Some Canadian Myths About the U.S.

Introduction:

Allan Ezra Gotlieb was born in Winnipeg in 1928. He received his B.A. degree from the University of California at Berkeley and, as a Rhodes Scholar, went on to Oxford for an MA., a B.C.L., and the Vinerian Law Prize; thence to Harvard for an L.L.B.

While at Harvard, he was on the Board of Editors of the prestigious Harvard Law Review and won top honours in his class-not bad for a start! He joined the Department of External Affairs in 1957 and went through the bureaucracy to become Under Secretary of State for External Affairs in 1977.

Along the line he has been a Deputy Minister of Communications, of Manpower and Immigration, also a Director of the International Development Research Centre, the National Film Board, the Export Development Corporation, and a Governor of Carleton University.

He is the author of four books and many publications about international law and federalism and he is a collector of the French artist Tissot. In 1981 he was appointed personal representative of Canada's Prime Minister for the Ottawa Summit Economic Conference and, in December of that year, took up his current posting in Washington. There he is a key player in our trade negotiations, openly tackling members of the U.S. Congress on trade issues, which he describes as "hand-to-hand combat."

The other kind of combat the Ambassador enjoys is not on the tennis or squash courts but over the chess board. In fact, his aversion to the sporting side of life is well illustrated by a story his journalist wife tells. While on the job reporting for a national magazine in the U.S., they went together to a diet clinic spa in Florida where Sondra, who was doing an article on the place, followed the regimen religiously from dawn to dusk and lost two pounds over the week. The Ambassador spent his time in the library reading, and lost ten pounds.

So let us welcome our Ambassador to the United States, Allan Gotlieb. He will debunk or confirm some of the myths we have about the U.S.

Allan Gotlieb

Myths define a nation; they give it a name, an ethos. They delimit a nation.

But myths can also limit a nation, if they are allowed to substitute for vision, if they become a retreat from challenge, if they become a refuge from reality.

At this crucial time in relations between Canada and the United States nothing is more important than to have a sound understanding of ourselves. But closeness does not always bring clarity of vision.

So I have recently talked quite a lot to Americans about how they perceive, or misperceive, Canada-U.S. trade. I have called their misperceptions the seven deadly myths. l listed them as follows: that Canada is not the American's biggest trading partner; that we try to keep our dollar low to gain an unfair trade advantage; that we have piled up huge trade surpluses; that we subsidise trade and the Americans don't; that publicsector ownership automatically equals subsidy; that we are not the biggest energy supplier to the United States; and that a free trade agreement would benefit only Canada and not the U.S.

All these statements are indeed myths, American myths, and they are hard to eradicate. But at the Embassy in Washington we are doing our best.

Today I want to deal with what I think are some unfortunate myths or misconceptions that Canadians have about the U.S. and about our relationship with the U.S.

"There are no psychiatrists," as Canadian author Robertson

Davies has said, "who minister to whole nations." And Ambassadors are not, in any case, surrogate psychiatrists to a nation's soul.

But as Canadian Ambassador in Washington, l believe that I have a favoured position to observe both American myths and misperceptions about Canada and Canadian myths about our American neighbours. So forgive me for my boldness in seeking to illuminate this territory.

No country, other than the U.S., so attracts our interest, excites our admiration or stirs our anxieties.

The first myth is the intellectual myth that we Canadians understand the United States, but the Americans don't understand Canada. Only the second part of the proposition is true. -.

There is no doubt in my mind that the Americans know less about us than we know about them. The border, as Margaret Atwood has put it, often seems like a one-way mirror. We see the Americans. They see themselves.

When we look at the Americans, we often do so to seek reassurance about our image of ourselves. Regrettably, when they look at us, they think of stereotypes-the 3M's-Mounties and Mountains and Molsons. They cannot fathom what we are driving at, especially when we talk of our national identity and express concerns about our culture and sovereignty.

By the time a Canadian is eighteen years old or so, he or she has absorbed more information about the United States than an American will ever encounter about Canada in his lifetime. Virtually every Canadian visits the United States sometime; in fact, often; some have condos there; millions take vacations in Florida or California; many of us have gone to school in the U.S., or attended any number of conferences, or visited New York for many a lively week-end. All of us have watched a zillion hours of U.S. TV programmes and movies.

So perhaps Canadians can be forgiven for believing that we have some unique insight into the U.S., for believing that knowing and understanding our American cousins, is, so to speak, our national birthright.

Well, maybe the giant stands too close for us to see it in perspective.

We see part, or the part we fear, or the part that appears most obvious, or the part we want to see. But I sometimes question the clarity of our vision and of our understanding. And while information is important, it is not the equivalent of understanding.

Of one thing I am sure. Our comprehension of the significance of American power to the American psyche is incomplete.

Of another thing I am equally sure. Our appreciation of the way the Americans govern themselves is also incomplete. By the time an American is eighteen years old, he or she knows that security is not a political abstraction. Americans know that their role in the world is pivotal, that their country is powerful, not just influential, that, judged by a number of standards, theirs is the most powerful country on earth. Americans know there are Minuteman III missiles in silos in Kansas and elsewhere and Trident submarines concealed beneath the seas. Americans comprehend, if anyone can comprehend, their awesome capacity for destruction. They know that it is their responsibility to control those weapons. They realise that one day, God forbid, it may be their duty to defend themselves and the Alliance by using them.

They may wish it were otherwise but they accept this power and the responsibility of custodianship it entails. No Canadian has ever borne such responsibility. Few Canadians can, therefore, comprehend the impact this has on the American character and on their world outlook.

Not that most Americans welcome the responsibility. And, to their credit, and to our benefit, I believe, they are not comfortable with the idea of empire. Most would prefer to be left alone.

Nor do Canadians fully understand how the Americans govern themselves.

Most Canadians know of Madison's famous Constitutional principle of the separation of powers-checks and balances among the three branches of government-the executive administration branch, the legislative branch and the judiciary. But, after five years of service in Washington, I believe I am entitled to say that few Canadians really understand the significance of those divisions.

Canadians just don't fully grasp that it is the Congress that is responsible for trade and that the powers the Administration does have are largely delegated to it by the Congress. Hence, it is the Congress that is now originating all the trade initiatives and concepts-reciprocity, automatic retaliation, natural-resource subsidies. Most of these are bad ideas.

It is the Congress that is now poised to pass one of the most far-reaching trade bills in history. One that will rewrite U.S. trade law in many fundamental respects, to the detriment of America's trading partners.

Every Canadian businessman should appreciate the role of Congress in trade. Indeed, every Canadian school child should know it and understand it.

Nor have many Canadians registered just how profoundly the American Government system has actually changed in recent years. The Congress has become, in a relatively short time span, a very fractionalised, fragmented body, with decision-making dispersed among dozens and dozens of influential and often competing Committees. Indeed, in many respects, there is no one more powerful in the U.S. system than the Chairman of a sub-committee. If he is skillful enough, and patient enough, he can literally write the law of the land. With the help, of course, of the special interest groups and the lobbies that are so prominent on the Congressional political landscape.

Although there is emerging a discernible American foreign policy towards Canada, it is often obscured and overpowered by an agglomeration of domestic policies that affect Canadian interests. These domestic policies-from trucking deregulation to energy regulation, from banking controls to environmental controls, from interest rates to freight rates-are increasingly driven by the special interest groups.

My point here is that Canadians cannot be comfortable with the idea that somehow we are privileged to understand the American system. When it comes to understanding the intricacies of the U.S. political system, we have to work at it: Ignorance on our part is our most dangerous enemy.

Myth number two is a psychological myth: that Canada somehow cannot compete with the U.S.A. Nothing could be farther from the truth.

The fact is we do compete with the Americans, all the time. Poor little Canada, only one-tenth the size of the U.S.A. In 1986, poor little Canada had a trade surplus with the U.S.A. of 12 billion U.S. dollars. Not the 23 billion of which we are accused but a mere 12. And an over-all surplus of almost three billion U.S. dollars, counting both merchandise trade and services.

Poor little Canada is literally remaking the face of American cities-look at what Olympia and York, and Cadillac Fairview, for example, are doing in New York, Washington and Los Angeles, in Denver, Minneapolis, Houston, and Dallas.

Poor little Canada is investing more equity capital, in absolute terms, in the United States than almost any other country is. And we are also investing more money in the U.S.A. on a per-capita basis than almost anyone but the Americans.

Canadians are running some of America's largest corporations and unions. They are the faces of some of America's largest television organisations.

Let us shed once and for all the ten percent syndrome. Myth number three is an historical, even hysterical, myth: that the United States is secretly hungering to take Canada over.

Perhaps this belief is a hangover from an earlier time when many Canadians believed, or seemed to, that we were sitting on top of the treasures of the world and everyone wanted to grab them.

This myth holds that every American investment in Canada is a 20th-century expression of manifest destiny, that every exercise in bilateral co-operation entails a unilateral sacrifice of Canadian sovereignty, that Canadian negotiators are outsmarted at every turn by the sharp Yankee traders, that the United States is cleverly waiting for a hapless Canada to fall into its lap.

The fact is that most Americans do not even think about Canada, most of the time. Were it not for weather reports, many wouldn't think about us at all.

Indeed, the dominant view of Americans today is shaped by the role the U.S. has played in the world's economic recovery. It sees most of the rest of the world lined up at its door, trying to sell more and more goods into the worlds's largest, richest domestic economy. The Americans believe, to a point of religion, that everyone wants better access to their market. They are absolutely right.

As the great Swedish economist and Nobel laureate Gunnar Myrdahl once observed, "No country is so parochial as a large one:' And the United States is a vast country, a turbulent, pluralistic, competitive, confrontational, litigious society, almost totally absorbed in the near-impossible task of governing itselt. Americans have little time and less inclination to look northward at all, let alone with empire on their minds.

I often think that what most Americans really would like is to be left alone. That's what protectionism is about. That, in the minds of some (not all), is what SrI is about. Many Americans would like to make themselves invulnerable again, not so they can dominate the world but so they can escape it.

Myth number four is a cultural myth: that U.S. culture is so strong, so overpowering that Canadian culture will be extinguished if we have a free-trade deal with the U.S.

It is undeniable that American culture is very powerful, both in artistic and anthropological terms. It poses serious problems for some of our cultural industries-films, and publishing for example. These problems should not be underestimated. These industries face high project costs, short runs, large risks, and competitive foreign products. The Government recognises that it has a responsibility to ensure fairness for them-to provide a level playing field, to use a popular U.S. phrase-and this must be done while respecting our international obligations. This we can and are doing. But the Canadian myth probably ascribes still more power to American culture than it really has. It ignores, for example, the fact that although most of our trade with the US. is already free of tariffs and the U.S. takes eighty percent of our trade, our arts and athletics are experiencing an explosion of excellence. We are standing taller and taller on the world stage and should be both proud of it and confident of ourselves.

We have world class writers in Robertson Davies, Antonine Maillet, Margaret Atwood and Mordecai Richler, to name a prominent few. We have world class talent in music and the performing arts in Jon Vickers, Oscar Peterson, Denyus Arcand, Michael J. Fox, the Stratford Festival Company, and the National Ballet. And we have world class athletes in Ben Johnson, Brian Orser, Wayne Gretzky and Alex Bauman.

Obviously, Canadian talents are thriving on the challenge and competition of the wider world; and no one is suggesting for one moment that we give up the means of helping them develop their talent.

No one is going to bargain away Canadian culture on the negotiating table.

But, in my view, what we need and what we will achieve is ever more excellence. And excellence, more often than not, is forged in competition.

Myth number five is a trade myth: that the US. people and public are deeply committed to free-trade throughout the world, that there is consensus in the U.S. that global free-trade is in the U.S. national interest and that protectionist pressures represent a temporary blip, a mere short-term tendency not derogating from the U.S. desire for global free trade. Would that these perceptions were all true. But they are not.

Protectionism in the U.S. is not a temporary aberration. It is true that the President and Administration are deeply opposed to it. But protectionism is a deep-rooted political response to structural problems in the U.S. economy.

The United States has steadily lost some of its competitive edge. Between 1982 and 1986, the U.S. merchandise trade deficit worsened in nine of ten product groups. Also between 1982 and 1986, the U.S. bilateral trade position worsened against all ten of the U.SA.s major trading partners-in fact, against 19 of its top 20 trading partners. Meanwhile, the proportion of U.S. imports subject to U.S. imposed quantitative restrictions has been growing apace, and is probably in the area of a quarter of its total trade.

Nor does the near future look especially promising. Imports are continuing to outpace exports. Part of the cause is the overvalued dollar, in which the U.S. budget deficit has been a factor. The dollar is coming down. But just as it was not, by itself, the sole, or even principal, cause of the American deficits, so it will not by itself be the solution.

Broadly speaking, the reason for United States trade deficits can be traced to global economic interdependence and the competitiveness and productivity of old and new trading partners. Together, they have had a heavily negative impact on US. trade balances. So the weaknesses in the American economy are not going to go away soon.

Indeed, protectionism has become a patriotic issue-a flag issue. Some Democrats believe the Republicans stole the flag in 1980 and they are going to get it back in '88-through trade. But the issue is really non-partisan-and the political sentiment that the rest of the world is not playing fair is deep, broad and growing.

Comparing the 1983-84 period with the last two years, we find that there have been more trade law cases filed against us in the past two years; more of them have been aimed at Canadian products. The industries affected have become more important for Canada; and the results have been more negative for us. On the legislative front, there has been an increase in the number of bills introduced in Congress targeted specifically on Canadian exports, where previously we were being "sideswiped" by general legislation aimed at other targets. And we are now facing, in the omnibus trade bill, the grand-daddy of them all.

So protectionism is not going to disappear soon. Nor is it going to spare Canadians.

I am convinced that the best, and possibly the only, real bulwark against further restrictions against our exports to the United States is an institutional one. It is only within the structure of a binding overall agreement that we can share in defining the new "rules of the game" and ensure that we have fairness and objectivity in making the decisions that are so vital to our national livelihood and well-being.

We need to make the U.S. respect for laws and courts work for us. We need to persuade the Americans that it is in our common interest to establish a new legal framework that will submit our trading relationship to a system of binding rules and dispute-settlement procedures.

In short, we need to create a system of extra-national trade laws to prevent the politics of protectionism in either country from undoing the integrated market already forged by geography and by economics. We need the legal framework of a bilateral trade agreement to make trade less political and more predictable.

If we can take some of the politics out of trade, we will have both better trade and better politics. We need this on our side of the border, and the Americans need it, too.

This leads me to a final myth, the eclipse myth. It is the flip side of the trade myth. This misconception holds that the United States is in secular decline, that U.S. military power is inherently unusable, that the age of the overwhelming American economic is passing, that the United States is a falling star.

Once again, the facts do not support the perception. Possibly, eventually, demographic trends and arms control agreements will combine to replicate the classical military balances of power of the past. Possibly the world will even be a safer place if that were ever ever to happen.

But it will not happen any time soon. Meanwhile, the United States will continue to control vast numbers of nuclear weapons. And the United States will continue deploy over two million of the best armed, trained and motivated conventional forces, perhaps, ever and no country will surpass the U.S. in military strength. That strength will remain the central factor in international order.

It is true that economic power is now more dispersed, that the star of the Pacific is rising and the United States is not the dominant economic power that it was in the fifties and sixties. It is probably also true that the U.S.A. will never again regain that same degree of ascendancy. But that period was an aberration, produced by World War 11. We should take care, therefore, not to let assessments of the U.SA.s relative economic importance obscure our appreciation of its truly vast absolute economic importance.

In contemplating American economic difficulties, we should bear in mind, that the U.S. economy has performed very strongly in recent years compared to all other industrial economies. In terms of domestic demand, United States' growth has been much stronger-forty-three percent stronger-over the past four years than that of West Germany or Japan. In terms of job creation, the U.S. economy has outperformed by the far the European and Japanese economies combined.

We should also bear in mind that manufacturing productivity has been rising at the rate of 3.6 percent per year since 1981. That is twice the growth rate of the seventies, and a full percentage point higher than the post-war average.

The relative abundance of food and energy resources in the U.S., the size, the diversity, the mobility, the dynamism of the population, the resilient enterprise ethic, the commitment to the freedom and human rights entrenched in the Constitution and the American way of life, will more or less guarantee that the United States economy remains gigantic far into the future. Competition notwithstanding, the U.S. is poised to enter the next century at the forefront or at the sharp edge of technology, particularly biotechnology and artificial intelligence.

The U.S. will remain, as one wag put it, the only full-service superpower for a long, long time to come.

Some falling star!

I end where I began.

I have no recipes to prescribe to address some of the features of our national psyche. But it is evident to me that if we are to a constructive, fruitful relationship with the United States, we should come to grips with our myths. We cannot allow ourselves to be imprisoned by them.

Perhaps we need to create a new mythology, and I believe that Canadians are in the process of doing just that. We are forging a new view, a new vision of ourselves. One that reflects the great progress we have made and are making as a nation. One that embraces the challenges of living peacefully and effectively with the most powerful nation on earth. One that keeps faith with the vision of what we can be.

The appreciation of the meeting was expressed by Peter Hermant, a Past President of The Empire Club of Canada.