Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

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Tuesday, October 18, 2005

Canada - U.S. Relations

There has been a shift in Canada-US relations over the past decade or so. More Americans now view Britain (vs. Canada) as their closest ally. This article by Harpriye A. Juneja in Chicago Online, a publication of the University of Chicago's Graduate School of Business, explores why.

The article begins:
For more than twenty years, American tariffs on Canadian soft lumber imports have been a major irritant on U.S. relations with Canada. Perhaps more so than at any time in those previous two decades, Canadian irritation with American tariffs reached a crescendo last week as a NAFTA panel ruled for the fourth consecutive time that U.S. tariffs on Canadian lumber imports were illegal.
It continues,
Unfortunately, once again, the U.S. government ignored both the ruling as well as Prime Minister Martin, preferring instead to capitulate to lobbyists and special interest groups from the American lumber industry and forfeiting an opportunity to simultaneously lower costs for American consumers as well as bolster flagging public relations in Canada. Even more unfortunate is the fact that there was utterly nothing surprising about this response. For years now, through both Republican and Democratic administrations, Washington politicians have found a way to sour relations with Canada, by far America's largest and most important trading partner, driving up the prices Americans pay for assorted Canadian products in order to curry favors from various agricultural and natural resource lobbies.
That is a pretty straight-forward analysis of the situation. But it doesn't cover everything. There has always been an antipathy of sorts from Canadians toward Americans because of American ignorance and arrogance about Canada. Some examples I encountered during the first several years after moving to Canada:
  1. When visiting relatives in the US, someone asked me, "How big a city is Canada?"
  2. When attending a large reception in the US Midwest, I won a prize for having traveled the farthest, even though someone else was there from Hawaii. [The distance from London, Ontario, was less than a thousand miles!]
  3. There are numerous stories about tourists expecting it to be really cold here, when much of the population of Canada lives no farther north than Minneapolis.

So much of the antipathy has been festering for a long time. It does not, however, forgive the recent rudeness of a few Canadian politicians that have played to some anti-US sentiments in Canada. From the article by Juneja:

Still, the United States is not solely responsible for the recent deterioration in relations with Canada. In fact, Canadian special interests - mostly ideologically rather than economically motivated - have also tapped into the deep-seated Canadian need to feel "sovereign" from the United States to exaggerate differences and curtail cooperation. For example, the tensions over the missile defense shield could have (and should have) been easily avoided with America, as the U.S. merely was seeking symbolic Canadian support for the project, which the Canadians refused largely on nationalistic and ideological grounds. Canadian businesses have also sometimes opportunistically raised the specter of American domination of Canadian natural resources as a cheap way of staving off competition from U.S. companies. Additionally, irresponsible comments from certain Canadian politicians, such as the former energy minister who called U.S. President George W. Bush a "moron" or the legislator who told Parliament she hated those "damn Americans," are neither productive nor dignified - even though they may play well with fringes on the Canadian left.
If the US would begin to honour its trade treaty obligations, that would go a long way toward reducing Canadian antipathy toward the U.S. But if they don't, eventually Canadians may have to look for remedies that make exclusive use of the U.S. Courts. Failing that, there is always this option.
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