Redefining Global Relations in the Post-Cold War World

Introduction

Distinguished past presidents, fellow members and friends.

Those of you who know our scheduled guest speaker, Ambassador Peter Teeley, will by now have noticed that he is not the gentleman sitting to my right. Unfortunately, due to an urgent family matter, Ambassador Teeley was not able to leave Ottawa to join us.

However, since the meeting is being held here in an American League city, he has graciously arranged to be represented today by a designated hitter, Mr. Michael Durkee, the United States Consul General here in Toronto, who will deliver the Ambassador's remarks.

Since 1990, Mr. Durkee has been the Consul General of the United States here in Toronto.

It must be said that Mr. Durkee is not a politician. But as Consul General, he takes very definite positions on the issues of the day. He has a definite position on the role of government; he has a definite position on the Free Trade Agreement; and he has a definite position on the World Series--Go Dodgers!

It seems Mr. Durkee is somewhat more of a politician than one might suspect. And he is somewhat of an optimist too if he is still supporting the Dodgers.

Michael Durkee has had a distinguished career in the service of his government.

Born in Gloversville, New York, he graduated from Colgate University in 1961. He was a Fulbright Student at the University of Oslo, and after military service did his graduate studies at Harvard University.

He joined the U.S. Foreign Service in 1967 and has served in Ecuador, Norway, Chile and Finland. On three occasions, he has served in Washington, working on a range of issues from Spanish affairs to arms control. Prior to his arrival in Toronto, he served for four years as Deputy Chief of Mission of the U.S. Embassy at Helsinki.

Unlike his colleague in Ottawa, Ambassador Peter Teeley, Mr. Durkee will not be obliged by tradition to resign if the Bush Administration is defeated on November 3rd. Nonetheless, his position on the U.S. election is as clear and unequivocal as his position on the world series: Go Truman.

Ladies and gentlemen, a few weeks ago we were addressed by Karl Otto Pohl from Germany, speaking on the events that have been transpiring in Eastern Europe. Today our speaker will be addressing a related topic as he discusses international relations in the post-Cold War Era.

Ladies and gentlemen please join me in welcoming our distinguished guest.

Michael Durkee

I want to thank The Empire Club for inviting me to speak, and for very thoughtfully scheduling my appearance at lunchtime. I suspect that I'd have about as much chance of drawing a crowd in this town tonight as Tony LaRussa speaking on the art of playing winning baseball.

The title of my remarks makes reference to the end of the Cold War, and I'm sure everyone in this room recalls the exhilaration with which the world greeted the crumbling of the Berlin Wall in November, 1989. Its collapse marked the end of the ideological confrontation between East and West. It celebrated the victory of democratic pluralism and free markets over political dictatorships and centralized economic planning.

All of which leads me to a question: If the Cold War is over, why don't we feel any better? One answer, of course, is that we find ourselves in the grip of a persistent global recession. Another must be the relentless images of human tragedy which appear on our television screens and front pages of our newspapers day after day.

And finally, I would suggest a certain amount of disorientation is bound to occur when the old frame of reference, within which the world conducted its affairs for nearly a half century, falls away, creating the need for nations to devise new ways to do business with one another.

Let's begin, then, by looking at the way things were, and turn our attention to the way I believe they must be if we are to confront successfully the challenges which face us in this post-Cold War environment.

With the close of the Second World War, a world order emerged which was to exist for over 50 years. Initially, the economic sphere was uni-polar, with the United States often exercising decisive influence. We poured billions of dollars into the reconstruction of Europe and Japan.

We provided the economic and political leadership necessary to create the institutions which can claim much of the credit for the greatest period of global economic growth in history. These institutions are the International Monetary Fund, the World Bank, and the General Agreement on Tariffs and Trade, the GAIT.

In the realm of security issues, the world was bipolar. Competition between East and West and, more specifically, between the United States and the Soviet Union, defined us.

As the Cold War ended, so did the ideological and superpower confrontation which characterized it.

The security impulses which encouraged major industrialized nations to suppress or moderate their differences have diminished. The old realities driving Western foreign policy have disappeared the emphasis on anti-communist military alliances, a bipolar international system, and the ideological dynamic of two very different value systems.

All of this is now gone or disappearing.

Today, relationships, both economic and security, are increasingly multi-polar. From the United Nations to the GATT Uruguay Round, from the Conference on Security and Cooperation in Europe to the NATO, from the EC to Asia Pacific Economic Cooperation, nations can compete or co-operate to suit their particular needs, without the hindrance of having to worry about political ideology and strategic alliances. There is a fluidity, a lack of identifiable leadership, which was not apparent before the collapse of communism.

This new environment of economic competition finds its roots in the dynamic of two separate but equally powerful global trends:

First, the globalization of the marketplace--the speed with which goods, services, capital and people move across borders. In this environment, competition is toughest among global corporations, without respect to national boundaries.

In this environment, economic benefit is awarded to those who perform the best--the most innovative, the most efficient, the quickest to identify and take advantage of global trends.

In this environment, knowledge becomes the most prized resource. As a result, our commitment to education is critical if we hope to remain competitive. We must provide the motivation and the opportunity for our children to acquire the skills necessary for success in the workforce of tomorrow.

The second and competing factor influencing this new economic environment is the pressure to protect domestic jobs and markets at any cost. The flames of protectionism are fuelled by the painful, fundamental and inevitable adjustments industrialized countries must make to be a strong competitor in a globalized economy.

Governments must be prepared to respond effectively to the social cost of this restructuring, especially in the matter of employment and worker retraining.

Persistent slow growth in the U.S. and other industrialized countries will only sharpen the need for effective labor policies while, at the same time, leading to stiffer competition for markets and reinforcing protectionist pressures.

The interaction of these two trends will, in my judgment, cast a shadow over international relations for the foreseeable future. The old bipolar system will be replaced by a world anchored around three central economic powers--North America, Asia, and Europe. How the leading economic, commercial and technological centres manage their relationships will be critical to the prospects for renewed prosperity during the first part of the 21st Century.

Over the years, Canada and the United States have presented the world with an enviable record of relationship management, in this case, the world's largest and most dynamic trading partnership. The bilateral Free Trade Agreement, now nearing completion of its fourth year, and the recently negotiated North American Free Trade Agreement, are signal accomplishments in how to incorporate the strengths of each participating nation--and that now includes Mexico in the NAFTA--into a strategy which enables us to face the challenges of the global marketplace and turn them to our advantage.

In his address to the UN General Assembly last month, President Bush stated that economic security, opportunity and competitiveness will become the primary goals of the United States in this new era.

The president also noted that prosperity is essential for world peace, along with peacemaking and non-proliferation. This prosperity depends on a growth-oriented international economic order, an order which safeguards the environment, and an order in which the private sector is the engine for the expansion of developing economies.

And the fact is, the world economy is changing so quickly that governments are hard-pressed to keep pace, to formulate policies which will ensure that all elements of society share in the benefits of global trading relationships. Seen in this context, the free trade agreements negotiated between our two countries and, most recently, with Mexico, are even more impressive, because they ensure economic growth for North America in ways that benefit all participating nations.

These agreements represent the best efforts of nations to adapt to a rapidly changing global environment. At the same time, we see an altogether different--and not surprising--reaction on the part of some sectors in both Canadian and American societies. I'm referring, of course, to those who would simply prefer to let the world pass us by.

To turn back the clock. To rebuild the walls we have worked so hard to tear down. To protect domestic industries from overseas competition. In other words, to doom our nations to an ever-diminishing standard of living and, ultimately, to economic failure.

The developing nations of the world see the folly in this way of thinking. They are moving with striking speed to put in place the economic reforms needed to gain access for their goods to our markets by ensuring that our merchandise and services receive the same access to their markets. Self-interest at work? Of course. Mutually beneficial? Absolutely. Trade, after all, is not a zero-sum game.

These nations recognize, as we all must by now, that free and fair trade is good for everyone. Indeed, one can argue that communism's defeat ultimately can be traced to the Western World's phenomenal economic success stemming from a series of unprecedented historic initiatives taken in the wake of the second World War--the Marshall Plan, GATT, Bretton Woods, the Treaty of Rome. The general opening of a robust global marketplace, which the communist states deliberately rejected, in effect planted the seeds of their own destruction.

Because we know that economic prosperity and political democracy go hand-in-hand, we must work closely with progressive elements in those nations moving slowly, sometimes reluctantly, but nevertheless inexorably, away from state-controlled economies towards market-oriented systems.

At the same time, we cannot allow ourselves to lose sight of the fact that this world remains a volatile place, full of risks and uncertainties, not limited, by any means, to the economic sphere. Regional conflicts, arms proliferation, even the continued instability within the former Soviet Union, all need to be addressed effectively, or we will find that the gains of recent years have evaporated and we are faced, once again, with serious military threats to our security.

In this respect, the co-operation which Canada and the United States demonstrate on so many fronts establishes a pattern which I believe other nations will try to emulate in their own relationships. As founding members of NATO and partners in NORAD, our two countries have used geographic proximity and shared political values to develop a security relationship unmatched in the world.

As we look ahead, I believe we will find this co-operation increasingly taking place in the context of the United Nations. Even here, though, we can see subtle changes indicating a shift to a more economic character. Discussions on nuclear non-proliferation resolutions have been joined by talk of trade sanctions, managerial reform of the UN system, and the crucial question of financing peacekeeping.

Clearly, in a world busily developing ways to privatize industry, integrate markets, and weather historical volatility in capital flows of $1 trillion a day, global stability will be determined less by ideological fiat and more by the forces of economics and finance.

In today's world, political leadership means global stewardship, and effective global stewardship depends on meaningful international co-operation.

No one has more experience in this regard than Canada and the United States, and no one has had more success.

We already have redefined the way sovereign nations conduct their relations with one another, demonstrating what can be achieved by building on a foundation of shared values, common goals and mutual respect.

For us, it is a way of life. For other nations, it is a whole new way of doing business. In this post-Cold War world, as the community of nations searches for models to follow in its own relationships, it will turn increasingly to the model in place in North America.

Ladies and gentlemen, the exhilaration of communism's end may have faded, but the opportunities which emerged from its ashes remain. Our two nations confront these opportunities with the optimism of societies unafraid to place their fate in the hands of their citizens.

The democratic traditions we share of individual freedom and economic opportunity were sufficiently strong to topple communism's most feared symbol, the Berlin Wall. Certainly, they are strong enough to lead us into the next century and toward a peaceful and prosperous future.

Thank you very much.

The appreciation of the meeting was expressed by Willis Blair, Secretary, The Empire Club of Canada.