The further retired politicians get away from what they did—and the responsibilities they held—the freer they are to think big. Brian Mulroney is still excited about what he did on tariffs in 1988 and is definitely working himself up over Stephen Harper’s negotiation of a possible Canada-US security pact:
“This is like a re-run of 1988,” Mr. Mulroney quipped, referring to the bitter free-trade election of that year. “Ask Canadians to choose between a big idea and this trivia and trash that goes on the other side and they’ll choose the big idea 10 times out of 10.”
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Should we be impressed? Is Harper earning his Mulroney moment? And more importantly, is this new flashy negotiation going to do anything significant to improve our economic prospects?
Harper certainly hasn’t made any big promises himself. Indeed, he was clear that lifting the border wasn’t even his objective. In a written statement to The Globe and Mail, Lawrence Cannon, Minister of Foreign Affairs, was equally cautious. “Keeping our common borders open to commerce and closed to criminal activity and terrorists threats” was as far as he’d go.
Keeping things the way they are has been at the heart of Canada’s feckless leadership in North America for over forty years.
As in 1988 negotiations, there is every likelihood that Canadian government spokespersons will oversell the menace of further protectionists moves in Washington and not roll back important barriers between our two economies that have accumulated over the past years.
We’ve had “historic” issue elections before that changed little. But the costs are rising.
Today it’s a bi-partisan hymn that Canada ought to diversify its trade and not rely too heavily on the old familiar American market. Well, the American consumer at least may have got the message: US consumers are diversifying away from Canada. Foreign Affairs and International Trade Canada issued a bulletin this week announcing that “Canada’s share of US imports is falling, but not due to China.”
Canada's share of the U.S. merchandise import market has fallen from a peak of 19.8% in 1996 to 17.4% in 2005, while China's share rose from 6.5% to 14.5%. But China is not largely responsible for Canada's slump. Two-thirds of Canada's loss was in sectors or sub-sectors (like softwood lumber) where China did not experience a substantial gain. Motor vehicles alone accounted for 36% of Canada's loss—an area in which Korea and Germany, not China, were the main countries to increase share. In sectors where China did gain market share, it was not necessarily at the cost of Canada, as other countries also experienced losses. Canada's falling share of U.S. imports may be a cause for concern, but the finger cannot be pointed squarely at China.
Since 2005, China’s industries have only grown stronger. Also, the Canadian dollar has appreciated against the US dollar and passport requirements and other obstacles at the border have been added to frustrate north-south commerce.
Rather than postponing the day of reckoning and clouding our thinking, however, Harper’s almost non-existent capacity for bombast could serve us. A border deal laced with bureaucratic mechanisms and good intentions will not impress. And real options to integrate our economies might get some attention.