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PARTNERS in NORTH AMERICA Advancing Canada's Relations With HOUSE OF COMMONS CANADA PARTNERS IN NORTH AMERICA Advancing Canada’s Relations with the United States and Mexico Report of the Standing Committee on Foreign Affairs and International Trade Bernard Patry, M.P. Chair December 2002 STANDING COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE CHAIR Bernard Patry VICE-CHAIRS Hon. Diane Marleau Stockwell Day MEMBERS Sarkis Assadourian John Harvard Stéphane Bergeron Marlene Jennings Aileen Carroll Francine Lalonde Bill Casey Keith Martin Irwin Cotler Deepak Obhrai John Duncan Pat O’Brien Hon. Art Eggleton Svend Robinson Mark Eyking OTHER MEMBERS OF PARLIAMENT PARTICIPATING IN THIS STUDY Hon. Jean Augustine Pat Martin Hon. George Baker Anita Neville Rick Casson Brian Pallister Joe Comartin Pierre Paquette Antoine Dubé Jerry Pickard Hon. Bill Graham Yves Rocheleau Stan Keyes Peter Stoffer Jason Kenney CLERK OF THE COMMITTEE Stephen Knowles FROM THE PARLIAMENTARY RESEARCH BRANCH OF THE LIBRARY OF PARLIAMENT Gerald Schmitz, Principal Analyst James Lee Peter Berg Jay Sinha Michael Holden iii CHAIR’S FOREWORD The Committee’s report comes at a time of unusual opportunity as well as challenge in addressing Canada’s relations with our partners on the North American continent. When the idea for undertaking such a study was first contemplated, much of the focus was on trade disputes and the evolution of the broader economic relationships, both the critically important one with the United States and the developing one with Mexico. That emphasis continues, but in the wake of the tragic terrorist attacks on the United States of September 11, 2001, security-related concerns moved to the front of the agenda. Given the urgency of those impacts, we produced a preliminary report a year ago on North American issues in light of the new security environment. During the past year the Committee has engaged in an extensive public consultation process across Canada. Thanks to the efforts of Ambassador Michael Kergin in Washington and Ambassador Keith Christie in Mexico City and their devoted staffs we also benefited from meeting key interlocutors during visits to the United States and Mexico. Our aim has been to examine, comprehensively and in detail, the future of Canada’s relations with the United States and Mexico, seeking to advance those relations in ways that serve Canada’s sovereign interests, promote Canadian values, and enhance the long-term security and prosperity of Canadians. That is a tall order, never more so than now, but we believe it can be done through the kinds of forward-looking initiatives recommended in this report. In achieving this result, I would like to acknowledge my predecessors, the Honourable Bill Graham, Minister of Foreign Affairs, whose leadership inspired the early stages of this study, and the Honourable Jean Augustine who chaired much of the hearings process. I extend my appreciation to all members of the Committee for an exemplary collaboration throughout a lengthy process and an onerous schedule. Their constructive contributions have been essential in bringing the report to fruition. The Committee would like to express its sincere appreciation to Canadians from coast to coast for sharing their vision and concerns for an evolving North American relationship. We were fortunate to have benefited from the wisdom of several distinguished Mexican and American observers and participants, including fellow Parliamentarians in both countries. Her Excellency Maria Teresa de Madero, Ambassador of Mexico, and His Excellency Paul Cellucci, Ambassador of the United States, took time to meet with us in Ottawa. The Committee commends the diplomatic representatives of all three North American partners for their key role in the management of the relationship. v Of course, a complex report of this magnitude — the biggest in the Committee’s history — could not be prepared and finalized without the assistance of a number of people. Our Clerk, Stephen Knowles, ably assisted by John Bejermi, Diane Lefebvre, Caroline Martin and Jean-Michel Roy, handled the administrative, procedural, and logistical matters with admirable efficiency. The enormous tasks of research, analysis, and drafting could not have been accomplished without the diligent work of our veteran principal staff from the Parliamentary Research Branch, Dr. Gerald Schmitz who coordinated the study, and James Lee, with expert contributions from Peter Berg, Michael Holden, and Jay Sinha. Also from the Parliamentary Research Branch, Elizabeth Shore deserves thanks for initial editing of drafts. Blayne Haggart covered public hearings during part of the Committee’s travel, and along with June Dewetering and Marc-André Pigeon, assisted with early background documents. Donald Reid and Louis Majeau respectively edited the English and French texts under tight deadlines. Not least, the Publications Service of the House of Commons deserve to be commended for their professionalism and consistent efforts throughout a very demanding process. It is our hope that this report will circulate widely and stimulate discussion, above all in this country, but also in the United States and Mexico. The report’s translation into Spanish — a first for a Canadian parliamentary report — is a recognition of that evolving North American fact. Parliamentarians and the citizens they represent must continue to play a central role in future policy debates and decisions involving the advancement of continental relations through a distinctive Canadian foreign policy capable of making a positive difference within North America and globally. Only through democratic public processes can sustainable progress be made towards securing soundly based partnership objectives, as addressed by our report, within strengthened national and international frameworks that both reflect Canadian ideas and initiative and realize Canada’s best interests and values. vi THE STANDING COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE has the honour to present its THIRD REPORT In accordance with its mandate under Standing Order 108(2), your Committee has undertaken a study of North American integration and Canada’s role in light of new security challenges and has agreed to report the following: vii TABLE OF CONTENTS CHAIR’S FOREWORD.................................................................................................. v PREFACE ..................................................................................................................... 1 PART I CANADA IN NORTH AMERICA: MEETING THE CHALLENGE CHAPTER 1: TOWARDS A STRATEGIC NORTH AMERICAN DIMENSION OF CANADIAN FOREIGN POLICY ............................................................................. 7 1.1 The North American Relationship and Canadian Foreign Policy in Question .................................................................................................. 10 Canada’s Situation in North American Perspective..................................... 13 Is Canada’s Sovereignty at Risk in North America?.................................... 17 1.2 Defining What Canada Wants: First Reflections on Bilateral, Trilateral, and Multilateral Aims in a North American Context ..................................... 19 1.3 Debating North American Options............................................................... 22 1.4 The Impact of September 11 on the North American Agenda .................... 26 1.5 Towards a Strategic North American Policy Direction for Canada .............. 29 CHAPTER 2: UNDERSTANDING A CHANGING NORTH AMERICA........................ 37 A. GROWING NORTH AMERICAN LINKAGES, BUT DISPARATE SOCIETAL REALITIES AND DISTINCT NATIONAL IDENTITIES ............. 37 Box 1 The Region in Socio-Economic Profile..................................................... 39 Witness Perceptions of North America’s Future.......................................... 45 Better Positioning Canada to Respond ....................................................... 49 B. NORTH AMERICA BY THE NUMBERS: OVERVIEW OF AN EMERGING ECONOMIC SPACE ......................................................... 52 Economic Trends in the 1990s: Increased Integration and Outward Orientation.............................................................................. 52 1. Trade Across North America ................................................................ 54 2. Growth in Interdependence .................................................................. 56 ix 3. Trading and Investment Relationships within North America ............... 57 (a) Canada and the United States................................................... 58 Trade by Product......................................................................................... 59 Trade by Province ....................................................................................... 60 Investment................................................................................................... 61 (b) Canada and Mexico ................................................................... 62 Trade by Product......................................................................................... 64 Trade by Province ....................................................................................... 65 Investment................................................................................................... 65 (c) The United States and Mexico................................................... 66 Trade by Product........................................................................................
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