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IN THE NEWS: Baby-Stepping Toward a Partnership

March 30, 2005

By JOHN IBBITSON, Toronto Globe and Mail Thursday, March 24, 2005 Updated at 3:59 AM EST

WACO, TEX. -- Twenty years from now, China and India will vie for supremacy as Asian superpowers, while Brazil leads a re-energized South American economic bloc and Europe languishes in relative economic decline.

In that world, what role will North America play? U.S. President George W. Bush, Canadian Prime Minister Paul Martin and Mexican President Vicente Fox attempted yesterday to chart that future by pursuing an incremental but essential path toward a more perfect union of the North American economies.

Yet this path may ultimately lead to a dead end, thanks to Canada's Pollyannaish refusal to confront the unsightly reality of an increasingly sticky border, personified by the absence from this summit of Canada's International Trade Minister, Jim Peterson.

If success trumps failure, the quality of life in North America will continue to steadily improve. If failure trumps success, move over Europe.

Yesterday's summit seeks an informal solution to a chronic problem: the lack of any institutional mechanism to regulate the integration of North American economies, along with their security perimeters.

While Europe has the European Union -- which is too structured by half -- and Asia still remains largely a collection of autonomous states, Canada, the United States and Mexico seek to open their economies to each other, while retaining their respective sovereignties.

The problem is that the NAFTA partners possess only "minimalist institutions" to regulate that integration and resolve disputes, observes Joseph McKinney, an economics professor and specialist in the North American free-trade agreement at Baylor University, where yesterday's summit was held.

The unspoken goal of the three leaders' initiative is to compensate for NAFTA's structural scarcity by creating ad-hoc groupings of ministers from the three countries, who have 90 days to identify measures that the NAFTA partners can take to ease the flow of trade across borders, buttress security against terrorist and criminal threat, and improve the quality of life, especially of the environment.

The goal is to shake up the bureaucracies, search for consensus and then steadily fill, empty and refill the policy buckets.

This approach lacks the big-bang quality of the Canada-U.S. free-trade agreement and NAFTA, but then, as Mr. Martin said, yesterday's agreement has the more realistic goal of steady progress.

And that's the problem. By definition, this bucket-filling process searches for areas of common interest. The mandarins working on the communiqué were told to concentrate all of their energies on areas where agreement would be achievable.

That's why Jim Peterson wasn't at this summit. The mere presence of Canada's International Trade Minister would have reminded everyone that the communiqué's obsession with process ignores the substance of the softwood lumber and mad-cow trade disputes, which are being held hostage by an antagonistic Congress in thrall to powerful lobbies.

We might remember that cautious, incremental approaches will never produce a big bang: common external tariffs, a labour mobility agreement, a binding dispute-resolution mechanism.

That is why Mr. Martin made a point of raising mad-cow disease, softwood lumber and the Devil's Lake water diversion project with Mr. Bush during his press conference. The Prime Minister was trying to hide the reality that, after six bilateral and trilateral meetings, he has failed to resolve a single major bilateral irritant. And this Texas pact will not bring any of these disputes one whit closer to resolution.

That doesn't mean what happened yesterday is meaningless. Quite the opposite. If specific trade irritants can't be resolved, then ways must be found to work around them. Otherwise, North American economic integration will stagnate, and the emerging tigers will pass us by.

Critics of continentalism believe Canada's future lies in forging stronger ties with the emerging Third World tigers, or even with an economically ossifying Europe. Nonsense. Canada belongs to North America, and North America is its future. Some day, Canada will have to start pushing for a big bang: for the free flow of people as well as goods across the border, for common tariffs, for a common regulatory framework. Until then, these baby steps are better than no steps at all.

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