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History Table of Contents
1999 Winter Conference
Winter Conference 1999
The New Europe and the Atlantic Relationship
Growth, change and opportunities...a comprehensive evaluation

North America and Europe: The next 50 years?

Speaking notes of the Hon. Donald S. Macdonald, P.C., C.C.

I will try to respond to 3 questions:

1. With Europe under evolution, how will the European economy change over the next 50 years?

2. What security problems will Europe have to address in that period?

3. What effect will this evolution have on the U.S. and Canada?

* * * * * * *

I am always reminded of the difficulty of being a prophet on Atlantic security, in particular by recollection of a spring '88 international symposium on Atlantic issues to which I was an invitee.

At that meeting there was no suggestion from any of prestigious presenters that in the next 18 months the Soviet Union would cease to exist and the Berlin Wall would come down. Nor, in fairness to them, have I since heard nor read anything from any of the experts present claiming foreknowledge of what happened. So much for prediction.

Notwithstanding the frailty of prophecy, I think we can expect the continued evolution of certain trends that are now evident.

1. I think that we can expect to see continued current trends toward the creation of a single market, with elimination of barriers at national boundaries, and with integration of neighbouring states, but not Russia.

I have noted over a period of 40 years, a repeated pattern of scepticism about the economic coalescing of Europe, followed by notable political achievements after which what was deemed to be impossible, in fact took place.

In '56-'57, as a student of trade law in Europe, I noted plenty of scepticism that the Common Market would not come into existence; by year end the Treaty of Rome was in force.

Similarly, the 1992 programme championed by M. Delors, and even despite the dissent of Mrs. Thatcher, brought about substantial harmonization in freer movement of people, goods, services and capital within Europe.

And now the Euro is in operation, despite many gainsayers.

Border controls in EU are substantially gone. But institutional barriers, within member states that restrict an open market, are still real. The pressure of the Commission, competition (within and without) and technology will, in time, create a single large market. It will be painful for some, much disputed and shrouded about with gloomy forebodings of failure -- but it will happen.

2. Security problems will arise from tribalism, as in Yugoslavia and Ireland, not conflict of national states. National governments, with the will, can be dealt with. Ethnic rivalries within nations have proven to be more difficult.

Within the European Union, national rivalries, i.e. rivalries between nation-states are not likely to create security problems. The apparatus of consultation and helpful intervention from outside: OSCE, the UN, the U.S. as world peacemaker (if not the world fighter for peace), plus the close intermingling of national activity within the EU -- make it highly improbable that war will break out between national states.

On the Mark Mazower thesis that World Wars I and II were "imperial wars", wars between empires, those empires have ceased to exist. If, as he suggests, World War II was the more vicious because of "utopian experiments of twentieth-century ideologies", i.e. Fascism and Communism, no such experiments now command serious support.

The risk of violent confrontations comes from two other sources:

(1) tribal rivalries within national states (the decade-long agony in Yugoslavia is the most obvious example), and

(2) a recovered (from its current low fortunes) Russia, in a truculent mood.

What about Russia? Its current weakness will not last. It will revive itself by autocratic means or democratic. Assume North American and European powers continue to render support, Russia could emerge again as a Great Power under democratic government as it has never been before. But we could fail, and democracy in Russia could fail, and then we could be faced with a serious security challenge.

3. For the 3 North American countries -- U.S., Mexico and Canada -- a single European market would be both a major opportunity and major challenge.

Europe is well on the way to being a single market with effective demand of over 300 million, which would be a major opportunity for North American business. Assuming that the trend to elimination of trade barriers continues -- North American economic successes could be replicated in Europe.

Mexico may be first to enjoy favourable access to that market, and Canada the last.

Favourable access depends on the nature of political arrangements in Europe. If political evolution follows economic evolution, and political institutions are in place to give the overall interest of the Community primacy over local and special interests, then North America will enjoy full access to the new large market.

If national governments are not displaced by strong Community institutions, then, speaking as a Canadian, we could be faced with trade barriers in support of local interests which the European Union might be powerless to restrain.

If that sounds familiar, it's because we are living next to an economic union with an imperfect governmental system.

This is the problem we have now when the foreign economic policy of the U.S. is in the control of Congress and not of the Executive. The Founding Fathers at Philadelphia deliberately created a local, parochial institution when they created the Congress; the political power is divided because they wanted it to be divided; they wanted checks and balances, and they got them.

It is not surprising that the truism about American political life: "All politics are local", should have been uttered by a Speaker of the House of Representatives. That kind of institution gives untoward leverage to local interest against the broader nationwide interest. I cite to prove that proposition just two proper nouns:

Helms, Burton.

How Europe deals with the outside world will be dependent on the ability of the political institutions at Brussels to act by other than consensus. If EU government can only act by consensus, then local leverage will be powerful.

How does this affect Canada?

At times, Canadian ministries, including the one of which I was a Member, have sought to develop a special relationship with Europe. In our case it was called "The Third Option". Brussels has not been interested, and we should understand why. In a world of most-favoured-nation clauses, the deal that counts for Europe is the one with the Big Guy: The U.S. An economy of the size, and the kind that Canada's is, cannot offer comparable benefits to a deal with the U.S.

A governing principle of Canadian trade policy should be that better access to Europe is a continuing goal even though it is one that we will have to pursue with patience. There are now great opportunities for Canadian business in the EU, and there could be in the future.

Going back to the security questions, that of security in Europe, what should Canada's role be? In the 20th century, Canadians have devoted 10 years of hot war, and 40 years of Cold War, to the resolution of security problems in Europe.

In the decade of the '90's, we are still at it. General Lew Mackenzie and his colleagues were on the ground in Bosnia-Herzegovina under UN auspices, and taking casualties, when none of the Great Powers, except for France, could decide if it was interested. General John De Chastelain is currently in Europe trying to disarm the warring tribes of Ireland, something that apparently no European is capable of doing.

So, we're there now and have been since the end of the Cold War.

In the '60's, there was a political debate in Canada and in the Liberal Party, as to whether Canada should continue a military commitment to Europe. Europe having re-established itself, at least west of the Iron Curtain, why did we in particular, not having the global pretensions of the U.S., have to be a guarantor of European security?

Mr. Pearson's response was from the experience of having been a Canadian soldier in Europe in W.W.I and a diplomat, under blitz in London, in W.W.II. His observation was that we would inevitably be drawn in if the time came for fighting, but that the next time we should at least be at the conference table beforehand, as a member of an alliance, to prevent the fighting from breaking out. I think that response is still relevant.