Thank you very much, Mr. Chairman.
It's a great privilege to have the opportunity to exchange ideas with the elected representatives who govern me. But it's a bit of a challenge to reduce 40 years of researching and teaching on this question down to 10 minutes.
So let me make three sets of points. The first couple of points are about what has changed--I started working on the Canadian-American relationship in the late sixties--followed by a couple of really basic features of the new reality that Canada faces in North America, and then I'll end with a couple of ideas about what, perhaps, you will want to be addressing and the recommendations you'll be getting.
What's changed, particularly in the Canadian-American relationship, is how Canada has lost importance in some dimensions and gained importance in others, as far as the United States is concerned. It's lost militarily with the end of the Cold War because we're no longer on the flight path, so NORAD is no longer a critical institution. We've lost economically in the sense that Canada is a relatively much smaller country, much smaller economy, with China, India, and the other big countries growing. And we've lost politically in the sense that we don't cause trouble--and I don't mean it sarcastically--so we're not on the horizon and not on the radar in Washington.
On the other hand, Canada is more important than it was in three dimensions of security. It's obvious that with American paranoia about terrorism, Canada plays a huge role in their concerns about sealing off the country to any possible terrorists crossing the border. In terms of energy security, it's obviously also true that Canada is the biggest supplier of oil and the only real supplier of natural gas. So Canada plays a big role in American concerns about their energy security. And with the new president putting the environment on the agenda, Canada is a very important, if not entirely positive, factor in the United States' environmental security concerns, given the ambivalent role of the tar sands, whether as a source of oil or as a huge source of pollution. That's not to say that Canada has entirely lost its importance, but its importance has shifted, I think, quite significantly. That's the first big change.
The second change is the shift in the international context. In the Cold War, the Canadian involvement in the world was trans-polar, with NORAD and the threat of the Soviet Union, and it was trans-Atlantic, with the huge involvement in NATO, given the Soviet threat in Europe. Now, the major international context for Canada is continental with NAFTA and global with the World Trade Organization, which, overwhelmingly, are the most important organizations that Canada relates to in terms of dealing with the United States. So those are pretty big shifts over 30 or 40 years in Canada's importance and in the context within which it deals with the United States.
I'll talk about the present very briefly. The reality of North America, 15 years after NAFTA went into operation, is the almost surprising failure of NAFTA as a primarily economic effort to create an integrated North America. It's failed primarily because disparities have increased rather than decreased between the countries and they've increased rather than decreased within the countries.
This means that NAFTA is by no means seen as a successful achievement, certainly not in Mexico and certainly not in the United States, although it's seen much more positively in Canada. That's a huge part of the present reality. One then has to include the tremendous troubles in Mexico, with the talk from Washington of its being a failed state.
We have, in effect, in North America this disintegration, the symbol of that being the wall--in fact it's a double wall--the United States is building along the southern border. That's the first major reality that the committee will obviously have to take very seriously.
The second new reality is security, the tremendous fears in the United States about terrorists possibly crossing the border. The point I want to make there is that it puts Canada in the same boat as Mexico, like it or not. The Department of Homeland Security sees Canada as just as much, if not more, of a threat. I'm sure you all know, probably better than I--and it's not just on the right-wing talk shows--it's thought to be easier in general for people from the Middle East to get into Canada than into Mexico. Therefore, Islamic terrorists can get into Canada easier, and the threat of getting across the border is more real. The United States differentiates between Canada and Mexico, but I don't think it sees Canada in a different light in the sense that Canada, along with Mexico, is a source of threat, not through its own citizens, but from people coming into those countries, just as it is seen as a source of illegal narcotics.
Mr. Chairman, about the future, the irony of the present situation is that Canada's political and economic elite, which brought us NAFTA, is now saying we should, in effect, get out, try to disconnect from Mexico, and try to re-establish a Canadian-American relationship, which in the 1960s was thought to be special--every country thinks it has a special relationship with the United States, of course. But the current line--with former Ambassadors Dereck Burney and Allan Gotlieb and the former advisors to the government who pushed for free trade, like Michael Hart--is that we are now being contaminated by our relationship with Mexico and we should create some kind of new Canadian-American relationship that is distinct from Mexico in some way.
I'd like to address that issue because I think it's naive to try to turn the clock back, or, to use another clichéd metaphor, to unscramble the omelette. I'm sure the members here from the west will know more about the drug problems in southern B.C. than I do, but I read in The Globe and Mail--and therefore it's true--that the drug crisis in British Columbia is directly connected to the cartels in Mexico. If you read The Globe and Mail a couple of days earlier, you'd have seen another report about how the drug cartels in Mexico are directly connected to the Mafia in Sicily, which has a new business plan, namely to work with Mexico.
The point there is that it's not possible to disconnect ourselves from Mexico. It's not possible to tell Bombardier to take their aircraft plant out of Querétaro. It's not possible to tell Magna to take their 19 plants out of Mexico and go home; we're going to pretend that Mexico doesn't exist. I think the reality is that we are in the omelette.
My own view is that Mexico should be dealt with, not denied. I don't think we can deny Mexico's great problems. We can't deny either that it's a growing market for us. We can't deny that it has a population of 110 million, which is three times that of Canada, that it's going to be stronger than us in due course, and that it is already stronger than Canada is in Washington.
Before the last election, over 5,000 American citizens of Mexican origin had been elected in some capacity in state, municipal, and federal government. Some 60% of illegal immigrants in the United States are Mexican. Some 30% of legal immigrants in the United States are Mexican. In the last Congress, there was a caucus of 27 Hispanics, most of whom are Mexican.
The point is that Mexico may cause trouble within the United States, but it is taken more seriously. I think Canada needs to work with Mexico in dealing with Washington on many issues in which we have a common interest, borders being one, trade and investment rules being another.
I'll just conclude with the notion that if we had spent $20 billion not on a futile military effort in Afghanistan but on building a partnership, on helping Mexico develop its infrastructure so that it could get into a development orbit, then I think.... Anyway, that's speculation, but I think it behooves Canada to work with Mexico in dealing with Washington on many common issues.
Thanks very much.