Thank you very much, Mr. Chairman and members of the committee. I'm delighted to be there. I would always rather be there in person, but it's great to be remotely visiting with you from Washington.

One of the benefits of being a later speaker in this process is that I've been able to look at the testimony of some of the preceding speakers. I'll just tell you that I agree with all of them. You've heard from Colin Robertson, Scotty Greenwood, and the CEO council. They've given you great lists, action plans, and strategies for what we need to be doing in this North American partnership.

You have Ambassador Suarez, who in my opinion is Mexico's best export to Canada, and you have Ambassador David Jacobson, who is not only a great bilateral and trilateral analyst and thinker, but also the best boss I ever had. He was such a great boss that I couldn't go to work for anybody else, so I had to go and start my own company. For five years I ran Dawson Strategic in Ottawa, which helped Canadian and American businesses to take advantage of our trade agreements, of our bilateral and trilateral initiatives.

As a consultant on cross-border issues, I can tell you that the relationship works really well. It is important. It is the basis of North American commerce and trade. But there's still a lot of work left to do, and these gaps, these delays are eroding Canadian competitiveness. We're not in a position right now such that we can afford to drag our feet. Competitors from other parts of the globe are frankly eating our lunch. This is not the time for North America to slow down. This is the time for North America to speed up and to engage better.

The non-tariff barriers that Ambassador Jacobson talked about and the gaps that Ambassador Suarez talked about that are keeping us from having fully functional supply chains means that we are letting important opportunities slip through our fingers.

The NAFTA is in the doldrums. I'm not sure I quite agree with Ambassador Suarez's characterization that it's a wrinkled old lady, but it's certainly a senior citizen and it's in need of some rejuvenating treatments. It's more than 20 years old, and it was negotiated at a time before we had the kinds of technology development that are now intrinsic in our economy, in the way we do business. We negotiated the NAFTA before we had third-party logistics and before we had electronic commerce. We hardly even had the Internet in 1994.

This agreement, the NAFTA, governs about 70% of our trade, and we are rapidly becoming a high-tech, knowledge-based, service-based economy, but our trade agreements reflect a time when our economy was based not on microchips but on wood chips.

We definitely need urgent attention to cross-border infrastructure for shipping and energy distribution. You've heard that our regulatory harmonization efforts, while important, are still really a drop in the bucket, very limited compared with what they should be for such integrated economies.

One of the statistics I use in my research, backed up by, I think, the OECD, is that border and regulatory barriers account for about 5% to 10% of the final cost of a product. What that means is not only that we as consumers are paying more for our products, but that our entire productive capacity is at a disadvantage. We are basically giving that advantage away to China and other lower-cost competitors. We don't need to be doing that. We can't afford to do that.

Now, through the Trans-Pacific Partnership we have the opportunity to remedy some of the gaps in the NAFTA, but with 12 parties to the agreement the interests of the three NAFTA parties are going to be diluted. There are going to be many other issues. There are many other issues that are not directly relevant to strengthening and streamlining the North American relationship. Also, in trade negotiations the pace and the content are defined by our slowest and least competitive sectors, not by our strong and emerging sectors.

We have a really hard time negotiating for the strong because we are defending the weak. We need to achieve a balance, but you cannot sacrifice our emerging strengths in the process.

What should we be doing? Last January I wrote a piece in The Globe and Mail in which I was highly critical of this government's decision to postpone the North American leaders' summit. I believed then, and I believe now, that it's a very important time for our leaders to be talking to each other, collaborating, etc., so I'm delighted that we're now planning a leaders' summit and that your committee is taking a leading role in ensuring that it's meaningful and substantive.

The other people who have spoken before have given you great lists of things you ought to do, and I think you ought to do all of them. I'm going to give you one principle that I think encompasses the action plans that you've already heard. It's simply this: that we treat the North American relationship with the seriousness it deserves. We need to invest the time and resources commensurate with the fact that the United States and Mexico are Canada's most important economic and political partners. I think we miss that. We are so busy looking at greener pastures elsewhere, or more exotic fields, and we miss the fact that North America is where we need to be investing most of our time and our energy. As Canada, we need to invest in a presence in both of those countries that is sustained and visible.

Canadians often complain that we are taken for granted in the United States, but here in Washington, not just since I've moved here last week, but in my work here in the past five or six years I have been struck by the absence of a Canadian voice in so many important policy issues in which Canada has a stake. I think we assume that we know everything about the United States because we watch U.S. TV and we don't feel that we need to be present. We do not effectively engage U.S. legislators, policy-makers, and thought leaders the way that other U.S. allies do. Even Mexico is more present in Washington than Canada is. Also, our knowledge base here in Canada is weak. I know we think we know a lot about the United States, but as a former university professor at Carleton, my students were woefully lacking in their understanding of how the U.S. legislative and decision-making process worked.

One of the things that strikes me is that in the United States you, as a university student, can go to a Canadian studies program. In Canada, I don't think there are any U.S. studies programs. If there are, I've never seen them. Secondly, I'm a Canadian employed by the U.S. government to lead a think tank on Canada-U.S. issues in Washington. How many think tanks on U.S.-Canada issues are funded by the Canadian government in Ottawa? I don't think there are any. We've become complacent in our efforts to understand and engage with the United States. They're always there, so why should we invest, why should we work harder?

We are quite effective at the bureaucratic level. Our officials work together very well, agriculture to agriculture, transport to transport. They pick up the phone and they talk to each other and they cooperate on routine day-to-day activities. But when those activities, when those issues rise to the political level and we need clout and they need sustained advocacy, we really don't have that here.

Make no mistake, Ambassador Gary Doer and his team in Washington are excellent. The team that is in Ottawa, the Department of Foreign Affairs, Trade and Development, do a terrific job as well, but there's simply not enough resources dedicated to the importance of this relationship. As we enter the next three years of transition, we need to reposition ourselves, not as the quiet Canadians but as a present and visible and valuable ally. To paraphrase a famous bookstore, “The World Needs More Canada”. The United States needs more Canada.

That's why I left a great job in Ottawa to come down here and wave the flag and to raise Canada's presence in a systematic and sustained way.

The principle of treating the relationship seriously also applies to Mexico. It's a relationship that requires time and attention and consistency. I think we expect quid pro quo results and that things will happen quickly with Mexico. They do not.

Our relationship has suffered as a result of the visa implementation issue. Now, with the electronic travel authorization service, we have that opportunity to re-establish our credibility and our presence in Mexico. It's a great signal that we're ready to re-engage in a serious and respectful way.

Mexico is much less a competitor to Canada than it is a production and supply chain ally. If Canadian manufacturing is to thrive in the coming decades it will be because of strong supply chain partnerships in the United States and in Mexico.

If our interests are going to be taken seriously in Mexico City and in Washington, Canadians need to bring their A game to the relationship. Our officials and our businessmen are great, but we need the political leadership. We need you folks down here.

It's well known North America's greatest, most important economic initiatives, the Auto Pact and the Canada-U.S. Free Trade Agreement, came as a result of Canadian ideas and Canadian proposals. We can't wait for the other guys to come to us. We have to be delivering these proposals. We have to be the innovators and the thinkers.

I expect to see every member of your committee here in Washington. I expect to see all of you at my office at the Canada Institute. I'd like you to accept this as my invitation to make the Canada Institute your home in Washington to help you reach out to your congressional and other counterparts here. In two years, I want to come back to this committee, and I want to report to you that our reputation in D.C. has been transformed from the quiet Canadian to the ubiquitous Canadian.

Thank you.

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