Home The Ambassador Canada's chief representatives to the U.S. Michael Kergin Ambassador Kergin's Speeches May 28, 2003

The U.S.-Canada Partnership: Three strongs do make it right

Remarks by Michael Kergin, Ambassador of Canada to the United States to the Memphis Chamber of Commerce

May 28, 2003
Memphis, Tennessee

Thank you for your kind introduction. It is quite exciting to be in your vibrant city, world renowned thanks to Elvis Presley and Graceland. "The King" is without a doubt the most widely known star of Tennessee. However, he is by no means the only Tennessean to have influenced millions of lives around the world.

Less known publicly, but I would argue more directly responsible for improving the well being of humankind was Cordell Hull, the Nobel Peace Prize laureate who was secretary of state under FDR and one of the founders of the United Nations.

He left the world two important legacies: first, a wide-spread recognition that liberalized trade policies pave the way for a strong economy; and, second, the ideas behind the creation of an international body to address threats to global security — threats as wide-ranging as poverty, environmental degradation, disease, violence and nuclear proliferation.

In some circles, free trade and the UN remain controversial today. However Cordell Hull's driving philosophy — that the well being of a country's citizens depends on strength at home and the collective strength of international allies — is without question.

In my view, these beliefs provide the rock solid basis of the Canada-U.S. relationship — a relationship which is founded on at least three strengths: being strong at home, being strong in partnership, and being strong internationally. The long-term prosperity of our respective democracies requires us to succeed in each of these three strengths.

Allow me to begin with a few remarks about the Canada's strength at home. For Canadians as for Americans, Sept 11 2001 was a wake-up call to acts of foreign terrorism on North American soil.

In the face of this new threat, Canada passed legislation to impede terrorist fund-raising, froze terrorist assets and tightened refugee regulations to ensure improved compliance and surveillance. Landmark legislation gave Canada's law enforcement agencies additional tools with which to shut down terrorist organizations.

Security arrangements such as these help to protect a robust economy, and I am pleased to report to you that, right now, Canada's economy is firing on all cylinders.

According to the OECD, our economy will lead the G-7 in growth again this year as it did last year. After several years of extreme financial constraints designed to eliminate our deficit and reduce national debt, Canada has enjoyed six consecutive years of balanced budgets.

We expect to have more years of surplus as this has entered into Canadian economic orthodoxy.

In addition to removing restrictions on foreign investment, Canada has developed one of the most competitive business tax regimes in the world.

There were 560,000 new jobs created in Canada last year, which is quite an achievement for a country whose total workforce consists of about 16 million people. Canada is a trading nation, with almost one third of our jobs linked in some way to international trade, a great preponderance of which is with the U.S. so our job growth is driven in large measure by our access to your markets.

Which brings me to my second theme: strong in partnership. At the centre of Canada's foreign policy is our relationship with the United States. Our countries are linked in ways like no two others. Our security and our prosperity are mutually dependent.

9/11 brought with it closer cross-border coordination between Canada and the U.S. to a degree we could not have imagined. We increased the number of police, immigration and customs officials on both sides of the border, and have begun to make use of newer, more sophisticated technologies.

Canadian and U.S. customs officials are jointly inspecting cargo arriving at each other's ports. Intelligence and law enforcement agencies have deepened their information sharing.

Our two countries have also created integrated border enforcement teams, composed of enforcement officers from both sides of the border, to jointly monitor areas between crossing points. These teams have common communications systems and work together in remote areas to interdict persons and traffic not authorized to cross our border.

We are working together on refugee policy, where Canada and U.S. acceptance rates are roughly similar. We share information on persons in third countries leaving for North America in order to ensure that those with evil intentions do not reach either country through back door methods.

The successful Canada-U.S. Smart Border Accord, which was signed in December 2001 by Deputy Prime Minister John Manley and then Director of Homeland Security, Tom Ridge, has succeeded, so far, in ensuring that our border is closed to terrorists and to criminals, yet open to the two-way movement of goods, services and talent that supports the largest trading relationship in the world.

The mission statement for this work might be: a user-friendly border, but only for friendly users.

The U.S. has sold more goods to Canada than to any other country for more than half a century. About $1.2 billion in two-way trade crosses our border every single day. This is a remarkable statistic, especially when you consider that Canada, with an economy less than a tenth the size of the U.S. economy, absorbs almost one quarter of all U.S. products — more than Japan, Germany, Britain, Italy, China and Hong Kong combined!

Thirty-nine U.S. states, including Tennessee, export more goods to Canada than anywhere else in the world. Canada bought 32% of Tennessee's exports, more than your next seven leading export destinations together.

The world's largest trading relationship, that between Canada and the U.S., is largely trouble free. This is in large part thanks to the foresight of those leaders in both countries who concluded the free trade agreement in 1989, and then added Mexico to create NAFTA in 1994. Since signing NAFTA, trade among all partners has grown by 65%.

Investors and producers in Canada and the U.S. have been quick to realise the opportunities to produce and sell in one another's market, creating economies of scale and efficiencies on the strength of an integrated North American market. This is particularly evident in sectors such as steel, energy and various agricultural products.

While the dramatic growth of North American trade is good news, occasionally it can produce some disputes, especially where the U.S. and Canadian systems have, for historical reasons, developed differing regulatory or management systems — not worse, or better, just different.

Two examples of this, softwood lumber and wheat, make up about 5% of Canadian exports to the U.S. The department of commerce has raised a tariff wall, a tax, if you will, of some 27% against Canadian lumber and about 14% against wheat. Canada is challenging these duties in the World Trade Organization (WTO) and NAFTA. And a recent decision from the WTO is most promising for the Canadian case.

But it would be far preferable to negotiate our differences so that a permanent settlement of these two long-standing disputes can be found – to the benefit of both our countries' consumers.

Another large resource sector commodity is, however, trading without impediment: energy.

And I am grateful to Tennessee for being such a faithful customer. Indeed, 41% of what Tennessee imports from Canada is natural gas.

It is interesting to note that we have almost an even balance of trade between gas and auto parts: you export about as much in value of auto parts to Canada, as you import from us in natural gas — about $1.5 billion each way. And yet these two items only make up about 40% of the total two way trade between Tennessee and Canada.

I believe it should provide Americans with some peace of mind to know that the U.S. has a reliable and secure energy source right next door — especially with continuing instability in the Middle East. Canada provides you with 94% of your natural gas imports, close to 100% of your electricity imports and more crude and refined oil products than any other foreign supplier, including Saudi Arabia.

Yet this extraordinary partnership goes well beyond energy and commerce. It embraces our learning establishments, trade associations, hospitals, and, above all, our people, who work together, marry one another, go to one another's schools and universities, pray together in the same religious institutions, and play in the same sports leagues.

Our special relationship is working very, very well. And it also extends overseas; which brings me to my third theme, strong internationally.

As a G8 country that has never been a colonial power or a superpower, Canada has developed a strong belief in a multilateral approach to global problems.

Multilateral institutions are as relevant today when we face global challenges as they were when we emerged from the chaos and misery of the Second World War. And Canada and the U.S. both have derived great benefit from them.

For instance, the GATT, latterly the World Trade Organization (WTO), contribute tremendously to Canadian and U.S. prosperity by providing a predictable, rules-based environment in which Canadian and U.S. exporters and investors can operate abroad.

In the WTO, Canada and the U.S. are on the same team in our efforts to reduce agricultural subsidies in developed countries. High agricultural subsidies in the EU, Japan and even in the U.S. (albeit to a lesser degree) diminish the possibility of the largely agrarian developing countries to survive in world markets where they should be competitive. By way of example, each year's agricultural subsidies in OECD countries are equal to two-thirds of Africa's annual GDP!

Allowing third world economies to advance is in everyone's interest — not only can they become markets for our own goods, but more importantly, economic health breeds stability, fosters democratic and social development, encourages coordinated action to combat the illegal drug trade and improves the lives of ordinary people. These, in turn, enhance world security.

While the views of Canada and the United States usually converge in most international institutions, however, we have had one important difference of approach to international security, recently. And this was with regard to Iraq. The U.S., understandably, ran out of patience with the Security Council's failure to reach agreement on how to deal with the threat of Saddam Hussein, and so proceeded with military action.

Canada, on the other hand, was not persuaded of any direct or imminent threat posed by Iraq's weapons of mass destruction, precisely because of the vigorous inspection regime put in place by UN Security Council Resolution 1441.

Nor were Canadians persuaded of the link between Saddam Hussein and Al Qaeda. In the absence of a specific Security Council mandate, therefore Canada did not feel comfortable in initiating military action.

We did not oppose or obstruct the decision of our closest friend and neighbour. Our prime minister publicly expressed Canada's wish for a quick U.S. victory with a minimum of casualties. And a speedy safe return of U.S. servicemen and women.

While Canada chose not to participate in the coalition of the willing, Canadians are unanimous in their desire to help in the coalition of the building. We have a strong tradition of assisting states recovering from conflict, and of coordinating our assistance with the UN, the U.S. and other members of the international community.

And we will pay our own way. Prime Minister Chrétien has committed contributions for humanitarian assistance and reconstruction in Iraq in the amount of US$225 million.

Canada is preparing to provide airlift capacity to distribute food and medical supplies. Additionally, police, corrections and legal officers will be sent to train and advise Iraqi counterparts on governance, judicial, and security sector activities.

Canada remains an important military ally in the war against terrorism which, if recent incidents in Bali, Saudi Arabia, Morocco and Israel are indicators, will, unfortunately, continue for some time yet.

Canadian forces fought shoulder-to-shoulder with the 101st Airborne in Afghanistan last year, in the thick of the early action. We have about 1200 forces in the Persian Gulf as part of Operation Enduring Freedom, with frigates and aircraft patrolling the gulf to ensure safe and secure maritime traffic.

Canada is also preparing to send next September 1600 new troops under NATO command to Afghanistan to join the International Security Assistance Forces known as ISAF. Their mission will be to create a secure environment to allow Afghanistan to develop democratic institutions.

Looking further afield, there are considerable security challenges ahead: North Korea's nuclear program, the Israeli Palestinian conflict, poverty in Africa — many of these flashpoints are best addressed through established international institutions, such as the United Nations, and NATO, or through regional coalitions.

That gentleman from Tennessee to whom I referred in my opening remarks, Secretary of State Hull, was evidently prescient. With FDR, he promoted the creation of the multilateral architecture managing many of today's global problems. By doing so, in my view, he sought and succeeded in strengthening U.S. security in the post war era.

Canada was and remains a viable and enthusiastic partner in this endeavour.

Let me conclude by saying that the Canada-U.S. relationship is without peer — whether we are working together to quell the threat of terrorism abroad, to improve the management of our shared border or to enhance international trade practices.

Elvis Presley once called ambition "a dream with a V-8 engine". If he were alive today, he might well have described the Canada U.S. partnership as a fired up V-12!

Canada and the U.S. are addressing challenges creatively, sensibly and compassionately. We will confront these challenges by being strong at home and by being strong internationally. But most importantly, we will triumph over them by being strong in partnership.

Thank you.