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INTRODUCTION From May 15 – 18, 2009, members of the Canadian and American sections of the Canada-United States Inter-Parliamentary Group (IPG) met in La Malbaie, Quebec for the IPG’s 50th Annual Meeting. The U.S. was represented by six Senators and four members of the House of Representatives, while the Canadian delegation included eight Senators and fourteen members of the House of Commons (see Appendix B). Established in 1959, the aims of the IPG are to find points of convergence in respective national policies, initiate dialogue on points of divergence, encourage exchanges of information, and promote better understanding between American and Canadian legislators on issues of shared concern. A principal means by which the aims of the IPG are achieved is the annual meeting, which alternates between Canada and the United States and is attended by delegates from the Canadian Parliament and the U.S. Congress. During the meeting, in both plenary and committee sessions, delegates seek to identify shared values and find possible solutions to a variety of bilateral and multilateral matters of concern to both countries. At the 50th Annual Meeting, in addition to opening and closing plenary sessions, delegates participated in one or more of three committee sessions: Committee I: Bilateral Cooperation on North American Economic Security Issues Committee II: Bilateral Cooperation on International Security Issues Committee III: Bilateral Cooperation on Energy and Environmental Issues. As indicated in Appendix A, the 50th Annual Meeting concluded with the adoption of ten resolutions that will, in part, guide the activities and priorities of the Canadian Section of the IPG over the coming year, and beyond if required. The 51st Annual Meeting of the IPG will be held in the United States. It is anticipated that delegates will continue with their efforts to find solutions to bilateral and multilateral issues of shared concern. OPENING PLENARY The opening plenary session of the annual meeting started with each delegate identifying himself/herself and indicating his/her particular areas of interest. Progress made in respect of the thirteen resolutions adopted at the 49th Annual Meeting were then highlighted. In particular, delegates were told that: North American Energy Framework: Following the first meeting between President Obama and Prime Minister Harper in February 2009, the leaders announced a Clean Energy Dialogue through which Canadian and American officials will discuss cooperative efforts to develop clean energy sources with the aim of reducing greenhouse gas emissions. In 2008, the U.S. Congress examined proposals aimed at lowering energy prices, though no major legislation was passed; the issue will likely be addressed in 2009. Also, in the United States, the American Recovery and Reinvestment Act of 2009 included US $37.5 billion for new energy technology and infrastructure. Canada continues to lobby U.S. legislators with a view to conveying that the Canadian oil extracted from the oil sands is not “dirty oil.” Climate Change: The three main goals of the Clean Energy Dialogue announced in February 2009 are: strengthening joint research to fight climate change; attaining broad reductions in greenhouse gas emissions; and supporting a two-nation electricity grid that will increase efficiency and lead to reductions in use. Moreover, in June 2008, the U.S. Senate debated legislation that would have established a cap-and-trade system for carbon emissions and other measures to reduce greenhouse gas emissions; though this legislation did not advance, major action to address climate change is expected in the U.S. Senate and House of Representatives in 2009. Cooperation in the Arctic Region: In May 2008, representatives from both countries attended the Arctic Ocean Conference. The five Arctic circumpolar nations, including the United States and Canada, signed the Ilulissat Declaration. While discussions about respective Canadian and American interests in the Arctic region – including in respect of deep seabed exploration and the Northwest Passage – continue, a shared strategy has not been developed. For Canada, an important avenue of multilateral cooperation is the Arctic Council. Great Lakes Water Resources: The American Recovery and Reinvestment Act of 2009 includes US $4 billion for the Clean Water Revolving Fund as well as $200 million for the U.S. Army Corps of Engineers for water-related environmental infrastructure projects. The review of the Great Lakes Water Quality Agreement called for renewal of, and revisions to, the bilateral Agreement; in Canada, a multi-departmental process to discuss the nature of the Agreement and how other levels of government and Great Lakes stakeholders can be engaged has been initiated. Trade: Recognizing the interrelated nature of the American and Canadian economies, the U.S. Congress has acted to ensure that the provisions of the American Recovery and Reinvestment Act of 2009 concerning government procurement of goods are consistent with U.S. commitments under trade agreements it has signed. Canada continues to support free trade, and recently introduced legislation that would implement bilateral trade agreements reached with Peru and Colombia furthermore legislation to implement a free trade agreement between Canada and the European Free Trade Association has received Royal Assent. The governments of Canada and the United States continue to work through disagreements, including bilateral trade in softwood lumber. Finally, Canada continues to advocate a shared management approach to our common border and is stressing that the Canada-U.S. and Mexico-U.S. borders are different; have different problems, and require different solutions. Intellectual Property Rights: In June 2008, Bill C-61 was introduced in the Canadian House of Commons; though it died on the Order Paper, timely introduction of amendments to the Copyright Act is expected. Canada and the U.S. are participating in international negotiations in respect of an Anti-Counterfeiting Trade Agreement. Consumer Product Safety: In the U.S., the Consumer Product Safety Improvement Act of 2008 includes efforts by manufacturers and regulators to reach agreements on safety standards. In February 2009, the U.S. Department of Agriculture announced that it would be revising its enforcement of country-of-origin labelling regulations to reference the original intent of the legislation passed by Congress, which involves differentiating, through labelling, between U.S.- and foreign-produced food. Capital Markets: The October 2008 Emergency Economic Stabilization Act authorized the U.S. Treasury Department to implement the $700-billion Troubled Asset Relief Program. During their February 2009 meeting, President Obama and Prime Minister Harper announced that the countries would actively work together in order to ensure that the April 2009 G-20 Summit contributes to restoring confidence in financial markets. The U.S. Administration and the U.S. Congress have indicated that they will pursue reform of the nation’s financial and banking regulatory structure. In light of global economic turmoil, Canada is cooperating – with a variety of other countries (including the U.S.), through the G‑7, the G-20 and in other fora – in the development of solutions to the current financial crisis. Finally, the International Monetary Fund has recognized the safety and soundness of Canada’s financial system. Afghanistan: In February 2009, President Obama announced that the U.S. would send an additional 17,000 troops to Afghanistan, with the possibility of more troops following a review of U.S. policy in respect of that country. Canada has 2,500 troops committed to Afghanistan until 2011, consistent with the Parliamentary resolution, adopted by Parliament and Prime Minister Harper has indicated that economic assistance will be increased. Furthermore, in June 2008, Canada announced six strategic priorities and three signature projects, with a greater emphasis on reconstruction, development and training of Afghan security forces; it was also indicated that the ten-year development commitment to the country would be increased to $1.9 billion. In September 2008, the Canadian government issued a series of benchmarks and progress indicators to measure progress on its six strategic priorities, and a Cabinet Committee on Afghanistan has been issuing quarterly reports on them. North Atlantic Treaty Organization members remain reluctant to commit a significant number of additional combat troops to Afghanistan, but several member states have indicated that they may be willing to deploy more civilians to train local security forces and build Afghanistan’s economy. Western Hemisphere Travel Initiative: On June 1, 2009, the U.S. government will implement the land and sea aspects of the Western Hemisphere Travel Initiative. While Canada supports the enhanced security that measures such as the Initiative bring about, some would like the implementation of the land and sea aspects to be delayed until after the 2010 Winter Olympic Games in Vancouver, British Columbia. In January 2009, the Passport Card Travel Enhancement Act was introduced in the U.S. Senate; if passed, the legislation would allow U.S. travellers to use passport cards for air travel between Canada and the United States. Detroit-Windsor Crossings: In January 2009, the U.S. government issued the final environmental clearance for the joint Detroit River International Crossing; the next step in the U.S. is the right-of-way acquisition. Construction of the bridge could be completed in 2013. Work has taken place on both sides of the common border to address access routes and environmental issues. Tobacco Smuggling: Law enforcement agencies in Canada and the United States continue to cooperate in efforts to disrupt cross-border tobacco smuggling. The U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives anticipates increased funding in 2009 to target tobacco smuggling in the U.S.. Airflight Security in the Pacific Northwest: Security officials responsible for the 2010 Winter Olympic Games in Vancouver have announced that flight restrictions will be in place during the Games. Exact details about the restrictions as well as the extent of bilateral cooperation between aviation security officials however, remain unclear. Agencies on both sides of the common border have been working on a coordinated policy regarding airflight security. Delegates then briefly commented on the following issues in advance of the concurrent committee sessions: · intellectual property rights, including the ways in which Canadian legislation might be improved; · the common border and the need for adequate infrastructure at the shared border, including at the Detroit-Windsor crossing and the Bluewater Bridge; · energy, including carbon capture and storage as well as liquefied natural gas in Maine; · the current economic and financial crisis, including the impact of the recession on particular sectors; · protectionism, including its harmful effects on economic recovery; · bilateral trade in softwood lumber, including recent trade actions; · agricultural issues, including country-of-origin labelling; · climate change, including the December 2009 conference in Copenhagen; · shared management of water resources, including the Great Lakes; · troops in Afghanistan; and · nuclear non-proliferation, including the need to strengthen the signed treaty. COMMITTEE I: NORTH AMERICAN ECONOMIC SECURITY ISSUES INTELLECTUAL PROPERTY Background Intellectual property rights have been described by the United States as the most important economic issue in its relations with Canada. In that context, the U.S. continues to believe that Canada should make improvements in two areas: the border enforcement regime for intellectual property rights; and copyright legislation in order to implement and ratify the World Intellectual Property Organization Internet treaties signed by Canada in 1997. Each April, the U.S. government releases the United States Trade Representative Special 301 report, which indicates the countries that are perceived to be lacking in their intellectual property protection and enforcement. This year, Canada has been elevated to the Priority Watch List, which is the middle of three levels. Canada believes that the issue of protection and enforcement of intellectual property rights is being taken seriously, and remains committed to working with partners to address counterfeiting and piracy at the international level, including through the G-8, Anti-Counterfeiting Trade Agreement negotiations, Asia-Pacific Economic Cooperation forum, World Trade Organization (WTO), World Intellectual Property Organization (WIPO), and the Security and Prosperity Partnership. Moreover, Canada thinks that its existing regime for the protection and enforcement of intellectual property rights is consistent with international obligations under the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), the North American Free Trade Agreement and a number of conventions under the WIPO. Finally, the November 2008 and January 2009 Speeches from the Throne indicated the Canadian government’s intention to modernize the nation’s regime for the protection and enforcement of intellectual property rights. Though Bill C‑59 (unauthorized recording of motion pictures) became law, Bill C-61 – which would have amended the Copyright Act – died on the Order Paper when the federal election was called in September 2008. Discussion An American delegate started the discussion by noting that Canada has an interest in amending intellectual property legislation for its own protection, and urged expedited passage of appropriate copyright amendments in Canada. A colleague noted that Canada is on the United States Trade Representative’s Priority Watch List as a result of inadequate protection of intellectual property; while Canada had been on the Watch List for 14 years, this year the nation was elevated to the middle of three levels. He expressed disappointment that Bill C‑61 failed to complete the legislative process, and supported the early introduction of needed amendments. He and his colleague advocated giving Canadian border agents the authority to seize pirated goods and to enforce intellectual property rights at the common border. A different Canadian delegate shared his view that strong protection of intellectual property is of joint benefit, and told participants that Canada is already quite aggressive in seizing pirated goods. While suggesting that copyright amendments could be introduced in fall 2009, he characterized the issue as complicated, with a great many different points of view among stakeholders; in his opinion, any legislative proposal is unlikely to enjoy 100% support. Nevertheless, he supported an expedited legislative review process, possibly by a special parliamentary committee, and urged all-party agreement in the Canadian Parliament. He also suggested that internet piracy should be addressed through a focus on internet providers. On the issue of enforcement, a colleague noted that adequate resources must be provided in order to undertake this activity. Other Canadian delegates suggested that “all-party support” could be “dangerous,” though there may be agreement in principle. Delegates adopted a resolution on this issue (see Appendix A). BORDER FACILITATION Background Given the integrated economic and personal relationships between Canada and the U.S., Canada believes that an efficient and secure common border is imperative. Many Canadian stakeholders, with an interest in the shared border continue to have concerns about unilateral security-related measures, as well as fees and regulations, implemented by the U.S. In some cases, these measures lead to higher costs associated with crossing the border. A variety of programs exist to facilitate the movement of goods and people across the common border; some initiatives exist in only one country, while others are shared. Moreover, senior officials in a number of Canadian federal departments meet regularly with their U.S. counterparts to seek ways in which a secure and efficient shared border can be managed. During their February 2009 visit, President Obama and Prime Minister Harper instructed senior officials to renew a dialogue on border management. Canada supports the U.S. in its focus on the security of the border but continues to believe that a risk-based approach to managing the shared border, along with constructive discussion about both border security and border facilitation concerns, must occur. Trade facilitation and security at the common border must be balanced as both countries pursue North American prosperity and global competitiveness. Discussion Canadian delegates began the discussion, with the first participant advocating a border czar with a structure similar to the International Joint Commission. He spoke about the benefits of trusted traveller programs, such as NEXUS and Free and Secure Trade (FAST), and noted that the Western Hemisphere Travel Initiative has had severe, negative impacts on cross-border tourism. He also argued that our countries are not doing a particularly good job of measuring best practices, and suggested the establishment of a central clearing house or coordination mechanism rather than continuing to operate in “silos.” This notion was supported by another Canadian delegate, who identified a need to “pull silos together” in order to get a full perspective on what is happening at the border. This assessment would include a study of existing fees and regulations. A colleague continued by telling participants that, from the Canadian perspective, U.S. actions have thickened the border. He asked delegates to consider the lost productivity associated with something as seemingly insignificant as an additional delay of 15 seconds per truck crossing the shared border, which adds up over time. In his view, our countries generally work well together, and should do so in the context of the shared border. He indicated that security is important, but argued that he sees no reason to add requirements that do nothing more than slow down our economies. Another Canadian delegate, who reminded participants about the successful bilateral efforts that occurred in the context of the December 2001 Smart Border Action Plan, noted that the Canada Border Services Agency and U.S. Customs and Border Protection are starting to better collaborate, and advocated a bilateral task force headed by the Canadian Minister of Public Security and the U.S. Secretary of Homeland Security. He also indicated that there needs to be a deeper understanding of the differences between the Canada-U.S. and Mexico-U.S. borders, since each has unique characteristics. Finally, in his view, bilateral trade and tourism have been affected by various initiatives without evidence that security has increased; he advocated an immediate, bilateral study of the impact of the common border on trade and tourism. In the view of still another Canadian participant, there is no threat to the United States that is not also a threat to Canada. In supporting the principle of North American perimeter security, he supported bringing each country’s security apparatus together as well as developing a common set of objectives on security and immigration with the aim of a smarter border that flows better. An American participant mentioned difficulties in getting visas, and identified the need to take actions designed to promote tourism and commerce. A colleague also noted the Smart Border Action Plan and said that something of this nature should be reinstituted; in his opinion, if no one is responsible, nothing gets done. Delegates adopted a resolution on this issue (see Appendix A). COORDINATED ECONOMIC STIMULUS MEASURES Background Governments worldwide have implemented measures to restore economic growth following the worst financial and economic crisis since the Great Depression. In the United States, significant support has been provided through the American Recovery and Reinvestment Act of 2009, which will deliver, over a two-year period, US$787 billion through such measures as tax reductions as well as assistance to state and local governments for investments in education, healthcare, unemployment benefits, infrastructure and energy. The goal is to create or save 3-4 million jobs by 2011. Of the total commitment of US$787 billion, US $220 billion has been allocated for federal procurement or transfers to sub-federal agencies for their procurement activities, which has given rise to concerns in a number of countries, including Canada. While the “Buy American” provisions of the Act do not apply to procurements covered under international trade agreements, and recognizing that Canada and the U.S. have government procurement commitments at the federal level only, Canadian suppliers will face “Buy American” provisions where state or local procurement is funded by the Act. In Canada, measures to stimulate the economy were included in the January 2009 Budget Plan. In particular, an estimated $51.6 billion over two years is proposed for measures in relation to infrastructure spending, personal tax reductions, a freeze on employment insurance premium rates, employment insurance program enhancements, support for housing construction and renovation, enhanced energy efficiency, more funding for training, and support for particular sectors, regions and communities. At meetings of the leaders of the G-20 nations in late 2008 and in 2009, commitments were made about the development of economic stimulus measures designed to address the global economic slowdown. Commitments were also made regarding the need to avoid protectionism. Discussion The discussion began with a Canadian delegate noting the strong commitment of leaders of the G-20 nations to “get on with recovery efforts together,” and the need to avoid protectionism. In this regard, he told participants that the “Buy American” provisions in U.S. legislation are giving rise to Buy Canadian procurement initiatives and pressures, and that an open procurement approach at the sub-national level is needed. He also highlighted the involvement of producers in both of our countries in global supply chains. Another Canadian noted the long-standing existence of legislative “Buy American” provisions, and advocated a “Buy North American” strategy, although this notion was not supported by some of his Canadian colleagues. A Canadian colleague continued, arguing that – at times – one must return to first principles: the need to develop North America as a competitive global exporter and to support the North American supply chains that are important for global competitiveness. In that regard, he thought that North America must become a model of “coordinated competition” and that countries must resist the drift toward protectionism which, during the Great Depression, made the situation worse rather than better. This notion was supported by a colleague when he said that an open competition policy has worked well for both countries. In his view, federal governments should send a message that protectionism in relation to procurement is good for no one. The need to treat North America as an entity and focus on its competitiveness as well as to send a message was supported by an American delegate, who – in addition to mentioning global and North American supply chains – noted that states and provinces must be urged to avoid protectionism as well; “Buy America” should be “Buy North American.” Another American participant suggested that protectionist sentiments are relatively less likely to exist when economies are doing well. In his view, if American taxpayer dollars are going to be used to build U.S. infrastructure, ensuring a substantively “Buy American” approach is reasonable, if not expected. Finally, another American delegate noted the economic damage caused by protectionism. TRADE Background As a small, open economy, Canada is committed to free and fair trade. From this perspective, a relatively ambitious trade agenda is being pursued, with free trade agreements – as of 4 May 2009 – signed with the European Free Trade Association (EFTA), Peru, Colombia and Jordan (labour cooperation and environment agreements have also been signed with all of these except the EFTA); bilateral agricultural agreements have been concluded with Norway, Iceland and Switzerland/Liechtenstein. Free trade negotiations are ongoing with Korea, Panama, the Central American Four (CA4), the Caribbean Community (CARICOM), Singapore and the Dominican Republic. Other initiatives include exploratory discussions with the European Union and with India on a comprehensive economic agreement, a trade and investment dialogue with Japan, and discussions on the possibility of launching free trade exploratory discussions with Morocco. Canada has free trade agreements in force with the United States and Mexico (1994), Israel (1997), Chile (1997) and Costa Rica (2002). Discussion Discussions focused on three trade “irritants” in particular, rather than on trade more generally: country-of-origin labelling; bilateral trade in softwood lumber and “black liquor.” A Canadian delegate opened the discussion of country-of-origin labelling by noting that U.S. country-of-origin labelling is related to supply chains rather than to food safety. A colleague informed participants that, in his opinion, the issue is not related to protectionism. No American delegate discussed the issue. Discussion of the softwood lumber issue began with an American delegate noting that the United States believes that Canada has violated the terms of the bilateral Softwood Lumber Agreement, while Canada believes that it is complying fully with the terms. He advocated respect for the terms of the Agreement and a mechanism to resolve concerns between the parties, including independent evaluation when required. The need for both countries to respect the terms and conditions of the Softwood Lumber Agreement was also mentioned by a Canadian delegate, who noted that it is important that the Agreement “work,” and that both countries respect the letter and the spirit of the Agreement. A colleague highlighted the importance of being able to verify facts, while still another noted the importance of the Agreement for both countries. Finally, a Canadian delegate opened the discussion of “black liquor” by describing the “black liquor tax credit” as a loophole that must be closed, since it is – in essence – a subsidy to the U.S. industry, is causing distortions in the North American pulp and paper market, and is harming Canadian producers. This view was supported by a colleague, who argued that the provision makes the Canadian industry relatively less competitive. An American participant responded by characterizing the issue as political, with intense pressure not to appear to be opposing the alternative fuel tax credit. He noted that, since the legislative provision expires at the end of the year, the issue will go away of its own accord. A colleague said that the tax credit is having unintended consequences, although it is hard to do anything about the credit at this time. FINANCIAL SYSTEM REFORM Background With countries worldwide experiencing a significant financial crisis, governments have taken various actions to support and reform their financial systems. In the United States, for example, a variety of initiatives have been taken, including: the Capital Purchase Program; the Systemically Significant Failing Institutions Program; the Targeted Investment Program; the Capital Assistance Program; the Public-Private Investment Program; and the Term Asset-Backed Securities Lending Facility. In Canada, the federal government announced the Extraordinary Financing Framework, which is designed to improve access to financing for consumers and businesses. The framework includes: greater liquidity to the financial system provided by the Bank of Canada; funding for non-bank asset-backed commercial paper; the Canada Small Business Financing Program; the Canada Mortgage Bond Program; the Insured Mortgage Purchase Program; the Business Credit Availability Program; the Canadian Lenders Assurance Facility; the Canadian Life Insurers Assurance Facility; and the Canadian Secured Credit Facility. Discussion In the view of the Canadian delegate who began the discussion, the financial system must work properly and politicians must act in order to ensure this outcome. The mistakes of the past must not be repeated. An American participant questioned what actions should be taken once it is clear what went wrong, and wondered what financial structure must be put in place in order to ensure that the situation does not recur. A colleague shared his view that the problem was caused by a lack of transparency. A Canadian participant advocated efforts, approaches and principles that are common to North America, and argued that the focus must be the bank and non-bank financial sectors as well as regulated and unregulated institutions. Another Canadian told delegates that – in light of the International Monetary Fund’s positive comments about the Canadian financial system – there are lessons that the U.S. can learn from Canada. He also indicated that our countries must work together on the system that we need, since neither country wants to have a global regime imposed on it. A Canadian delegate continued by supporting the need for specific regulations as well as checks and balances. In his comments, he also noted that the Canadian banking system is properly regulated; however, he believed that there is a need to regulate the non-bank financial sector and to ensure that credit rating agencies are responsible and accountable. Finally, an American delegate said that Canada’s Office of the Superintendent of Financial Institutions sounds like a “good system,” and urged consolidation of regulators in the United States. He also thought that a mutually beneficial solution must be developed, and argued that the notion that some institutions are “too big to fail” must be addressed. Delegates adopted a resolution on this issue (see Appendix A). COMMITTEE II: INTERNATIONAL SECURITY ISSUES AFGHANISTAN Background Canada and the United States were founding members of the North Atlantic Treaty Organization (NATO), which only invoked its Article V collective defence provisions for the first time following the terrorist attacks of September 11, 2001. In the years since 2001, the international community has been involved in United Nations-mandated military and other activity in Afghanistan designed to strengthen the elected government of that country and defeat an insurgency made up largely of Taliban forces led from neighbouring Pakistan. NATO took on responsibility for the International Security Assistance Force (ISAF) in Afghanistan in 2003, and by 2006 had expanded it throughout the country. By December 2008, some 51,000 troops from 41 nations were in Afghanistan as part of the International Security Assistance Force. Approximately 20,000 other troops – about 18,000 of these American – were also operating separately under Operation Enduring Freedom. Following his inauguration in early 2009, President Obama named veteran diplomat Richard Holbrooke as his special representative to Afghanistan and Pakistan, and also ordered a 60-day interagency review of U.S. policy toward those countries. Even before this review was completed, the President announced the deployment of 17,000 additional troops to Afghanistan. The new U.S. policy, unveiled in March 2009, underlined the need to: refocus on the goal of disrupting al-Qaeda and its Taliban and other allies; consider Afghanistan and Pakistan as two countries but one problem; increase military and especially civilian personnel deployed to the region; and re-emphasize the importance of cooperating with allies and the United Nations. The President also responded to an outstanding request from American military leaders by ordering another 4,000 American trainers to Afghanistan. Canada’s military contribution to Kandahar Province in southern Afghanistan has been its largest military operation since the Korean War, and the Independent Panel on Canada’s Future Role in Afghanistan reported, in January 2008, that Canadian casualties had been the highest in the ISAF as a proportion of troops deployed. In 2008, the Canadian House of Commons passed a motion specifying that Canada’s current military mission in Afghanistan would end in 2011. Later that year, the Government of Canada unveiled a series of strategic goals and related benchmarks for the Canadian mission. By May 2009, Canada had some 2,800 military personnel deployed in southern Afghanistan, and had lost almost 120 soldiers and one diplomat. Canada and the United States have long argued that, in the interest of both achieving NATO’s mission and sharing the burden more equitably, other NATO countries should both increase the number of troops they have deployed in Afghanistan and remove “caveats” or other restrictions placed on those already deployed. While other NATO nations have often reiterated their commitment to Alliance goals in Afghanistan, many believe that they remain preoccupied with security challenges in areas such as Kosovo. At the Strasbourg-Kehl summit in April 2009, NATO allies committed to send up to 5,000 additional forces, although many of these were mainly to assist with security during the election scheduled for August 2009. The fact that few additional allies seem either willing to increase substantially their forces in Afghanistan or reduce the caveats and restrictions on those already there remains a source of tension within the Alliance. Discussion An American delegate began by acknowledging Canadian sacrifices in Afghanistan. He said that now that the U.S. was winding down in Iraq, it could focus on Afghanistan and make progress there. Delegates were told that the new Administration has proposed an “Af/Pak” policy, and that the Congress had recently passed a measure to fund this and other activities. A Canadian delegate argued that other allies should acknowledge recent U.S. policy changes, and that all allies – especially those who have serious restrictions on their soldiers – should get behind this mission; he said that some NATO nations were not putting their “shoulders to the wheel” in this case. In his view, if the Afghanistan mission fails, people will question the future of the Alliance. He argued that any committee resolution should reflect that urgency. Another Canadian had recently participated in the NATO Parliamentary Assembly meetings. He said that, given new U.S. policies, American delegates there were “eating humble pie,” and noted that everyone is multilateralist now. An American delegate argued that we had all been overly optimistic initially about the prospect of building a functioning government from nothing in Afghanistan, and those that had been sceptical can now “take a bow”. He had recently been in Afghanistan and Pakistan, and reviewed a number of the challenges facing the U.S. and its allies there. He said that the recent change in American military leadership on the ground in Afghanistan appeared to be a good development. In his view, while Pakistan’s president seems like a “lame duck”, former Prime Minister Nawaz Sharif was impressive, and will probably be the next prime minister. He told delegates that while the Pakistanis wanted to believe that the Taliban threat to their country was not really serious, he had sensed that they were beginning to recognize that it might be. He argued that the situation there is very serious, and shared his view that we should not underestimate the challenges. When a Canadian delegate asked about refugees, another American replied that, among other things, the recent supplemental funding had included money for “Af/Pak” refugees, including Pakistani refugees fleeing the Taliban within their own country. An American added that while the U.S. had slipped into a goal of nation-building in Afghanistan, Secretary of Defence, Robert Gates had said, at a recent Congressional hearing, that the current Administration was going to be more modest about its goals. He argued that the Taliban in Afghanistan had to be bloodied to learn that they cannot win. In his view, even with questions about President Karzai, Afghanistan is in better shape than Pakistan is a number of ways. Moreover, he noted that the United States was encouraging regional allies and others to engage. When a Canadian delegate pointed out that Canada and other allies had announced end dates for their current military missions, he replied that the U.S. was not depending on NATO allies: it never had, and it never will. When a Canadian asked about mission fatigue and how the U.S. could continue with an expensive war given its economic problems, an American replied that this region has become even more unstable, and it is incumbent upon NATO allies to do something about it. In his view, despite the gravity of the economic crisis, the U.S. will remain committed to Afghanistan/Pakistan, because, if Afghanistan goes perhaps Pakistan will as well, and it has nuclear weapons. Delegates adopted a resolution on this issue (see Appendix A). NUCLEAR NON-PROLIFERATION AND DISARMAMENT Background Canada and the United States have both traditionally been strong supporters of nuclear non-proliferation and disarmament, which is codified in the treaty on the Non-Proliferation of Nuclear Weapons (NPT). While significant success was achieved immediately following the Cold War both in terms of nuclear disarmament (reducing existing nuclear stockpiles) and non-proliferation (preventing the further spread of nuclear weapons), the past decade had seen little progress, and – in fact – growing challenges to the international regime based on the NPT. The last NPT Review Conference in 2005 was largely judged a failure, making the next one in 2010 all the more important. The American debate on these issues was re-invigorated in January 2007 and again in January 2008 by published declarations by four high-profile former statesmen and political opponents – Republicans George Schultz and Henry Kissinger, and Democrats Sam Nunn and William Perry – in favour of greater action in this area. Following his inauguration in early 2009, President Obama stated that progress on nuclear issues – from an early resumption of strategic arms reductions with Russia to another attempt to secure U.S. Senate acceptance of the Comprehensive Test Ban Treaty (CTBT) – would be a high priority for his Administration. Indeed, President Obama went further in his April 2009 Prague speech, pledging to “take concrete steps toward a world without nuclear weapons.” He said: “ ... today, I state clearly and with conviction America's commitment to seek the peace and security of a world without nuclear weapons. This goal will not be reached quickly – perhaps not in my lifetime. It will take patience and persistence. But now we, too, must ignore the voices who tell us that the world cannot change.” Canada has traditionally been a strong supporter of nuclear non-proliferation and disarmament, as the first country capable of making nuclear weapons to decide not to do so, the first to decide to divest itself of (American) nuclear weapons on its soil, and one whose early nuclear assistance to India was misused in pursuit of a nuclear weapon. Beyond these realities, the fact that Canada is a major supplier of uranium and nuclear technology means that Canada can play an important role as the international community attempts to balance the right to peaceful nuclear technology contained in the NPT with the need to ensure non-proliferation in cooperation with the International Atomic Energy Agency (IAEA). Discussion A Canadian delegate introduced the subject of nuclear weapons, arguing that delegates should support the Non-Proliferation Treaty as the world makes its way eventually to zero nuclear weapons. An American delegate said that the recent report by the Commission on the Strategic Posture of the United States, which he thought was well done and which he supported, had argued that we must begin once again to discuss nuclear issues. While there are a number of reviews and other initiatives under way in the U.S., he argued that the real threat to the world today is that of proliferation and terrorism, and the countries of concern are those such as Iran, North Korea and Pakistan. In his view, we should worry less about Russia and its nuclear arsenal than about such states. While the goal of reducing nuclear weapons may be good, he believed that the danger is that if the U.S. draws down too much, other countries – such as Japan and Egypt – may feel that their security is jeopardized and then be tempted to pursue their own nuclear weapons. When a Canadian said that Israel may take action to prevent Iran from getting nuclear weapons, another Canadian added that the current Iranian leadership might change in the upcoming election. An American argued that a big problem is the transfer of technology to states like Iran by countries such as Russia. A Canadian added that he had heard that Russia does not feel threatened by Iran’s possession of nuclear weapons. Delegates adopted a resolution on this issue (see Appendix A). ARCTIC COOPERATION Background While the Arctic has long been a subject of discussion in the international community, recent developments have greatly increased the attention focused on the region. Among other issues, concerns about global warming have led to speculation that the Northwest Passage may soon become ice-free for much of the year, leading to the possibility of increased commercial or tourist traffic there. At the same time, the symbolic planting of a Russian flag under water at the North Pole in 2007 has seemingly spurred a rush by a number of countries to prepare scientific and legal arguments justifying claims to extended limits of their continental shelves. Despite increased media reports and rhetoric on all sides, however, the official approach to this region is still one of cooperation within the context of the United Nations Convention on the Law of the Sea. At a meeting in Ilulissat, Greenland in May 2008, for example, the five coastal states bordering the Arctic Ocean – Canada, Denmark, Norway, Russia and the United States – collectively affirmed their commitment to the Convention on the Law of the Sea and the “orderly settlement of any possible overlapping claims.” Canada and the United States have long had two unresolved bilateral disputes in the Arctic. One involves a boundary demarcation in the Beaufort Sea. The second, which has traditionally been invoked in discussions of Canadian Arctic “sovereignty,” involves a disagreement about the legal status of the waters of the Canadian Arctic Archipelago. The Government of Canada argues that the waters of the Canadian Arctic Archipelago are internal by virtue of historic title, though as a matter of policy it permits international navigation through them as long as environmental and other conditions and controls established by it are met. The United States argues that the waters of the Northwest Passage are a strait used for international navigation through which foreign-flagged ships have the right of transit passage. Canada and the United States have essentially agreed to disagree on this issue while still cooperating: in 1988, they agreed on procedures for the United States to notify Canada in advance of icebreaker transits through the Northwest Passage “without prejudice to the legal dispute.” In order to explore further areas for possible cooperation between Canada and the United States, in February 2008 two teams of non-governmental experts – the American one led by former U.S. Ambassador to Canada Paul Celucci – held a Model Negotiation on Northern Waters, which resulted in nine recommendations regarding concrete ways in which the two countries could cooperate and build confidence in the Northwest Passage while still maintaining their different legal positions. Discussion A Canadian delegate began by noting that the rhetoric coming from the Canadian government on this issue in recent months was much stronger. The Russians are also speaking more strongly on this issue and claiming resources, and they can back up their words. An American replied that he has been troubled by Russian claims, adding that perhaps delegates should condemn their bellicose behaviour. A Canadian noted that Canada and the United States had two unresolved disagreements in the north, one related to the Beaufort Sea boundary and the other to the Northwest Passage. Another Canadian said that the immediate priority was the Northwest Passage. A Canadian colleague said that while everyone else wants to use the Northwest Passage, cleanup, etc. will fall to Canada if something bad happens. He also noted that there was a de facto agreement between Canada and the United States regarding the Northwest Passage. An American added that it was not just a Canada-U.S. issue, but a global one: the United States has worldwide responsibilities and needs to keep straits open for international passage. A Canadian referred to the negotiations that had occurred in early 2008 by teams of Canadian and American experts, the latter led by a former American Ambassador to Canada, Paul Celucci. He told delegates that these negotiations had identified a number of areas where the two countries could work together cooperatively while still maintaining their legal positions. Another Canadian said that any committee resolution should focus on what could be done cooperatively, and colleague noted that both Russia and the European Union were attempting to exert more influence in the Arctic. An American replied that Canada and the United States should tell Russia to “keep its nose out.” Delegates adopted a resolution on this issue (see Appendix A). COMMITTEE III: ENERGY AND ENVIRONMENTAL ISSUES THE GREAT LAKES Background The Great Lakes are a vast resource (84% of North America’s supply of freshwater) shared by the United States and Canada that are fundamental to the well-being of one-third of the population of Canada and one-tenth of the population of the United States. The Great Lakes are a direct source of drinking water for 8.5 million Canadians. The region supports Canada’s highest concentration of industry, nearly 25% of total Canadian agricultural production, a commercial fishery and a transportation corridor with shipping from all over the world. The Great Lakes Basin also supports a rich variety of plants, animals and ecosystems. Discussion Discussions among the delegates centred on the fact that the Great Lakes are facing a number of challenges as a consequence of population growth such as, increased urbanization, infrastructure deterioration, invasive species, new chemicals and the impacts of climate change. One delegate estimated the overall cost of aquatic invasive species in the Great Lakes at $2 to $7 million annually. Discussions also focused on the Great Lakes Water Quality Agreement (GLWQA), which was signed in 1972 by Canada and the United States; it covers the Great Lakes Basin, including the international portion of the St. Lawrence River. The Agreement addresses critical water quality issues to protect the Great Lakes from pollution and toxic substances as well as to protect aquatic life. Since its inception, the Agreement has been amended three times and was last updated in 1987. Participants noted that a review of the GLWQA, which takes place every six years, was triggered in September 2004 and that a bi-national report was completed in 2007. They highlighted the fact that it was distributed to governments and Great Lakes stakeholders for comment and review, and that there was a broad call from reviewers for renewal of, and revisions to, the Agreement so that it can once again serve as a visionary document driving bi-national cooperation to address the environmental issues facing the Great Lakes. Delegates believed that the Agreement should be updated to ensure that this outcome occurs. The discussions on this issue ended with delegates from both countries stressing their commitment to protecting the Great Lakes for populations and ecosystems that depend on a safe and secure water supply. They wanted the cleanup of the Great Lakes to be accelerated and a commitment of resources sufficient to enable an assurance of appropriate water levels, the elimination of dead zones and a reduction in invasive species. Delegates adopted a resolution on this issue (see Appendix A). CLIMATE CHANGE Background The Obama Administration and the U.S. Congress are developing new policies on climate change. As the U.S. is Canada’s primary trading partner and energy customer, it is in Canada’s best interests to be proactive in engaging the United States in the development of clean energy and climate change policy. Discussion The delegates saw great opportunities for an effective, coordinated approach to energy and climate change issues. U.S. delegates pointed out that serious efforts by the U.S. Congress on climate change legislation are expected this year and noted that, in March 2009, the House of Representatives Energy and Commerce Committee and the Energy and Environment Subcommittee released their “draft discussion” Bill on energy and greenhouse gas emissions. Delegates were told that the Bill proposes a cap-and-trade system for carbon emissions, a renewable electricity standard, a low carbon fuel standard and vehicle fuel standards, among other elements. Americans stated that although the Bill would establish ambitious carbon reduction targets for the U.S., it is expected to be altered substantially once it is formally presented before a Congressional committee and passed some time later this year. American delegates also pointed out that there are major regional initiatives that are taking place to deal with climate change, including: the Midwestern Greenhouse Gas Reduction Accord (MGGRA); the Western Climate Initiative (WCI); and the Regional Greenhouse Gas Initiative (RGGI). Delegates were told that while all three are at different stages of development and implementation, each aims to put a regional emissions trading scheme in place. Finally, delegates were informed that discussions to link the RGGI and the WCI, possibly as early as 2012, have also begun and that the MGGRA and the WCI have also expressed an interest in considering the inclusion of a low carbon fuel standard. Canadian discussants cited the fact that Ontario, Quebec, Manitoba and British Columbia are members of the WCI, with Saskatchewan having observer status. They also noted that Manitoba is the only Canadian member of the MGGRA, with Ontario having observer status. The Canadian delegates said that they supported a collaborative and cooperative partnership with the United States in the development of a North American approach to climate change issues. They pointed to the fact that one step in this direction was the signing of the Clean Energy Dialogue by President Obama and Prime Minister Harper during the President’s visit to Canada in February 2009. They noted that its goal is to enhance the ways in which we cooperate to encourage the development of clean energy technologies and to reduce greenhouse gas emissions. They also pointed out that it will promote cooperation on several critical energy, science and technology issues under three main pillars: expanding clean energy research and development; developing and deploying clean energy technology; and building a more efficient electricity grid based on clean and renewable generation. Delegates from both countries reiterated their commitment to coordinated efforts within North America to address climate change. They urged both nations to work together to reduce air pollution and greenhouse gas emissions, and favoured systems that could be applied on a continental basis. They believed that, through this approach, emissions can be reduced through new innovative technologies with the common goal of diversifying both nations’ energy sources. Delegates adopted a resolution on this issue (see Appendix A). ENERGY FRAMEWORK Background Canada and the United States share the largest intercontinental bilateral energy and environmental partnership in the world. This energy relationship constitutes C$100 billion in two-way trade and nearly C$90 billion in combined cross-border direct energy investments. Canada is the largest energy supplier to the U.S., and exports crude and refined oil, natural gas, uranium and electricity to that country. About 95% of Canada’s energy exports are destined for the U.S., accounting for 19% of U.S. crude oil and petroleum and 85% of U.S. natural gas imports. Oil sands products represent roughly one-half of Canada’s crude oil supply to the U.S. Discussion Discussion in this session focused on oil sands issues, particularly the criticism by some that there are negative environmental impacts from oil sands development. The most common impacts that have been cited are greenhouse gas emissions, land use, water use and tailing ponds. Canadian delegates highlighted that oil sands production is evolving and many negative impacts are being reduced. In particular; · greenhouse gas emissions: oil sands producers are employing new technology that uses combustion instead of steam to liquefy the bitumen deep underground, with the result that emissions are reduced because it takes less energy than heating water to make steam; as well, producers are using carbon capture and storage to sequester carbon dioxide and store it underground, and are researching how geothermal energy from deep in the earth could provide a low-emission alternative to provide heat and steam in oil sands production; · land use: oil sands operations require a large amount of land, especially when open-pit mining occurs, although 80% of Canadian oil sands are drilled from deep underground sites rather than using open-pit mines; moreover, the government requires oil sands companies to have a reclamation plan in place and to have it approved by the government as part of the development process; · water use: water is used in open-pit mining for oil separation and in situ (a deep-drilling operation) to make steam; oil sands operators have been able to reduce their per-barrel water use from 3.5 barrels in 1985 to one-half a barrel today, which has been accomplished by recycling more than 95% of the water that is used; and · tailing ponds: while only 20% of the oil sands is developed by open-pit mining, those operations produce tailing ponds (a mixture of water, sand, clay and bitumen) that are regulated by provincial governments; producers are using new techniques to reduce the size of tailings ponds and the amount of water used. Concerns were also raised by delegates regarding whether oil sands products would fall under section 526 of the 2007 Energy Independence and Security Act, which prohibits the U.S. federal government from acquiring alternative fuels whose lifecycle greenhouse gas emissions are higher than those from conventional production. While recognizing that there are issues associated with oil sands development, delegates also believed that the oil sands are an essential part of achieving North American energy security. Delegates wanted the two countries to work in a coordinated manner to strengthen and integrate their energy partnerships by developing a comprehensive plan for both renewable and non-renewable energy sources. They encouraged the continued development of advanced technologies for the detection, extraction and processing of oil sands deposits, focusing on reduced environmental impacts and increased economic competitiveness. Finally, they urged the United States to clarify whether the U.S. government can purchase petroleum products derived from the oil sands in Canada. Delegates adopted a resolution on this issue (see Appendix A). MARITIME COOPERATION Discussion In this session, delegates considered the situation of ships navigating through the territorial waters of each others’ country. Issues such as who controls this type of passage, the regulations that are in place to deal with this situation, the types of port facilities to which these ships are transiting and the manner in which these disputes are resolved were raised in the discussion. The delegates encouraged bilateral cooperation in order to ensure that all investigations and reviews of proposals to build facilities in ports, to and from which vessels would need to navigate through the territorial waters of the other country, would receive the full, good faith and expeditious cooperation of both countries. Delegates adopted a resolution on this issue (see Appendix A). CLOSING PLENARY During the closing plenary session, delegates summarized the discussions undertaken in each committee, and examined the draft resolutions developed in them. Delegates agreed on the ten resolutions found in Appendix A.
Respectfully submitted,
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