Leaked U.S. cable lays out North American ‘integration’ strategy

OTTAWA — The integration of North America’s economies would best be achieved through an “incremental” approach, according to a leaked U.S. diplomatic cable.

The cable, released through the WikiLeaks website and apparently written Jan. 28, 2005, discusses some of the obstacles surrounding the merger of the economies of Canada, the United States and Mexico in a fashion similar to the European Union.

“An incremental and pragmatic package of tasks for a new North American Initiative (NAI) will likely gain the most support among Canadian policymakers,” the document said. “The economic payoff of the prospective North American initiative … is available, but its size and timing are unpredictable, so it should not be oversold.”

Many different areas of a possible integration are discussed throughout the cable, but the focus is on improving the economic welfare of the continent. It suggests one of the main benefits to Canada would be easier access across the U.S. border, calling it a “top motive” for this country.

The cable states Canada and the U.S. already share perimeter security “to some degree,” the question is then how “strong” the two countries want to make that bond.

Discussions are currently underway about increasing co-operation between the two countries when it comes to perimeter security. A broad-based document was released by Prime Minister Stephen Harper and U.S. President Barack Obama in February of this year, laying the groundwork for a deal that would see improved intelligence communication for security concerns and trade.

The details are currently being hashed out by officials from both countries. The proposed deal aims to improve the flow of cross-border traffic and increase security against terrorist threats.

Opposition parties have expressed a certain wariness over the lack of transparency of the talks and say they worry Harper will be too willing to make concessions to the U.S. over security issues, in order to gain an advantage in cross-border trade.

In the cable, U.S. diplomats focused on a number of key areas to move forward with continental integration, including a possible common currency, labour markets, international trade and the borders of the three countries.

The cable said Canadian economists were split on whether a fixed exchange rate, or a move to adopt the U.S. greenback, would benefit this country.

The document states Canadian economists point to labour markets as one of the areas which could have the greatest benefit for all three countries.

“They advocate freeing up professional licensing laws, and developing a quick, simple, low-cost work permit system, at least for U.S. and Canadian citizens,” the cable said.

It goes on to say North America would be well served by implementing a single, continent wide, tariff or a customs union arrangement.

The proposed customs union would eliminate the North American Free Trade Agreement’s “restrictive” rules of origin.

“NAFTA’s (rules of origin) are so restrictive that importers often prefer to pay the tariff rather than try to prove North American origin,” the cable said.

The cable concludes with a caveat: “There is little basis on which to estimate the size of the ‘upside’ gains from an integration initiative concentrating on non-tariff barriers of the kind contained in NAI. For this reason we cannot make the claims about how large the benefits might be on a national or continental scale.”

Origin
Source: National Post