Coronavirus shows why Canada must reduce its dependence on the U.S.
Canadians must be willing to think harder about Canada-U.S. relations and an increasingly fractured international order
Canadian foreign policy has long embraced both a deep continental relationship with the United States and a devotion to liberal internationalism. In light of the COVID-19 pandemic, the time has come to re-evaluate our approach.
While Canada has been able to manage the coronavirus crisis so far, our ability to continue to keep the pandemic at bay and successfully rescue the economy will likely be even more difficult.
If the U.S. cannot get a handle on the virus, and if its leadership chooses a protectionist route to economic recovery, Canada’s return to normalcy will be that much harder. That’s especially true if the Canadian government is not able to secure exceptions from Washington’s protectionist measures, as it has recently.
Similarly, if international trade and movement are slow to re-establish themselves, and if protectionism becomes a worldwide response, Canada can expect a cumbersome recovery.
Canada’s dependence on the United States has been mostly benign. Yes, American decisions on softwood lumber and steel/aluminum tariffs, and limitations on other free trade agreements found in the USMCA hurt Canada, but Canada also greatly benefits from its commercial relationships with its neighbour.
But as COVID-19 radicalizes the already radical presidency of Donald Trump, Canada may be forced to confront its dependence on the U.S. more directly and with greater urgency.
Short-lived tensions — including Trump’s unsuccessful attempt to halt exports of masks to Canada and his musings about stationing troops near the border — may be harbingers of longer term restrictions, disagreements or spillover effects that slow or stifle Canada’s attempt to rebound from the current crisis.
Worse, the rise of nationalism and geopolitical competition points to the likelihood of a fragmented international order built around a handful of large protectionist or self-sufficient power blocs. Liberal principles of free trade and movement may come under increasing pressure, leaving Canada particularly vulnerable to the whims of protectionist powers.
The ‘Third Option,’ COVID-19 edition
So, what, if anything, can be done? In 1972, following the shock to the world economy brought about by former U.S. president Richard Nixon’s decision to effectively end the Bretton Woods system of fixed exchange rates, Pierre Trudeau’s government introduced a policy idea called the “Third Option.” It was essentially a call for more self-sufficiency at home and stronger ties with the rest of the world to lessen dependence on the United States.
Though the Third Option dissipated after a few years, the idea behind it never quite died off. COVID-19 renders Third Option thinking not only respectable but also responsible again.
Witness, for example, increasing appeals for a more self-sufficient Canada, and Foreign Minister François-Philippe Champagne’s efforts to co-ordinate Canada’s pandemic response with both “traditional” and “new” international partners.
Whether general or issue-specific, multilateral or “plurilateral,” ties with partners in Africa, Asia, the Americas and Europe are in Canada’s best interest, simply because they constitute a counterweight to the United States. True, some of these ties will always be shallow, others short-lived, and still others both. Yet, some ties might well lead to the establishment of deeper and closer strategic relationship with the rest of the world.
More diverse trading relationships will be essential to ensure Canadian resilience. In light of the recently concluded Comprehensive Economic and Trade Agreement, the European Union, for all its shortcomings and uncertainties, is one good candidate for such a relationship.
No heavy reliance on allies
The principal challenge of the COVID-19-era Third Option, though, is not finding new partners. Rather, it’s Canada’s ability to do things on its own without relying on too heavily allies and partners.
We may see Canada invest in national manufacturing of medical goods as a result, akin to the munitions supply program that ensures the Canadian military has the ammunition it needs.
But the pandemic has also highlighted that Canada’s COVID-19 response has arguably been too reliant on international assessments. Canada will need to strengthen its own ability to assess and craft effective responses to global crises, not only in the area of public health, but finance, security and defence, climate change and migration, among others.
While global problems require global solutions, the pandemic has highlighted that national responses remain vital and should not be overly dependent on allies and international bodies.
Building the capacity to pursue the Third Option will take time, money and, most importantly, a political culture willing to reconsider the fundamentals of Canadian foreign policy. To get there, Canadians must be willing to think harder about Canada-U.S. relations and an increasingly fractured international order.