The Financial Seminary
Written by Diane Francis, reviewed by John Santosuosso.
Diane Francis could be said to be either a Canadian or an American, given that she really tends to live in both countries. Her experiences and love for each of her "homelands" enables her to explore the strengths, challenges, and opportunities that both face and how they might assist each other in the future. The author feels that Canada can provide the natural resource base that the United States will increasingly need in the future. In turn the United States, if given the opportunity, can furnish Canada with the necessary capital, technology, and military security to develop these resources, improve the Canadian standard of living, and provide protection for the country's sovereignty. Canada also brings to the table more than just resources. She has a very strong banking system and has had success with the kind of state-sponsored capitalism that has been extremely successful for several Asian nations.
Ms. Francis is quite aware of the economic dependency of the two states on each other, noting that over 70 percent of Canada's exports go to the United States. Indeed this has shifted Canadians from a sort of East-West economic orientation to one that is North-South. She is a strong advocate of the North American Free Trade Agreement, although she feels the inclusion of Mexico was premature and only retards Canadian-American cooperation and integration.
One of the major themes of Ms. Francis's work is the perceived threat to Canada's economic independence by China and other, particularly Asian, countries. She sees the Chinese as attempting to gain control of Canada's corporations and resources and also fears a possible conflict from Russia for control of various Arctic territories and their potential mineral wealth. Canada, she argues, is vulnerable and has neither the political will nor military strength to fend off such rivals. Canada's best defense would be a closer relationship with the United States, and the most opportune way to do this would be a merger of the two countries into one. In return the United States would gain more efficient and reliable access to Canadian resources and have more secure borders with less threat from uncontrolled immigration and terrorism. A merger might also help reduce Canada's "brain drain," which causes well educated and innovative Canadians to immigrate South in search of better opportunities.
Given the success of the North American Free Trade Agreement and that of the European Union, in spite of its problems with the euro, it is difficult to argue with the basic premise of her book. The United States and Canada need each other. Whatever they can do to facilitate cooperation should reap considerable benefits. If such efforts take the form of improvement of the North American Free Trade Agreement, her statistics would seem to point to approval in both countries. Closer economic integration in this form is not only possibly but highly desirable. Canada, however, may not share her disdain for inclusion of Mexico. While the country's Mexican trade is still small, it has increased considerably under the Free Trade Agreement and has the potential for future growth. Even Quebec's separatist Parti Quebecois is committed to this. Many Canadians see it as a step toward lessening dependency on trade with the United States, even though it may be a small one.
Probably most Americans reading this book would give their approval for the author's preferred method for closer economic integration, a complete merger of the two countries. Americans tend to think of Canadians as "just like us" and know essentially nothing about Canadian history or culture. Most have never traveled to Canada, and those that have may have tended to visit those parts that are the most "Americanized." The one part of Ms. Francis's proposal that might meet with vehement objections would be the plan to financially compensate Canadian citizens for what in effect seems to be selling the country to the Americans. According to the author's calculations, she and her husband would be able to walk away with over one million dollars under such a plan. Others might receive more.
In 1949 the former British colony of Newfoundland somewhat reluctantly joined the Canadian Confederation as its tenth province, today officially known as Newfoundland and Labrador. It is clear they did so for economic benefits, perhaps for financial survival. None the less, quite a few were not happy about it, and some still are not. However, people tend to do what they must do. In Atlantic Canada, the Maritime Provinces and Newfoundland, there might be some support for a merger with the United States with the hope it would improve economic opportunity in the region that is less developed than the other provinces. Still, it would hardly be one embraced with enthusiasm. Even here a referendum on the question might fail. Elsewhere in the country, including Quebec, there is no doubt that it would be rejected.
Canadians see the history of their relationship with the United States quite differently than do Americans. In their eyes it has often not been the "good neighbor" relationship that Americans conjure up in their mind. Many of Canada's early settlers were United Empire Loyalists who immigrated here from the rebellious colonies because they were still faithful subjects of King George. Canadians viewed the Americans as invaders during the War of 1812, and some think they won that conflict, though in reality neither side did. They constructed their railroads in part to secure Western lands from a potential American threat and created the Yukon Territory for essentially the same reason after having a dispute over the Alaska border.
The country's National Anthem includes the words, "We stand on guard for thee." Numerous Canadians see a far greater threat to their sovereignty from the United States than from China. Under International Law the Canadian claim to the waters of the Northwest Passage and other Arctic seas may be questionable, but only the United States physically challenges it by sending warships into the area. It is ironic that Ms. Francis never mentions even once the Helms-Burton Act, which many would see as the most serious threat to the country's sovereignty. Among other things, it seeks to prevent Canadian subsidiaries of American companies from doing business with Cuba.
Some Canadians would agree with the author that their military is too small to be effective in an age of global warming and competing Arctic claims. However, they probably see the United States Navy's spending of close to 7.6 billion dollars for its latest guided missile destroyer as an outrageous waste. The possibility of a physical military invasion of Canada, is close to nil. Canada has no enemies. She does dispute ownership of two small islands, one with Denmark and the other with the United States. No one is talking war. Disputes over the economic resources of the Arctic continental shelf can probably be settled peacefully through United Nations sponsored treaties or similar efforts. There is little need for American military protection. Terrorists operating on Canadian soil are a far greater danger to the United States than to Canada.
When it comes to international relations, there are some significant differences between Washington and Ottawa. Canada opposed the war in Iraq. During the Vietnam conflict, Canada was a safe haven for American men seeking to avoid the military draft. Canada was one of the sponsoring nations of the Land Mines Treaty, which bans the use of such weapons. The United States is one of only a handful of major states that has refused to ratify that treaty. Canada is a member of the International Criminal Court. The United States has put pressure on other countries to reject the authority and jurisdiction of the Court.
If Canadians are not always happy with the way Americans do business, Americans can find much about Canadian methods that make them uncomfortable. Ms. Francis believes that should the two countries merge they could use the kind of state-sponsored capitalism which has been used successfully by Canada, Japan, China, and the European governments that sponsored the creation of Airbus. In effect this makes government and the private sector partners in various business ventures. She does not appear to realize that probably most Americans, not just those who call themselves Republicans, are philosophically opposed to such a relationship and may even go so far as to see it as a giant step toward socialism.
There are other problems as well. Washington strongly dislikes the Canadian Wheat Board, a semi-government organization that markets most of the country's wheat and barley. There have often been serious disputes over the Pacific salmon fishery and softwood lumber imports into the United States. These and similar problems are not insurmountable, but they are obstacles that would have to be resolved before a meerger could take place.
If the United States is "The Land of the Free and the Home of the Brave," Canada is the land of "Peace, Order, and Good Government." The political, economic, and social cultures of the two countries are too different to make a merger realistic. For example, the United States has often been called a melting pot. Canada is frequently described as the country of "two solitudes," one English, the other French. The author's view that Quebec is rather similar to the American South has to be challenged. One prides itself on being conservative. The other is still wrestling with the question of whether it is Canadian or not. If nothing else, the inclusion on Quebec in the merged state would raise the possibility for future political instability, despite the author's claim to the contrary.
In her book, "The Merger of the Century," Diane Francis has laid out for us a beautiful dream. It is one that should inspire Americans and Canadians alike. Both countries have gained much from each other in the past. They will very much need each other in the future. However, they can do this best by contributing the distinctive strengths and characteristics that each has to offer. A strong partnership has much better prospects for success than does a marriage.