Home The Ambassador Canada's chief representatives to the U.S. Michael Kergin Ambassador Kergin's Speeches April 23, 2002

Credos and caveats for keeping up with Uncle

Notes for a speech by Ambassador Michael Kergin to The Assistant Deputy Minister's Forum

Ottawa, Ontario
April 23 2002

Je tiens à vous remercier de votre accueil chalereux. J'ai été honoré lorsque Mel m'a contacté, il y a quelques mois, pour me demander d'être un conférencier du "Forum des SMA" de cette année.

Ce rassemblement exceptionnel de hauts fonctionnaires joue un rôle particulièrement utile dans les nobles efforts visant à promouvoir la cohésion et la coopération dans l'ensemble de la fonction publique — une qualité particulièrement nécessaire dans nos relations avec notre voisin le plus proche et le plus important.

Le thème du forum de cette année est particulièrement bien choisi. En effet, les relations avec les États-Unis ont toujours été d'une importance vitale pour le Canada. Étant le plus petit des deux partenaires, le Canada est celui qui a le plus d'intérêt dans cette relation. Mais cette année les enjeux sont plus importants que jamais : de la lutte contre le terrorisme suite aux évènements du 11 septembre aux niveaux records des exportations canadiennes vers le marché américain.

J'ai occupé différents postes aux États-Unis pendant près de 15 ans — difficile à croire que Richard Nixon était president lors de ma première affectation! Ces derniers 18 mois en tant qu'ambassadeur sont avérés de loin les plus passionnants. Les relations du Canada avec les États-Unis sont vraiment au coeur de notre plan d'action national.

Pratiquement tous les ministères ont été touchés par tous ces événements. Je le sais parce que j'ai accueilli plus de 30 délégations ministérielles depuis que je suis ambassadeur — presque le cabinet en entier! Et durant cette période le Premier ministre nous a rendu visite une demi-douzaine de fois.

L'importance du trafic en direction du sud à partir d'Ottawa est considérable. Mais ce qui est crucial — et c'est ce que je désire partager avec vous aujourd'hui — est la grande diversité des dossiers que les fonctionnaires ont accumulés en faisant des allées et des venues entre Ottawa et Washington. D'une façon ou d'une autre, vous avez tous des intérêts en jeu à Washington.

The management of the Canada-U.S. relationship extends deeply into Canadian domestic policy. And in this respect, our Embassy on Pennsylvania Avenue also provides a unique perch from which to observe the state of federal government machinery.

The experience of the last 18 months — and the horizontal nature of so many of the issues we have faced — has only re-enforced my conviction that an informed, coordinated foreign policy (and capable practitioners) are vital to Canada's domestic interest. And foreign policy most definitely must be the symbiosis of domestic interests and international possibilities.

One of the bestselling books in Washington these days is The Rumsfeld Way — chronicling lessons learned from the famously pragmatic Defense Secretary's storied career. It delineates what have become known as "Rumsfeld's rules" for success in politics and business.

So with apologies to our friend "Rummy", I have identified a few "rules" of my own — "Kergin's credos" if you will — pertaining to the increasingly important nexus between domestic and foreign policy:

Rule one: no one country controls the international context in which it pursues its policy objectives. This is true for all nations — even for our powerful neighbour to the south. Witness recent events:

The global status of the United States has been elevated by some to a level, unprecedented in world history — that of a "hyper-puissance". Yet what a monstrous demonstration of the limits of even the most hegemonic of powers, when the world trade towers collapsed on September 11th .

Currently, the Middle East situation and power struggles in Venezuela, with their effects on the world price of oil — have important and inevitable implications for American domestic policy.

And what is true for the United States is, in this case, even more so for Canada. As a mid-level power, we depend heavily on global circumstances:

• Over 40% of our GNP is derived from international trade (just as a tariff against our lumber will affect 20,000 jobs);
• Security alliances are a fundamental tenet of our national defence (the benefits of which are clear — but so are the costs, as we mourn the tragic deaths of Canadian servicemen occurring in a previously forgotten desert half a world away);
• And the state of our ecology is vulnerable to actions taken outside our sovereign control (such as emissions of sulphur and nitric oxides, global warming, and the depletion of fish stocks off our two coasts).

So nations, citizens and families are all impacted by events beyond our borders and beyond our control.

Rule two is that "all politics is still local"; from everything that I've seen in Washington lately, this old aphorism (coined by former Speaker of the U.S. House of Representatives Tip O'Neil) is right on the money!

Consider this curious linkage between the war on terrorism and the upcoming U.S. congressional elections: no ally has been more valuable to the United States in the Afghanistan campaign than Pakistan. Now Pakistan is seeking a modest benefit in return: increased access to the valuable U.S. textiles and clothing market.

But for years, America's textile lobby has imposed quotas on imports such as sheets and linens — and with control of the House of Representatives hanging on a six-seat margin, two key Republican seats are in the textile-producing regions of Alabama and North Carolina. The White House has chosen to weigh international counter-terrorism objectives against domestic political realities.

As George Will wrote in the Washington Post last week, the country which "made short shrift of the Taliban...[now] flinches from a potential torrent of inexpensive Pakistani pajamas!"

If "all politics is local", my third rule is: "all policy is global". The process of globalization — which offers so many benefits and opportunities — has narrowed the gap between "international shocks" and "Main Street".

Now, as policy makers, we all have been trained to handle challenges originating from the outside. For example, the Red River flooding some five years ago had understandable origins — though unpredictable consequences for Winnipeg and southern Manitoba.

How much different, however, were the sudden attacks of September 11, originating from within the United States but caused by factors beyond immediate sight and sound?

Moreover, are we prepared for the light speed of electronic transmission at which events are communicated — events which have instant effects and require instant responses?

New York Times columnist Thomas Friedman described the transmission of economic shocks by an "electronic herd" — billions of dollars moving around the globe in micro-seconds provoked by the Asian financial crisis in the mid 90s. The "Main Streets" of Thailand, Brazil and even Mexico were overwhelmed by those international shock waves — in part because they did not have the proper shock absorbers in place.

And here is Kergin's rule number four: it is the effective management of "international shocks", which will determine the well-being of Canadians, if not our very survival, in this coming century.

Issues such as international terrorism, global warming and desperate economic circumstances around the world all must be handled consistently and strategically. Such issues test the effectiveness and efficiency of government machinery — and it is up to us to get it right.

The U.S. - Canada relationship is particularly illustrative of the necessity of coordinated, competent and clear-eyed management.

Because our relations with the United States are best described as "intermestic": international because the United States is, of course, a foreign country; domestic because issues are so often driven by local or domestic pressures.

As this "intermesticity" has evolved during the past 20-30 years, so, in the case of the USA, we have shifted away from traditional diplomacy towards a "postmodern" approach — one that is becoming more common in an age of connectivity.

The work of the Canadian Embassy in Washington is very much emblematic of the postmodern diplomacy. And we feed directly into the business of Cabinet. The Prime Minister is, after all, the chief executive of the relationship with the United States.

And it should be stated that the Embassy also responds to the concerns of sub-federal governments and interests.

Where classical diplomacy involved the artful conduct of international affairs, postmodern diplomacy assumes a distinctly domestic awareness. The breadth of issues requires horizontal management, cross-disciplinary approaches at the federal level and multi-tiered knowledge of the sub-national levels of government.

Every Canadian has a stake in the U.S.-Canada relationship. And, as in personnel policy, everyone purports to be an expert on the subject!

In my view, the effective maximization of Canadian influence with the United States requires a deft combination of operational coordination, policy formulation, and message communication. Each is essential, and none is solely sufficient.

First of all, coordination. Lack of coordination can prove costly. One particularly ambitious federal government coordination effort is underway as we speak. Our softwood lumber negotiators have invested greatly in close working relationships with provincial governments, industry leaders and other federal departments.

These Canadian actors have a wide range of often diverging interests. And yet a failure to coordinate and cooperate weakens our overall negotiating position and translates into a defeat for everyone — not unlike the "game theory" exercise known as the "prisoner's dilemma".

The good news is that coordination and solidarity on the Canadian side have been strong, allowing us to resist the highly unsatisfactory offer put forward by U.S. industry. The resolution of the softwood stand-off — whether through agreement with the Americans or litigation — is ultimately a strategic policy question. But the coordination is what has kept us united, at least this far.

Of course successful coordination also depends on sound policy and engagement strategy. Therefore, policy formulation is fundamental.

Consider one of the most important Canada-U.S. issues on the table today: the border. For many, many years our challenge has been to balance security and commercial interests; this objective has become far more acute since September 11th. More than ever, our job is to ensure that interrogation points at the border don't post dollar signs in the boardroom.

The issues are complex, but the stakes could not be higher. If we fail to ensure border efficiency we risk nothing less than sustained levels of foreign investment, industrial efficiency, and our global competitiveness.

The issue also cuts across a broad swath of federal Ottawa: from DFAIT to PCO, CCRA to CIC, with Industry Canada and SOLGEN thrown in for good measure.

And the policy questions are philosophically deep: is our sovereignty dependent on maintaining the current border arrangement? Or is the pursuit of border efficiency, and the attendant economic rewards, a rational exercise of our sovereignty?

In the absence of an effective policy formulation process among the key players, there will be no Canadian "border vision"; in the absence of a credible "border vision" we will yield to the default American position — which in many quarters is to enforce first and worry about commerce later. And yielding to the American position on the border will, in my view, cost our country dearly in terms of both economics and sovereignty.

I am glad to be able to report that we appear to be on the right track. The 30-point plan being pursued by Deputy Prime Minister Manley has all the elements necessary to effectively balance security and efficiency concerns in a "smart" border this century. The agreement is falling into place. What remains will be to ensure buy-in among highly disparate constituencies on both sides of the border. Which is where communication comes into play.

Communication is crucial. A key component of our work is advocacy — part and parcel of "postmodern" diplomacy. To be seen and heard in Washington, the Embassy aggressively cultivates the media, engages think tanks, importunes Congress and reaches out to business interests.

We expend significant resources:

• To promote from the top down (four deputy ministers travel extensively as "investment champions");
• To publicize Canadian advantages such as the recent KPMG study on business competitiveness;
• And to lobby — which we do strenuously by targeting influential decision-makers on specific points of policy.

And our Consulates-General play a key role in communicating Canadian messages at the grassroots political level across the United States. Different U.S. regions are important to Canada for different reasons.

The South wields increasing economic and political power with concomitant strategic effect at the national level; local politics in the North, however, are more likely to impinge directly on specific Canadian interests, largely trade and environmental.

While keys to success in dealing with Uncle Sam include coordination, policy formulation and communication, there are as always, a few hitches. So finally, we come to "Kergin's caveats":

First, one must never lose sight of the importance of Congress; that "other executive branch" of government. Well beyond the comprehension of many Canadians is the extent of congressional influence on the administration's approach to trade issues such as wheat and steel, and its authority over the executive branch's ability to conduct trade negotiations.

In the softwood case, it is congressionally legislated trade law which obliges the administration to impose tariffs — the White House has minimal say in the matter (although their hands may be willingly tied!).

My second caveat: our own ability to influence Congress is directly proportional to the degree to which our case can be framed in congressional self interest. There is no room for sentimentality.

For example, the fact that 20,000 Canadian lumber workers will be laid off because of U.S. trade action will earn us precious little sympathy on Capitol Hill. On the other hand, our ability to successfully portray U.S. lumber duties as a 30% tax on the home building industry (the backbone of the U.S. economy during the slump) is a message that somebody in Congress just might listen to.

One final caveat to bear in mind: there are undeniable limits to what policy-makers can do. And here I differ with some of my colleagues. The popular term "branding", in my view, is something which the country, la nation, accomplishes not by government, but in spite of government. It is the collective identity given by other countries to one's own country's qualities.

Canada was branded long ago not by bureaucratic actions, but by Canadians themselves. And that brand was reaffirmed recently by Salé and Pelletier as supreme examples of Canadian artistry and dignity. The government could never buy this type of publicity — which so well suited the image that Canadians have earned internationally over past decades.

Je voudrais conclure avec quelques mots sur le rôle du Ministère des Affaires étrangères et du Commerce international. Le ministère est sur les lignes du front dans nos relations avec les États-Unis. Et le ministère est également bien placé pour gérer les divergences entre les différentes institutions domestiques, soit fédérales, soit sous nationales.

But in order to ensure a proper synergy between the government's policy needs and DFAIT's ability to deliver, there are some basic machinery requirements.

Among those, I would cite as a minimum:

• Transparent operational cooperation;
• Collegial policy development;
• Increased personnel exchanges;
• And recognition that postmodern diplomacy does require adequate resources.

In conclusion, my principal message has been that the U.S.-Canada relationship illustrates that all of us here tonight have some responsibility to get our foreign and domestic acts together.

To do anything less would be to fail in managing the U.S.-Canada agenda and also to fail in safeguarding Canada's future in North America.

I would be more than happy to discuss with you these or any other issues.

Thank you. I welcome any questions you may have.