Canada is nervous about depending on America. No surprise there, we live in a time when America is nervous about depending on America, so why shouldn't its foreign allies feel the same? The United States doesn't do itself any favours, mind you, when—as two Canadians in Foreign Affairs put it this week— "Obama jilts Canada." But jiltings and hurt feelings aside, the resurrection of Canada's infamous "third option" is more fact of history than knee-jerk diplomacy. Obama didn't lose Canada, America lost the world. And the rise of the rest means Canadian policy makers and trade negotiators must diversify our interests.
As Canadians, it's important we dampen the fires of mean spirited panic at this shift in trade strategy. It is neither new nor radical. In 1972, Mitchell Sharp—Trudeau's Secretary of State for External Affairs—proposed what has famously been called his Third Option. The impulse at that time was to weaken Canadian cultural and economic dependence on the United States in the interest of safeguarding Canadian identity. This was the time of George Grant's Lament for a Nation, and of the Trudeauvian cultural project, which birthed such agencies as the CRTC.
The Third Option in a bipolar world of the Cold War was a tough sell. It meant a small détente with the Soviets, a softening of language and trade barriers which included buying and selling in unfriendly markets. Critics say Canada tried to play both sides, defenders that Canada was opening a door for conversation and exchange in the overheated rhetoric of the Cold War, while positioning the Canadian state as a constructive intermediary.
Whatever you make of Mitchell Sharp's Third Option, we're back at it again, but this time for very different reasons. The Keystone XL pipeline was a quixotic and bizarre diplomatic affair, but Canadian diversification is a long term trend that has run parallel to American decline. President Obama can neither absorb nor resolve the blame of Canadian interests moving abroad, anymore than the causes of American decline and recession can be placed at his feet. One diplomatic incident, even one about moving oil, does not change a state's trade policy.
Today Canada has better options than dodgy back rooming with the Soviets. Rising economies in the so-called BRIC (Brazil, Russia, India, and China) and the emergent MIST (Mexico, Indonesia, South Korea, and Turkey) economies have produced serious market options for Canada which did not exist in the bipolar world of Mitchell Sharp. That does, and should, change a state's trading policy. Diversification in this context is not only prudent but necessary.
But let us calm our Canadian nerves and relax our standing guard: the Americans are still, and will undoubtedly remain, our very best friends. Prime Minister Harper proved it again this week by fronting the $500 million for the Detroit River International Crossing. Keystone hurt some feelings, but it hasn't altered the economic and political trajectory of global politics. For the time being, much of Canadian business and trade flows south. But that will change over time, and a revitalized Third Option names that trend. It is not apathy. It is not betrayal. It is an incremental market reality. Diversification, in friends as in economies, is only betrayal in a world of zero-sum relationships.
