Canada's three solitudes.

• Author: Dunsky, Dan

EVERY COUNTRY has its problematic national story: race in the United States, class in Britain, empire in Russia. Canada's problem is its perpetual identity crisis, a collective neurosis bred of being a confederation of English and French peoples--what the novelist Hugh MacLennan once called the country's "Two Solitudes"--and the small neighbor to one of history's few great nations. Canadians alternately worry about too much American attention--of being overwhelmed by the United States--and, as suggested by the title of a recent book, Invisible and Inaudible in Washington (2000), of being ignored by the United States. (It didn't help that the New Republic once judged the most boring headline ever to be "Worthwhile Canadian Initiative.")

These twin pressures have always existed as an immutable fact for Canadians and likely always will. But American policymakers need to be far more interested in how Canadians deal with these questions, since their answers will largely determine whether Canada is likely to remain a trusted ally in the unpredictable post-9/11 world or become a dangerously exposed northern flank.

The United States cannot "wall itself off" from Canada. Traffic across the 5,061-kilometer U.S.-Canadian border, which Ronald Reagan once hailed as "a meeting place between great and true friends", cements the most comprehensive bilateral trading relationship in history. A truck crosses the U.S.-Canadian border every 2.5 seconds. Approximately $1.3 billion in two-way trade crosses the border every day--or $500 billion a year. More than 200 million two-way border crossings occur yearly, making the shared border the busiest international boundary in the world.

Nearly 25 percent of American exports go north to Canada. More significantly, Canada is now America's largest source of crude oil and petroleum products. This may grow more important, both because of continuing instability in the Persian Gulf and because, according to the Oil and Gas Journal, Canada now contains, at 180 billion barrels, the world's second-largest proven reserves of oil. "Anyone watching what is happening up north will recognize that, before long, Canada will inevitably overtake Saudi Arabia as the world's oil giant", said Utah Senator Orrin Hatch recently. While chastising Canada for "irresponsible" talk of favoring China with increased oil exports as payback for the ongoing U.S.-Canadian softwood lumber dispute, Hatch nevertheless said that "we in this country don't want to be on Canada's shit list, ever."

Despite the senator's fears, however, Canada has much more to worry about than the United States. Quite simply, the border is Canada's economic lifeline. Owing to the absence of a large domestic market and an abundance of natural resources, Canada must export to survive. And today the United States consumes fully 85 percent of Canada's exports, accounting for an astounding 40 percent of the country's total GDP. In addition, many high-value Canadian products and services--for example, Canada's contribution to the U.S. space program--are designed to piggyback on existing American initiatives.

The signing of the U.S.-Canadian free trade agreement in 1988 (and NAFTA in 1993) accelerated the vertical integration of Canada's economy with that of the United States. Some 50 percent of Canadian foreign direct investment (FDI) is now aimed at the United States, while more than 60 percent of inbound FDI is American. According to Export Development Canada, a federal crown corporation, "the import content used to make Canadian exports has been growing steadily and now averages around 35 percent, and in many manufacturing industries [exceeds] 50 percent." This integration has, in turn, increased Canadian productivity. In short, it is no exaggeration to say that Canada's primary national interest is located south of the border.

The shock on Canadian economic activity of the effective closure of the border after 9/11 demonstrated the country's vulnerabilities and highlighted Canada's interest in safeguarding its southern frontier. The nightmare scenario for Canadian politicians today is a successful attack on the U.S. homeland by a terrorist who enters through Canada.

FACED WITH this reality, Canada has strengthened its anti-terrorism posture. Over the past four years, in addition to specific action on the border, the country's Parliament has passed Canada's first-ever Anti-Terrorism Act, a Public Safety Act and a new Immigration and...