Foreign Affairs Committee on Feb. 23rd, 2009

[The Chair, Conservative, Kevin Sorenson]

Good afternoon, colleagues.

This is the fourth meeting of the Standing Committee on Foreign Affairs and International Development. Today we begin our review of key elements of Canadian foreign policy.

On behalf of the committee, I want to welcome our guests and our witnesses here today.

As a witness in our first hour, we have, from the Norman Paterson School of International Affairs, Dr. Fen Osler Hampson, chancellor's professor and director. Dr. Hampson is the senior adviser to the United States Institute of Peace, a member of the board of directors of the Pearson Peacekeeping Centre, and the social science foundation board at the University of Denver. Dr. Hampson is the author or co-author of eight books and editor or co-editor of more than 23 other volumes. In addition, he is the author of more than 80 articles and book chapters on international affairs.

We also have with us today Mr. Michael Hart. He holds the Simon Reisman chair in trade policy at the Norman Paterson School. He is formerly from the Department of Foreign Affairs, specializing in trade policy and trade negotiations. He is the author, editor, and co-editor of more than a dozen books, and he has numerous articles and chapters in books on international trade issues. His latest book is From Pride to Influence: Towards a New Canadian Foreign Policy.

Our committee provides time for an opening statement from both our witnesses, and then we proceed into the first round of questioning. We don't rule too tough on the timelines, but we try to keep close to 10 minutes for the opening statements, and then we go into the first round of questions, which is seven minutes per party.

As a reminder to the committee, in our second hour we're going to hear from the Department of Foreign Affairs. We'll introduce them when they come.

Welcome.

Mr. Hampson, I believe you've drawn the short straw and will begin, so we look forward to your comments.

[Professor Fen Osler Hampson, Chancellor's Professor and Director, Norman Paterson School of International Affairs]

Thank you very much, Mr. Chairman.

Both Professor Hart and I will be speaking to some of the themes that appeared in Carleton University's report, a blueprint for a new engagement with the United States, copies of which were sent to all members of Parliament. It is a two-volume report. I would encourage the members, if they haven't seen it or read it, to refer to it.

What I am going to do in my remarks is focus on some of the general foreign policy challenges of the Canada-U.S. relationship. I will also discuss broadly what some of the key elements of our new strategy should be in dealing with the United States on global economic and security issues.

Professor Hart is then going to speak to some of the very specific economic challenges in managing our bilateral relationship with the United States, just so that everyone is clear on what our dog and pony show is going to do for you.

The first element of our strategy with the United States should be to engage America's leadership at the highest level and to continue to do so in order to advance a mutually beneficial agenda. That obviously began with the short working visit that took place last week. But I think it's going to be absolutely critical in the weeks, months, and years ahead to maintain the positive tone and momentum of that meeting.

We need to regularize the bilateral summit process on an annual basis. Summits with a high-level agenda, with deadlines, goals that are endorsed by the Prime Minister's office and the White House are key to galvanizing the bureaucracy and to supporting a serious dialogue between the two countries. I think it's fair to say that permanent consultative institutions have long been a key missing ingredient in our bilateral relationship, certainly in the recent and not-so-recent past.

The second key element of our strategy should be to engage America's leadership with adroit diplomacy and inspired ideas for managing the major economic and security challenges of our fast-changing international system. As we all know, the global economy is in trouble and there are a large number of major security challenges that both we and our American partners face.

That being said, I think it's fair to say that there are many potential avenues of engagement on the global agenda, but we have to be selective and we also have to play to our strengths. There are three specific areas of engagement that I would like to draw your committee's attention to.

The first one is the reform and strengthening of international economic institutions. The current global financial crisis, stock and commodity market gyrations, and impending deep recession are corroding the structures and traditions of international economic cooperation that were constructed over the last half century. I think it's fair to say that the G-20 meeting that was convened by George Bush last November underscored that there are still some major divisions and disparities as to how to move ahead and how global governance is perceived. What we're seeing right now are some key differences that are emerging between ourselves--that is to say, Canada and the United States--and the European Union about what the nature of new financial regulatory initiatives should be, about the depth and breadth of governance at the international level. I think there's a real risk that different views about how to deal with the current crisis, if it's not handled properly, are going to exacerbate international tensions and make cooperation more difficult. That's an opportunity for us to not only work with Washington but also with our European partners to realign some of the machinery of global governance, particularly in the financial area.

The second area for intensified cooperation is to recalibrate the mission in Afghanistan by strengthening the role of diplomacy and development to ensure that al-Qaeda does not gain a stronger foothold in the region. As we all know, the administration is moving quickly to ratchet up the level of its diplomatic engagement with Richard Holbrooke's appointment as special representative for Afghanistan and Pakistan.

The biggest problem right now is that neither the United States nor NATO has a clear political strategy for dealing with this escalating conflict. As a major combat-troop-contributing country, Canada can and should play a constructive role in defining the goals of this new diplomatic offensive. For example, we could take the lead ourselves in establishing an eminent persons group that might include, for example, individuals like former UN envoy Lakhdar Brahimi and former European Union envoy Francesc Vendrell—individuals of that calibre—who know Afghanistan and the region well. By convening and supporting the work of such a brain trust, Canada could help broaden the base of the U.S.-led political process that is under way right now and also bring new ideas to the table that are constructive and not necessarily American.

I think one of our challenges is to convince the United States that it's important to widen the circle of the conversation around Afghanistan and Pakistan's future, and that Mr. Holbrooke, in spite of his many diplomatic talents, cannot and should not carry the torch alone. Canada can play a key role in opening up additional avenues for dialogue and discussion with key constituents and affected parties, help with the engagement of other external actors—the neighbours, and that includes Iran—and also with the testing of ideas and political solutions before they are formally put on the table. A group of wise persons supported by Canada could help ensure that the new U.S. diplomatic offensive in the region gets off on the right foot and stays on course.

The third area for intensified cooperation is the area of nuclear non-proliferation. Secretary of State Hillary Clinton identified the gravest threat facing the United States as the danger that weapons of mass destruction are going to fall into the hands of terrorists. To address this threat, the new administration has indicated that it is going to look to negotiating reductions in nuclear stockpiles with other countries, particularly Russia, while strengthening the current nuclear non-proliferation treaty regime. It's also going to revive negotiations on the Fissile Material Cut-Off Treaty, and it will urge the U.S. Senate to ratify the comprehensive test ban treaty.

One of the biggest problems with the current nuclear non-proliferation regime is that countries such as Iran can play both sides of it by blurring the distinction between possession and non-possession of nuclear weapons capability while staying within the NPT regime. As the world's leading exporter of uranium and a major supplier of nuclear technology, we clearly have a key role to play. We have been long-standing champions of the nuclear non-proliferation regime and a key supporter of the International Atomic Energy Agency and of the development of nuclear safeguards. We are very well positioned to work with the new administration to strengthen and preserve the integrity and structure of the NPT regime so that there are proper firewalls in place for countries that have or that intend to pursue nuclear energy programs.

One final observation before I turn to my colleague is that the third element of our strategy with the United States is to redefine the sovereignty-security equation in our overall defence relationships, and also in the north. These have traditionally been especially sensitive areas in our relationship with the United States, but I think it's going to be important as we look to the future, and particularly to the security challenges that we face at the border, that we also look and keep pace with the broader security challenges confronting the North American continent.

One of the recommendations in our report is to look at ways of broadening the scope and command of current structures and existing partnerships, particularly around NORAD, looking perhaps to a NORAD or a new set of arrangements that would secure the North American perimeter on land, sea, and air. And I think if we were to begin to move in that direction, or at least begin to have a discussion about moving in that direction, we could alleviate or begin to alleviate some of the concerns the United States has about a porous and vulnerable northern border.

Thank you.

[The Chair, Conservative, Kevin Sorenson]

Thank you, Mr. Hampson.

We'll turn to Mr. Hart, please.

[Professor Michael Hart, Simon Reisman Chair in Trade Policy, Norman Paterson School of International Affairs]

Thank you, Mr. Chairman, for this opportunity to provide some testimony to the committee.

I'll be fairly brief. I want to make two broad points. First, I want to sell my book, and, secondly, I want to speak to some of the points that are in the report that Professor Hampson has already mentioned.

The broad theme of the book that I did while I was on sabbatical at the Woodrow Wilson International Center for Scholars in Washington was to look at Canadian foreign policy and Canada-U.S. relations at the same time. The theme of the book is that Canadian foreign policy, if it is to succeed with our wider partners around the world, must be grounded in a constructive, well functioning relationship with the United States. Our ability to influence our partners around the world is considerably enhanced if we're able to demonstrate at the same time that we have a constructive, well-functioning working relationship with the United States. In the absence of such a relationship, our ability to influence the rest of the world is much diminished. So I think that job number one of the department and the government is to pursue that constructive relationship. I think that was one reason we undertook the project that we did at Carleton, to look at what are the themes in the relationship that need some work. So let me turn to them now.

Professor Hampson has already indicated the broader foreign policy issues, the global security issues, and the bilateral security relationship. I want to emphasize the economic relationship.

We have, over a period of more than a century, developed a very intense trade and economic relationship between our two countries, to the point where we now trade, as I think we heard perhaps once too often last week, somewhere in the neighbourhood of $2 billion Canadian in goods and services across the border daily. We have somewhere in the neighbourhood of 400,000 people who cross the border every day. That's indicative of a very intense economic relationship.

We have made a lot of progress over the last 25 to 30 years in making sure that relationship works to our mutual benefit. The Canada-U.S. Free Trade Agreement in 1988 and the NAFTA in 1993 were key components of that strategy. But I think it is a job that is not quite finished yet. If we're going to have the benefits of that relationship, we need to work on a few other issues. Let me explain why, before I turn to the issues that I think we need to deal with.

One of the things that has happened as a result of deeper integration between our two countries is that it is really not accurate to speak of it as a trade relationship or an investment relationship; we have gone beyond that. Canada and the United States make things together. We are deeply integrated into the U.S. economy, and the U.S. economy in turn is deeply dependent on what we contribute to it.

Just to give you one typical example, cars made in North America are no longer Canadian or U.S. cars, but North American cars. The typical car now crosses the border seven times. Also, in a project that I did a few years ago on the impact of the BSE crisis on Canada, one of the things I discovered was that even in the beef industry, we're deeply integrated. One of the problems seen in the fallout from that crisis was that we had developed a relationship where we did some of the work and they did some of the work, which was then interrupted by the crisis we had.

So given the extent of our integration, the extent of our interdependence, I think there are four issues that are especially important at this particular time.

The first is that we have to make that border function much better than it does. From about the 1920s through to the end of the 1990s, the trajectory of how we managed the border was to make it gradually an easier place to cross. From 2001, we have done the opposite; we have made it an increasingly difficult place to cross. That is an inconvenience to tourists, and I'm sure all of you have experienced the same silent dialogue with yourself as you're going across the border, asking why is all of this necessary—and I won't repeat what I say, just that it's frustrating. However, think of someone whose business or livelihood depends on that border functioning well, sitting in a truck hours at a time, waiting not at the border, because they now require you to let them know ahead of time if you're going to come to the border and you have to get cleared before you can leave for the border, but before the border. That way the statistics look better; they can say that trucks are crossing the border much more quickly than they used to. No, they are not, because trucks are being held in holding patterns far from the border, sitting there wasting time.

So this is a very expensive process and we need to get our act together with the U.S. We need to sit down with the new Secretary of Homeland Security and see if there isn't some way in which we can learn from what the Europeans did to make a much better working border in what's known as the Schengen Agreement.

If you go to Europe now and you land at Charles de Gaulle Airport and rent a car, you can then drive all over the continent without ever having to tell anybody your name, your purpose, whether you bought anything, or what have you. And I think we should aspire to do the same thing.

In order to do that, I think we need to do some work on the security front. I think it is critical that the Americans have confidence in us as a security partner before they will be willing to talk about opening up the border. But we also need to do something else. One of things I think people may not understand sufficiently is that the border is no longer a customs facility. That's what it used to be. It used to be a revenue device, particularly on the Canadian side where we wanted to make sure that people were paying their share of customs taxes. It has long ceased to be that. The amount of tax that's collected at the border now is slightly more than the cost of collecting it. It is now largely a regulatory control mechanism. On the Canadian side of the border, customs officials are responsible for ensuring compliance with over 100 statutory instruments, and on the U.S. side of the border they're responsible for ensuring compliance with over 400 statutory instruments. So that's what we do at the border. We use it as a regulatory compliance mechanism.

The question then arises: are our regulations very different from theirs? The answer is no, but just enough to keep civil servants working. I think we need to put together a very aggressive regulatory convergence exercise where we look at what we are doing, what they are doing, and how different are they?

I just completed a paper for the C.D. Howe Institute that looked at the auto sector. In the auto sector we have benefited from the Auto Pact for almost 45 years, and you'd think that is a sector where we would have pretty well got to the point where the differences between us were quite small. The truth is they're not. There are still 22 major regulatory differences between cars made in Canada and cars made in the United States, and it's not just a matter of the fact that we have a metric system and they still have the old mileage system. There are quite a number of small differences, which are just enough to make sure that Canadians pay more for their cars than they should. And it also keeps people in the Department of Transport employed.

I don't wish them ill, but I do, as a citizen, wish them to do less. I would like to move towards a better functioning regulatory regime in North America.

In order to do that, it brings me to the third point I want to make. If we're going to have a higher level of cooperation both at the border and on regulations, we need a better set of institutions to ensure that we're working together to reach common decisions. We need to make sure we have a privileged position in the decision-making process in Washington, and they at the same time need a privileged position in the decision-making in Canada. That way we are working not at cross-purposes but towards a common set of regulations in as many areas as possible.

Finally, I want to say something about energy and the environment. I think those are the two most important areas of regulatory activity over the next decade or so, and I think it is critical that in this area the two governments work together. I was very happy to see that at the end of Mr. Obama's visit last week the government pledged that this is now firmly ensconced on the agenda, and I think it is critical that there be success along those fronts.

That's all I want to say by way of introduction. Thank you.

[The Chair, Conservative, Kevin Sorenson]

Thank you very much, Mr. Hart.

We'll proceed into the first round, and we'll go to Mr. Rae, for seven minutes, please.

[Bob Rae, Liberal, Toronto Centre, ON]

Thank you very much, gentlemen. It's great to see you again and have you back.

I have just a couple of questions. I'll try to do one for each of you, and I'm sure that will use up the time. It seems to go very quickly.

To Dr. Hampson, I want to focus on the second idea, if I may. John Manley has talked about this. We've talked a great deal about diplomacy, development, politics taking a stronger hand in Afghanistan. Why do you think it's been so difficult to get what is really a pretty basic idea more firmly entrenched in Canadian and, I might add, NATO thinking?

[Prof. Fen Osler Hampson]

I think one of the challenges, certainly historically, is that until quite recently Afghanistan was not an American preoccupation, and that affected the entire NATO mission.

Towards the end of the Bush era, Afghanistan, with the impending drawdown of U.S. troops in Iraq, came to be a much greater area of focus and attention. And you may recall that it was President George Bush who made the decision to increase U.S. troop deployments in Afghanistan.

That being said, and I think it was said in spades by the Manley Commission, we still have a problem of not only herding cats in NATO but the absence of any kind of clear political strategy coming out of Washington, which, after all, is the leader of the pack.

Special Representative Holbrook has been tasked with coming up with a political strategy. I think it's fair to say that it's also part of what President Obama would like to have as an exit strategy from Afghanistan. He has made it very clear that he doesn't want to be there for the long haul, and he has recognized that the notion that we can export full-blown democracy to Afghanistan is not realistic given the social, economic, and political circumstances, not just in Afghanistan but in the region as a whole.

The point of my remarks was that there is no political strategy in place right now. Holbrook's challenge is to develop one. I think we have to be there. I think it may be difficult to do that. Mr. Holbrook is not one known to carry the torch with others, if you look at the history of his previous intermediary interventions in Bosnia and elsewhere.

But that being said, nature abhors a vacuum. And I think we could be creative and bring together, under Canadian auspices, some of the best minds, who really understand the politics of the region and the politics of Afghanistan, and that includes people like Brahimi, who was the mediator of the Bonn process that brought the loya jirga and the current government to Afghanistan, and others like Vendrell, who again knows the region well and who has been very critical of the absence of any clear diplomatic and political strategy. And I think there are some Canadians who could also contribute to that. Now is the time to do it.

I don't think we need to appoint another special envoy. The Americans have one, the British have said they're appointing one. Special envoys are sprouting up like fortune cookies in different parts of the globe. But I think there's a real window of opportunity there.

[The Chair, Conservative, Kevin Sorenson]

Thank you, Mr. Hampson.

Very quickly, Mr. Rae, and allow Mr. Hart the opportunity to finish.

[Bob Rae, Liberal, Toronto Centre, ON]

Michael, just to focus on this question, you talked about how we need a better set of institutions. Can you fill that in a little bit more? What are you talking about here?

[Prof. Michael Hart]

If you look, for instance, at the Canada-Europe relationship, there are a number of formal institutions. There's a formal annual summit, there is a formal semi-annual meeting of senior officials, there are a number of committees. There is nothing between Canada and the United States of a similar nature. But given the extent and the depth of that relationship, it's a relationship that just cries out for better management.

So what you have is an awful lot of informal, below-the-radar relationships, hundreds of relationships among officials and so on, but none of them are provided with a kind of from-the-top political guidance as to what the objectives are. So I'd like to fill that gap between the adhocery, which we have seen, and that vast network of relationships by setting up a number of institutions that would require reporting by these people, on an occasional basis, on what they're doing and why they're doing it, and by providing them with instructions as to what the priorities should be.

[Bob Rae, Liberal, Toronto Centre, ON]

Do you share the view that's in your report, but widely out there as well, that we can't allow the NAFTA formalities to get in the way of a stronger bilateral relationship with the U.S.?

[Prof. Michael Hart]

My view is that the NAFTA was an excellent agreement. It served its purpose. It's 15 years old. It's all implemented. The issues that we have identified in the report are bilateral issues, not trilateral issues, and to hold them hostage to the equally complicated but different Canada-U.S.-Mexico relationship I think is the wrong way to go. I'm not saying ignore Mexico, but let's do what we need to do in order to get the Canada-U.S. relationship right and to speak to the issues that now confront the relationship.

[The Chair, Conservative, Kevin Sorenson]

Thank you, Mr. Hart.

We'll move to Mr. Crête.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you for the quality of your presentations.

If I understand your comments correctly, Canada will have influence in the rest of the world as long as the rest of the world is under the impression that Canada is able, not just to carry messages for the Americans, but to maintain a dialogue with them. In recent years, for example, the Security and Prosperity Partnership of North America seems to me to have been pretty much a failure, in the sense that it stayed behind closed doors and was not something in which the population as a whole was involved.

You mentioned the importance of economic relationships, of an integrated economy and of border operations. Would it not be really useful on both sides of the border to get the people a little more familiar with the importance and the realities of these things?

[Prof. Michael Hart]

Let me make two broad comments on that. The first one is on the security and prosperity initiative, which dominated the agenda over the last seven or eight years. I think that agenda has been largely met. It was an agenda to see what could be done within existing regulatory strengths by the two governments. It was largely exhausted three or four years ago because the two governments took the view that they were not going to pursue anything that would require them to seek legislative change, and they had exhausted that particular agenda. I think they need to move beyond that agenda because I think there are things they need to do that may require legislative changes.

In order to do that, we need to have an open dialogue among Canadians, but also among Canadians and Americans to look at what we're doing, why we are doing it, what we are achieving. I see no reason that cannot be done in a much more transparent way than was the case with the security and prosperity initiative, although to tell you the truth, I don't think there was nearly as much there as people feared. I think there was much more talk about what might be there than what actually was there, and there wasn't all that much to it.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Along the same lines, Mr. Hampson, you mentioned that we should play a leadership role in Afghanistan and you talked about forming a brain trust. That assumes from the outset that there is a recognized common objective for Afghanistan. It implies a stage when the past is left in the past in order to pursue a specific objective. In my opinion, at the moment, the objective in Afghanistan is far from clear.

[Prof. Fen Osler Hampson]

I would agree with your last observation that the objective has not been that clear. But that said, I think we are seeing convergence of both Canadian and U.S. interests in the region. Canada has announced that it's going to withdraw troops in 2011, and everything I hear coming out of Washington today suggests that the Americans don't want to be there for that much longer. I think President Obama is all too aware that this is a quagmire.

The focus has really shifted from trying to have a military solution that would obliterate the Taliban and al-Qaeda forces in the region to one of some sort of political settlement that would stabilize politics in Afghanistan to allow for a withdrawal of NATO forces. That may well mean, as many have argued, engaging in dialogue with those elements of the Taliban not closely associated with al-Qaeda to come to some kind of political arrangement that, at the end of the day, Afghanis themselves have to live with and can live with.

Again, by creating a forum that is led by skilled, eminent practitioners, wise persons who have credibility in the region, there's an opportunity to engage in dialogue with elements of the political equation in Afghanistan and also Afghanistan's neighbours in a constructive way.

[The Chair, Conservative, Kevin Sorenson]

Mr. Crête.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

The relationship between the United States and Canada is often compared to the relationship between an elephant and a mouse. When the elephant turns over in bed, it is the mouse's interests not to be underneath. I use the image because I would like to know if that is your impression too, but I would also like you to tell us how you feel that the mouse can make sure that the elephant listens to it and knows that it needs a mouse around.

[The Chair, Conservative, Kevin Sorenson]

Mr. Hart—and I don't know if that was for Mr. Hampson as well.

Go ahead.

[Prof. Fen Osler Hampson]

I have a short answer to that.

If you think of yourself as being a mouse, you're always going to be a mouse. Our challenge, quite frankly, is to start thinking big in a selective way, along the lines that I have suggested in terms of global economic and security issues, and really to start ratcheting up the level of our diplomacy and engagement where we have something to offer, where we have clear interests, and where we're seen as having something to offer. And that is a challenge of leadership and diplomacy.

[The Chair, Conservative, Kevin Sorenson]

Mr. Hart, do you want to make some comments?

[Prof. Michael Hart]

I'm just going to add to that.

[The Chair, Conservative, Kevin Sorenson]

Very quickly.

[Prof. Michael Hart]

In 22 years of negotiating with the Americans, bilaterally and multilaterally, I have never felt mouse-like. These were negotiations among people who had very common objectives; we were working together. I think more often than not we had the good ideas and had to explain to the Americans what we were doing and why, and they'd say, “Yes, we like that; let's do that.”

One of the reasons we were a very effective player in the multilateral system from the late 1940s through the 1980s was that we were very good at preparing the ground by putting forward good ideas early in the game and therefore leading negotiations toward areas that were of interest to us. So never, never did I feel mouse-like, nor did I see them as elephant-like.