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72nd Annual Summer Conference, August 7–10, 2003

Sovereignty, Interdependence and Integration

Notes for an address by the Honourable Bill Graham, Minister of Foreign Affairs


It’s a pleasure for me to be back here at Couchiching, especially since the theme of this year’s conference is both complex and of great significance for Canadians. I regret I was unable to participate in the earlier proceedings, because I know that I would, as in previous years, have learned a lot both from the conference presenters and in discussions with you.

In considering what Canadians want from continental integration, some basic things are obvious but perhaps bear repeating. First, we are a sovereign country enjoying peace and a healthy economy, and we constitute a society that is widely admired around the world. Second, we are also part of North America, sharing one of the largest economic relationships in the world with the United States, as well as countless ties of history, geography, culture and values. Over the past decade, NAFTA has joined our two countries together with Mexico in a partnership that has made the prosperity of the three countries on our continent inseparable. Finally, we are a country with a global outlook stemming from our amazingly diverse population, our broad international trade relations and our long-standing commitment to finding multilateral solutions to problems facing the globe.

Taken together, these three facets of Canadian identity mean that when we seek to maximize opportunities in one sphere, we must bear in mind the demands placed on the other two spheres. This implies that we have to be very clear about what our bottom line is in each sphere, as well as identifying our non-negotiable priorities as a sovereign nation, as a North American partner and as a member of the global community.

From this perspective, the crux of the issue is determining the right balance between continental integration and independence. This is, no doubt, complicated by the disparity of size and power between us and our American neighbours. It is also hardly a new challenge for Canadians. Sir Wilfrid Laurier put it this way: “I have the greatest possible admiration for the American people. I have always admired their many strong qualities. But I have found in the short experience during which it has been my privilege and my fortune to be placed at the head of affairs, by the will of the Canadian people, that the best and most effective way to maintain friendship with our American neighbours is to be absolutely independent of them.” Being typically Canadian, and perhaps quintessentially Liberal, he then ran an election in 1911 on the notion of free trade with the United States – and lost. Some will recall that our 1988 election campaign largely revolved around this one issue. I’m sorry that Michael Wilson is not here; we might have rerun some of our debates of those days. Nonetheless, I am sure Mel Hurtig did a good job of presenting his perspective in the earlier session, and that Lloyd Axworthy will have added his shrewd political perspective as well.

For some time then, those responsible for Canadian public policy have been wrestling with the question: How can we best enjoy the benefits of an economic and security partnership with the U.S. (and now Mexico) while retaining our capacity to pursue distinctively Canadian policies within our borders as well as differing relations with the wider world? It is important to start with the observation that the benefits we stand to gain by integration do serve national priorities of the first order, namely economic prosperity and the security of our country and continent. Equally clear are the values our country embraces: egalitarianism, diversity, concern for the welfare of those beyond our borders, multilateral approaches to global problems, and socially liberal attitudes on domestic issues ranging from our Charter’s guarantee of human rights to more recent concerns about decriminalizing the consumption of marijuana.

When we consider continental integration, especially with a superpower, all of these priorities must be weighed in the balance. We know that cooperative ventures of many kinds involve giving up some degree of independence for the sake of greater benefits; that’s what happens when couples get married, when athletes join sports teams and when countries enter into agreements with other nations. While this process is often portrayed (usually by its opponents) as a loss of sovereignty, in fact what we are seeking to achieve is “pooled sovereignty” – in other words, increased effectiveness for all the participants. As such, the trade-offs work to our overall advantage and often, in today’s interdependent world, are the only way to deal with issues such as international crime, health pandemics such as HIV/AIDS, terrorism, weapons of mass destruction or transboundary environmental degradation.

It goes without saying, then, that resisting continental integration simply to distinguish ourselves from the United States is contrary to Canada’s real economic and security interests. More than that, it can exaggerate the scope of our differences from the U.S. In fact, we have many interests and values in common with the U.S., and we should never lose sight of the fact that many Americans share Canadians’ points of view, often on issues where we disagree with certain U.S. governments’ policies.

On the other hand, we also need to keep in mind that sometimes our own interests, outlooks and policies do diverge significantly from those of the United States. To those who say then that Canada has no choice but to proceed full steam ahead with economic and security integration, I would firmly disagree on two counts. First, our pragmatic margin of manoeuver is, in fact, considerably larger than some would choose to admit; and, second, to claim that “we have no choice” is to undercut the democratic legitimacy of decisions that must, in the end, be responsible to the full range of what Canadians want from their foreign policy.

So for me this means that proposals for Canada’s integration into North American economic and security arrangements must be evaluated in light of the specific issues and consequences at stake, and the nature of the bargain that we are able to strike. Where we stand to gain from further political and institutional integration, we should of course seize the chance. Securing an efficient flow of goods and people across the Canada-U.S. border in the new security environment is clearly a top priority, one that this government has pursued with our 30-point border accord. And wherever appropriate, we must continue to seek to reduce regulatory differences and transaction costs for businesses that trade with our continental partners.

The crux of the debate about integration lies with that caveat I just mentioned: “wherever appropriate.” Since the United States is the superpower next door and our largest trading partner, it will generally be to our advantage to join continental partnerships; but particular policy choices must be made in light of what Canadians want for our own society and for the world beyond our borders when determining both the content and the structure of that partnership.

The current Ottawa jargon for the approach I’ve been describing is “smart sovereignty”: going with integration to serve our political and economic interests while maintaining our capacity to take a stand and make choices when national commitments and values are at stake. Given how much we do have in common with our partners in the U.S. and Mexico, most of the time integration will serve us well; but where there are serious differences, we must retain our sovereign choice to set our own direction.

This conviction guided Canada’s decision not to join the U.S.-led coalition that went to war in Iraq. Most Canadians supported the government’s decision, and they did so in spite of a chorus of voices arguing that our economic dependence on the U.S. is now so great that we had no choice but to fall into line at the risk of serious economic consequences. At the time of those public debates, I often expressed my own conviction that the cause-and-effect premise behind this argument was false. The extent of economic interdependence between our two countries means that a single political divergence will not derail it – any more, by the way, than an agreement on going to war can resolve long-standing disputes over softwood lumber or wheat, or made our beef problem go away. We have had many examples in the past – the Vietnam War is one – that demonstrate that specific political differences, however major, do not, if managed carefully, derail our extensive economic and security relationship with the United States.

Beyond these cause-and-effect issues, however, a larger principle is at stake in taking on the claims that we have no choice. As you’ve doubtless been noting over the past few days here, and as I have been made aware since I have been in politics, Canadian citizens want to pursue a diverse array of national goods – not just prosperity and a particular approach to security, but distinctive social and cultural values as well. As an elected official and member of Cabinet, my job is to make sure that initiatives in continental integration respond to all the concerns of Canadians. So far, I think we’ve been doing pretty well at this: alongside the prosperity resulting from NAFTA, we’ve seen a distinctive Canadian stand not just on Iraq but also on the Kyoto Accord, the International Criminal Court, the Ottawa Landmines Convention, the preservation of our medicare system, and other areas where Canadians’ views on social policy diverge from those prevailing in the United States – areas such as family benefits, maternity leave, gun control and political campaign financing. In fact, we are going our own way; and it is a distinctively Canadian way.

The support of Canadian citizens for measures such as these, then, must inform our consideration of options for further integration with the U.S. and Mexico. For the distinctively Canadian values and attitudes that set us apart from our continental neighbours persist, and even today are accentuated, despite the economic and cultural integration NAFTA has brought over the past decade. And according to Michael Adams’s remarkable new book Fire and Ice, our citizens are not about to turn into Americans or Mexicans any time soon. His findings certainly illustrate why our citizens continue to support public services and standards, multiculturalism, expanded notions of the family, and ways of promoting our interests both domestically and abroad through cooperation rather than confrontation. Adams concludes his book by predicting that Canadians will continue to grow farther apart from Americans in our social values – a position that is counter-intuitive to those who say that integration is making us more like Americans and restricting our freedom to manoeuvre. If this is true, politicians will have to pay close attention to that reality as we craft policies to advance Canadian prosperity and security through closer continental integration. To sustain the democratic legitimacy of these policies, we will have to show not only that they can deliver the benefits they promise, but also that these benefits are compatible with preserving the values and commitments we embrace as Canadians.

And in Canada, what citizens value most is a complex set of goals that doesn’t simply boil down to higher per capita income or reinforced border security measures. To be sure, these are greatly valued; but so are many other kinds of goods for ourselves and those beyond our borders. This fact has been brought home to me through the Dialogue on Foreign Policy that I have recently conducted, during which thousands of citizens gave their views on long-term directions for our foreign policy. Among other things, Canadians want to see us have more engagement abroad, to continue our support for international organizations and UN reform, and to have flourishing relations with the United States. They want to see us sharing abroad the tolerance, diversity and equality we value here at home. They also want to see Canada pursue a broad notion of global security, one that not only tackles direct threats but also seeks to prevent conflicts, to sustain the environment and to ensure that the benefits of globalization are shared more fairly around the world.

For many of the reasons I’ve discussed above, therefore, much of the work of sound continental integration will have to develop issue by issue. However, this doesn’t mean that there aren’t any clear roads to pursue in the years ahead. I’d like to mention just a few of the directions that seem most significant.

In so doing, I must note a significant caveat. We are currently engaged in a Foreign Policy Review, for which the Dialogue with Canadians was only the beginning. Much thought is going into these issues both in government and in Canadian society generally. And in coming to our conclusions about what path to follow, consultations with Canadians, like those that were part of the initial dialogue, are essential if future policy choices are to have democratic legitimacy. However, consultations are only one part of the process. The Conference Board and other groups representing business have done some excellent work, work that reveals some significant differences over whether our approach to integration should proceed by proposing a new “grand bargain” or by way of more modest or incremental measures. The Standing Committee on Foreign Affairs and International Trade has prepared an exhaustive and constructive report that, together with the government’s response, canvasses many of the issues. (The report was published in Spanish, as well as French and English, a first in parliamentary practice and a tangible sign of the increasing depth of our relations with Mexico.) This conference will, I am sure, provide a rich source of materials that will help us as we continue to refine our thinking. Finally, it would be naive not to recognize that there will be a new government in the near future that will want to put its stamp on this critical feature of foreign policy.

That said, there are, as I suggested, some clear signs of direction. First and most obviously, we have to ensure that relations with both Mexico and the United States are broadened and deepened from the political level to the public at large. This means doing more outreach through activities such as business development and public diplomacy aimed at all regions and all sectors of society. The government is now pursuing this in the United States through the Enhanced Representation Initiative, which brings together many federal departments in setting up expanded Canadian representation in new U.S. locations, particularly in the South and in Texas, Florida and California. With expanded diplomatic representation and 20 new honorary consuls advocating Canadian interests around the country – particularly in areas where we were under-represented before, but which have become new centres of political influence in the American system – we are creating a more favourable environment for pursuing Canadian interests.

We must also communicate our differences with our partners clearly and respectfully when they do arise. During the Iraq war and its aftermath, I believed it was crucial to convey to the United States that Canada was acting as a friend and ally, both in our significant contribution to the war on terrorism and in our view that going to war in Iraq without UN sanction was not in the best interests of either the world community or the United States itself in the long term. I strongly believe that we are a better ally, a truer friend, when we hold fast to our convictions and advance them with our American friends than when we start from the premise that in some areas there is just no room for a divergent view.

Our message may not have convinced every American, but it has been taken up by many. A recent essay about Canada in the New Yorker magazine included these remarks: “By sending their soldiers to serve side by side with ours in Afghanistan, they supported us in our hour of need – the act of a true friend. By declining to participate in our Iraq adventure, they let us know that they sincerely thought we were making a mistake – also the act of a true friend.” Colin Powell recognized this fact when he rejected the idea that our divergent views on the war represented a fundamental rift between us. Rather, he spoke of the inextricable and deep relationship between our two countries – one that in his view would survive the disagreement we had on the best way to deal with Iraq. And as we look at the world of security today, the wisdom of his view is readily apparent. Think of our commitment – not only in soldiers and materiel, but also in substantial aid to stabilizing Afghanistan, our role in the Persian Gulf, and our increasing presence in and contribution to reconstruction in Iraq. Closer to home, witness our discussions on the best ways to share the defence of our continent, whether through ballistic missile defence or other innovative measures that include joint planning for emergencies by both civilian and military authorities. The more widely this message gets through to American citizens and policy makers, the clearer it will be to all that a distinctively Canadian foreign policy does and should coexist alongside our deep alliance with the United States, complementing and enriching a relationship that is fundamental to both countries.

Another important point to remember is that Canada’s foreign policy will continue to be defined not just by the values we share with the U.S. but just as much by how we differ in our size, our history and our population. As the Dialogue on Foreign Policy highlighted, Canadians are aware that we possess a special knowledge of how to make pluralism work in a federal state. We have rich experience in peacekeeping and in the crafting of multilateral systems based on the rule of law. And the unequalled diversity of our population gives us both access to and responsibilities in countries around the world. Canadians want us to retain these links and will not accept their being jeopardized by the imperatives of integration.

It is significant to note that today when we speak of continental integration, we are speaking of Mexico as well as the United States. This presents some specific challenges as well as opportunities. Mexico is at a significantly lower level of development than Canada or the U.S., a fact recognized in the labour and environmental side agreements of NAFTA, which were absent from the FTA. It may well be appropriate, then, to consider different levels of integration, particularly in sensitive areas such as the free movement of people. This is a route adopted in Europe, most significantly in monetary policy (the Euro Zone), but it does create its own problems. Many who are actively engaged in Mexico also point out that through that country we are being drawn more and more into the Americas, of which it, by virtue of its history, culture and trade, is more of an integral part. This in turn is reinforcing Canada’s development as a country of this hemisphere, a fact reflected in our determination to realize the FTAA [Free Trade Area of the Americas] and increase our presence in institutions such as the OAS [Organization of American States].

Certainly within the continent, we need to work on thinking creatively about new institutions to serve the common interests of our three countries. President Fox of Mexico was elected partly on the strength of a new vision of North America patterned somewhat on the European model, with a regional development fund and new institutional arrangements. While this may not be exactly the road we want to follow, and while it clearly fails to recognize the degree of resistance to supra-national institutions in Washington, it does show how ambitiously we could think. And it reminds us that the benefits of integration will come hand in hand with the development of new institutions to protect Canadian interests. NAFTA established some innovative procedures (particularly in the area of dispute resolution), and these in my view could be improved upon. Certainly the advocates of a customs union, monetary union or other forms of deeper integration – if they are to be credible at all and if their project is to succeed – must be prepared to propose an institutional framework adequate to manage such complex areas as establishing the common tariff and eliminating measures such as countervailing and anti-dumping duties. And, of course, such institutional modifications must be acceptable to the other parties.

So in conclusion, we need to keep an eye on both the advantages and potential limitations of continental integration. And as we do so, we must guard against both simplistic views of what defines our sovereignty and simplistic views of what matters most to Canadians. All of this means that a certain complexity is irreducible in considering these matters. With this audience here, though, I’m confident in thinking that intellectual complexity is an asset rather than a liability. I look forward to continuing discussions on a subject that has preoccupied Canadians ever since the Fathers of Confederation sought to create a loyalist British and bilingual entity across the continent, its distinctiveness from its American neighbour being one of the driving forces of its creation.

As this conference carries on our Canadian debates, it is all the more enriched by the presence here of Mexican and American colleagues. I congratulate the convenors of this year’s conference for bringing together such a diverse and distinguished group, and I thank you for giving me the opportunity to share these thoughts with you today.