VANCOUVER, BC-Despite Canadians' stated preference for a
Barack Obama presidency, Prime Minister Stephen Harper will
have his work cut out for him to convince the president-elect
not to pursue polices that will negatively affect Canada,
concludes a new study from independent research organization
the Fraser Institute.
"On all the key economic and bilateral issues between our
two countries, including trade, energy, border management, and
defence, an Obama administration poses a major challenge to
Canada's immediate interests," said Dr. Alexander Moens, author
of Canada and Obama: Canada's Stake in the 2008 US Election and a senior fellow with the Fraser Institute.
"Prime Minister Harper has a very large hurdle ahead of him
in terms of trying to gain Obama's attention, build a
relationship, and advance Canada's interests."
In the new study, Moens, a political science professor at
Simon Fraser University and expert on Canada-U.S. relations,
breaks down the main policy issues of Canadian interest facing
the two North American neighbours, and examines how an Obama
presidency is likely to approach them. His conclusion is not
reassuring for the Canadian economy, which relies heavily on
exports to the U.S.
"There is no indication Obama will change the American
approach to border security, and he has been critical of
Canada's production of what he calls 'dirty oil.' Combined with
Obama's lack of foreign affairs experience, it will be a
challenge for Canada to get on his agenda," Moens said.
Moens points out that Canada did not feature in the Obama
campaign except in the NAFTA flap, when a Canadian memo was
leaked to the press in which an aide to Obama indicated that
Obama was less critical of NAFTA than his campaign rhetoric
For the past several years, Canada and the U.S. have been
moving to integrate markets in the two countries, initially
under the North American Free Trade Agreement (NAFTA) and more
recently through the Security and Prosperity Partnership (SPP).
The ability for transactions to occur freely across the border
has been a key engine of Canadian growth in the past two
decades. In 2007, Canada's trade with the United States
amounted to 67 per cent of its overall trade, or 40 per cent of
GDP. But these gains could disappear if the new U.S.
administration embraces more protectionist policies.
"Given Obama's expressed hesitation for free trade
agreements and his promises to seek more labour and
environmental conditions in agreements such as NAFTA, Canada
will likely face more than security demands from the new
administration in bilateral negotiations on deepening trade,"
"But Obama is a highly intelligent person, and a master
politician. If Harper can persuade him that the United States
will benefit from good relations with Canada, he may adjust his
The other key issue facing Canada is the likelihood of Obama
bringing forward a carbon cap-and-trade system. Canada is
particularly sensitive to arbitrary caps on carbon set in
Washington which would most likely lead to American industry
demanding import tariffs or levies on Canadian energy products
and manufactured goods. Because carbon policies lead to trade
distortions, Canada can only minimize its losses if it joins an
American cap and trade system. Any difference between the two
markets on these regulations will likely hurt the Canadian
Moens concludes that because of the challenge of getting
Canada on Barack Obama's agenda and getting Canadian interests
acknowledged, Prime Minister Stephen Harper needs to meet early
with the new president and exert maximum effort to build a
personal relationship of trust and respect.
And he suggests the Prime Minister concentrate on three main
1. Renew efforts to open bilateral, rather than
trilateral (with Mexico), discussions on trade and border
issues. Canadian steps toward more border staffing and deeper
cooperation on homeland security as well as joint projects on
accelerated infrastructure (bridges and roads) could be a
2. Reconsider the decision to withdraw Canadian Forces
from combat operations in Afghanistan in 2011. This issue
should be put on the bilateral table to find a common strategy
with the Obama administration on how to achieve long-term
security and stability in Afghanistan using both military and
3. If the new Administration and Congress launch a
cap-and-trade system on carbon emissions, Canada should lobby
for a single Canadian-American approach, rather than separate
Canadian and American policies. Such an accord must give
special protection for the oil sands industry to give it time
to move towards more steam-assisted gravity drainage, the use
of nuclear power to generate steam, and carbon
Despite Obama's popularity among Canadians, Moens points out
that the Canadian public remains leery of working closely with
the United States and it remains to be seen if public opinion
will change under an Obama administration.
"Canadians are almost evenly split on the operations in
Afghanistan and they showed little support for the SPP
initiative to deepen trade relations. Any Canadian government
will face a tough challenge explaining why it is in Canada's
national interest to move towards closer trade integration and
border efficiency, as well as to bring the integrated energy
markets even closer," he said.
Watch the Video