Friday, February 13, 2009

Canada and NAFTA – No Mariachis, Please

(The Economist)

Some Canadians think they are more important than Mexicans

For the past 15 years Canada and Mexico have been joined with the United States in the three-way North American Free-Trade Agreement. But both still set much more store by their bilateral relationship with their superpower neighbour. This has led to sometimes farcical rivalry. To the joy of Canadian officials, Barack Obama is making his first, albeit brief, foreign visit as American president to Ottawa on February 19th. But Mexican officials whisper that their president, Felipe Calderón, got in first with a lunch with Mr Obama days before his inauguration.

More seriously, a growing number of Canadians, including politicians, trade negotiators and former ambassadors, have called for their government to turn its back on NAFTA and put all its efforts into improving bilateral ties with Washington. Canada was always a reluctant member of NAFTA, joining the talks mostly to safeguard gains made in a bilateral free-trade deal with the United States concluded five years earlier. Politicians chafe when Canada is lumped together with Mexico, as happened last year during Mr Obama’s campaign when he vowed to renegotiate NAFTA to protect Americans from weak environmental and labour standards. Even more woundingly, Janet Napolitano, the new secretary of homeland security, who is a former governor of Arizona, ordered a review of the northern border, saying that it presented a greater terrorist threat than the southern one.

Peter Harder, a former Canadian deputy foreign minister, argues that NAFTA holds back bilateral ties. “It is not in our interests to allow the speed of three to define the relationship of two,” says Mr Harder. “We have trilateralised for too long.” That view has been echoed by John Manley, a former Liberal deputy prime minister.

In fact many cross-border problems differ only in degree. That applies to the drug trade, gun smuggling, border security, the environment and illegal immigration. All three countries have a stake in the floundering car industry, which is organised on a North American basis. Canada and Mexico are the United States’ top two suppliers of imported energy, giving them both an interest in Mr Obama’s plans for energy and environmental measures. Read more here.