Familiarity Breeds Respect?

It seems as though one cannot watch a stretch of television (at least in North America) without catching a commercial for some online dating / matchmaking service – and no, I am not speaking of the late night spots where some attractive young lady wants to gossip with you for $5 a minute. The commercials I’m talking about target people who profess to having trouble meeting that special someone who could be ‘the one.’

Whether or not it’s a scholarly grandfather figure, a man doing interviews on the street, or a winsome figure telling the camera that they are seeking a soulmate, the inference is the same – compatibility is what counts. With the divorce rate in most developed countries approaching 50 percent, who can dispute the appeal to such logic?

And yet…

I bring this up not because I am an expert at dating advice or marriage. I have been married for the better part of twenty years and have managed to stay out of jeopardy – which may owe more to my wife’s patience and my dumb luck than anything else. I mention it because the arguments that seem so basic and intuitive to determine who our partners in life should be do not seem to translate elsewhere.

I’m talking trade, of course.

When countries seek out trade agreements, they often remind me of people who cruise bars for a hook-up. You may find that a bit unfair, but is it?

A leader talks about doing a deal with Country X. Okay, so why? Well, they have tens of millions of consumers and billions of dollars of GDP. But isn’t that the equivalent of saying you want to hook up with someone because of their looks and the contents of their bank account? Furthermore, what if you don’t like the same music, or books or films? What if you don’t like the same food, or you can’t agree on whether or not to have children? How long can a relationship last when the best thing you can say about it is “they look great naked and their father’s filthy rich”?

Population and GDP get you noticed. Population and GDP are, to borrow the phrase from the Kelis song, the “milkshake that brings all the boys to the yard.”  But if population and GDP were enough, then why isn’t trade working better? Why are people angry? Why do they protest against the TPP? Why did Britons vote to leave the EU?

Because there is a difference between quantity and quality.

Take, for example, the United States. Its two largest trading relationships are with China and Canada. If you are the superficial type, you look at both and say “China’s got a billion people and Canada has only 35 million. To hell with the Canucks – I’m heading to Beijing with a bottle of bubbly, some flowers and a Barry White CD!”

That is a strategy, but before you uncork the Reunite on ice (very nice) and place that red gauze scarf over the lamp in order to get some mood lighting, consider the following:

According to the Office of the US Trade Representative, the total amount of two way trade between the US and China in 2015 was $599.32 billion while the amount with Canada was only $576.76 billion. China is still more impressive by this measure, but look a little further.

The United States runs a trade deficit with both countries. With Canada, the trade deficit is $15.55 billion. With China, however, the deficit is $367.17 billion.

In layman’s terms, for every dollar of trade the US does with Canada, it’s losing about 3 cents. For every dollar of trade the US does with China, it’s losing 61 cents.   But hey – a billion people…

Okay, so you say ‘that’s not fair – you’re comparing apples to mandarin oranges’. Fine, then let’s look at another country with a billion people and a comparable low wage workforce. Two way trade between the US and India over the same period was US$66.24 billion, and the deficit was $23.34 billion. But that means that for every dollar of trade, the US loses 35 cents – almost half the loss as the trade with the PRC.

Let’s look at the US with Britain. Two way trade in 2015 was US$114.08 billion. Deficit was US$1.85 billion. That’s a loss of a little under 2 cents on the dollar.

But they’re in the European Union (for now), right. Okay, so let’s take another equally large EU country, say Germany, and look at the numbers. Two way trade was US$174.8 billion, deficit was US$74.85, totaling a loss of 42 cents on the dollar.

But, but but…Germany is an industrial powerhouse. That’s not fair! How about…France? Yeah, France! Okay – two way trade was US$77.92 billion, deficit was US$17.71 billion, for a loss of 22 cents on the dollar.

Seriously, folks – I can go all night here….What? Just one more? Well, okay – since you asked nice.

Italy. Two way trade was US$60.36 billion, deficit was US$27.95 billion, for a loss of 46 cents on the dollar.

Quality over quantity, folks. Quality over quantity.

Understand that many free trade deals are about the volumes – the two way trade. When it gets big, certain people make money. They are usually the ones on your TV and in the financial papers who are telling you that life has never been better. Of course, if your pay packet is largely a commission on transactions, how could it not be better? A couple of late night’s in the corner office, and then some quality time with the secret…oops, I mean, wife…as you broil you buns on the beaches of Ibiza.

Surplus, deficit - it doesn't matter. You get paid regardless of the direction the money flows.

Problem is that the overwhelming majority of people don't. They only get paid when the money is coming in. You may not have noticed, but they are the ones who made Bernie Sanders and Donald Trump's candidacies the topic of much kvetching on the news channels. They are the ones who made Brexit a reality. They are the ones who question the value of free trade altogether.

This is unfortunate, and admittedly short sighted. Just because the store managers pay themselves a fortune, or a few people dip their hands in the till doesn’t mean that the business model is flawed. It means there is a greed and graft problem.

It’s interesting to note that long before Canada and the US ratified their free trade deal in 1988, there were other trade deals between the two – dating back as far as the 1850’s and right up to Sir Wilfrid Laurier’s ill-fated attempt in 1911. Funny enough, none of them were called ‘free trade’ treaties. They were called ‘reciprocity’ treaties.

The Merriam-Webster Dictionary defines ‘reciprocity’ as follows: "a situation or relationship in which two people or groups agree to do something similar for each other, to allow each other to have the same rights, etc."  Of all the cases of two way trade with the US I've listed, the ones that approach what one would consider to be 'reciprocity' all have something in common. They are fellow Anglosphere jurisdictions.

To be clear, speaking English helps, but in a world with Google Translate and Rosetta Stone CD's, it should not be overstated. After all, in nearly 100 percent of divorce cases, both the respondent and the plaintiff can understand the words each are speaking.

Like in a more intimate relationship, it is about the intent behind the words, and not the syntax itself. It's not what is said, but what is meant.

The Anglosphere means a certain type of law, a certain type of government, and a certain type of relationship between individuals and civil authority. It makes a difference - even when geography and ethnicity vary. The common reference points that define what is right and what is fair have a tangible effect. 

Just look at Canada’s trade with the European Union. According to Statistics Canada, our total exports to the EU in 2015 were C$39.47 billion, but of that fully C$16.60 billion were destined specifically for Britain. That means that Britain took 42 percent of our products while the other 27 countries combined to take the other 58 percent. Of course, among the others you find Ireland and Malta, who took C$1.55 billion of our products in the same time period. That means that the 3 Anglosphere members among the 28 nation bloc accounted for C$18.15 billion, or 46 percent of the total of Canada’s exports to the EU.

In the decade that I have been advocating Commonwealth free trade, I have had people tell me that I was wrong - and sometimes in not the politest way either. That may account for some portion of my current sarcastic tone. Back then, it was 'Britain would never contemplate leaving the EU', followed by 'Well, even if they left, nobody would have anything to do with them.'

A little over two weeks - fourteen days, including weekends - since Brexit, we have the US and a dozen other countries clamoring for bilateral deals with the UK. We have not only offers of trade from Australia and New Zealand, but offers to 'lend' Britain their trade negotiators to work on the UK's behalf. As I write this, my country's International Trade Minister is in London, briefing Liam Fox on how Canada cut our own deal with the EU!

We also learn that as President Obama was giving his famous 'back of the queue' speech, his trade representative was working on a proposal for a US-UK treaty.

Our crowd has not been proven right because we possess some extraordinary intellect or power to define the future. We got it right because we know that in international affairs, as in our personal lives, compatibility still counts for something.

Some people may think 'familiarity breeds contempt.' In this case, however, maybe familiarity breeds respect.

Some thoughts on Brexit

It has been a little over ten years since I made a trip to London. Early May, and very warm.

A few months before that, I had published my book ‘The Case for Commonwealth Free Trade’. In the days and weeks that followed, I had made the acquaintance of a good number of people – many of which I am still proud to count as valued colleagues and friends.

During that trip I met with a great number of individuals involved in government and business who told me that they liked the book and it’s general direction (although some felt that the idea of a Free Trade bloc encompassing the entire Commonwealth was far too ambitious).

Almost to a person, they told me that it was a great idea and that Canada should partner with Australia and New Zealand, and possibly a couple of other member states. They also said that it was a shame that they could never contemplate any involvement in such a venture. They explained that membership in the EU precluded them from ever contemplating signing on, but that they wished us every success.

During a few candid moments in private, I asked whether or not they saw a day when this might change.

Almost all of them, regardless of party stripe, remarked that they didn’t see this as a possibility, although they would certainly back a change.

For years, I had the sense that the sentiments in Britain were akin to what you would see at a grade school dance. Boys lined up along one wall, with girls along the other. A slow dance is playing, but the only thing dancing are the lights reflecting from the mirrored ball.

Possessing perfect knowledge and some degree of mind reading, you determine that there are at least a half-dozen cases where a boy would not be refused a dance by the girl he likes and vice versa. A dispassionate and neutral observer might see the attractions, but they don’t. What they see is the prospect of humiliation and disappointment. Given the notorious degree of self-consciousness among adolescents, those involved sit through ‘Stairway to Heaven’, moving either to the washroom or the refreshment table, not to the opposite wall.

Almost every Briton I spoke to was unhappy with the European Union. Yes, they wanted to trade freely with the continent, but the whole incremental move toward a United States of Europe was an entirely different matter.

The thing is that in the spring of 2006, the call to have a referendum was a decidedly minority view, and the push to quit the EU even more exclusive.

Today, ten years and about five weeks later, not only is there a vote on the issue, it will be decided in less than a week and if polling is to be believed, that departure is a real possibility. In short, a significant portion of the British electorate has summoned the courage to cross the dance floor and seize the moment.

What changed?

A lot of people will have their own views on what represented a pivot moment, and many theories are equally valid. Having said that, I have my own.

In October of 2008, while celebrating our 9^th wedding anniversary, I lay in a hotel suite in a Cuban resort. The television was turned to CNN and the camera was panned to a group of Congressmen and Senators in Washington. At the same time, to the side of the image, one could see the Dow Jones and NASDAQ dropping like a two ton boulder off a sheer cliff face.

Like a great deal of the world, we were shocked and nervous, although the abundance of rum and sun were effective distractions.

The biggest crisis to the global economy dictated a concerted response, and the world through everything it had at the situation. Interest rates at near zero, deficit spending and ‘quantitative easing’ on a historic scale.

The good news is that it worked, but even the most effective medicine has some nasty side-effects. When using chemotherapy, doctors can kill cancer cells (which is good), but the tradeoff is to knock your immune system down to nearly nothing.

In fixing the global economy, governments and authorities did something else. They exposed their weaknesses. Like the proverbial receding tide at a nudist beach, modesties and shortcomings were revealed.

The Eurozone had always had its inconsistencies and contradictions. Harmonizing currencies among still sovereign states with greatly differing economies and economic policies was going to be a difficult task at the best of times. The difficulty lie in the fact that abandoning a significant symbol of nationhood – a currency – meant rolling back the cause of an ‘ever closer union’. That’s what it’s been all about – a European Parliament, European Courts, European laws, and yes – European money.

The Euro was not so much a deception, but a delusion – that you could harmonize the currency before you harmonized the forces that controlled and regulated it. But delusions are as stubbornly held as deceptions, and are defended just as vigorously. The defense is also similar in its pathology – defend a deception by laying down another one to cover it. If that doesn’t work, then add another.

The problem is that a delusion, no matter how stubbornly held it is, is just that – a delusion.

The delusions in this case led to drastic economic measures, and it is in the effects of those drastic measures that everyday citizens felt the pain – higher unemployment, bank failures and credit constrictions.

Had 2008 not happened, I doubt that Britons would be presented with the referendum. There would certainly have been calls for one, but they would have been dismissed by the powers-that-be as a ‘fringe’ opinion.

Delusions have a short shelf life, and even with that, require a great deal of energy to sustain. For those fighting to create a ‘United States of Europe’, the delusions have been plentiful, and the effort to keep them up equally demanding.

The delusions that you could ignore national and cultural identities and histories, that you could introduce a single currency without fully merging economic and political power, that you could create political institutions without giving them democratic legitimacy are all significant, but they pale in comparison to the one that – for Britain – started it all.

It is the delusion that you must give up your flag, your Head of State, your currency, your laws and your system of government in order to sell 10 percent more widgets.

This coming Wednesday, the world will learn if the delusion holds, or if it collapses under the weight of its own inherent inconsistencies.

Canada Needs a ‘Commonwealth Minister’

A few years ago, the government was taken to task over the appointment of Ted Menzies as a Parliamentary Secretary to then Cabinet Minister Josee Verner. The criticism had nothing to do with Mr. Menzies’ per se, but was made because his role made him a ‘back up’ to a Minister whose portfolio included the job of ‘Minister of State for la Francophonie’. For some, the idea of an Alberta Anglophone answering on behalf of the Francophonie Minister seemed inappropriate.

The one thing that the critics could not ask, however, was how many of us would feel if a Quebec francophone had been named as the Parliamentary Secretary to the Minister of State for the Commonwealth. For that to happen, the federal government would first need to name a Commonwealth Minister – something that no Prime Minister has done in the more than two decades since the Francophonie portfolio came into being.

Canada’s support for the Francophonie has been significant and substantial. With the election of Michaelle Jean as its Secretary-General, that support has only increased in stature. Having a member of Cabinet whose job, in part, is to focus on Francophonie issues sends the signal that Canada considers the organization, and the community of nations it represents, as a priority. I would be the last person to argue with that view.

On the other hand, we are also prominent members of the Commonwealth – an organization that encompasses significantly more jurisdictions and a higher portion of the world’s population than la Francophonie. Outside of the United States and France, all of the most important military and economic allies Canada has are Commonwealth jurisdictions. Based on population, GDP, and the distribution of regional and global power, the Commonwealth is a far larger presence on the world stage.

The Commonwealth comprises 54 jurisdictions that hold one-third of the world’s population. Together, they account for 13 of the world’s fastest growing economies and almost a quarter of the world’s economic output. It includes every continent and region, as well as India, which is emerging as a global economic power in its own right. With Britain, Australia and New Zealand, it also includes the nations outside of the US who are our closest allies.

It all begs the obvious question - if the Francophonie merits a seat at the Cabinet table, why is the Commonwealth not even present in the room?

In fairness to the present government, the appointment of then-Senator Hugh Segal as a ‘Special Envoy to the Commonwealth’ was the most attention any Canadian government had afforded the organization since the appointment of Arnold Smith as its Secretary-General fifty years ago.

I would also acknowledge that the Commonwealth has its share of challenges, from the effectiveness of the Secretariat to the governance issues and human rights concerns within member jurisdictions. The problem with using this as an excuse for non-engagement is the fact that the same complaints could be made about la Francophonie. In many cases, it fares no better. 

Canadian objections to the Commonwealth of late were primarily due to human rights concerns in Sri Lanka. This issue appeared to be the impetus for the withdrawal of Canadian support for the Commonwealth Secretariat. If one considers this action to be principled and legitimate, then one would need to ask why the current situation in Egypt has not brought about a similar reaction toward the Francophonie? In the former case, we downgraded our support while in the latter we have maintained our commitment and lobbied to have a former Governor-General lead the organization.

Canada’s neglect of the Commonwealth has been long standing, and the remedy will not be found in a quick fix. It could, however, turn the corner with a simple act – the naming of a Minister of State for the Commonwealth.

The advantages of such an appointment are numerous. They would act as a reference point in dealings with the Secretariat, yet be able to work with officials and organizations in member states directly. They would also demonstrate to Canadians and to the rest of the Commonwealth that this nation does value our relationships. At a time when nearly fifty percent of immigrants to Canada come from Commonwealth jurisdictions, this importance cannot be overstated.

It would be naïve to presume that the Commonwealth could not benefit from reform, but Canada’s disengagement will do nothing to remedy the situation. Indeed, by applying a different standard to our involvement in la Francophonie, we create a perception that our stance on issues of principle are purely situational.

The logic behind Canada’s support for la Francophonie is understandable. The lack of equal regard for the Commonwealth is not. Naming a Commonwealth Minister would be a tangible step in the right direction.