Canada-United States relations from the International Boundary Waters Treaty, the auto pact, the Free Trade Agreement, the North American Free Trade Agreement, the security and prosperity partnership, and beyond: lessons learned.

Author:Crane, David
Position:PROCEEDINGS OF THE CANADA-UNITED STATES LAW INSTITUTE CONFERENCE on An Example of Cooperation and Common Cause: Enhancing Canada-United States Security and Prosperity Through the Great Lakes and North American Trade: Cleveland, Ohio April 2-4, 2009
 
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Session Chair--David Crane

United States Speaker--James Blanchard

Canadian Speaker--Michael Kergin

Canadian Speaker--Jessica LeCroy

INTRODUCTION

MR. CRANE: Let me welcome everybody to this evening's session. It was a long and lively day, and the panelists tonight promise to continue that trend. We have three speakers tonight, and their biographies are all set out in the program. We will hear from Jim Blanchard first, followed by Michael Kergin, and concluding with Jessica LeCroy.

Tonight's topic is an ambitious one with an ambitious title. It starts a hundred years ago and takes us through the Canada-United States relationship until the present and then focuses on the future. Now in that context, I think that one of the mistakes we often make in these discussions is pretending that there is no external world and focusing only on North America. I sort of made a rash prediction speaking to students in their final year at Vietoria University the other night. I predicted that, by 2025 the North American Free Trade Agreement (NAFTA) would be a footnote, that we would be truly a global society, and that the worst thing that can happen would be for the world to be divided at that point into competing blocks. So that is one of my own personal starting points.

This week we had the Group of Twenty (G20) Summit in London, and I think it gave off to a clear signal that the world is changing. (1) We talked about a new kind of globalization and the fact that China, although not taking center stage, was clearly moving up as an important player. (2) In fact, that all the bricks were asserting themselves much more, and that the sort of the old alliance between the United States and Europe was having to mend its way. For example, the idea that the presidency of the World Bank would always go to an American and the head of the International Monetary Fund (IMF) would always be European is gone. It has been recognized that China and Brazil and the others must have significantly increased voting power in all of these international institutions, and I think that when we talk about the future of North America, we must take that into account. (3)

Now, when I talked to the students about 2025, I pointed out that the world population will be roughly eight billion people, or a bit over that, compared to about 6.7 or 6.8 billion today; not only would the dynamics of the global economy be much different, but so would the challenges of resource management, the environment of competitiveness and global governments and all of these kinds of things. We have to think of North America in that context. Within Canada, we have had this mixed feeling about NAFTA because when we signed the Free Trade Agreement, we sort of had this idea of an equal collaborative of Canada and the United States. (4) When, all of a sudden, the Mexicans came along and became a part of that, it surprised a lot of Canadians. (5)

Looking ahead, I expect that Mexico is going to command a lot more attention than Canada will in the formulation of United States policy. It is becoming the second-largest economy in North America, and it has the youngest population in terms of median age. (6) Mexico surpassed Canada in 2001 as the leading supplier of auto parts to the United States. (7) In 2008, it surpassed Canada as the second producer of automobiles in the United States. (8)

There is a negative reason for the United State's focus on Mexico that has to do with drugs and political stability in Mexico. Another factor is the importance of the Hispanic-American population in United States politics, and the rapid population growth in the southern states, which will shift electoral college votes further south, increasing the voice of the south in choosing presidents and in the representation in the House of Representatives. (9) I just wanted to set out a couple of those points in looking ahead to the kind of world we are going to be addressing and the circumstances in which we will find ourselves.

I think that the biggest future role for Canada in Canada-United States relations will involve cooperation with the United States to deal with global challenges, the environment, global governance, security, and development, all of those kinds of issues. I think that this will be a point of discussion for the two countries.

Anyway, I probably said enough. I would like to welcome the first of our speakers, Jim Blanchard, who is going to talk a little bit about the Obama Administration and where they may be headed on trade policy. But before Jim starts, I will note that we want to keep this discussion as informal as possible because we have had a long day. I think we will benefit more from the interchange than from long presentations, so that each of our panelists can speak for a relatively short period of time.

(1) See generally The London Summit 2009, http://www.londonsummit.gov.uk/en (last visited Oct. 4, 2009).

(2) See generally Brian Wingfield, China: A World Leader in Many Ways, N.Y. TIMES, Mar. 19, 2009, available at http://www.nytimes.com/2008/03/19/business/world-business/19iht-19forbes- china.11255323.html (discussing China's growth).

(3) See Bob Davis, Developing Nations Try to Build Leverage at the IMF, WALL ST. J., Apr. 27, 2009, at A2.

(4) See Key Economic Events: 1989--Free Trade Agreement: Eliminating Barriers to Trade, http://www.canadianeconomy.gc.ca/English/economy/1989economic.html (last visited Oct. 5, 2009).

(5) See generally Office of the United States Trade Representative: North American Free Trade Agreement (NAFTA), http://www.ustr.gov/trade-agreements/free-trade-agreements/north-american-free-trade- agreement-nafta (last visited Oct. 5, 2009) (stating that NAFTA was signed by the United States, Canada and Mexico).

(6) See generally World Factbook: Field Listing: GDP (Purchasing Power Parity), https://www.cia.gov/library/publications/the-world- factbook/fields/2001.html?countryName=Mexico&countryCode=mx&regionCode=na&#mx (last visited Oct. 5, 2009) (stating 2008 GDP for Canada [$1.3 trillion], Mexico [$1.563 trillion], and the United States [$14.26 trillion]); see generally World Factbook: Field Listing: Median Age, https://www.cia.gov/library/publications/the_world_facthook/fields/2177.html ?countryName=Mexico&countryCode=mx&regionCode=na&#mx (last visited Oct. 5, 2009) (stating median ages for Canada [40.4], Mexico [26.3], and the United States [36.7]).

(7) See generally Lindsay Chappell, China's parts exports to U.S. rise 28%, AUTOMOTIVE NEWS, Feb. 26, 2007, at 1 (stating that in 2007, Mexico continued to supply the most auto parts to the United States).

(8) See generally OICA: 2008 Production Statistics, http://oica.net/category/production-statistics (last visited Oct. 26, 2009) (stating that Canada produced 2.077 automobiles in 2008, while Mexico produced 2.191 million).

(9) See MARK HUGO LOPEZ & PAUL TAYLOR, PEW RESEARCH CENTER, DISSECTING THE 2008 ELECTORATE: MOST DIVERSE IN U.S. HISTORY 1-3 (Apr. 30, 2009), available at http://pewhispanic.org/files/reports/108.pdf.

UNITED STATES SPEAKER

MR. BLANCHARD: Thank you. Well, here we are at the silver anniversary of the Canada--United States Law Institute. Every time I come to Cleveland, I think of Henry King. (10) You cannot think about this institute, Cleveland, or United States-Canada relations without thinking about Henry.

I want to thank so many people here. I have worked with Ambassador Kergin, who is a real Ambassador career person whereas I was a political appointee for Bill Clinton. (11) And Jessica, I never had the privilege of being Ambassador when you were Consul General, but you have a great reputation in our foreign service. There are some others here that I worked with and need to acknowledge. George Costaris and I started together. I was Governor when he started with the Consulate in Detroit. I do not know how many Consulate Generals you served, but you had black hair when I met you. Also, Robert Noble, Consul General. We worked together on a lot of stuff. Dean Bob Rawson, thank you for your hospitality. And Dan Ujczo, thank you for your leadership. Also, John Tennant, the Consul General with whom I worked earlier, and Margarita Kergin, the boss. I do not know how you put up with this thing. I cannot imagine. Anyway it is good to see you. I also want to acknowledge Rick Newcomb who I think you have already heard from. Rick Newcomb was the head of our International Trade Group in my law firm of DLA Piper. (12) The Chairman of our firm is George Mitchell, who is now leaving to become special envoy in the Middle East, so I wish we could get him here to talk about things. (13)

Let me try to do a quick overview of things. Most of you follow Canada-United States relations, so I do not want to dwell on a lot of this. Whenever we have a new Prime Minister or a President, it is time to refresh and renew relations, and that is what is going on. It is actually a good time. In fact, by and large, it is a really good time for United States-Canada relations. Obama's first trip was fabulous. Just to say "I love Canada," to say "oil" sands, not "tar" sands, and to stop in the ByWard Market, it really was fabulous. (14) Stephen Harper did everything but hug him and kiss him the entire time. I think that was a good thing. It was his first foreign trip.

Canada and the United States have many common challenges to work on including trying to figure out how to regulate the financial situation, and Canada has done a very good job of that. Some Canadians say it was by accident. Whatever it is, the banking system really has been well regulated in Canada. (15) Obviously, we are talking about working on stimulus and cooperating on the auto rescue. Canada has offered about twenty percent of whatever the United States does. (16) We are also cooperating on Afghanistan, on other foreign policy issues, and especially on energy and the environment. (17)

Before I continue, I want to make it clear that I cannot speak for...

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