Remarks to Canadian-American Border Trade Alliance

This fact is especially evident right now. The Katrina tragedy has again brought into relief our strong bonds our friendship, a friendship that recognizes that we have a shared North American destiny. The list of what Canada, the individual provinces, and private Canadians have provided is impressive – from ships to helicopters to divers to rescue teams to electrical repair crews to oil supplies to cash donations to bandages and diapers.

Ambassador Wilkins, who is off to a very good start in Canada, observed in an open letter to the Canadian people following the initial outpouring of assistance offers that Canada has left no stone unturned and given no second thought, to aiding the United States with its "treasure…talent and …time."

It was the same after 9-11 when Canadians stood by the United States and the American people. Prime Minister Martin and other Canadian leaders reaffirmed that sentiment Sunday at a 9-11 commemoration at the U.S. Embassy in Ottawa. It was the same after Hurricane Juan and the Quebec ice storms when the United States rushed assistance to Canada. As many public and private Canadians have been quoted in the press as saying, "It is what good neighbors do."

I’d like to think that is our shared mantra – the U.S. and Canada, as the best of friends, look to help one another, not out of a sense of potential gain, but because we are friends, good neighbors and, often, family. Recognizing this, I again want to take the opportunity to publicly thank all Canadians, including Prime Minister Martin, the Premiers of Canada’s provinces, business leaders and other Canadian citizens for their generosity and friendship.

Not surprisingly, this bedrock of deep friendship is sometimes buffeted by our inevitable disagreements and the headline issue of the day. Given that, I think it would be useful to reflect on the year since I last met this group –  including some of the highs and lows of our relationship.

As many of you know, I will soon be leaving my position as Assistant Secretary for Western Hemisphere Affairs and joining you in the private sector. Again, being a diplomat for a few more days, let me start with the highs of what has been a jam-packed year.

From my personal perspective, the highlight of the past twelve months was the President’s trip to Canada in late 2004 – his first foreign trip after his reelection and a reflection of the importance he attaches to this relationship. President Bush underscored the strength of our relationship by traveling to Halifax for the signature public event of the visit.

In his Halifax speech, which I commend to each of you, President Bush thanked Canada for its hospitality to more than 33,000 passengers whose planes were diverted because of the cowardly 9-11 attacks, stating that, "You opened your homes and your churches to strangers. You brought food, you set up clinics, you arranged calls to their loves ones, and you asked nothing in return." How reminiscent are the President’s remarks to what Canadians are doing now with regard to Katrina.

Another obvious highlight was the March 2005 launch of the Security and Prosperity Partnership of North America. This three-way partnership with Mexico and Canada seeks to increase the security, prosperity, and quality of life of the citizens of all three countries on the principle that security and prosperity are mutually dependent and complementary. The boldness of SPP is evident in the fact that many would have thought there was no way to improve the most dynamic trade relationship on the planet. But that is precisely what our leaders set out to do.

Since Presidents Bush and Fox and Prime Minister Martin announced the SPP in Waco, much progress has been made on the agenda, with Secretary Chertoff providing overall guidance for us on the security arm of the SPP and Secretary Gutierrez chairing our prosperity portion of the SPP. Though this effort is in its early days, we are working well with Canada (and Mexico) and hopeful the SPP will concretely and measurably improve our already strong relations.

A critical part of our SPP agenda and of our bilateral discussions with Canada is strengthening border security and law enforcement cooperation. These discussions have been very positive over the last year and conducted in a spirit of how we can help one another reach a shared goal. While I will let my colleague directly comment on the Western Hemisphere Travel Initiative (WHTI), I do want to state that we intend to implement it in a manner consistent with our cooperative relationships with our neighbors.

The SPP and WHTI help point out another fact of "foreign" policy toward Canada – it is often at least as domestic as foreign. One area that illustrates this well – and also shows how we can work together to solve thorny problems – involves Devils Lake in North Dakota.

For many years, this complicated dispute over proposals to relieve the dangerous flood-level waters of that lake was a constant topic of conversation between the U.S. federal government, the Canadian federal government, the states of North Dakota and Minnesota, and the province of Manitoba. With good will and tremendous effort, though, the United States and Canada set in place this summer a draft arrangement that will safeguard the interests of all parties. I thank Council on Environmental Quality Chairman Connaughton for his personal effort in solving this problem.

Another highlight of the last year was the Administration’s successful effort to reopen our border to Canadian cattle under the age of 30 months. This was another difficult dispute that we resolved based on the President’s strong stance in favor of a science-based approach to the "Mad Cow" issue and reflective of our commitment to free trade.

I know there was great frustration in Canada at the pace of work on our side, but we knew it had to be done right to survive the likely legal challenges. There was a legal challenge and, thanks to the careful work of our colleagues in the Department of Agriculture, the Administration prevailed in court.

Canada has been a staunch ally in the war against terrorism and shares our concerns that this scourge of the new millennium be defeated.

Cooperation with Canada in foreign policy also is excellent, both in this hemisphere and on the wider world stage. We are cooperating closely on the Summit of the Americas process, where we share a vision of a positive and productive meeting, and in the OAS. In the Caribbean, Canada is assisting greatly in the effort to rebuild and solidify democracy in Haiti. It is the third largest donor to that nation and has contributed one hundred officers and the commander to the civilian police contingent of the UN stabilization mission. In addition, through Elections Canada, Ottawa is playing a leading role in advancing the Haitian democratic process.

Further afield, of course, Canada is a key member of the NATO force helping secure the new democracy in Afghanistan. In August, Canada took over the Khandahar PRT (Provincial Reconstruction Team) from the United States. Over the next several months, the Canadian presence in Khandahar will grow to nearly 2,000 soldiers helping the Afghan people rebuild their country. In addition, and in line with its democratic vocation, Canada is actively assisting the National Assembly election process and has been a very generous donor to Afghanistan – total assistance between 2001 and 2009 for that nation is budgeted at some $440 million.

It is fair to say that there are few issues that we deal with in foreign policy that are not made better by an even greater partnership with Canada and, while I have commented on only a few of the almost innumerable areas where we cooperate, I do want to touch upon a few areas of disagreement over the past year. As sovereign nations with our own distinct interests around the world, we do not always see eye-to-eye, but we also place these disagreements in the context of our broader extremely positive relationship.

I am sensitive to the fact that because of the relative size and nature of the overall economy, issues that are viewed as mere irritants by the United States have a much greater impact and profile up north.

To hit the biggest headline first, we have a disagreement over softwood lumber. I know this issue has been going on longer than many trees have been growing and it most certainly will continue beyond this Friday when I leave my current post.

As you know well, we have the largest and deepest trade partnership in the world, with the vast majority of our trade occurring without a hitch. The enormity of this largely non-conflictive trade is well known – more than $1.5 billion a day in good and services cross the border, with yearly American exports across one bridge in Detroit amounting to more than our exports to Japan. What is less well known is that softwood represented only 2% of our trade in 2004. Moreover, Canada had a $66 billion trade surplus, $6-7 billion of which came from softwood lumber. You will probably beat that record this year.

So, both sides have a great deal to lose if we aren’t able to manage our trade disputes in a cooperative way.

We also must recognize the softwood lumber dispute is an important one for Canada, and the stakes are very high. There are some 20 legal challenges ongoing involving softwood. Both sides can make strong legal arguments and have been doing so – with the help of very talented (and expensive) lawyers – for the past three years. The mere number of them helps explain why one week the press triumphs a Canadian victory before a NAFTA panel and the next week a U.S. win before the WTO.

The bottom line on this contentious issue – where both sides have arguments worth hearing – is that we need to return to the table and negotiate our differences. Talks were scheduled in Ottawa last month. Canada chose to cancel them.

I know the idea of negotiations is not popular in Canada, but it’s the way to a lasting decision. I’ve heard people say Canada has negotiated agreements on softwood – but it was Canada’s decision each time to allow those agreements to lapse. Let’s see if we can reach a permanent peace – not a truce.

On a very different subject, we also had a well-publicized divergence of views over missile defense when Prime Minister Martin announced in February that Canada would not join that program. At the time, the U.S. expressed regret over this decision, but acknowledged it was Canada’s to make.

Though we would have preferred a different approach, Canada’s decision did not affect our overall very close military-to-military relationship, as represented by NORAD and the many other defense ties. Reflective of this, we will shortly begin talking with Canada to renew the NORAD agreement beyond 2006 and explore other ways to strengthen our joint defense of North America against today’s threats.

Finally, I’d like to note that I still see occasional commentary invoking our differences over Iraq. I will not deny that there were some initial tensions, but Canada and the U.S. now share the same goals in Iraq of a peaceful, stable and democratic state. As such, Canada has pledged $260 million for reconstruction, been helpful as chair of the International Reconstruction Fund Facility for Iraq (IRFFI) donors’ committee, contributed police trainers to the UN’s effort based in Jordan and committed funds to the NATO training mission for the Iraqi military.

Without going any further into the highlights and lowlights of the last year, let me just conclude with the observation that our relationship does not boil down to softwood lumber, or missile defense, or the war in Iraq. It’s much, much bigger than a few isolated, though important, issues. Our ties are strong and deep and, as I leave the State Department, I have no doubt that they will remain as such and our relationship will continue to flourish. Thank you.