A conservative re-opens the idea of continental integration

The Canada-US border—one of the world’s most un-economic political inventions—has been effectively untouched by the extensive efforts of conservatives to restore the vitality and influence of markets in North America. They are governing in Ottawa today and have dominated US economic policy since Jimmy Carter. In both capitals, however, vainglorious nationalists keep the border safe.

Right wingers in both countries stand for secure borders and emotional nationalism. In the US, they beat their chests for American exceptionalism. Canadian conservatives keep their distance from American conservatives by talking about making Canada a superpower as well.

The border status quo persists; a minor deal between Harper and Obama is accepted as “good progress” by business and conservative voices in both countries. The old patriot game carries on: US politicians look out for Mexican “illegals” and Canadian politicians, including Harper, threatening to exercise their options in Asia.

One well-read Canadian conservative, finally, is sounding restive. Brian Lee Crowley, managing director of the Macdonald-Laurier Institute, an Ottawa-based think-tank, pointed out recently that the Canada-US relationship isn’t just about trade but also about running a “single integrated economy.”

“. . . NAFTA is not (despite its name) chiefly about trading finished goods between separate national economies. It is about managing a highly integrated continental economy in which Canadians and Americans work together to make things. NAFTA should really be called the North American Integrated Production Agreement (NAIPA).

“Canadians and Americans do not trade with each other as the French and the Japanese do. We make things together and then sell them to each other and the rest of the world. That is why, for example, about two-fifths of the vast “trade” between our two countries takes place within individual companies. They move goods from one plant to another at different stages of production, and those plants are spread about in both Canada and the United States.”

Click on: http://opinion.financialpost.com/2011/12/13/it-isnt-about-trade/

Then, he goes on to identify the fundamental tension between us:

“Politicians respond only to national voters, and so live in a closed political system. Alas, that closed polity is superimposed on an open economy. Government policies that result cannot truly encompass the interests of North Americans, but only of Americans and Canadians separately. Hence we get border thickening in the post-9/11 world and post-recession protectionism in the United States. Canadians’ vulnerability is that we live in another country, but not another economy.

“National policy mismatches inevitably show up at the border. An inefficient border is an annoyance in a trading bloc. But in a production bloc, it is disastrous.”

While the Beyond the Border agreement between Obama and Harper points in the right direction, Crawley concludes that we can do better:

“In thinking about what comes “after NAFTA” we must be capable of the effort of imagination to create institutions that can overcome the political divisions that scar our economic efforts while preserving our national sovereignty.”  

Crawley could have gone much further. We should be better integrating business and professional services, human resources, and investment capital, as well as the production of goods. Further, there are several big time-tested institutions already available to better integrate our economies: a common currency, a common labor market, a common security pact that would eliminate the border all together, for instance. Courage, not imagination, is our problem.

However, Crawley has ended this year—for this blogger—on a promising note.

He has re-introduced the explosive word “integration” to Canadians and has acknowledged that the politics of two national democracies—not just two bureaucracies—divide us. This is an important, potentially disruptive step for the manager of a Canadian think-tank.

Environmental innuendos about Canada-EU free trade negotiations

Complex policy projects occasionally attract the attention of big-name polemists. This is a mixed blessing. When a star gets excited about your work, your work can get exciting too. And your children, for instance, might be treated like little celebrities at school. Unfortunately, in order for the stars to keep the attention of the media, they often have to say extravagant and alarming things about what you’re doing.

Maude Barlow, National Chair of the Council of Canadians and visionary speaker on everything from American imperialism to water purity, has issued a call to arms to stop the Canada-European Union Comprehensive Economic and Trade Agreement (CETA.) Despite the treaty’s incomplete state, Ms. Barlow is unqualified in her opposition:

“At its heart, this deal is a bid for unprecedented and uncontrolled European access to Canadian resources . . . CETA is the wrong model for Canada and Europe. Unlimited growth and economic globalization are killing the planet.”

Click on: http://www.theglobeandmail.com/news/opinions/opinion/what-you-dont-know-about-a-deal-you-havent-heard-of/article1859216/

Her op-ed piece was headlined “What you don’t know about a deal you haven’t heard of.” The Globe and Mail could have altered their readers with “What Ms. Barlow doesn’t know about trade doesn’t discourage her.”

Even in Canada—a country where some people actually water their Canada Dry ginger ale—there are activists who can fly at 35,000 feet and slander entire forests by seeing trees others can only imagine.

While it involves many countries, CETA cannot possibly be the “largest tree-trade deal this country has ever undertaken,” as Barlow claims. The NAFTA, with the US and Mexico, affected approximately ten times more Canadian trade. Also, it encompasses markets that will grow faster than Europe. NAFTA was very big and scared Ms. Barlow twenty years ago. Her accusations haven’t changed—or been modified by how NAFTA has actually worked—but this time her target is less important.  

Barlow casts free trade as a menace to local and national decision-making on vital economic and environmental concerns. As a secular polemist, she refers to sources, not gods, for evidence. But her evidence is entirely speculative. Alluding to studies by European and Canadian environmental lawyers, she draws rather sneaky conclusions. The caveats are overwhelmed by the size of the accusations.

CETA will “open the door” for European water utilities to “challenge” local water conservation and source protection rules, as well as bottled water bans. Liberalized trade will “lead to” increased European investment in the Alberta tar sands and, thus, increase greenhouse gas emissions. A commitment to “regulatory cooperation” will make it twice as hard to bring in new rules and standards to protect the environment. And just to be thorough, she asserts that increasing commodity exports will increase “virtual” water exports. “Our current exports of water in grains alone,” she warns, is already “totally unsustainable.”

To keep Canada as the wettest big country in the world, should we turn the prairies back to wild grass? To keep ourselves, as citizens and governments, from mindlessly squandering our natural resources and ignoring our obligations to the environment, must we not make trade and investment more open internationally?

Rural Canadians and grain farmers can protect themselves from urban speculation about the depletion of our gigantic renewable water supplies.

Rather than suffer the rest in silence, free traders ought to raise their voices. Treating traders and foreign investors as equals under the law does intensify domestic competition, but it has not limited—and wouldn’t with this proposed deal—the rights of Alberta, Ontario, and federal governments to regulate resources and protect the environment. There are more than enough investors ready now to expand oil sands production. Canadian governments, not the availability of European money, will decide what happens.

If trade barriers and command-and-control economics were good for the environment, and capitalism per se was the problem, the Communist Bloc would not have been both dirty and poor.