclear explosive devices. A fissile material cut-off treaty has long been a priority for Canada, and the scientific research and diplomatic capital it has invested will now begin to show dividends.

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ot he r i t e m s Canada has also played a positive role in limiting the use of chemical weapons. Participating in negotiation of the Chemical Weapons Convention (cwc) in 1996, Canada went on to play an active role in the Organization for the Prohibition of Chemical Weapons set up to implement the cwc and achieve total elimination of chemical weapons by 2012. The Biological and Toxin Weapons Convention (btwc) of 1972 also enjoys Canada’s strong support with its inter-sessional meetings, as the parties pick up the pieces left after U.S. Ambassador John Bolton’s 2001 destruction of the draft protocol that was patiently negotiated by all parties, including the U.S., over six and half years. There are two other areas linked to sensitive issues where U.S. policy impinges on Canadian policy: prevention of an arms race in outer space and missiles. On outer space, Canada has a great deal of technical and legal expertise, evident in the contributions of Canadian delegations to the Conference on Disarmament, the General Assembly, and the Committee on the Peaceful Uses of Outer Space (copuos). Despite U.S. opposition, Canada has favoured negotiating a treaty for the prevention of an arms race in outer space within the Conference on Disarmament. The recent adoption of a work program in the Conference on Disarmament will enable establishment of a working group, without a negotiating mandate but able to have substantive discussions on all related issues. Canada has also emphasized the need for collaboration between the Conference on Disarmament and copuos and practical measures, such as codes of conduct and debris mitigation guidelines, in outer space. A theme running through the Canadian approach to outer space is space security, described in Canada’s statement to the General Assembly’s First Committee on 20 October 2008 as “the need to develop an increasingly broad and encompassing approach to space security that includes not only addressing the weaponization of outer space, but also the broader, military, environmental, commercial and civil dimensions. Practical steps towards achieving a common understanding of space security can serve to set in place a foundation for a more comprehensive regime which may be built in the coming years” (Frost 2008). Canada can obviously make this its niche area of expertise in disarmament and develop innovative proposals that will be of benefit to international peace and security in light of U.S. plans for full spectrum dominance in the space area detailed in the U.S. National Space Policy of 31 August 2006, which has not been renounced or amended so far by the Obama administration. On missiles, where there is an obvious lacuna in the existing norms, Canada was among the original members of the Missile Technology

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Control Regime established in 1987. Faced with the increasingly untenable position of maintaining a regime of those who have missile technology and those who do not (especially as missile technology is close to space launch technology sought by many countries), Canada has endorsed The Hague Code of Conduct against the Proliferation of Ballistic Missiles which is not treaty based and does not have universal acceptance. Canada has participated in the three un panels of experts on missiles, which have produced meagre results. This issue is closely linked to ballistic missile defence, on which Canada would not want to confront U.S. plans unless they are changed under the Obama administration. Canada is, therefore, an active member of the un pursuing disarmament objectives and taking fresh initiatives to advance the cause of security at lower levels of armaments. However, it is severely constrained by its nato membership and its alliance with the U.S. Recent developments in the U.S., with op-ed articles by Shultz, Perry, Kissinger, and Nunn (2007, 2008) calling for a world without nuclear weapons, have had widespread influence. If the Obama administration’s policies bear fruit with new U.S.–Russian agreements on deep cuts in nuclear arsenals (as promised in the Joint Understanding of 8 July 2009), a U.S. ratification of the ctbt, and progress in the Conference on Disarmament, Canada will be encouraged to come out with bolder initiatives in the areas of weapons of mass destruction, missiles, and outer space similar to those taken in conventional weapons and global governance. A more imaginative response would be for Canada to openly support and encourage the Obama initiatives in the nuclear disarmament area, while being cautious of any compromises forced on the U.S. by its right-wing groups.

references Frost, Gillian. 2009. Statement to the First Committee on the prevention of an arms race in outer space, 63rd session, 20 October 2008. New York: Permanent Mission of Canada to the United Nations. Available at: . Last accessed 4 Oct. 2009. Grinius, Marius. 2008. Statement on disarmament to the un General Assembly First Committee plenary, 63rd session, 7 October 2008. New York: Permanent Mission of Canada to the United Nations. Available at: . Last accessed 3 Oct. 2009.

329 Canada’s Role in Arms Control and Disarmament nato (North Atlantic Treaty Organization). 1949. The North Atlantic treaty. Washington: nato. – 1999. The alliance’s strategic concept. Brussels: nato, 24 April. Available at: . Last accessed 3 Oct. 2009. Shultz, George P., William J. Perry, Henry A. Kissinger, and Sam Nunn. 2007. Kissinger, Shultz, Perry and Nunn call for a world free of nuclear weapons. The Wall Street Journal, 4 Jan. Available at: . Last accessed 4 Oct. 2009. – 2008. Toward a nuclear-free world. The Wall Street Journal, 15 Jan. Available at: . Last accessed 4 Oct. 2009. sipri (Stockholm Interenational Peace Research Institute). 2009a. Arms transfers database. Stockholm: sipri. Available at: . Last accessed 4 Oct. 2009. – 2009b. Military expenditures database. Stockholm: sipri. Available at: . Last accessed 4 Oct. 2009. Bush, George W. 2006. U.S. national space policy. Washington: National Security Presidential Directives. Available at: . Last accessed 4 Oct. 2009. U.S. Department of State. 2009. Voting practices in the United Nations, 2008. Washington: U.S. Department of State, March. Available at: . Last accessed 3 Oct. 2009. West, Jessica. 2008. Nuclear weapons at the un: Canada as a bridge builder? The Ploughshares Monitor, Winter: 10–11.

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human rights

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Human Rights and Canada’s Foreign Policy k e n n e t h ro t h

Prime Minister Stephen Harper has made the promotion of human rights a key element of his foreign policy, but these days Canadian leadership in this domain seems to have waned. Canada has long “punched above its weight” because its foreign policy has been bolstered by a strong moral element. The demise of a strong human rights policy has led to a diminution in Canada’s global influence. With a new president in Washington seemingly more interested in making human rights an important element of United States (U.S.) foreign policy, Canada’s retreat is particularly unfortunate. Now is a good time to reverse course. The contrast between Canada’s position on landmines and its policy on cluster munitions illustrates the change for the worse under the Harper administration. A decade ago, Canada took the lead in abolishing anti-personnel landmines, a deadly and indiscriminate weapon. Canada’s central role was acknowledged in what became known as the “Ottawa process,” which yielded the Convention on the Prohibition of the Use, Stockpiling, Production and Transfer of Anti-Personnel Mines and on their Destruction. More recently, however, during efforts to abolish cluster munitions, also a deadly and indiscriminate weapon, Canada was largely in the shadows. Instead, Norway stole the spotlight and the credit by taking the lead in what became known as the “Oslo process.” Canada reluctantly tagged along, never joining the core group of progressive governments that pushed for the treaty. Rather, Canada associated itself more closely with a group of states that was far from enthusiastic about it. Indeed, Canada was prepared to exempt large categories of cluster

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munitions from the terms – a position that was ultimately rejected. In the end, Canada signed the Convention on Cluster Munitions, but it still has not ratified this important humanitarian instrument. Similarly, Canada has traditionally made a name for itself by promoting peacekeeping. Yet today, there is much opposition in Canada to one of the most important multilateral military efforts – in Afghanistan. Afghanistan is a North Atlantic Treaty Organization (nato) venture, not a traditional un peacekeeping mission, but the stakes are comparable as the alliance tries to provide security for an embattled people threatened by an insurgent and lawless Taliban. The Canadian government and public are understandably reluctant to risk soldiers’ lives in a conflict that seems to be faring poorly. Canada’s 2500 combat troops are due to be withdrawn by 2011. But this is a critical moment for Afghanistan, and the new Obama administration is devoting substantially increased resources to the effort. Rather than abandon the Afghan people to the brutal whims of the country’s various armed factions, Canada should pledge an ongoing troop commitment to this important multilateral effort. It need not do so blindly. There is currently considerable rethinking about strategy for Afghanistan. Canada should be taking part in the discussion as a government committed to Afghanistan’s future, not one that is heading for the exits. The U.S. government seems to be moving in the right direction by promising greater attention to avoiding civilian casualties, even if that sometimes means letting Taliban forces escape. Washington also seems willing to place greater emphasis on protecting Afghan civilians rather than simply fighting enemy forces and then leaving. In addition, Washington has pledged to train the Afghan army to take over these duties. The Canadian armed forces have the necessary credibility as a fighting force to hold the U.S. to these commitments. But other, less comfortable steps are also needed. These include putting pressure on Afghan President Hamid Karzai to distance himself from the warlords, who increasingly make up his base of support. Greater international civilian input is also needed to help build the capacity of the Afghan police and judiciary. Currently, many Afghans complain that they need money or connections to get a fair hearing in the courts, while the powerful drug lords and former warlords appear to be above the law. Without tackling the warlord problem and related issues of violence, official corruption, and impunity, the Afghan government will only enhance the Taliban’s popularity, despite an increased presence of international troops. Canada has been one of the most vocal nations pressing the Afghan government to protect women’s rights and freedom of

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expression. Its assistance in pressing for these other policy changes as well would help to stabilize the central government, promote respect for fundamental rights, and deprive al-Qaeda of an operational base that would pose an international threat. Ottawa’s human rights role is particularly important because Canada is one of the few Western democracies with a fully independent foreign policy. The vast majority of European countries now promote human rights largely through the European Union (eu). That gives them the added clout of numbers, but at the cost of a lengthy consensus-building process that often produces watered-down and indecisive policies. The U.S., of course, has an independent foreign policy, but it is especially prone to the rationalizations and double standards of realpolitik that undermine its human rights voice. In Asia, Japan and South Korea are still finding their land legs when it comes to promoting human rights. That leaves a handful of independent democracies – Canada, along with such allies as Switzerland, Norway, Australia, and New Zealand – that have been committed to a human rights-based foreign policy and are unhindered by eu-style alliances. Canada is thus well placed to make a real difference on human rights, but only if it renews its commitment to principled leadership. On Colombia, for example, a major change in Canadian policy is needed. The Harper government has been actively promoting a freetrade agreement with Bogotá. Instead, it should insist that the agreement be put on hold until the Colombian government dismantles the paramilitary organizations that have been behind the murder of thousands of trade unionists and so many others and brings to justice their many accomplices among politicians and the military. A parallel debate is raging in the U.S., where the Democratic-led Congress fended off efforts by the Bush administration to secure a trade agreement, arguing that a regime of “free trade” should not be constructed on the graves of dead trade unionists. Then Senator Obama agreed, arguing that the killing of trade unionists in Colombia would make a “mockery” of the agreement’s labour protections. The Harper government’s main argument for a trade pact is that human rights have improved in Colombia, but that is only selectively true. Extrajudicial killings by government troops have skyrocketed and, although there has been some progress in bringing paramilitary leaders to justice, the Colombian government has not made a sincere effort to dismantle their machinery of repression, with the result that a new generation of killers is now taking over. Meanwhile, President Uribe has undermined civil-society advocacy on the paramilitary issue by equating human rights activists with the “intellectual arm” of the Fuerzas Armadas Revolucionarias de Colombia (farc), the Colombian

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rebels. In addition, his intelligence services have been engaging in widespread illegal surveillance of human rights defenders, journalists, and the Supreme Court justices who are trying to investigate the paramilitaries’ influence on the political system. The Harper government, as well as some Liberals, have argued that the problem of impunity for officially sponsored mass murder is best addressed through the “engagement” of increased trade. But there is plenty of engagement, and trade, between Colombia and Canada. The issue is the type of engagement. Will Ottawa engage by suggesting that there is no price to be paid for killing trade unionists with impunity, or engage by standing on principle and insisting that Colombia be rewarded with a new trade agreement only after it has dismantled the killing machines that lie behind these murders and brought to justice their leadership and their official accomplices? The proposed free trade agreement is the best source of pressure that Canada has to encourage urgently needed steps to address Colombia’s impunity problem. An agreement should not be awarded until Bogotá has earned it. Prime Minister Harper’s push for a premature agreement would squander this opportunity and leave Colombians still subject to the murderous ways of the Colombian military and its murderous paramilitary allies. The Middle East is another place that provides fertile terrain for re-energized Canadian leadership. President Obama has signaled a renewed willingness to engage on human rights, suggesting that the U.S. might no longer blindly support dictators, such as Egypt’s Hosni Mubarak, just because he is a close ally. Similarly, at least on the issue of settlements, Obama has begun to put pressure on Israel – pressure from which Israel has been largely exempt for the prior eight years. But these are still half measures; much remains to be done to make Middle Eastern governments feel the heat for their human rights abuses. Canada should be encouraging a more principled human rights policy in the region. One good place to start would be in addressing Israel’s collective punishment of the people of Gaza as well as the indiscriminate force that Israel used during the December 2008 to January 2009 military conflict there. The United Nations Human Rights Council has appointed Richard Goldstone, a highly respected South African jurist, to lead an investigation into the conduct of both Israel and Hamas during the recent fighting. The U.S. has not pressed Israel to cooperate with this investigation. Canada has also been reluctant, going so far as to claim that the council, the un’s leading governmental human rights body, is not the place to discus Gaza. That position should change. Canada should be stressing that a credible investigation like Goldstone’s will help to end the impunity that lies behind

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so many of the conflict’s attacks on civilians – and is such an obstacle to the trust needed to build peace. There are a host of other countries where a Canadian voice on human rights would be welcome – particularly countries that, because of their power or connections, tend to be exempt from consistent human rights criticism. China and Russia are two powerhouses that are cracking down on civil society and independent voices with relatively little protest from other governments. On a smaller scale, Ethiopia and Rwanda, both close allies of the U.S. and Britain, are making similar moves. Canada’s independent voice could make a difference. Canada should also play a stronger role in promoting a human rights approach to development. So far, Canada has resisted the trend among many governments to evaluate development projects according to the recipient government’s respect for the full range of human rights, civil and political as well as social and economic. That approach tends to be best for ensuring that international development assistance is most likely to improve the lot of the worst-off segments of society. Canada should adopt it. The Harper government has been particularly unhelpful on the problem of the Guantanamo detention facility. Recognizing that Guantanamo has become a symbol of injustice that undermines international cooperation in fighting terrorism and is a boon to terrorist recruiters, President Obama vowed to close the facility during his first year in office. It is in everyone’s interest that he succeed, but he needs help. Of some 230 detainees still held in Guantanamo as of July 2009, approximately 50 are designated for “release or transfer” but cannot be sent home for fear of torture or worse. Some should be admitted to the U.S., but Obama is asking close allies to help share the political burden of resettling the rest. Even the Bush administration no longer considered these particular detainees dangerous, but its one-time claim that all Guantanamo detainees are “the worst of the worst” makes governments nervous about accepting them. Nonetheless, several European countries have now said that they would lend a hand by accepting a few. But the Harper government has so far refused to do the same. It should reverse course. It should also, as a Canadian court has ordered, request the return of Omar Khadr, the alleged child soldier who should never have been sent to Guantanamo in the first place and who today is the only Western citizen detained at Guantanamo who has not been reclaimed by his government. Ottawa’s assistance on closing Guantanamo would also give the Canadian government standing to object to the more dangerous proposals being considered in Washington for handling some Guantanamo detainees. Rather than adopt a policy of prosecuting detainees in regular

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courts or releasing them, President Obama is considering trying some of them before substandard military commissions, which are designed to admit coerced confessions into evidence while allowing that embarrassing fact to be covered up through hearsay statements. In some cases, he is even considering continuing the Bush practice of detaining suspects for lengthy periods without charge or trial. It was one thing for the extremist Bush administration to use these abusive devices, but the more moderate Obama administration’s adoption of them would go a long way toward legitimizing them. The damage done to basic rights is unlikely to stop at the U.S.–Canadian border. It is very much in Canada’s interest that Ottawa press Washington not to take these dangerous steps. A Canada more engaged on human rights issues could also play an important role in nudging the U.S. toward a more positive attitude toward international human rights machinery. Canada has long stood for multilateral efforts to promote human rights. But for the past eight years, international rights institutions have been hampered by the indifference if not overt hostility of the Bush administration. A more engaged Harper government could encourage Washington to rejoin the community of nations and end the Bush administration’s dangerous exceptionalism. President Obama has already taken an important step in this direction by having the U.S. run for membership on the un Human Rights Council. It was easily elected. The council has been a troubled institution, but is salvageable if the diplomatic work is done to convince moderate democratic governments, especially in Africa, to stop following the anti-human rights leadership of the likes of Egypt and Algeria. But it is difficult to imagine how that transformation will be accomplished without the active involvement of Washington. Now that the U.S. will be on the council, Canada should encourage it to play an active diplomatic role in building a pro-human rights majority. Canada should also press the U.S. to “re-sign” the treaty that created the International Criminal Court as a symbol of support for the tribunal and a clean break with President Bush’s efforts to destroy it. In addition, Canada should encourage the U.S. to adopt a series of important human rights treaties, from the mine ban treaty and the Cluster Munitions Convention to such foundational treaties as those protecting women’s and children’s rights. Canada can help President Obama explain to isolationists in Washington that everyone suffers when the U.S. eschews full participation in the international legal regime to protect human rights. Canada, for its size, has traditionally enjoyed unusual influence in international affairs because it has been seen as a moral voice promoting international law, multilateral institutions, and respect for human

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rights. That is the platform on which President Obama ran as well, but it will not be easy for him to implement. By re-embracing its traditional policies, Canada can not only stand as a key ally of its southern neighbor, but it can also secure its place once more as a beacon of enlightenment in a hostile and dangerous world.

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development assistance and food security

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Canadian Aid – More, Not Less, Is Needed ca ro ly n m c as k i e

Much has been written lately on the evolution of Canadian aid, some quite critical, but no one should doubt its need or its place in the world. Healthy ongoing criticism and critique is essential to keep aid on course. This chapter argues that aid is a learning process, that much has been learned and applied that Canada can be proud of, and that this learning must continue in an open and cooperative environment. Claims that aid has not “worked,” because the ills of the world are still with us, fail to understand the complexity and the magnitude of the job.

va l u e s a n d i n t e r e s t s : two sides of the same coin Canadian aid had a political birth, supporting newly independent states under the Colombo Plan and Commonwealth programs in Africa and the Caribbean. But the post-Second World War spirit was one in which political ends were married to cooperative means, with the Marshall Plan and the Bretton Woods institutions launched to rebuild Europe and the United Nations created to avoid the failure of the League of Nations. Alongside Cold War sentiments of halting the spread of communism was the realization that advancing the human condition was a global good that would benefit us all. If there is a concern over where Canadian aid is going, it is a concern that the Canadian leadership has abandoned this concept of the global good being both good in its own right and good for Canada.

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Successive post-war prime ministers, both Liberal and Conservative, supported the independence of former colonies and saw it as natural to assist them. After all, Canada had received financial assistance to build the infrastructure needed by a new country in the 19th century, notably the railroad. After creation of the Canadian International Development Agency (cida) in 1968, Francophone countries were brought into the circle. Partners in development (Commission on International Development 1969), which laid down many of the principles we still acknowledge today, such as 0.7 per cent of gdp as the goal of aid flows, was led by former Canadian Prime Minister Lester Pearson. From the beginning, Canada’s stated aid objectives were to address the disparity between the North and the new countries of the South. As development investment became the norm among Western countries, joining in the effort became part of one’s membership dues in the club of respectable nations (we forget this at our peril). For Canada, this was particularly attractive. We had been a colony rather than a colonizer and could show leadership and solidarity to newly minted states, and we could do it in two languages. Becoming a major donor was an extension of Canada’s post-war role as system builder. Support for the development roles of the United Nations and World Bank organizations was a natural progression. From the beginning, there was a link to Canada’s interests and values (need they be separated?) and neither trade nor international security was invisible in the expression of an aid policy clearly focused on the elimination of widespread endemic poverty. The 1970 Foreign policy for Canadians (Canada 1970) is still reflected in cida’s current mandate – support for sustainable development to reduce poverty and contribute to a more secure, equitable, and prosperous world. But what was missing (and still is) was the understanding that aid should not be left to do the job alone. Adequate aid levels had to go hand in hand with more enlightened trade and finance policies. In the early days, what was also missing was a resolve to stand up to corruption and dictatorship. This would not change until the Cold War came to an end.

th e g o o d , t h e b a d , a n d t h e u g l y cida grew rapidly through the 1970s. We had places to go and money to spend, and cida attracted a group of young idealists who wanted to contribute to the world. Canada was a player, whether in the G7 or in Africa. cida was widely present (this was not held against it in the early days) and innovative: participating as one of eight countries to launch the Organisation for Economic Co-operation and Development’s

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Development Assistance Group (later the Development Assistance Committee [dac]) to manage and document the flow of funds to developing countries; launching the International Development Research Centre; founding the Consultative Group on International Agricultural Research, which was responsible for the Green Revolution; participating in the reform of the United Nations technical assistance programs under a new United Nations Development Programme; and supporting the growth of Canadian non-governmental organizations, which brought substantial numbers of Canadian actors into development. Throughout the 1970s and 1980s, cida was part of the growth in Western aid models and experiments, some more successful than others. The difficulty with aid experimentation is that it is played out on people’s lives and within foreign social and political structures, which do not (and should not) come under the control of the aid agency. A mix of successes and failures should not have been unexpected, particularly given the serious state of governance in many parts of Africa at the time, which was difficult to address in a Cold War environment. One of cida’s presidents famously told the press, after a report of a project that had not done well, that she could guarantee at least one or two failures a year as that was the only way to prove that cida was a bona fide aid agency that would experiment rather than just an investment bank (no longer a good choice of metaphor). The Canadian mood (or is it culture?) is to manage government expenditures extremely tightly, with the auditor general adding new controls whenever anything strays from the norm. For cida, this was death by a hundred rules and regulations and it was said that it took longer to plan a project than it had taken the allies to win the Second World War. Peer reviews by dac members decried the stultifying effect on cida of the Canadian regulatory framework, and cida’s managers found their accounting skills more valued than their development knowledge. This shaped the aid program not necessarily for the good, as in such an environment innovation was difficult, senior managers became nervous of central agencies, and ministers became shy of publicity. Criticism at home was constant, but cida’s reputation abroad was generally good and its assistance sought after. Within foreign policy, an aid presence was a vehicle to advance a broad range of Canadian interests. cida’s growing cooperation with China was a case in point, where relatively small amounts of money went a long way toward building an important new relationship. In the multilateral sphere, managers had a freer hand. Canada’s performance in multilateral development fora does not figure much in histories of cida, but Canada was known for its active engagement in the United Nations, as a major contributor, carrying a lot of weight and

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instrumental in launching significant reforms. We could muster allies from the Commonwealth and the Francophonie as well as among other socially progressive donors, the like-minded, a category which has disappeared now that Europe has to move as a bloc. In the regional development banks, Canada played a strong policy and financial role, creating the donor-funded soft loan window for the African Development Bank and leading the negotiations that brought the bank back from the brink of collapse. In multilateral institutions, Canada was a respected voice and part of a movement that ensured policy coherence and attention to poverty alleviation and gender and environment issues by these large and influential institutions. The successes and unfortunate failures of structural adjustment led by the Bretton Woods institutions defined the late 1980s in Africa and did a lot to discredit donor institutions. But we forget that this grew out of the debt crisis, in itself a function of irresponsible governance in the international financial system, which led to over-lending in risky environments (shades of today?) to corrupt or inefficient governments. Poverty stricken governments then paid back several times the value of original loans as interest rates sky-rocketed and loans were “re-scheduled” with outstanding interest payments added to the loan value. Inadequate Western aid budgets tried to mitigate the worst effects, but structural adjustment, which aimed to rationalize the miniscule budgets of struggling countries, caused real harm through massive reductions in already inadequate social expenditures and the removal of large numbers of people from government payrolls in places where there was no other source of employment. Canada supported unicef’s (1985) Adjustment with a human face, which showed that adjustment per se was not the problem, but rather the lack of attention it paid to basic requirements in health, education, and nutrition. But the beast lumbered on with incremental improvements (including Canadian-led attempts to find ways to reduce the effects on women) until it morphed into a new approach in the 1990s.

learning lessons in the 90s This new approach eschewed pure conditionality and was based on a more mature donor–recipient contractual relationship that rewarded performance. Donors agreed to support recipients in exchange for meeting performance criteria of good governance, democratic development, and human rights. This recognized the growing desire and capability of new leaders (particularly in Africa) to fix their own problems, and Canada played a central role in the series of donor reflections that led to agreements, such as the dac Donors Paris Declaration on Aid

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Effectiveness, governing donor behaviour. However, although rewarding performance was not a bad thing, it didn’t provide for a way to help non-performers become performers. This created a whole new set of unintended consequences. The 1990s were a time of much greater policy coherence, coming out of major United Nations’ conferences – on women, social development, human rights, population, environment, food security. The 1995 foreign policy review, Canada in the world, placed most of these agreements at the centre of Canada’s aid policy (dfait 1995). Africa, Asia, and the Americas would get their share, as would Eastern Europe (but non-official development assistance). Within cida, the 1990s saw the implementation of results-based management. Unlike other government efficiency methods brought in by central agencies, results-based management was welcomed by staff as a tool that would help them to define their work and their objectives. The 2000 world summit saw the endorsement of the millennium development goals (mdg s). Although the mdg s don’t claim to be a universal panacea, they rightly remain a major pillar of international development efforts and have served to galvanize serious and successful efforts.

wh at roa d to ta k e in the new millennium The current state of Canadian aid is not very clear. There are three new priorities: food security, economic growth, and children, with only a passing reference to some of the mdg s. Efficiency and results are showcased, but without any reference to international agreements on donor behaviour. The recent, rapid changes in leadership are not a good guarantee of effectiveness. The last ten years have seen four presidents of cida and six ministers, none of whom has a place at the Cabinet table. There have been calls for a stronger legislative basis for Canada’s policies and practices with regard to developing countries (not just aid) to ensure continuity and professionalism. Unfortunately, Bill C-293, known as the Better Aid Bill, which calls for a primary focus on poverty alleviation, has not prevented the latest drift away from poor and performing African countries in favour of potential trade partners in the Americas. Although the outcome is not known at the time of writing, it appears possible that Canada will win its bid for a seat on the Security Council. Good will still exists for this nation that played such a leadership role in the international sphere for so long as institution builders and problem solvers. But this leadership started to fade over a decade ago. Despite international successes by concerned individuals, whether

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political, civil service, or non-governmental, Canada’s position of leadership has slowly eroded. The political class in Ottawa became mired in domestic politics with a runaway deficit (are we returning to those days?) and a rise in regionalism. The international stage and Canada’s role on it became victim to the law of unintended consequences. The result is an international profile hostage to domestic concerns and leaders with little interest in the affairs of the world. We have backed away from environmental and anti-poverty commitments and from the enlightened (i.e., value-based) self-interest of the past.

h ow c a n w e r e jo i n t h e wo r l d ? In the meantime, the international community has been learning a number of critical lessons. In the post-Cold War world, while Canada was withdrawing from un peacekeeping, robust un peace-making and peacekeeping efforts were credited with substantially reducing the number of conflicts world-wide. At the same time, players began to understand the link between development neglect and conflict and realized that too many post-conflict countries returned to conflict within five to ten years. The 1990s’ policy of exclusively rewarding performance and striking non-performing countries off the lists had come home to roost. Neglect, as much as poor governance policies, is now recognized as having contributed to extensive state failure in already fragile poor countries. In the un, the High Level Panel on Threats, Challenges and Change (2004) recommended a new approach that would bring together peacemaking, peacekeeping, and early recovery efforts to support countries coming out of conflict through a new Peacebuilding Commission. This recognizes that improvements in political and development efforts must be brought together in a more coherent, integrated, and sustainable approach, based on an understanding of the interdependence of the economic, social, human rights, political, and security aspects of postconflict recovery and sustainable development. This would radically alter the way we support countries coming out of conflict and would recognize the importance of political, economic, and social investments before countries descend into conflict with all the human and financial cost of dealing with the fall-out from “failed states.” For member states of the un, especially those that carry the burden of cost in responding to crisis, this lesson is an important challenge. For Canada, it is a reminder that, in an interdependent world, we cannot set our priorities in a purely national process. Where financial, political, and physical disasters whip around the world like a tsunami, setting priorities on the basis of our particular likes and dislikes will leave

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us isolated without a coherent agenda. Rather than sitting in our icy steadfastness, we need to view the world as one in which we are a player who can make a difference, while picking up our global responsibilities – and not just in Afghanistan. While we complain that others are not sharing the burden in Afghanistan, we forget that others believe we are not sharing the burden globally. For the development program, this means addressing the link between neglect-driven poverty and global security; working with other donors and with recipient countries to support countries that perform well and address potential failed states before the crises hit; and playing a more proactive role in international fora to develop strategies to address political and development issues in a holistic way. We can now, hopefully, take advantage of being a member of both the Security Council and the Peacebuilding Commission. Domestically, it means giving the full spectrum of political, trade, and development relations with developing countries a more prominent place in government policy and spending and recognizing development investment as part of the solution to global problems that are already affecting us –whether political, financial, environmental, or security. Managerially, it means once and for all developing quick turnaround capability to respond to fast-changing environments and building a greater level of trust between the political and bureaucratic levels of government. Canada has a highly professional civil service based on a tradition of service that sees speaking truth to power as the ultimate expression of loyalty. This has been eroded. But there is a whole new generation of young people anxious to serve the cause. Finally, how should we deal with the charge contained in the report of the Standing Senate Committee on Foreign Affairs and Trade (2007), Overcoming 40 years of failure, that Canadian aid has failed Africa and that cida should be abolished? Or that aid has actually caused the failures of Africa and should be abolished? The great aid success story was the Marshall Plan for Europe, where large transfers in aid, usd 13 billion in four years – a huge sum in the late 1940s – went hand in hand with debt relief, more cooperative trade policies, social investments, and security guarantees. Canada spends over 30 per cent of its budget investing in the wellbeing of its citizens. How can the investment of less than 0.5 per cent be castigated for not achieving meaningful results? Can usd 35 billion in global aid for Africa – less than three times what Europe received 60 years ago – be taken seriously when compared with the usd 60 billion bailout for General Motors alone and trillions of dollars in bailouts for financial institutions? The very real danger now is that the diversion of billions to bailouts will reduce development budgets at

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a time when developing countries do not have the flexibility to adapt to the global economic crisis Despite this, major African-led improvements in governance and democracy are changing the face of leadership in Africa supported by significant policy efforts of the dac donors. For example, Mozambique’s former President Joaquim Chissano has been rightly honoured for his leadership in putting his country on a footing for sustainable peace and growth. Leaders in Botswana, Malawi, Tanzania, and Mali are other excellent examples. Africa needs partners who will support its own efforts, not abolish aid. On the contrary, effective levels of funding should be established. For Canada, taking aid seriously will mean coming full circle and remembering that our strength lies in our commitment to global causes as an expression of our values. That is what will achieve real results, drive our influence, and ultimately protect our long-term interests.

references Canada, Government of. 1970. Foreign policy for Canadians (white paper). Ottawa: Government of Canada. Commission on International Development. 1969. Partners in development: report of the Commission on International Development. New York: Praeger Publishers. dfait (Department of Foreign Affairs and International Trade). 1995. Canada in the world: Canadian foreign policy review. Ottawa: Government of Canada. Available at: . Last accessed 2 Oct. 2009. High Level Panel on Threats, Challenges and Change. 2004. A more secure world: our shared responsibility. New York: United Nations. Available at: . Last accessed 2 Oct. 2009. Standing Senate Committee on Foreign Affairs and International Trade. 2007. Overcoming 40 years of failure: a new road map for sub-Saharan Africa. Ottawa: Government of Canada. Available at: . Last accessed 2 Oct. 2009. unicef. 1985. Adjustment with a human face. New York: unicef.

Innovating in Development ro h i n t o n p. m e d h o r a *

There is great ferment in the world of development assistance. Academics and practitioners have gained pop-star status by making cogent arguments commonly interpreted as being against (William Easterly, Dambisa Moyo) and for (Jeffrey Sachs, Paul Collier) foreign aid. There are important differences between the camps, for example, on whether aid increases or decreases incentives to invest or govern well in recipient countries. But frankly, once the interpretations nourished by accounts in the popular media and the rhetorical flourishes encouraged by the beguiling spotlight of intellectual stardom are set aside, differences narrow. The “pro” camp is not unquestioningly for increasing foreign aid everywhere and at all costs, and the “con” camp does not suggest its rapid ramp down to zero. Instead, a broad middle ground – arguably broad enough to include key participants from the alleged two extremes – emerges. This terrain includes setting the conditions under which aid achieves its objectives, mapping the process by which aid functions, and measuring impacts. Hovering a level below the jet stream lies a second set of discussions. Not entirely disconnected from the above, three converging lines of reasoning emerge. One, most associated with the work of members of the Massachusetts Institute of Technology’s Poverty Action Lab, borrows from the world of medical research to explore the use of methods * The views expressed in this paper are mine and do not necessarily reflect those of the International Development Research Centre.

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based on randomized controlled trials to assess the impact of a particular policy intervention. Another seeks to define and bring rigour to “social investing,” where rates of return must go beyond narrow financial calculation. Finally, these concepts find their home in important segments of the private philanthropic world, particularly in the United States (U.S.), and have come to be called a “theory of change.” The world view of the principal U.S. foundations working in developing countries is close to that of the Obama administration, certainly closer to it than to that of the previous administration. The current administration largely buys into a view that sees a positive role for foreign aid and, equally, it wishes to pursue a reinvigorated global development agenda in a hard-headed way. This would be entirely in keeping with the tenor of the aid and change discourse described above. It would be of little contemporary practical value to overplay the notion of Canada as a philanthropic foundation. However, the country possesses an endowment, its natural resource-based economy, from which flow uneven but significant income streams devoted to pursuing good things in less fortunate countries. There is an altruistic as well as a narrower interest in this pursuit, although the balance between the two differs across countries and over time. More like foundations and less like the aid programs of super powers, Canada’s aid objectives balance altruistic objectives with national, corporate, and efficiencyoriented considerations. Might it follow that some of the thinking around the activities of the foundations applies to elements of Canada’s aid program too? The rest of this chapter is devoted to exploring this line of reasoning further. While donors, be they official aid agencies or foundations, correctly focus on measuring impacts, interventions based on knowledge creation, such as support for the Consultative Group on International Agricultural Research (cgiar), do not always lend themselves to easy measurement. Yet science, technology, and innovation are central to the development process broadly defined. Recent evidence from the literature on intellectual property rights buttresses this point. Canada is well positioned to play an even larger role in putting innovation at the core of development (and development assistance). While the “theory of change” underlying all this is complex, it is arguably the right one to pursue – and quintessentially Canadian.

a u s a b l e t h e o ry o f c h a n g e Change theory has its roots in the work of social psychologist Kurt Lewin in the 1940s. More recently, Carol Weiss, Michael Quinn Patton,

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and other notables in the U.S. evaluation community have been instrumental in applying the concept to community-based initiatives. A theory of change is the current method by which development outcomes are compared to the original intent of the spending, by setting out a series of “mini-steps” that are expected to connect the two. The narrower the intent, the easier it is to measure impact. But as the whole point of most development interventions is to influence social (and political and cultural) outcomes, theories of change suffer from an inherent tension. To be realistic, they must be complex. As a means to measure impact, they must be simple. Consider the cgiar, the principal global public effort devoted to achieving “sustainable food security and reduce poverty” (cgiar n.d.) through research. In April 1969 in Bellagio, at the conference that launched the process leading to the eventual creation of the cgiar, all six background papers were devoted to some aspect or other of agricultural production. To be sure, the sixth paper threatened to stray into wider territory with the title “Priorities in agricultural development,” but it ultimately limited itself to three things – technology transfer from developed to developing countries; water management; and price policies. So long as the cgiar’s aim was to increase agricultural productivity or aggregate food production, assessing outputs and, more important, ascribing them to the research activities of the cgiar’s institutes are relatively straightforward matters. Ironically, precisely during the decades in which skepticism about the utility of foreign aid has increased, so too has the ambit of the cgiar mission, culminating in the current quite heroic statement cited in part above. A theory of change connecting investments in research to higher farm yields and perhaps farmers’ incomes is relatively easy to construct. But it misses the wider context with which even the founding fathers of the cgiar were concerned, albeit in passing: situating agricultural (and livestock) production in the fight against hunger and poverty. This type of theory of change makes for a more satisfying development story, but works against an assessor of the cgiar being able to demonstrate success or failure.

i n n ovat i o n f o r d e v e l o p m e n t Support for the creation of knowledge, of processes, and of ways of doing things is harder to appraise than support for the actual production of things. Yet, Canada has always privileged knowledge and capacity building in its aid efforts. It has been a stalwart of the cgiar, always represented at key discussions starting with Maurice Strong’s participation in the first Bellagio meeting. It consistently places among the top

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five funders of the system, which, corrected for country size, places it well ahead of those contributing larger absolute amounts, such as the European Union, the United Kingdom, and the U.S.; in dollar terms, Canada’s contribution in recent years has been about half that of all foundations combined. In 1970, an act of Parliament created the International Development Research Centre (idrc) – the organization for which I work – with the express purpose of strengthening research capacities in developing countries. Although he does not state this explicitly, in David Morrison’s (1998) careful study of Canadian development assistance, it is striking how throughout its history (arguably even during the “infrastructure phase” of the 1970s), capital and technology transfers, technical assistance, and capacity building have gone hand-in-hand. In a curious way, this reflects the research and development (r&d) situation in Canada. In last year’s Innis Lecture, Daniel Trefler (2008, 1171) noted that “among the 15 countries with the world’s highest r&d shares [of gross domestic product], Canada is dead last. And other countries, such as China and India, are hard on our heels.” This gap is not due to low levels of spending on r&d in government or universities; rather, it is almost entirely due to low levels of r&d spending among Canadian businesses (Trefler 2008).† It is in keeping with this tradition that a wholly public enterprise, such as official development assistance (oda), appears to privilege r&d and “r&d-like” activities. I say appears to privilege because internationally comparable data on the research and innovation component of oda are notoriously unreliable. This might be the single most worthwhile exercise in which the Organisation for Economic Cooperation and Development’s (oecd’s) Development Assistance Committee or the United Nations Educational, Scientific and Cultural Organization (unesco) might embark. Despite the complexity of the theory of change – or perhaps because of it – Canada has persisted in supporting research and innovation through its oda and is currently probably increasing its relative share. Although never operationalized, the government’s response to the Speech from the Throne in February 2005 included this commitment: “Our long-term goal as a country should be to devote no less than 5% of our r&d investment to a knowledge-based approach to development assistance for less fortunate countries. We in Canada are rich in † This conclusion might also be drawn from the analysis in stic (2009) especially pages 15–17 and 20–23 and cca (2009) especially pages 7 and 18–19, although in these reports the principal thrust of the argument is the poor performance in productivity in Canada despite high levels of direct and indirect governement support for r&d relative to other oecd countries.

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medical science and research. We have a moral obligation to share our capability with those in desperate need.” Patterned on the Bill and Melinda Gates Foundation’s Gates Grand Challenges in Global Health initiative, the federal budget of 2008 mentioned the creation of a development innovation fund devoted to supporting a globally competitive granting process to fund so-called breakthrough technologies, initially in the area of health, but in principle to extend to such other fields as agriculture, energy, and the environment. “Innovation for development,” admittedly an all things to all people concept but still centred on science and technology (S&T), looms large in current G8 and G20 discourse leading up to the summit in Muskoka, Ontario, in 2010, not least because of keen support from the host country establishment. Canada’s science funding agencies are keen players in the internationalization of the research agenda. The Gates approach has not been beyond criticism, mainly on two grounds. The first is its underlying belief in technology-led (“silver bullet”) approaches that neglect the social, economic, political, and cultural context within which technologies are created and applied in developing countries. The second is the predominance of high-income country researchers and institutions among grantees (see, for example, Black et al. 2009). It is entirely possible to envisage (says the man from idrc) a Canadian version of the Gates approach, and indeed Canada’s stewardship of the innovation for development agenda more generally, that deals with these two issues head on – and effectively. This approach – emphasis on modernity and innovation, rounded off by a concern with context and equity – is in keeping with Canada’s own historical experience. It is also in keeping with the notion of Canada as the respected middle power, “attractively average” in Christopher Berzins’ (2009) words, exemplary rather than exceptional. The distinction he draws between the two terms, although used more generally in an essay on foreign policy, applies quite well to an innovation-based aid agenda: “Striving to be exceptional means striving to be either at the very centre or furthest periphery of world affairs, either leading the way or beating your own path. But striving to be exemplary ... means seeking to stake out an acceptable middle ground among other countries: seeking to represent that which is positive in the nature or behaviour of a group as a whole” (Berzins 2009, 8).

hope via the scientific method An area yet to be explored in any depth, at least through the lens of support via foreign aid, is the impact of strengthening s&t systems on

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the wider society. There is an implicit assumption – resonating, for example, in Barack Obama’s (2009) speech in Cairo in June that announced a fund to support technology transfer and development in Muslim-majority countries – that scientific advance holds the key, evidently to economic prosperity, but also to openness and understanding within and between countries (read cultures). Recently John Polanyi (2009) put it this way: “It is sometimes overlooked that the power of science comes from debate – that science is grounded in democracy. [W]e advance propositions. As with evidence in court, these are tested in cross-examination before a jury of peers. ... [S]cience marshals the power of reason ... in a civilized way.” Countries of the former Soviet Union and Eastern Bloc are sometimes held as counterexamples, where seemingly high levels of scientific and technical proficiency co-existed with repressive political and social systems. No doubt, a large part of an infatuation with science in some repressive regimes is driven precisely to avoid debate in non-technical areas. But the record also shows that the science and innovation edifice, in the absence of full and open debate within the country and with the outside world, is a weak and unsustainable one. The lesson, as with the critique of the Gates approach cited above, is to situate support for science within the wider development objective and to support the process of scientific enquiry in the spirit of Polanyi’s representation of it.

new evidence on drivers o f i n n ovat i o n The current discussion on foreign aid, s&t, and innovation comes at a time when the literature on intellectual property rights is yielding some interesting historical and contemporary insights. The conventional view, dating back to Adam Smith and John Stuart Mill, and more recently epitomized by Douglass North’s seminal contributions to institutional economics, is that Britain’s patent system, established in 1624, provided the economic incentive for curious minds to devote time and effort to inventing the very sorts of advances that started and sustained the Industrial Revolution in that country. More recent research suggests that the early investigators were as motivated by honour and altruism as anything else. Besides, despite the existence of a patent regime, many early inventions were money-losing for the inventors. Although some argue that this suggests the patent system is insignificant in explaining the technological advances of the Industrial Revolution, a middle view might be that because of its weak application, the patent system allowed benefits of the inventions to be

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captured by consumers, thus unintentionally stimulating a wider culture of enquiry and innovation.‡ Although still a contentious debate, the bulk of the contemporary evidence on the empirical link between stronger patent regimes and the level of innovation suggests either no link or a negative one. Lerner’s (2009) extensive study finds the negative effect stronger in developing countries than in developed ones. Although the current evidence is counterintuitive from a traditionalist perspective, a number of explanations have been advanced. Excessive amounts of proprietary knowledge inhibit further innovation that depends on access to it. The data are conceptually and actually weak (how to measure innovation?). The time frames used in the empirical studies are too short. Finally, perhaps the new view is the right one – innovative activity does not respond simply to stronger patent regimes. The current view on innovation and intellectual property has a number of implications for development assistance. Clearly, attention must continue to be paid to creative ways to ensure that new knowledge has the widest possible public application. Patents held in the public interest or their content made widely available at minimal cost, as in the cgiar and the Gates Grand Challenges in Global Health initiative, or other means to match the public and private interest, such as advanced market commitments, all form part of this arsenal. But the case for public funding to stimulate enquiry is made stronger precisely because private funding is unlikely to respond adequately to incentives provided by intellectual property regimes grounded in proprietary knowledge. Finally, the spirit of scientific enquiry itself has spin-off effects on society that go beyond the first iteration of technical advances.

i n s u m m a ry Where does this leave Canada and a theory of change? I have argued that support for S&T and innovation is a valid projection of Canada’s image abroad. The scientific enterprise is, at minimum, coincident with and, at most, a necessary condition to achieve the wider goals of economic, political, and social development. The steps involved here are not all “mini,” which is exactly why they are worth pursuing. Conceived in a broad rather than limited way, there is an appealing theory of change here. ‡ For a representative statement of the traditional view see North (1981) and North and Weingast (1989); for a summary of the debate and the revisionist view see Mokyr (2009) and Levine and Boldrin (2008).

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Historically, a relatively under-appreciated but discernible undercurrent of this has existed in Canada’s aid policies. It is too early to even speculate on how the innovation for development agenda will play out; nor is this chapter meant to be an operational document. But the parameters within which success or failure might lie can be portrayed. The term “innovation” has three broad connotations. To some, it represents scientific invention and technical advance. Others use a more economistic definition that signals competitiveness of firms and their resulting profitability. In the development discourse, innovation and social innovation (for example, micro-credit) are often used interchangeably. In rolling out an innovation for development agenda, reliance on any single concept will be needlessly limiting. Increased support for existing streams of basic and applied science should not now have to be heralded under the innovation moniker. Nor should traditional foci of development assistance (for example, micro-credit and small enterprise development) be re-branded. Rather, the emerging agenda should strive to blend the various interpretations of innovation by identifying endeavours where the principal entry point is science, but with well articulated, direct, and significant implications for one or more of the elements of development, be it economic, social, or political. Several fields of work present opportunities for greater involvement. The application of information and communication technologies in health, education, and government; the links between the environment and human health; and pandemic prevention are all areas where demonstrated Canadian expertise and finance will find (and have already found) ready reception in developing countries, many of them with quite impressive platforms of their own science capacity. This also presents the opportunity to forge new, “beyond aid” partnerships with the advanced developing countries to work jointly in less advanced ones. This list is not exhaustive, nor is it meant to be. Rather, the purpose here is to motivate further discussion on the subject. Current moves that appear to bring this element further to the fore place Canada squarely in the exemplary category of actors in the development arena. In size, scope, and intent, these are a projection of Canada as a country with economic and political interests as well as altruistic ones.

ac k n ow l e d g m e n t s I wish to thank, without implicating, Barry Carin, Tim Dottridge, David Malone, Marie-Claude Martin and the editors of this volume for their comments on earlier versions of this paper.

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references Berzins, Christopher. 2009. Let’s hear it for being average. Literary Review of Canada, 17(4): 7–9. Black, Robert E., Maharaj K. Bhan, Mickey Chopra, Igor Rudan, and Cesar G. Victora. 2009. Accelerating the health impact of the Gates Foundation. The Lancet, 373(9675): 1584–85. cgiar (Consultative Group on International Agricultural Research). n.d. Who we are: the cgiar mission. Washington: cgiar. Available at . Last accessed 2 Oct. 2009. cca (Council of Canadian Academies) Expert Panel on Business Innovation. 2009. Innovation and business strategy: why Canada falls short. Ottawa: cca. Available at: . Last accessed 2 Oct. 2009. Lerner, Josh. 2009. The empirical impact of intellectual property rights on innovation: puzzles and clues. American Economic Review, 99(2): 343–48. Levine, David, and Michele Boldrin. 2008. Against intellectual monopoly. Cambridge: Cambridge University Press. Mokyr, Joel. 2009. Intellectual property rights, the industrial revolution, and the beginnings of modern economic growth. American Economic Review, 99(2): 349–55. Morrison, David R. 1998. Aid and ebb tide. A history of cida and Canadian development assistance. Waterloo, Ontario: Wilfrid Laurier University Press. North, Douglass C. 1981. Structure and change in economic history. New York: Norton. North, Douglass C., and Barry R. Weingast. 1989. Constitutions and commitment: the evolution of institutions governing public choice in seventeenthcentury England. Journal of Economic History, 49(4): 803–32. Obama, Barack. 2009. Remarks by the president on a new beginning (Cairo University, Cairo, Egypt). Washington: The White House. Available at: . Last accessed 2 Oct. 2009. Polanyi, John. 2009. Hope lies in the scientific method. The Globe and Mail, 26 May: A15. stic (Science, Technology and Innovation Council). 2009. State of the nation 2008. Canada’s science, technology and innovation system. Ottawa: stic. Available at: . Last accessed 2 Oct. 2009. Trefler, Daniel. 2008. Innis Lecture: Canadian policies for broad-based prosperity. Canadian Journal of Economics 41(4): 1156–84.

Responding to the Food Crisis: The Untying of Canadian Food Aid jennifer clapp

In spring 2008, in the midst of rapidly rising food prices, Canada announced full untying of its food aid. By choosing this particular moment to remove all restrictions requiring the procurement of food aid from Canadian producers, the government was able to maximize its international reputation as a country that puts a priority on humanitarian concerns over domestic interests. Canada won international kudos for this policy move. Typically the third largest donor of international food aid after the United States and the European Union, Canada’s policies have significant international impact. Josette Sheeran, executive director of the United Nations’ World Food Programme (wfp) publicly thanked Canada for its donation and untying of its food aid at the Rome food summit in June 2008. Canada certainly deserves applause for its actions on food aid as part of its response to the global food crisis. At the same time, a closer look at the circumstances around the policy shift reveals that, although humanitarian concerns played an important role, self-interest was also a factor in its timing. Moving forward in the current context of growing global food insecurity, with now over 1 billion undernourished people on the planet and continued high food prices in developing countries, Canada must remain vigilant in promoting appropriate international food aid and food security policies.

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th e t r o u b l e w i t h t i e d f o o d a i d Early food aid programs were established by donors specifically as mechanisms to dispose of agricultural surpluses, which explains why they were fully tied to commodities grown in donor countries. Even though agricultural surpluses largely disappeared after the 1970s, most major donors maintained tied food aid policies well into the 1990s and beyond. The question of whether food aid should be tied to procurement in the donor country has been subject to heated debate on the international stage in recent years. It has been widely critiqued as serving donor rather than recipient needs. But is it worth tying food aid to benefit domestic agricultural producers? Tied food aid has a number of downsides. First, it is a highly inefficient form of international aid. On average, it costs 50 per cent more than supplying food purchased locally in the recipient country and a third more than it would cost to buy food from a third country on the open market (oecd 2005, 13). Delivery is also highly inefficient in terms of time; it can take four to six months for a food shipment to reach its destination, and such significant delays could cost lives. Second, tied food aid is often highly disruptive to local markets in developing countries, particularly when that aid is not well-targeted to those most in need of it. Food aid is typically sold on local markets in recipient countries at low prices, depressing local production incentives (fao 2006, 38). Third, tied food aid can distort international markets by displacing commercial trade that would have taken place in its absence. For this reason, food aid has become a controversial item in the context of the Doha round of trade negotiations under the auspices of the World Trade Organization. Finally, food from donor countries may not suit local food preferences, simply because it brought in from outside of the region. In light of these problems, since the mid-1990s, a number of donor countries have moved significantly toward untying their food aid. The European Union did so in 1996, and Australia followed suit a decade later. Canada untied 50 per cent of its food aid in 2005, and fully untied it in 2008. Meanwhile, the largest donor, the United States, has maintained a nearly 100 per cent tied food aid policy.

th e m o v e t o wa r d l o c a l and regional purchase Countries that have untied their food aid have largely moved to a policy of making donations in the form of cash, which is directed via the wfp to be used for local and regional purchases (lrp s).

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lrp food aid transactions use financial resources to purchase food either locally in the recipient country or in a neighbouring country. The rationale for this practice is that, although hunger may exist in a community, it is not always linked to a lack of food in local or nearby markets. Typically, the problem is simply that people cannot afford to buy that food. lrps allow food aid dollars to reach more people in need by acquiring more food with scarce resources. lrps also usually arrive much more quickly than food shipped from donor countries, as they have a much shorter distance to travel. Developing country farmers also benefit from lrp food aid. Rather than harming farmer incentives by flooding markets with cheap imported food, lrp transactions provide a market for locally grown grains, which in turn gives local farmers an incentive to increase production. This contributes to a more resilient food system within developing countries and reduces their dependence on food imports. And by providing foods that are grown close to the source of hunger, lrp s are also much more likely to be in line with local food preferences. lrp is not always a “silver bullet” solution to hunger. If not carried out carefully, it may disrupt local markets in poor countries. For example, large purchases of grain could drive up local food prices and, thus, make food less available to the poorest members of society. But agencies, such as the wfp, that engage in this practice are careful to analyze markets first, before making local purchases. If there is a potential for problems, the wfp will buy regionally or from a more distant third country.

c a n a d a’ s e a r l y f o o d a i d p o l i c i e s Because of its function as a mechanism for disposing of surpluses, Canada’s food aid was fully tied from early on. As the lead agency for food aid, the Canadian International Development Agency (cida) made serious efforts from the mid-1970s on to make its food aid policy more efficient. This included a partial untying of food aid over 1975–80 to allow up to 20 per cent of its food aid budget to be spent on local purchases, although this goal was never close to being met (Charlton 1992, 106–7). A 1980 review of Canadian aid policy recommended that “every effort be made to supply food-deficit developing countries with food aid purchased by Canada from neighbouring food surplus developing countries” (Charlton 1994, 79). But the government reduced cida’s untying authority to just 5 per cent of its food aid budget in 1984, and this was only to be allowed in emergency situations that met certain criteria and only as a “one-time response” (Gillies 1994, 189).

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A further major review of Canadian aid policy in 1987 again recommended untying food aid, but the response of the government was to keep it tied at 95 per cent (Charleton 1994, 80). Charleton (1994, 77) suggests that this may have been due to aggressive lobbying on the part of commodity producer organizations, who have long advocated increases in Canadian food aid. Following steep cuts to Canada’s overall international aid program in 1990s, cida’s expenditures on food aid fell sharply from cad 390 million to cad 218 million between 1993 and 1997. However, despite budgetary constraints, the policy of tied food aid remained in place. By the mid-1990s, cida began to allow up to 10 per cent of its food aid to be allocated to lrp, but this still meant that 90 per cent was strictly tied to Canadian-grown commodities.

s h i f t i n g t h e “ t i e d ” i n ca n a da In the 1990s, there was a move by a group of domestic non-governmental organizations (ngo s), led by the Canadian Foodgrains Bank, to launch a campaign to allow more local purchases of commodities in developing countries to make Canadian aid dollars go further (Carty n.d.). Rather than start with the agricultural lobby, the ngo s first sought grassroots support for untying Canadian food aid. They pointed out that Canadian farmers would not see their own incomes drop by any significant amount by untying food aid, because food aid amounted to less than 1 per cent of Canada’s production of any major food commodity (Carty n.d., 7). They also explained that lrp was beneficial for developing world farmers. Canadian farmers were receptive to the idea. They understood the problems associated with foreign competition and wanted to help, not hurt, developing world farmers. After securing the support of farmers, the ngo s took on the agricultural lobbies – the large farmer organizations, including the National Farmers’ Union and the Canadian Wheat Board. They were somewhat surprised to find that rather than being hostile to the idea, these organizations were receptive to it, provided that they could be given assurance that the beneficiaries of untied policies were developing world farmers and not farmers in other industrialized countries, who may be producing food more cheaply because they are supported by hefty farm subsidies. Support from farm groups for the proposal was perhaps made easier by the fact that food aid had sustained such serious cuts in the 1990s that the economic stake these groups had in the program was at this point very small.

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th e 5 0 p e r c e n t u n t y i n g i n 2 0 0 5 By October 2005, the federal government finally came onside. Citing the need for improved efficiency and effectiveness, it announced that it would allow up to 50 per cent of its food aid budget to be allocated in the form of cash for lrps in developing countries. Although the idea of the policy shift was a long time coming, the timing of this move suggests that there were likely several forces beyond simply efficiency and effectiveness that were at play. First, by 2005, Canada had fallen into arrears on its commitments under the Food Aid Convention (fac). It was significantly under its obligation to provide 420 000 tonnes of wheat a year for much of the period from 2000 to 2005, following an edging up of wheat prices that began in late 2000. The fac requires donors to make up for its past shortfalls in subsequent years, but by late 2005 meeting both current commitments and past shortfalls had become very expensive. Donor commitments to the fac are spelled out in tonnes of wheat, which can be given in the form of wheat, cash, or other commodities equivalent to the tonnage of wheat. The equivalents are calculated according to formulas set out in the rules of procedure of the fac; cash equivalents are equal to the average price of wheat in the previous calendar year in U.S. dollars. In 2004, wheat prices, while on average higher than in 2000, were low compared with those of 2003 and 2005. This meant that converting some of Canada’s food aid obligation to cash in 2005 – which would be based on 2004 wheat prices – would result in a substantial savings. In October 2005, the Canadian dollar was also at a high point compared with the previous five years, making it a particularly good moment to switch to cash for food aid. A second factor in the timing was that, by late 2005, the Doha trade negotiations were restarting in preparation for the Hong Kong ministerial conference scheduled for December of that year, at which a decision was likely to be made about whether food aid would be subject to trade rules. Canada, like the European Union and Australia, was keen to push the United States to reduce its domestic agricultural subsidies, including what were seen to be unfair trade practices in its food aid policies. If Canada were to make a bold move to untie a significant portion of its food aid, it could use that as leverage at the World Trade Organization talks.

full untying in 2008 in the context of the food crisis Just two and a half years later, as food prices were experiencing sharp upward spikes in early 2008, Canada announced that it was taking the

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step of fully untying its food aid, allowing all of it to be sourced in developing countries or in countries that had also untied their food aid. This time, the policy change was not the result of an intense grassroots campaign, nor had it been politicized in the government. The announcement was made alongside the government’s response to the wfp’s plea for additional funding in the midst of the food price crisis. Bev Oda, the minister of international cooperation at the time, noted that in addition to improved efficiency and effectiveness of the aid, the move was intended to reduce any perception that Canada’s aid policies were self-serving. Again, although the stated objective of improving the ability of aid policies to address hunger was no doubt very important in this decision, particularly in the midst of an emerging food crisis, the underlying economic conditions also made it an especially good time to completely untie Canadian food aid. The high price of grain in spring 2008 was an important consideration. At the time, the conversion price of wheat to cash under the fac rules was approximately usd 226 a tonne (the average price of wheat for 2007), while the cost to provide wheat on international markets was close to usd 450 a tonne. In effect, untying at that particular moment gave Canada a “two for one deal” if it contributed cash, enabling it to meet its fac commitments at a much lower cost than if it provided grain. As was the case in 2005, the strength of the Canadian dollar was another important consideration. In April 2008, at the time of the announcement, the U.S.–Canadian dollar exchange rate was roughly one-to-one, a rate that hadn’t been seen in over 30 years. With such a strong Canadian dollar, the option of meeting its fac commitments in U.S. dollars rather than wheat was no doubt especially attractive to the government.

th e w a y f o r w a r d The untying of food aid has been on the Canadian agenda for over 30 years, but only in the past four years – in the midst of rising food prices and an emerging global food crisis – was any significant action taken to realize that policy goal. Although efficiency and effectiveness were no doubt important factors in this policy change, the broader economic context appears to have played an important role in the timing of that change. The broader forces underlying the untying of Canadian food aid remind us that policy change is rarely the product of ideas alone. Interests also matter. Still, this does not take away from the significance of the policy shift that Canada undertook. The untying of Canadian food aid signaled the end of a three-decade debate and struggle and helps to

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boost Canada’s standing in the world and to restore its reputation as a provider of humanitarian assistance. While the untying of Canadian food aid was an important step, it alone is not sufficient to address the current global food crisis. The Canadian government is aware of this and has made support for agriculture and food security a central part of its new strategy. This new strategy is in line with other G8 countries, which recently endorsed a policy of prioritizing long-term agricultural development and reducing the role of food aid at their 2009 summit. Although the long-term goal should be to reduce the need for food aid, there is a risk that this shift could distract attention and resources from emergency food aid that is currently required to feed the growing numbers of the world’s chronically hungry people. The transition to supporting agricultural production rather than food aid is one that must take place slowly and be implemented with great care. It is important that the Canadian government take a leadership role on food aid and food security. It could do this in the following ways. Canada should continue to provide adequate financial support to the wfp for lrp food aid transactions. The wfp’s budget doubled in recent years to usd 6 billion for 2008–09, a level that agencies such as the World Bank predict will remain constant in the near future. In mid-2009, the wfp was well short of raising the funds it needed to carry out its operations. • Canada should take a leadership role in renegotiating the fac. Renewal is nearly 10 years overdue, and a renegotiated convention could lock in substantially higher funding requirements for donors with specific allocations to the wfp. A renewed fac could also include requirements for all donors to increase the flexibility of their food aid to make aid dollars go further. • Canada should support developing countries’ efforts to reduce their dependence on food imports, including food aid. This would entail continuation of Canada’s commitment to invest in sustainable agricultural production in developing countries. It would also mean supporting developing country requests for space in wto trade policy negotiations, which would enable them to shield themselves from subsidized agricultural imports that dampen local production incentives. •

references Charlton, Mark. 1992. The making of Canadian food aid policy. Montréal and Kingston: McGill-Queen’s Press.

367 The Untying of Canadian Food Aid – 1994. Continuity and change in Canadian food aid. In Pratt, Cranford (editor). Canadian international development assistance policies. Montréal and Kingston: McGill-Queen’s Press: 55–86. Gillies, David. 1994. Export promotion and Canadian development assistance. In Pratt, Cranford (editor). Canadian international development assistance policies. Montréal and Kingston: McGill-Queen’s Press: 186–209. oecd (Organisation for Economic Co-operation and Development). 2006. The development effectiveness of food aid: does tying matter? Paris: oecd. fao (Food and Agriculture Organization). 2006. The state of food and agriculture: food aid for food security? Rome: fao.

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climate change

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Canada and Climate Change Politics da v i d r u n n a l l s and adil najam

Canadians like to be liked, and polls indicate that they like their country to be a world leader in caring for the environment. By all indications, the world also likes to like Canada – especially in contrast to its giant neighbour – and the world has good reason to expect much from Canada in terms of its caring for the global environment, including climate change. But in recent years, the world has learned to curb its enthusiasm about just how much Canada is actually able to deliver in this area. Maybe it is time for Canada to surprise the world. Today, no one would accuse Canada of being among the leaders when it comes to international negotiations on climate change. For example, a recent World Wildlife Federation report card, prepared for the G8 summit in Italy, placed Canada dead last on its climate change policies (wwf 2009). This has not always been so. Canada and Canadians have a long history as world leaders on all things environmental, including climate change. However, over the years the intricacies of domestic Canadian politics have constantly come in the way of Canadian aspirations as well as its ability to positively influence the course of global climate change politics. By identifying three distinct phases of Canada’s politics of climate change, this chapter traces how Canada has systematically squandered a leadership role that should have been its for the taking. It also highlights some lessons that this history offers on ways in which Canada can still redeem itself and reclaim the leadership that the world would have loved it to take.

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1987–94: the mantle of leadership When the international climate negotiations began in the 1980s, Canada and Canadians were at the forefront of the global environmental movement. Indeed, they had – as much as any other single nation – helped set the stage and define the parameters of the global environmental movement. They had played a key role as bridge-builders between the advanced industrialized economies of the North and the developing countries of the South. Maurice Strong, as secretary-general of the first world environment conference held in Stockholm in 1972, shaped the conference that ended up shaping global environmental politics as we know it. As the head of the 1992 Earth Summit in Rio de Janeiro in 1992, he helped reshape and reinvigorate those politics. Between the two events, he helped establish the United Nations Environment Programme (unep) as its founding executive director and was a member of the Brundtland Commission (1984–87), which outlined and popularized the concept of sustainable development. In all these roles, he gained the confidence and respect of developing countries for being able to champion not only the environmental priorities of his native Canada, but also the developmental concerns of the South. Strong was not alone among those in key leadership positions in adopting such an approach. To add just two of many examples, Dave Munro, a former Canadian public servant, was director general of the International Union for Conservation of Nature (1977–80), one of the world’s most prominent conservation groups, where he led the work on the first world conservation strategy. Jim MacNeill, another former Canadian bureaucrat, was the principal author of the Brundtland Commission Report (Brundtland 1987), which popularized the concept of sustainable development, and he headed the environment division of the Organisation for Economic Co-operation and Development (oecd). These achievements were matched by government efforts. It was Canadian Prime Minister Brian Mulroney who first put climate change on the G8 agenda in Toronto in 1988. A week later, he co-hosted the Toronto conference on the changing atmosphere. That meeting brought together more than 340 scientists and policymakers from 46 countries, including two heads of government. The meeting was designed not only to provide for an exchange of the latest research results among the scientists, but also to present the findings to decision-makers. It produced a clear and strong declaration that was well ahead of its time: “Humanity is conducting an unintended, uncontrolled, globally pervasive experiment whose ultimate consequence could be second only to a nuclear war … It is imperative to act now” (wmo et al. 1989).

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In 1990, the government produced its long awaited Green Plan, which had started under the leadership of Lucien Bouchard, Mulroney’s environment minister. The ambitious cad 3 billion plan contained both money and commitments to do something about climate change and was visionary in its approach to cross-sectoral planning and implementation of environmental policy. Canadian scientists were prominent members of the Intergovernmental Panel on Climate Change and major players in the second World Climate Conference in 1990 in Geneva. This conference called for negotiations to begin on an international agreement on climate change to be adopted in 1992 in Rio. Canada was a founder of the canz group (Canada, Australia, and New Zealand), which was active in pushing for concrete targets to be incorporated into the convention, in direct opposition to the position adopted by the United States (U.S.) under the first President Bush. By threatening to boycott the conference, the latter eventually won out and a framework convention with no targets emerged from the Earth Summit. However, Canadian leadership on pushing for meaningful targets did not go unnoticed by the rest of the world. Mulroney, along with his newly appointed environment minister, Jean Charest, was very active in Rio and, unlike his counterpart from the U.S., was much respected by developing-country delegations as well as non-governmental organizations (ngo s). Many Southern delegates looked to Canada as a friend, particularly because of Canada’s role in “saving” the international convention on biodiversity, which was opposed by the U.S. Canada was one of the first signatories of the Convention on Biological Diversity and also became the first industrialized country to sign the framework convention on climate change. 1994–2005: reluctant engagement The Earth Summit in Rio was the high point of Canadian leadership on global environmental issues. Things began slipping soon afterward. The Mulroney government was defeated in 1993. Initially, it seemed that the Liberals under Prime Minister Chrétien were determined to outbid their predecessors in the climate change sweepstakes. For example, their “red book” of policies produced for the campaign pledged that Canada would achieve the Toronto conference target of a 20 per cent reduction in greenhouse gases by 2005. This was not to be. The first Conference of the Parties (cop) to the Convention on Climate Change was held in Berlin in 1995, and it marked the beginning of a retreat by Canada from its leadership position. The Europeans were now calling for targets and timetables. The canz group had been

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expanded to include the U.S. and Japan (becoming juscanz), neither of whom was willing to join the Europeans in this call, and Canada chose to follow the U.S. lead. Developing countries, whose own positions on climate change had begun to become more defined, now saw Canada more as a U.S. understudy than as a country that could potentially help bridge the North–South divide. But it was much more than just the coalitional dynamics at work. There was real conflict between Environment Minister Sheila Copps in Berlin and Natural Resources Minister Anne McLellan in Ottawa and between Copps and provincial governments and industry associations. The Mulroney government had enjoyed free rein in developing its policies on climate change. Industry had been largely uninvolved before 1993 and the provinces had been so absorbed in the constitutional quagmire that they had been strangely detached from discussions on climate. However, by the Berlin conference, this had changed. Copps had signaled a desire to do much more on emissions reduction, but found it difficult to convince her own Cabinet colleagues. Both Finance Minister Paul Martin and Anne McLellan were not keen on action to prevent climate change. At that stage, Prime Minister Chrétien was not engaged on the issue, and the ministerial impasse remained unresolved. In what was to become a recurring lesson, the lack of prime ministerial involvement led to a serious impasse. It was becoming obvious that the government was beginning to back away from its commitments and would not be able to meet its goals. As one of us (dr) wrote in 1995: The climate change issue touches upon a number of sensitive political nerves in Canada, including energy policy, fossil fuel production, federal/provincial relations and federal interdepartmental affairs. As the debate has proceeded from broad declarations to policy initiatives, these political elements have intensified, producing an acute struggle for hegemony among various stakeholders in Canada. At this juncture in the process, a number of lobbies have succeeded in diluting federal, provincial and municipal policy initiatives to the extent that Canada will more than likely fall short of its objective to stabilize greenhouse gas emissions at 1990 levels by the year 2000 (Johnson and Runnalls 1997). But 1997 was to be the fateful year. Canada did inadequate preparatory work before the cop meeting in Kyoto. In fact, the government was largely relying on U.S. models to predict future trends in Canadian emissions. Its domestic political preparations were also flawed. A final federal–provincial meeting was convened in November 1997, literally

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days before the Kyoto meeting, and participants agreed on a target of stabilization at 1990 levels by 2010. Despite this consensus, Prime Minister Chrétien decided to enter the fray. Influenced by German Chancellor Kohl and British Prime Minister Blair on a trip to Europe, he decided that the Canadian position in Kyoto had to be stronger than the U.S. one. As columnist Jeffrey Simpson described it: Forget the instructions the delegation had received as it departed in December 1997 for international negotiations on climate change in Kyoto. Forget the agreement negotiated with the provinces a few weeks earlier, for Ottawa had already unilaterally countermanded it. Now, Jean Chrétien sent fresh instructions: Canada must accept even more difficult targets for reducing greenhouse gas emissions. Officials were incredulous. Provincial officials were steaming. Natural Resources Minister Ralph Goodale, co-chair of the Canadian delegation and a climate change skeptic, phoned a cabinet colleague in Ottawa and muttered the r word resignation … From that moment on, guided almost entirely by political optics, Chrétien set Canada on a climate change policy course whereby the government accepted onerous obligations without knowing how to fulfill them. (Simpson et al. 2007) Before the delegation departed for Kyoto, it learned that Canada was already 13 per cent over its stabilization target. It returned with a Kyoto Protocol target of 6 per cent below 1990 levels. This meant a real target of 19 per cent below the 1995 emission levels. The private sector and the provinces were furious, especially when they discovered that such other major carbon producers as Australia and Norway had returned with targets that allowed them to actually increase their greenhouse gas emissions. Canada was now seen to be firmly in the U.S. camp on climate change. Neither industrialized nor developing countries saw Canada as a natural leader on climate change and neither group looked up to it as a potential North–South bridge builder. In 1998, another attempt was made to bring the various stakeholders together to develop a plan. The federal government established a national climate change process and a Climate Change Secretariat and eventually a cad 100 million Climate Change Action Fund. Later, in 2000, Environment Minister David Anderson managed to persuade the cabinet, against strong opposition, to adopt a follow-up action plan with an additional cad 500 million. The government estimated this would get Canada about a third of the way toward its Kyoto targets.

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It was in this happy frame of mind that Canada now approached the 2000 cop in The Hague. Expectations were high going into the meeting that the last obstacles preventing the Kyoto Protocol coming into force would be cleared away. Although Kyoto had already been signed by over 100 countries, relatively few had ratified the agreement. The meeting in The Hague was a failure, not because of Canada, but Canada neither tried to nor could have salvaged it. The Europeans pushed a little too hard and the U.S., in the last days of a thenailing Clinton administration, resisted. Canada did little – too little, by some estimations. But clearly, an opportunity that cried out for a demonstration of international leadership was squandered by all, including Canada. Later that spring, President Bush announced that the U.S. had no intention of ratifying the Kyoto Protocol. As a country that was seen to be clearly following the U.S. lead, this made Canada’s position even more untenable. In an attempt to pick up the pieces, countries gathered again in Bonn in mid-2001 to see if there remained any hope for the Kyoto Protocol. This meeting gave Canada new and powerful influence – not to be confused with leadership – in international climate negotiations. Because of the peculiar arithmetic that governed Kyoto’s implementation, both Canada and Russia had to ratify. If either backed away, the protocol was dead. Thus, Canada emerged from Bonn with major concessions, which would allow it to count its carbon sinks (such as forests and soils) toward its emissions total. The other participants also agreed that there would be no limits on the “mechanisms” in the protocol that allowed developed country investors to fund projects in developing countries, which would reduce greenhouse gas emissions and earn credits against their national targets. Previously, many European countries and most ngo s had opposed this on the grounds that countries should have to reach their targets almost entirely by reducing their own emissions. The next year the Chrétien government tried yet again to develop a national plan. The Climate Change Plan for Canada (Canada 2002) promised annual cuts of 240 million tonnes of greenhouse gas emissions, but was sketchy on how these cuts would be made. In June 2002, Prime Minister Jean Chrétien used his international swan song at the tenth anniversary of the Earth Summit, at Johannesburg, to announce that Canada would ratify the Kyoto Protocol. It led to a major national debate culminating in ratification by Parliament in 2003. But the irony that Canada, which had been the first industrialized country to sign the climate convention in 1992, was now among the last of the industrialized countries to ratify the Kyoto Protocol – and was doing so quite

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reluctantly – was a stern reminder of just how much Canadian leadership on the issue had slipped. Paul Martin, the new prime minister, was not originally a strong supporter of the Kyoto Protocol. However, he changed his tune during the 2003 election, when this support and action to prevent climate change were viewed as one of the reasons for the Liberal victory. Now that the prime minister was taking an interest in the issue and now with real international obligations to act, the Liberals announced yet another climate change plan. Released in April 2005, this one relied heavily on government-funded purchases of emission reductions, both domestically and through the Kyoto Protocol’s market-based mechanisms (Canada 2005). More important, compared with its predecessors, this plan promised to be well funded, with a total of cad 10 billion on offer. It was announced as Canada made preparations to host the next meeting of the climate change cop, in Montréal in December 2005. Environment Minister Stéphane Dion was the key figure and threw himself into his role with enormous energy. An admiring New York Times editorial described him thus: Mr Dion, a mild-mannered man who wears a windmill pin on his lapel, has been credited by many environmentalists for his diplomatic skills with China, India and the Bush administration. He has pushed for international efforts to increase innovation like hydrogen fuel cells and methods for capturing carbon dioxide, the main greenhouse gas, before it is emitted from smokestacks. (Krauss 2005) The Montréal cop was ruled a success, partly because expectations for it had been so low, but also because Canada, it seemed, was trying to reassert its more traditional role as a North–South bridge builder on environmental issues. 2006–08: disengagement The Liberal government was defeated during the cop and the Conservatives took office in January 2006. Climate change was never a favourite issue for the Conservative Party and was not included among the five priorities that the prime minister promised his government would make the centerpiece of its term in office. However, it faced an almost immediate challenge. Environment Minister Rona Ambrose was still president of the cop, finishing out Stéphane Dion’s term, which had begun in Montréal. She presided over a meeting in the spring in Bonn, then headed the Canadian

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delegation at the following cop in Nairobi later that year. Both performances were viewed as disastrous. If the Earth Summit had been the apex of Canadian leadership on global climate change, the nadir for Canada’s international reputation came when Prime Minister Stephen Harper’s government announced that Canada would not even attempt to meet its obligations under the Kyoto Protocol. Late in 2007, Minister John Baird headed up the delegation to the Bali cop, where Canada’s participation was extremely controversial. The government staged several events in Bali in an attempt to explain Canada’s policies to an increasingly skeptical group of Canadian ngo s, journalists, and officials. The rest of the world looked on in amazement – sometimes in shock. Canada’s disengagement from the effort to halt global climate change seemed palpable at Bali. It was difficult to watch, not only for many Canadians – the majority of whom still said in polls that they wanted more engagement – but also for Canada’s international friends and those many who still saw international environmental leadership as Canada’s “natural” role. Global civil society activists awarded the “fossil of the day” prize to Canada on at least five occasions during the twoweek meeting. It was not an inapt title for a country that had once been a leader but had been reduced to a shadow of itself. 20 0 9 a n d b e yo n d : o n wa r d t o t h e f u t u r e One way or another, 2009 is going to be yet another landmark year in the saga of Canada and the politics of global climate change. The appointment of Jim Prentice as Canada’s environment minister signals a change in national policy and reflects the changes in U.S. policy under Barack Obama. Many argue that the Canadian climate train really came off the rails when George W. Bush rejected Kyoto. Canada had been developing its own strategy on the assumption that the U.S. would be moving in the same direction, at more or less the same pace. Now that U.S. policy is once again more fluid, Canada also becomes a more consequential global policy player. Both Canada and the U.S. will seek to salvage their international reputations on climate change at the Copenhagen cop in late 2009. Both countries have much to salvage. No matter what happens at Copenhagen, the global politics of climate change can only become more important, more intricate, and more interdependent on other policy areas than ever before. Learning from Canada’s past experience – three distinct phases of clear leadership turning into tortured engagement morphing into disdain and

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disengagement – we can identify the following lessons that Canada will do well to remember as it plans for the future. First, climate change never was, and never should be, the domain of environmental ministers alone. Environmentalists need to understand that, but so do economic and foreign policy decision-makers. Even more than for many other issues, domestic policy on climate change drives foreign policy. Effective climate policy cannot come from any single ministry, and the biggest challenge will always be coherence among ministries and with the provinces. That means turf battles and potentially vicious ones. Because of the nature of the issue – and the stakes – leadership at the very top, i.e., the prime minister, is not just crucial, it is essential. As host of the next G8 meeting, the prime minister must now view climate as one his top concerns – up there with economic recovery, job creation, and Arctic sovereignty. And the finance department must be an intimate part of the solution. As Nicholas Stern (2007) has pointed out, climate change is the most important economic issue facing the world in this century. Second, climate change results from dysfunctional energy policies. As an energy superpower, Canada is the largest source of oil and natural gas for the U.S. It is the world’s largest exporter of electricity and uranium. And Canada has substantial coal reserves. Canada’s impact and influence on global climate change policy will come not only from the agreements it crafts, but also from its own energy actions. Yet, the country has nothing that remotely resembles a national energy strategy. It is difficult to conceive of an effective climate policy in the absence of a robust energy policy. Ultimately, Canada’s climate policy – and much of the world’s future climate – will be determined by Canada’s energy policy. Third, by necessity for reasons of geography and economy, Canada’s climate policy will have to continue to be harmonized with that of the U.S. However, Canada need not walk in lockstep with its southerly neighbour. There may well be opportunities to include Canada’s other nafta partner in a continent-wide solution as well. Part of harmonizing climate policy with the U.S. has to be to push them harder to understand Canada’s own interests and public preferences. Canada’s position as the largest energy supplier to the U.S. is not an insignificant point of leverage in the global politics of climate change. Finally, Canada has a rich legacy of international environmental leadership. Dragging its feet on this most important of global environmental challenges has not been without costs, but all is far from lost. Many countries and individuals still see international environmental leadership and particularly North–South bridge building as Canada’s “natural” role. There is going to be ample need for both in the years to come.

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It is not too late to begin rebuilding this capital. This does not have to mean giving up essential Canadian interests or assuming targets that Canada cannot meet or costs it cannot afford. Instead, it means building on Canada’s traditional foreign policy assets, including: being a bridge builder in the Atlantic politics of the U.S. and the European Union; being a champion for developing country interests – particularly those of the most climatically vulnerable countries – within the G8, juscanz, and oecd; and using its considerable intellectual resources within civil society, academia, and bureaucracy to craft the more innovative options that simply cannot come from those who identify themselves at the extremes of the debate.

references Brundtland, Gro Harlem. 1987. Report of the World Commission on Environment and Development: our common future. New York: United Nations. Available at: . Last accessed 29 Sept. 2009. Canada, Government of. 2002. Climate change plan for Canada. Ottawa: Government of Canada. Available at . Last accessed 29 Sept. 2009. – 2005. Moving forward on climate change: a plan for honouring our Kyoto commitment. Ottawa: Government of Canada, 13 April. Summary available at . Last accessed 27 Sept. 2009. Johnson, Craig, and David Runnalls. 1997. Climate change and the politics of energy and environment in Canada. In Jyoti K. Parikh, Roy Culpeper, David Runnalls, J.P. Painuly (editors). Climate change and North–South cooperation: Indo-Canadian cooperation in joint implementation. New Delhi: Tata/McGraw-Hill: 148–86. Krauss, Clifford. 2005. No-confidence vote in Canada threatens U.N. climate change meeting. New York Times, 27 Nov. Available at: . Last accessed 29 Sept. 2009. Simpson, Jeffrey, Mark Jaccard, and Nic Rivers. 2007. Hot air: meeting Canada’s climate change challenge. Toronto: McLelland and Stewart: 9, 33–4. Stern, Nicholas. 2007. The economics of climate change: the Stern review. New York: Cambridge University Press. wmo (World Meteorological Organization), United Nations Environment Programme, and Environment Canada. 1989. Proceedings of the World Conference on the Changing Atmosphere: implications for global security, 27–30 June 1988, Toronto, Canada. Geneva: wmo. Publ. no. 710.

381 Canada and Climate Change Politics wwf (World Wildlife Federation) Canada. 2009. Canada ranked last in G8 on climate action. Toronto: wwf-Canada, 1 July. Available at: . Last accessed 29 Sept. 2009.

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Contributors

kanti bajpai is a professor in the Department of Politics and International Relations at Oxford University. nicholas bayne served in the British diplomatic service until 1996. For over 25 years, he has been writing on G7 and G8 summitry, starting with Hanging Together, which he co-authored with Robert D. Putnam. marie bernard-meunier is a retired career diplomat, who served as Canada’s ambassador to unesco, the Netherlands, and Germany. Currently, she sits on the boards of several public organizations. kwesi botchwey is a professor of practice in development economics at the Fletcher School, Tufts University, and the founder and chairman of the African Development Policy Ownership Initiative. lakhdar brahimi has served as foreign minister, ambassador, and international diplomat for Algeria. He led several United Nations peace operations and helped negotiate the end of civil war in Lebanon on behalf of the League of Arab States. derek burney is senior strategic advisor with Ogilvy Renault. He has had a distinguished career in Canada’s foreign service, serving as ambassador to Japan and Korea.

384 Contributors

don campbell is senior strategy advisor with Davis llp. He has served as Canada’s ambassador to Japan, Canadian co-chair of the Canada Japan Forum, deputy foreign minister, and the prime minister’s personal representative at G8 summits. jennifer clapp is a Centre for International Governance Innovation chair in global environmental governance at the University of Waterloo and co-editor of the journal Global Environmental Politics. jayantha dhanapala is a former United Nations under-secretarygeneral for disarmament affairs and a former ambassador of Sri Lanka to the United States and to the un office in Geneva. Currently, he is the 11th president of the Nobel Peace Prize-winning Pugwash Conferences on Science and World Affairs. paul evans is a professor at the Liu Institute for Global Issues and the Institute of Asian Research at the University of British Columbia. louise fréchette is a distinguished fellow at the Centre for International Governance Innovation. She has had an illustrious career in the public service of Canada and served as deputy secretary-general of the United Nations from 1998 to 2006. gordon giffin is chair of the Public Policy and International Department of McKenna Long & Aldridge. From 1997 to 2001, he served as the 19th United States ambassador to Canada john graham is chair emeritus of the Canadian Foundation for the Americas, the first head of the Unit for the Promotion of Democracy of the Organization of American States, and a former Canadian ambassador. angel gurría is the secretary-general of the Organisation for Economic Co-operation and Development. He has had a distinguished career in the Mexican public service, where he headed the Ministry of Foreign Affairs and the Ministry of Finance and Public Credit. fen osler hampson is the chancellor’s professor and director of the Norman Paterson School of International Affairs at Carleton University. He is the author or coauthor of eight books and editor and coeditor of more than 25 other volumes on international affairs.

385 Contributors

paul heinbecker is a Centre for International Governance Innovation distinguished fellow and director of the Centre for Global Relations at Wilfrid Laurier University. He has served abroad as Canadian ambassador to Germany and as Canada’s ambassador and permanent representative to the United Nations. jorge heine is a distinguished fellow at the Centre for International Governance Innovation (cigi), a professor at Wilfrid Laurier University and a cigi chair in global governance. He has served as Chile’s ambassador to India, Bangladesh, Sri Lanka, and South Africa. eric helleiner is a Centre for International Governance Innovation chair in international political economy, a Trudeau Foundation fellow, and co-editor of the book series Cornell studies in money. His most recent co-edited books include Global finance in crisis: the politics of international regulatory change and The future of the dollar. gordon houlden is director of the China Institute at the University of Alberta. Previously, he was director general for the East Asia Bureau with the federal Department of Foreign Affairs and International Trade in Ottawa. michael kergin is a senior fellow at the Graduate School of Public and International Affairs at the University of Ottawa. From 2000 to 2005, he served as Canada’s ambassador to the United States. jeremy kinsman was Canada’s ambassador to the European Union from 2002 until his retirement in 2007. Before that, he was high commissioner to London as well as ambassador to Russia and Italy. He is regents’ lecturer at the University of California, Berkeley, for 2009–10. arif lalani is a senior fellow at the Munk Centre for International Affairs and director-general for policy planning in Canada’s Department of Foreign Affairs and International Trade. He has served as Canadian ambassador to Afghanistan, Jordan, and Iraq. claude laverdure is a senior fellow at the Graduate School of Public and International Affairs at the University of Ottawa and is vicepresident and secretary of the Canadian Ditchley Foundation. She served in Canada’s foreign service as ambassador to France, foreign policy advisor to the prime minister, and the prime minister’s personal representative at the G8 summit.

386 Contributors

kishore mahbubani is dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore. From 1971 to 2004, he served as Singapore’s ambassador to the United Nations. the hon. john manley will join the Canadian Council of Chief Executives as president and ceo on 1 January 2010. He was a member of the Canadian Parliament for more than a decade, and served as minister of foreign affairs and deputy prime minister. patrick martin is former foreign editor of The Globe and Mail. He is currently serving for the second time as the newspaper’s Middle East correspondent, based in Jerusalem. carolyn mcaskie is a senior fellow at the University of Ottawa and a mentor with the Trudeau Foundation. She is an Officer of the Order of Canada and serves on the boards of canadem and the Pearson Peacekeeping Centre. donald mcrae is the Hyman Soloway professor of business and trade law at the University of Ottawa. He is a prominent Canadian expert on Arctic issues. rohinton p. medhora is vice-president, programs at the International Development Research Centre and a former economics faculty member at the University of Toronto. bessma momani is associate professor at the University of Waterloo and senior fellow at the Centre for International Governance Innovation, specializing in the Middle East and the International Monetary Fund. She is the author of Twentieth century world history and coeditor of Canada and the Middle East. adil najam is a professor of global public policy at Boston University and the director of the Pardee Center for the Study of the LongerRange Future. He served as lead author for the work of the Intergovernmental Panel on Climate Change, for which panel was awarded the 2007 Nobel Peace Prize along with Al Gore. sadaaki numata was Japan’s ambassador to Canada. After retiring from the diplomatic service in 2007, he was appointed executive director, Center for Global Partnership, Japan Foundation.

387 Contributors

robert a. pastor is professor of international relations and co-director of the Center for North American Studies at American University. He has served as director of Latin American affairs on the National Security Council and was vice-chair of the Council on Foreign Relations Task Force on North America. thomas pickering is currently vice-chair of Hills & Co, an international consulting firm. He served as senior vice-president for international relations at Boeing until 2006 and is a retired United States ambassador. mei ping was the Chinese ambassador to Canada from 1998 to 2005. ernie regehr is co-founder of Project Ploughshares and an adjunct associate professor in peace and conflict studies at Conrad Grebel University College, University of Waterloo. kenneth roth is executive director of Human Rights Watch. andrés rozental is a senior non-resident fellow at the Brookings Institution in Washington and a senior adviser to the Royal Institute of International Affairs (Chatham House) in London. From 1988 to 1994, he served as Mexico’s deputy foreign minister. david runnalls is president of International Institute for Sustainable Development. He has served as senior advisor to the president of the International Development Research Centre and administrator of the United Nations Development Programme. cyrus rustomjee is director of the Economic Affairs Division of the Commonwealth Secretariat. He has represented both private banking and the South African national government in various international institutions. In 2007, he headed the G20 Secretariat during South Africa’s term as chair. dimitry ryurikov is adviser to the director-general of the World Trade Centre in Moscow, vice-chair of the Russian Trade and Industries Chamber’s Committee for economic relations with Commonwealth of Independent States and Shaghai Cooperation Organization countries. He has served as Russian ambassador to Iran, Afghanistan, Uzbekistan, and Denmark.

388 Contributors

john schram is a distinguished senior fellow at the Norman Paterson School of International Affairs and a senior fellow at the Queen’s Centre for International Relations. He was Canada’s ambassador to Zimbabwe and Angola, Ethiopia, Eritrea and Sudan and high commissioner to Ghana and Sierra Leone. gordon smith is the executive director of the Centre for Global Studies at the University of Victoria. He joined the university in 1997 following a distinguished career with the Canadian public service. He recently received the Vanier Medal in honour of his longstanding service to Canada. ramesh thakur is director of the Balsillie School of International affairs, distinguished fellow at the Centre for International Governance Innovation, and professor of political science at the University of Waterloo. karsten d. voigt is coordinator for German–American cooperation in the foreign office of the Federal Republic of Germany. He has served as a long-time member of the Bundestag (German federal parliament) and has held many positions within both the Bundestag and the German Social Democratic Party. robert wolfe is a professor at the School of Policy Studies, Queen’s University.