I am pleased to be in Los Angeles to speak to such a distinguished audience. I would like to thank the World Affairs Council for providing this opportunity to outline for you how Canada sees itself in a changing global context, and particularly in its relations with the United States.

Over the last decade or so, the world has experienced a profound geo-political shift. To use a metaphor that will have particular resonance here in Los Angeles, the tectonic plates of international relations have realigned themselves. In doing so, they have unleashed huge forces. A new landscape is beginning to appear, but the aftershocks of these movements are still going on. New countries are taking shape, and people are making their voices heard in the world in a way they could not before.

Countries are being forced to redefine their international relations in the face of the trends that underlie this tectonic shift:

increasing economic integration and interdependence, linked to the process of globalization;

the realization that "human security" -- human rights and fundamental freedoms, the rule of law, good governance, sustainable development and social equity -- is as important to global peace as arms control and disarmament; and

the changing nature of diplomacy itself, as we redefine alliances, partnerships and the role of international co-operation.

Canada-U.S. Relations in an Era of Change

Nowhere is this process of redefinition more clear than in our relationship with one another. Our two economies are becoming increasingly integrated, both nationally and regionally. In 1996, Canada's two-way trade with California was about C$20 billion -- approximately the same figure as all of our trade with Japan. We, in turn, are your second-largest trading partner and fourth most important foreign investor. Canadian trade and investment supports some 238 000 jobs in California.

In addition to quantitative increases in flows of goods and funds, there has been qualitative change, as Canadians and Americans work together in innovative ways. Los Angeles has long been a magnet for Canadians working in the entertainment and communications fields -- so much so that it is now home to the largest Canadian population outside Canada. Increasingly, though, Hollywood is heading north. Last year the Disney Corporation established animation studios in Vancouver and Toronto. The popular "X-Files" series is one of many American television programs filmed in Vancouver. Altogether, Canada earns in the order of C$500 million a year from film and television production services of this sort.

Environment: Shared Stewardship

Our growing interdependence is not just a phenomenon of trade and investment. It is increasingly urgent that we work together to manage and protect the ecological footprint that we share. Neither natural resources nor environmental pollution are any respecters of national borders. The west coast of the United States and of Canada share many environmental concerns: global warming, the depletion of forests, and management of shared water resources and fish stocks.

California's imports of Canadian natural gas -- C$1.1 billion in 1995 -- are one example of how we can co-operate in combatting global warming by moving to cleaner energy sources. Another positive development is the recently started stakeholders talks on British Columbia salmon. I do not want to prejudge the outcome of an ongoing process, but I think the nature of the process itself is noteworthy. This is a process with local "buy-in," both by Canadians and Americans who make their living from the salmon fishery, and by the governments of your neighbouring states and the province of British Columbia. It is a process that recognizes that the days when all international issues could be settled by national governments alone are over.

Culture and Communications

Yet another area of growing interdependence, where we need to find creative responses to global trends, is culture and communications. I have already referred to our links as producers, be it in the development of a "Hollywood North" or the Canadian expatriate community here in Los Angeles. We are even more closely linked as consumers of cultural goods and services. For example, 80 per cent of the English-language magazines that Canadians buy from their newsstands are American. At least 70 per cent of the music that Canadians listen to on English-language radio stations in Canada is foreign, mostly American. Americans in turn consumed C$977 million in Canadian cultural goods and services in 1995.

These figures for the market share of American goods and services show just how open the Canadian market is to foreign cultural products. I had an interesting conversation on this issue recently with a member of the U.S. Congress. I asked him what he would consider a fair percentage of U.S. penetration of our film and television markets. His view was that a maximum of 50 per cent would be acceptable. In that case, I told him, Canadians had better get to work on retooling our system, because currently 90 per cent of the films and 80 per cent of all non-public affairs television programs that we watch are American. It seems we are not living up to your standards!

In this context, it is important to recognize that interdependence is not the same thing as integration. We need to retain some space of our own, in which Canadians can hear their own voices tell their own stories. We need to do this because of the fundamental role that culture plays in forming national identity. For Canada in particular, forming and reinforcing a sense of national identity is a crucial part of nation building, and hence a vital national interest. Our commitment to that option has only strengthened as we move towards a 500-channel universe, in which it is all too easy for individual voices to be swamped.

In other words, the goal of Canada's cultural support mechanisms and of public policy instruments relating to issues such as foreign ownership or priority cable carriage, is to encourage and develop indigenous capacity, not to obstruct foreign content. On the contrary, Canadians can choose from one of the largest and most diverse arrays of programming and materials available anywhere in the world. And that choice can only expand with the ongoing revolution in communications technology.

We need to be creative in our bilateral relations in responding to global change of this magnitude. Not just on culture, but also in areas such as environmental protection and resource management, we have scores of bilateral agreements and mechanisms for dispute settlement. But virtually no processes exist to foster forward-looking dialogue and policy exchanges. We should not simply be waiting until things go wrong, and then discussing our disagreements in the litigious atmosphere of a dispute panel.

If we do that, the danger is that we get stuck in a "Honeymooners" mode, where we take each other for granted except when we quarrel. Instead we should be thinking ahead, and looking for ways to co-operate actively, not simply to avoid or settle disputes. And we should be encouraging a wide range of stakeholders to share with us their thinking on how to prepare for, adjust to and benefit from global trends.

I raised this with Secretary of State Albright when I was in Washington a few weeks ago. The meeting between our Prime Minister and President Clinton next month will be another opportunity to discuss innovative ways in which we can advance co-operation and share ideas. If we are successful in this, both our nations will benefit. At the same time, we will be providing a model to others of a complex, multifaceted bilateral relationship that works; that goes beyond managing disputes to build new ways to deal with the global challenges we all face.

Canada and the United States in a Changing World

This is particularly important because the United States remains, as President Clinton put it, the "indispensable nation": the acknowledged single economic, political and military superpower in the world. As such, the United States has both a special capacity and a responsibility to act as the promoter and protector of the international rule of law, and the guarantor of the system of international institutions.

At the same time, it is important to recognize that Canada is also a global power, that we reach into Asia Pacific, into Europe, and particularly into the Americas. I like to think of Canada as the "value-added nation." Canada has the capacity to act as an honest broker on a range of issues, where we bring our particular skills and experience to bear. As a wielder of what has been termed "soft power," Canada is working internationally to build coalitions of the willing on issues ranging from child labour to land mines. We are also combining our expertise in peacekeeping with new thinking on peacebuilding to respond to human security challenges that affect us all. I am thinking here of issues such as refugee flows, illegal drugs and the spread of disease.

There is a great deal of scope for a "value-added" nation and an "indispensable" nation to work together in pursuit of our many shared goals. I would like to draw a few examples today from two regions for which California serves in some sense as the American gateway: Asia Pacific, and the rest of our hemisphere.

Canada and the United States in the Asia Pacific Region

Flows of goods, of investment funds, of people and of ideas across the Pacific have increased dramatically in the last two decades. In response, the nations on either side of that ocean are working to shape both an institutional infrastructure and an identity as a true region. Canada and the United States face some similar challenges as we take part in that process: how to build institutions suited to such a diverse region, how to deal with differences on issues such as human rights, and what form our relations with emerging powers, particularly with China, should take.

For Canada, these are not simply arcane questions for foreign policy debate; they touch our lives directly. After the United States, five of our next 10 trade partners are in Asia: Japan, the PRC [People's Republic of China], the Republic of Korea, Hong Kong and Taiwan. Over 2 million Canadians are of Asian origin. More Hong Kongers have chosen to immigrate to Canada than to any other country in recent years. In 1994 alone, 43 000 Hong Kongers came to Canada. Chinese is now the third most common language in Canada, after English and French.

In terms of building regional institutions, Canada is proud to host the Asia-Pacific Economic Cooperation (APEC) forum this year. In its early years, some observers doubted APEC's effectiveness. But, as with Canada, APEC's diversity has proven to be one of its strengths. Operating on the basis of mutual trust and confidence, APEC has moved further and faster in just a few years than many would have predicted. And not just in the area of trade facilitation and liberalization -- APEC has paired progress on this front with work on economic and technical co-operation. Our ultimate aim is sustainable growth, which means growth that is equitable and widely shared.

On human rights issues, both our countries are grappling with the same problems and working toward similar goals. In Burma, for example, how do we exert pressure on a regime that has one of the worst human rights records in the world? And, at the same time, how can we most effectively cut off the flow of illegal drugs that starts in Burma and ends up with another dead child on the streets of Vancouver or Los Angeles?

Other nations, such as Indonesia, continue to have a poor human rights record. In these cases, the challenge is to find ways to support and reinforce positive change, if and when it occurs. Co-operation between the Canadian and the Indonesian national human rights commissions, for example, has helped to strengthen the Indonesian commission to the point where it has openly criticized government actions against the democratic opposition.

Perhaps the greatest challenge for us in Asia, and one that I discussed at some length with Secretary Albright, lies in our relations with China and Hong Kong. Over the past 27 years, Canada has built an astonishing range of linkages with China. Our policy is to move forward on a wide range of fronts, from regional peace and stability to human rights and the rule of law; from environmental protection and sustainable development to an expanding economic relationship, including Chinese entry into the WTO [World Trade Organization]. Our relationship with China cannot, and must not, be defined as a stand-off between trade and human rights.

Our approach may not always be the stuff of headlines. But it is the most effective way open to Canada to gradually increase the political space available for civil society, and for respect of human rights.

Canada and the United States in the Hemisphere

The complementarity of American and Canadian approaches -- of the "indispensable" and the "value-added" nations -- is particularly clear within our own hemisphere. Admittedly, this is a relatively new focus for Canada. The United States has long looked south. But for Canada, our southern horizon until recently ended somewhere north of Arizona, or in Disneyland if you were a tourist. We were of the Western hemisphere before; now we are truly in it. We have made a firm and irreversible decision that just as Canada's future is intertwined with yours, so is it also inextricably linked with that of the hemisphere as whole.

For Canada, our first major step towards integrating ourselves into the hemispheric economy was the 1994 expansion of the Canada-U.S. Free Trade Agreement to include Mexico. Last year, we concluded a Free Trade Agreement with Chile, which we hope will ease Chile's accession to the NAFTA [North American Free Trade Agreement] when that time arrives.

These steps spur us on toward the big prize, a Free Trade Agreement of the Americas -- the hemispheric trade and investment regime proposed at the 1994 Miami Summit of the Americas. We have begun a dialogue with the MERCOSUR countries on how we should work towards this goal. American enactment of fast-track legislation will also send an important message of support, as we start work on making free trade throughout the Americas a reality.

Canada in the Hemisphere: Adding Value

Hemispheric trade is one of the areas where Canada adds value by seizing opportunities to build a system of economic standards, rules and practices. This is based on our strong belief that to develop international or multilateral forums, you need a set of basic rules to play by, rules that are accepted and honoured by everyone.

We are also adding value by supporting the processes of democratization, political maturation and peacebuilding that are taking place across the Americas. We have focussed our efforts, and particularly our human resources, to provide leadership in key areas. Canadian peacekeepers and peacebuilders, both military and civilian, are doing vital work in Haiti and in Guatemala, for example.

In Haiti, we are not simply maintaining security, but investing in peacebuilding. Canadians are helping to train the Haitian police force, to build the justice system, to improve government administration, and to help various civil organizations to start building a democratic society from the ground up. Now that the recent peace accords are starting to be implemented in Guatemala, we are working there too. Canadian observers are helping to build peace by assisting in the demobilization of the guerilla forces.

Canada and Cuba

In Cuba, too, we see the potential to add value in the context of the real, if incremental, change that is taking place there. Since it emerged from the Soviet embrace, the Cuban government has struggled to reform its economy over the past few years. The NGOs [non-governmental organizations] I met with in Cuba told me that, while they still face severe restrictions, their room for manoeuvre is somewhat greater than before. One of our objectives is to help Cuba make a transition, without collapsing into violence that would be disruptive to the entire hemisphere.

In many ways, our approach is similar to the one we have taken in China: to work from within to develop indigenous capacity for change, and to widen the political space for a fledgling civil society that has opened up as a side effect of economic reform. We are supporting those within Cuban society who are working to change not just the economy, but also the functioning of governance and politics. This involves a range of projects, both with the government and with grassroots organizations.

Canadian officials met recently with Cuban officials for the first of a series of detailed exchanges on human rights. The Speaker of the Canadian Parliament and the President of the Cuban National Assembly last week signed an agreement on parliamentary exchanges. Under this agreement, members of the Cuban National Assembly will come to Canada for two seminars on how Canadian government functions, for the purpose of strengthening Cuban parliamentary procedures. The seminars will include discussion of the role of Parliamentarians as servants of the people, and the workings of the Supreme Court. Perhaps most important are our projects with grassroots organizations -- for it is by building from the bottom up, not the top down, that democracy will emerge.

I am not naïve -- I do not expect an overnight conversion to democracy. But I do believe that there is room now to work incrementally for positive change in Cuba. And I believe that Canada is well placed to do this work. Our basic principle in doing so is that isolationism simply does not work. It leads to misunderstandings and mistakes, and it should be a policy of last resort only. The "Big Chill" that defines U.S.-Cuba relations runs counter to the new paradigm that is emerging for the hemisphere as a whole.

Canada's Views on the Helms-Burton Act

In this context, I should perhaps say a word about Canada's views on the Helms-Burton Act, although for us it is not a Cuba issue, but one of international law.

Clearly, one of our objections to the Act is that we do not like, any more than you would, to be told by another country how to run our own foreign policy. Compensation for seized U.S. property is an issue for negotiation between the United States and Cuba. There is no reason to sideswipe your friends in this dispute.

But we have a more fundamental objection to the Act, and one that should concern you too. The Helms-Burton Act, by its unacceptable extraterritoriality, undermines the most basic premises of international law, upon which all of our international obligations and agreements are based.

The United States has taken the lead in the establishment of the major postwar international economic institutions. The current international trade regime owes its existence in large part to the very strong and respected influence exerted by the United States. When the world's most powerful nation decides to change rules governing trade unilaterally and arbitrarily, it brings this entire regime into question. If the United States can claim exemptions to rules that it does not like, for example, by citing national security before the WTO panel on Helms-Burton, then why cannot other countries?

The danger is that suddenly, everyone will be claiming exemptions to rules that do not suit them, and that the carefully constructed international framework that has brought about such an enormous expansion in trade and investment, will be undermined. Seen in this light, Helms-Burton is a dangerous virus in the international trade system.

Conclusion

Canada and the United States have what many consider the strongest -- certainly the most intensive -- bilateral relationship in the world. And when we look at the world around us, we do so from similar perspectives, and with similar goals. But that does not mean that we see or do everything alike. We follow our own paths, which allow us to play to our own strengths and our own unique role in the world.

Perhaps the best metaphor for our relationship is the Johnson-Bailey rivalry. They are being pitted directly against one another in a race to try to decide which one is the fastest man in the world. But the fact is that they are both fastest -- each one over his own distance, in his own specialization. Canada and the United States are the same. We each run on our own track, in a race that is similar, but not the same; but when we team up together, think of what a relay team we make.

Thank you.

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