The Vancouver Scrum

What the hell is it with the business lobby these days? I'm starting to think that they've become Canada's biggest war cheerleaders. Yesterday, the Ontario finance minister railed against the Canadian position in Iraq at one of those chamber of commerce luncheons, and it earned her a standing ovation. Is every business type in this country a super-hawk? No, not likely; I think that they've bought into the idea that unless Canada goes along with the United States in Iraq, trade with the 'States will fall to hell. "Security trumps the economy" and all that chatter...

Rubbish. Let's pick apart the common ‘economic’ arguments for obeying America’s every beck and call. It'll be fun, really!

Favourite Theory Number One is that trade between Canada and the U.S. will be slowed by heightened security on the American side. Sounds reasonable, but even if Canada went along with the United States and supported the war, the border would still tighten up once the shooting started. Wait a second, though. During the first Gulf War, when Canada was part of that coalition against Saddam, cross-border commerce got snagged due to tightened security. There's no evidence out there that the Americans would be any less vigilant about Canadian border security this time out – or that they're more vigilant than they were 12 years ago.

The economic fear monger’s other pet argument is that the United States will slap penalties on Canadian goods to retaliate against our international impudence. They point to the continued softwood lumber dispute, recent duties on Canadian wheat, and the decision to slap tariffs on European and Asian steel imports, and swear up and down that Canadians will face more of this unless we yell "Ready, aye, ready!" and join in the war effort.

I hate to be the one to burst their balloons, but none of those trade disputes has word one to do with Canada's or Europe's geopolitical stances. The softwood (oh, to use the French term bois d'oeuvre instead!) dispute has been years in the making. Any time that Canadian wood takes more than around 30% of the American market, American producers get their K Street crew to convince lawmakers to slap on a duty because Canadian lumber is supposedly subsidized -- despite three past GATT and WTO rulings to the contrary. Canada’s participation in the campaign in Afghanistan won it no favours on softwood. Why should support for the war in Iraq improve our position?

The same goes for steel and wheat. In every case, the American government’s decision to levy countervailing duties was to protect American businesses from foreign imports. It doesn’t jibe with the free-trade rhetoric of man a politician, but protectionism can win you votes in ways that open competition doesn’t. Your average voter in the Rust Belt, agriculture, or the timber industry cares about his job, not free-market ideals.

American businesses don’t trade with Canadians out of charity; they do it because there are deals to be had, whether it’s a market to sell to or producers to buy from. A handful of companies have refused to do sell to Canadians, the French, Germans, and Mexicans as a PR stunt and political statement. Those businesses do most of their trade at home, and they’ve gambled that the extra business that they get by appealing to a certain sort of patriotism makes up for any lost sales abroad. Companies that do a lot of trade with Canada will continue to do so, and any boycotts that make no economic sense won’t last long.

“But wait!” holler the business hawks. “Canada won’t get a fair hearing in Washington after how we’ve abandoned out allies!” To them I ask: Did Canada get shuffled to the back of the line over its decision to stay out of ‘Nam? No. Neither did they lose out when Canada opened relationships with China before the Americans. Only minor repercussions stemmed from Canada’s decision to trade with Cuba, and they’ve been tiny compared to the billion dollars a day in trade between Canada and the U.S.

The Canada-U.S. trade relationship is what it is because of geography and economics – and not for any other reason. Surely the war supporters on this side of the border understand this, even if they would like the masses to believe otherwise.

(Then again, if the American government agreed to take on about half of Canada's national debt, I'd probably change my tune on Canada's role in the war. That kind of relief would free up $19.6-billion in the federal budget, some of which could be spent on defence to shut Paul Cellucci up. What can I say? Everyone has his price.)