Go North Young Man


With his foreign policy team now in place, President-elect Barack Obama certainly will be urged to make his first forays into high profile places like Pakistan, Israel and Palestine, as well as to greet his devoted fan base in Europe.

But before heading off on the diplomatic grand tour, he might do well to turn his attention first to the country with which we have the closest political, economic and environmental ties: Canada. Although not as momentous or sexy a locale as Paris or Jerusalem, Ottawa could well hold the key to developing a bold new strategy for America in an increasingly incoherent and multi-polar world.

A focus on Canada and to some extent Mexico as well, would require a reversal of the kind of wide-ranging foreign policy focus that has dominated the country since the 1940s. In that period, the United States has extended – one might increasingly say overextended — its economic and political reach ever further from its continental base.

In the process, the country has become ever more intertwined with unreliable and often malicious regimes on the Asian continent and subservient to the interests of an often jealous and uncomprehending Europe. As a result, the country has sacrificed its own economic health, becoming ever more dependent on fuel, manufactured goods and even its self-esteem from countries with which we often share distressingly little.

Instead, the new President should place greater emphasis on the fundamental basis of our uniqueness and economic strength: the enormous continent we share with our Canadian as well as Mexican neighbors. This would represent a return to a version of the politics – so important in our 19th Century emergence – that understood resources, natural and human, constitute the true foundation of national greatness.

This shift also would help us establish significant psychological distance between the United States and Europe. Although there are segments of the country, notably in the Northeast, who would prefer America become a clone of the Old Continent, our demographic and physical realities are diverging every day from those of a rapidly aging and resource-poor Europe.

In contrast, Canada shares with America a somewhat more vibrant demography. This is driven largely by immigrants who are rapidly integrating and invigorating both countries. With Australia, the two countries have emerged as the preferred location for immigrants in part because they are where they are – in sharp contrast with that of Europe – most likely to succeed.

Being a country of immigrant aspiration represents just one aspect of our close cultural ties with Canada. Our northern neighbor ranks among the largest senders of immigrants as well; roughly 840,000 Canadian citizens now have established themselves south of the border. On a familial level millions of Canadians have relations with Americans; in fact, places like Los Angeles, if current and former Canadians were counted, would constitute among the largest cities in that country.

Canada is also our country’s largest source of visitors – there are parts of Florida where French is the second language – and a major player in our national real estate and financial market. Whole sections of the northern Great Plains depend on consumers coming from over the border. (Full disclosure: Joel Kotkin’s wife is a native of Montreal, Quebec and the Schills live in Grand Forks, an icy spit from the Manitoba border).

Most critically our economic ties to Canada represent the largest bilateral relationship in the world while Mexico has emerged as our third largest trading partner. And unlike our chronically poor terms of engagement with countries like China and Japan, our trade with Canada and Mexico also includes healthy transactions in basic manufactured goods, technology and farm products.

At the same time, Canada and United States together share a critical interest in agricultural commodities, a market where they are the undisputed world leaders. In a world that is likely to get too crowded and short of basic resources, a strong North America should be well-positioned in comparison with relatively resource-poor competitors such as Western Europe and East Asia.

But perhaps the most critical relationship lies in the energy arena. The globally Saudi-centered energy policy of recent years, particularly during the Bush-Cheney era, has fueled our deadliest enemies and also threatens both our environment and long-term economic viability.

A U.S.-Canada energy consortium — with the eventual involvement of Mexico — provides an out from our fundamental geopolitical dilemma: how to grow our economy while reducing our dependence on imported energy and, over time, carbon-emitting fuels. This could take the form of something like a North American Energy Community, which would help coordinate research, development and environmental resources across the continent.

This approach would offer a way to shift our economic interests away from unreliable and unfriendly regimes towards countries with whom we have far better personal, political and economic ties. Current estimates indicate we will increase oil imports from 12.6 million barrels a day today to 16.4 million in 2030. More than half of that is expected to come from OPEC suppliers, with much of the rest from Russia and the Central Asia autocracies.

A continental strategy would halt this dangerous slide. Taken together, the resources of our three countries are both immense and extraordinarily diverse. Overall, North America ranks second only to the Middle East in proven oil reserves. Canada, for example, has the world’s second largest proven crude oil reserves, outpaced only by Saudi Arabia; the United States ranks 11th and Mexico 14th. The three North American states rank in the top fifteen in natural gas production, as well.

This alliance can work both in the short run on fossil fuels and will, over time, blossom with the shift to renewables. Canada, well known for its surplus of fossil fuels, also possesses promising potential in hydroelectric and wind energy. Wind alone, Canadian researchers believe, could provide 20 percent of that nation’s power. Prince Edward Island, on the country’s east coast, is already conducting a major experiment to shift its primary energy dependence towards wind and biomass.

Mexico, long an oil exporter, needs new technology both to upgrade its current energy industry and to exploit its potential in renewable fuels. Over time, experts say, Mexican production of fossil fuels will drop, but the nation has an almost totally unexploited potential in solar and sugar-based ethanol fuel, following the Brazilian model. For its part, the United States also has considerable solar, wind, and biofuels, of which we are already the world’s second largest producer.

This energy alliance would also help spark employment and growth across the continent. Money spent on development and importation of energy from Russia, Saudi Arabia, or Iran offers few benefits for our economy. We conduct pathetically little export trade with these nations; we constitute less than 5 percent of Russia’s imports, less than 14 percent of Saudi Arabia’s, and virtually none of Iran’s. Europe, Japan, and, increasingly, China – not the United States – are the growing and primary beneficiaries of the energy-producers’ wealth.

The same dollars spent within North America have a very different effect. Canada and Mexico together constitute by far the largest export market for the United States. Over one third of our exports now go to our North American allies, compared to less than 5 percent to OPEC and less than one percent to the Russian Federation.

Investment in Mexico’s Peninsula de Atasta, an ethanol plant in Iowa, or a hydroelectric plant in Quebec enriches customers for whom the United States is a primary source of both manufactured goods and of services, including tourism. A wealthier Mexico also means more visitors to the parks of Orlando, Anaheim or to Houston’s Galleria. Canadians, for their part, flock first to New York, Seattle, Chicago, Los Angeles or Florida when they have extra change to spend.

So as he considers his options, President-elect Obama may want to consider this continental strategy as a means to create new wealth here and to strengthen our hand abroad. We know these proposals are radical, and will be subject to all sorts of opposition by well-organized pressure groups.

But by focusing on our continental economy, the United States can begin facing the world not as another slowly declining European descended power but once again as a youthful, defiantly multi-racial and ascendant one.

This piece originally appeared at Politico.com

Joel Kotkin is a presidential fellow at Chapman University and is finishing a book on the American future. He is executive editor of www.newgeography.com. Mark Schill is the site’s managing editor and an associate at the Praxis Strategy Group.