When Barack Obama takes the traditional first foreign trip as
the new U.S. President to Ottawa on February 19, our northern
neighbors will be watching closely-and somewhat nervously.
Canada is one of America's closest friends, as "reflected in the
staggering volume of bilateral trade-the equivalent of $1.5 billion
a day in goods-as well as in people-to-people contact. About
300,000 people cross the shared border every day." We are connected by
everything from shared democratic values to the everyday matters
like integrated auto manufacturing and professional sports teams.
Will the new U.S. leader seek to impose an anti-trade,
environmentally extreme agenda in line with his campaign promises?
Or will he embrace Canada as a partner in a renewed effort to
continue the historic policies of economic and entrepreneurial
freedom that has produced record prosperity for both countries?
Buy Canadian-Not Just American
One of President Obama's campaign promises was to "upgrade" and
"retool" the North American Free Trade Agreement
(NAFTA). If the "Buy American" provisions in the recently signed
$787 billion "stimulus" package are an example of the sort of NAFTA
changes coming under the Obama Administration, they are sending
decidedly chilly headwinds ahead of Air Force One. Canadians are
justifiably skeptical of the stimulus bill promises that the
provisions will be WTO-compliant, as evident in a Globe and
Mail column ("While the bill was amended to comply with
international law, we believe these reassurances are largely
The U.S. and Canada have the highest scores of any Western
Hemisphere country in the 2009 Index of Economic Freedom,
published by The Heritage Foundation and The Wall Street
Journal, and are ranked among the top 10 countries in the
world. Both have benefited by allowing "labor, capital, and goods
to move freely, and refrain[ing] from coercion or constraint of
liberty beyond the extent necessary to protect and maintain liberty
Let the Private Sector Restructure the
U.S. and Canadian Auto Industries
The auto sector is extremely important to the health of the
Canadian economy. It employs hundreds of thousands of workers and
"accounts for a higher percentage of Canada's manufacturing output
than that of the United States." Heritage Foundation analysts
have reported extensively on the folly of U.S. government efforts
to "rescue" the American auto industry from decades of
mismanagement and overly generous labor agreements.
Unfortunately, Canadian Prime Minister Stephen Harper has made
the same mistake as his U.S. counterparts in backing Canadian
government bailouts of the Canadian subsidiaries of the Big
Don't Bury America's Energy Future in
Alberta's Tar Sands-Use Them
President Obama was elected by appealing to global warming
alarmists, among other groups on the left. Will he cave in to their
demands to leave untouched the vast oil sand deposits in Alberta
that could provide millions of barrels of oil to fuel economic
growth in both countries for decades to come? Development of
Alberta's energy sector would be led by U.S. companies, too,
thereby boosting growth on both sides of the border.
According to Time, "Canada may become the new Saudi
Arabia," but not if the U.S., which represents the
major market for Canadian oil, tries to block development of the
tar sands on environmental and climate change grounds. Extreme
environmental blinders will leave Americans feeling more complacent
about buying "cleaner" Venezuelan oil from anti-American Hugo
Chávez, who periodically threatens to cut off oil sales to
the U.S., than in partnering with Canada's free market development
of its "dirty" oil sands.
Recognize Need for Continuing Canadian
Role in Afghanistan
The meeting with Prime Minister Harper comes shortly after the
announcement that the Obama Administration plans to deploy an
additional 17,000 troops to augment the 65,000 allied troops
currently stationed in Afghanistan in response to a "deteriorating
situation." Since 2006, Canada has made a substantial commitment to
NATO's International Security Assistance Force, especially in hard
fighting in southern Afghanistan. As of February 2009, it had lost
108 Canadian military personnel and three diplomats and aid
workers. Between 2001 and 2007, Canada allocated $741 million for
Afghan reconstruction and development.
Canada is scheduled to withdraw its combat units in the summer
of 2011. President Obama should thank Canada for its major
contribution and lay the groundwork for a continued Canadian
presence in Afghanistan after 2011. Canada, moreover, can work with
the U.S. to enlist support from other NATO members who have been
far more reticent in committing boots on the ground and resources
to the critical front in Afghanistan.
Keep in Step with Canada on the
The geopolitical and geo-economic importance of the Arctic
region is rising rapidly, and its mineral and hydrocarbon wealth
will likely transform the region into a booming economic frontier
in the 21st century. Russia has recognized the importance of the
Arctic and has designs on a large part of it-an area the size of
Germany, France, and Italy combined. With the shrinking of the
polar ice cap, extended navigation through the Northwest Passage
along the northern coast of North America may soon become possible
with the help of icebreakers.
Use of the Northwest Passage is a contentious issue between the
U.S. and Canada. Resolving this dispute amicably is essential for
both countries. The United States has a strong interest in
cooperating with its Arctic neighbors, especially Canada, in
developing offshore oil and gas fields and policing the region.
Opening the Arctic is a major opportunity for U.S. and Canadian
companies to enhance the energy security of North America.
Continue the Strong Alliance for
The U.S. and Canadian economies, national security concerns, and
cultures are deeply interwoven; both face daunting problems.
Increasing efficiency in trade between the two countries will
benefit both sides.
- Obama should pledge to seek immediate removal of protectionist
"Buy American" provisions in the stimulus law and commit to further
measures to deepen and strengthen NAFTA.
- Obama and Harper should commit both countries to seeking
private sector restructuring of the U.S. and Canadian auto
- Obama and Harper should commit to sensible, private-sector-led
development of the vast oil sand deposits in Alberta.
- Obama should use the opportunity to cement a viable and
sustainable security partnership with the Canadian government in
Afghanistan, in the Arctic, and elsewhere.
James M. Roberts is
Research Fellow for Economic Freedom and Growth in the Center for
International Trade and Economics (CITE) at The Heritage
Foundation, and Ray Walser,
Ph.D., is a Senior Policy Analyst for Latin America in the
Douglas and Sarah Allison Center for Foreign Policy Studies, a
division of the Kathryn and Shelby Cullom Davis Institute for
International Studies, at The Heritage Foundation.
Terry Miller and Kim R. Holmes, 2009 Index
of Economic Freedom (Washington, D.C.: The Heritage Foundation
and Dow Jones & Company, Inc., 2009) at http://www.heritage.org/index/.