A basic description of the Security and Prosperity Partnership—an “ongoing dialogue” between the U.S., Canada, and Mexico—reads like a riddle. It’s not an official agreement, but it affects policy in all three countries. It doesn’t require parliamentary involvement, but its decisions affect citizens directly. Leaders describe it as a minor undertaking to expedite cross-border trade and tweak border security—Stephen Harper has joked that its priorities are as insignificant as standardizing the size of jellybeans—yet its meetings are sensitive enough to bar NGOs and reporters. What, then, could it be?
Depending on who you ask, the SPP is anything from a sinister plot to converge the three countries into an EU-style North American Union to a series of mundane chats between political and business leaders. Because of how the leaders involved spin their activities—shrugging off accusations of secret plotting while remaining vague and secretive—impartial opinions are hard to come by. Some on the right see the SPP as a threat to national sovereignty. Much of the serious research and writing has been done by left-leaning organizations.
So elusive are the details that some observers, on both sides of the political spectrum, have proclaimed the discussions dead. “I was down [at the fourth SPP summit] in New Orleans this year, and we talked to the media—they were complaining to us,” says Stuart Trew, Ontario-Quebec Regional Organizer for the Council of Canadians, a citizens’ organization formed in 1985 to challenge Brian Mulroney’s free trade policies. “They said ‘We’re getting no information, we’re being spoon-fed tiny little clips, we have no idea what they’re talking about, so our only assumption is that nothing’s happening.’” Whether or not the SPP is active may be of little importance: its underlying ideas are neither new, nor are they likely to disappear anytime soon. If the talks are finished, their effects remain active in their wake.
What piques the interest of free trade critics and NGOs is that SPP proceedings have lacked transparency and democratic oversight from the beginning. “The secrecy is normal, but it doesn’t mean it’s acceptable,” says Trew. “It’s a shame that it’s become the norm, and it’s a shame that the media is very much a part of it. CTVglobemedia sat on the North American Competitiveness Council [an SPP advisory group comprised of CEOs from each country]—they own CTV and they own The Globe and Mail. Can you imagine if either of those news outlets was to report an exposé of the SPP?”
The SPP was officially announced in Waco, Texas on March 23, 2005 by Paul Martin, George W. Bush, and Vicente Fox. According to many, its conception date was September 11, 2001. Border shutdowns following the terrorist attacks put a temporary stop to trade with the United States, delivering a quick shock to Canadian business, which relies on the swift movement of goods between the two countries. Business leaders and right-wing academics—proponents of “deep integration,” or eliminating the differences between Canadian and U.S. policy that negatively affect trade—saw an opportunity to push their agenda for the further harmonization of regulatory, economic, and political policies between the two states. In a 2002 commentary for the C.D. Howe Institute, Wendy Dobson, director of the Institute for International Business at the Rotman School of Management, wrote, “A window of opportunity is now open because of the United States’ current openness to its friends and neighbours. Canada should decide how to take advantage of this opportunity.” The commentary proposes a customs union, a common market, and a “strategic bargain” to further Canadian economic interests in light of the United States’ post-9/11 security priorities. In the years that followed, Dobson would join other thinkers, CEOs, and political leaders in drafting an eventual partnership.
After 9/11, Canada linked its security policies to those of the United States. The Smart Border Declaration and Associated 30-Point Action Plan followed, along with the controversial USA PATRIOT and Anti-Terrorism Acts in the United States and Canada, respectively. Prudent measures were at odds with civil liberties, and sloppy intelligence sharing led to the wrongful arrest, deportation, and torture of Maher Arar as well as the similar ordeals of Abdullah Almalki, Ahmad Abou El-Maati, and Muayyed Nureddin. Homeland Security thus appeased, business leaders and thinkers capitalized on the opportunity to pick up where NAFTA left off. With rising competition in developing economies like China and India, it was an opportunity to boost North America’s competitiveness.
The SPP was unveiled without much fanfare. Even two years after its inception, when accumulated research and leaked documents drew activists by the thousands to its third summit in Montebello, Quebec, the “partners” involved remained reticent. In a way, there was no need for a broad announcement, as commentators on both sides have noted that the SPP’s ambitions are hardly novel. “What they’re talking about is not radically new. These things were proposed prior to September 11—various levels of integration at the economic and political level,” says Todd Gordon, an assistant professor of Canadian Studies at the University of Toronto. “They flow from a long historical process.” Michael Hart, a Carleton professor and former trade advisor during the Mulroney years, downplays the partnership as a link in a long chain: “The Security and Prosperity initiative was largely the fifth generation of an initiative that was first announced in 1996, and then repackaged five times in order to keep officials busy. But most of the things that could usefully be done have been done […] so the Security and Prosperity Partnership is little more than a matter of gift wrapping things that have already been done.”
Comprised of a number of working groups—the members of which have never been publicized—the SPP advertised itself as a supplement to “other existing positive and productive bilateral and trilateral relationships” like NAFTA. Some initiatives were little more than nitpicking—agreeing on a common crate labelling system, for instance, to simplify the process of exchanging goods. Others were not so simple. Predictably, SPP officials couched their dealings in benign terms, and there seemed to be little reason for those who weren’t analysts by trade to engage in any scrutiny. The kicker came in 2006 with the announcement of the North American Competitiveness Council, an advisory group comprised of ten CEOs from each country. NACC members have been less bashful than the politicians about their privileges. “The guidance from the ministers was, ‘Tell us what we need to do and we’ll make it happen,’” Ron Covais, President of the Americas for Lockheed Martin told Maclean’s in 2006. Trew echoed that quote (from the mouth of U.S. Commerce Secretary Carlos Gutierrez) when I spoke to him. “This is astonishing,” he laughs. “They basically said, ‘This is your game, what do we need to do to make North America competitive?’ So they came up with 50 recommendations, and on the top of the list was regulatory harmonization.” Many of the NACC’s recommendations—released in early 2007—became major priorities. Some of them have already chipped away at Canadian policy.
The question remains: how does a non-official body, not voted on or impressed upon the law books, change the way governments do business—and what sort of legal framework allows a private-sector advisory group to change public policy? NAFTA set a stunning example for corporate influence with its infamous Chapter 11, which allows investors to sue governments over policies deemed detrimental to trade. According to a report from the Canadian Centre for Policy Alternatives, from 1994 (when NAFTA took effect) to October 2007, there were 49 challenges filed under Chapter 11. Canada had paid $27 million in damages, and Mexico, $18.2 million. The United States, on the other hand, had been spared. Recently, Mobil Investments Canada, Inc. (a Canadian arm of ExxonMobil) took issue with guidelines requiring energy companies operating off the coast of Newfoundland and Labrador to reinvest some of their profits into local projects. Chemical companies have also challenged bans on toxic pesticides. An environmental measure in Ontario that halted a proposed landfill site on a man-made lake was challenged to the tune of $355.1 million. Governments, to a certain extent, are beholden to companies on legal grounds. The SPP sees the two working together with alacrity.
NAFTA was (and continues to be) an election issue, with dangers well documented. Governments, it seems, have learned their lesson. “They’ve decided to use a process where they wouldn’t have to pass any laws,” Trew says. “This is what we heard from the U.S. embassy […] They booked a meeting to talk to the Council and other groups, and one of the things they told us during that meeting was, ‘We wanted to avoid another bruising NAFTA battle.’ NAFTA needed legislation, and it opened up a political debate. They got smart, and they said there’s not going to be any political opportunity for debate. We’re going to do this entirely through regulatory changes.”
In Canada, there are significant differences between acts and regulations: the former must pass through the legislative branch, while the latter can be enacted after two postings in the Canada Gazette, the Canadian government’s official newspaper. In Canada, the Cabinet Directive on Streamlining Regulation was released in April 2007, while the SPP-spawned Regulatory Cooperation Framework, released in August 2007, established officiating principles such as “[Justifying] the need for regulation, including the consideration of market failures” and “[minimizing] the adverse impact of regulation on a fair, competitive, and innovative market economy.”
We’ve felt the SPP’s regulatory effects. They did, for instance, contribute directly to the listeriosis crisis, which killed 20 people and made a confirmed 53 sick. The Canadian Food Inspection Agency’s Report on Plans and Priorities 2007-2008 states “The CFIA continues to implement initiatives under the SPP, which are aimed at a more effective North American food and agriculture regulatory system,” and a leaked government document shows a move from formal inspection to industry self-regulation as of March 31. Of course, this led to the proliferation of deadly listeria inside a Toronto Maple Leaf Foods plant. According to the Ottawa Citizen, Canada also increased acceptable levels of pesticide residues in order to harmonize agricultural standards with the United States.
SPP directives have found their way to Parliament. Bills C-51 and C-52—which would place homeopathic products under federal drug controls, increase penalties, and allow foreign governments a hand in domestic regulation—have been vigorously decried by natural health practitioners as the result of Big Pharmaceutical interests. They also coincide with initiatives set by the SPP Health Working Group. The controversial Bill C-61, which tightens copyright controls, coincides with the SPP Intellectual Property Action Plan established at Montebello. The bills’ likely closed-door origins merit consideration, regardless of what you think of them.
“Most of the concerns are psychological,” says Hart. “There are Canadians who worry that doing this will reduce our ability to make sovereign decisions. I think that’s overwrought, because most of what we do is done with a view to ensuring that Canadians are able to participate in the global economy. I think there are very few Canadians who want to stop the world and get off, who say, ‘Let’s not trade with the rest of the world.’ Canadians are worried that if we do more work with the United States, we will get implicated in American foreign policy adventures. I doubt that that’s the case—it hasn’t been the case for the last 50 years […] If we work with the United States to solve economic problems, why do we then have to get involved in US foreign policy issues?”
Critics are worried about how trade-inspired security initiatives will affect the countries involved. The SPP’s stated initiatives include intelligence sharing, military convergence (achieved via the recent Civil Assistance Plan, which integrates the U.S. Northern Command with Canada Command), the use of biometric data in assessing threats posed by travellers, and the creation of a Canadian no-fly list (Transport Canada’s Specified Persons List, which took effect in June 2007 to much criticism by civil liberties advocates).
SPP initiatives straddling “security” and “prosperity” designations trouble environmentally minded critics. In his 2006 State of the Union Address, George W. Bush talked about reducing U.S. dependence on Middle Eastern oil. Two months later, the North American Energy Security Initiative was established at the SPP’s Cancun summit. One country’s economic priority is another’s security precaution.
“I’ve been told that the break-even point for refining, using bitumen, is somewhere in the 75 to 85 dollar range,” says David Israelson, a veteran journalist and author of How the Oil Sands Got to the Great Lakes Basin, a report for the Program on Water Issues at the Munk Centre for
International Studies. “We’re below that now. Like anything else, you put off doing the work if you’re not making a lot of money doing it. “Turning bitumen into petroleum is, in Israelson’s words, “one of the most energy-intensive, dirtiest industrial activities in existence.” Needless to say, it’s also a huge economic priority in Canada.
Hart is confident that our energy industry serves our best interests. “We have no obligation to provide the United States with energy,” he says. “We develop energy because we think it can be profitably sold to the United States, to our economic advantage. And we do that on the basis that it meets the regulatory requirements of the Canadian government, or the Alberta government.” Others have a different take. “Under NAFTA, once we agreed to export a certain amount of energy to the United States […] we can’t send less anymore,” Israelson explains. “It’s treated as one market. Economically, you can say it’s in our interest because we make money from it, even if we say ‘this is bad for the environment’ or ‘we’re moving too fast’ or ‘we have other markets.’ Once we’ve agreed to a certain level, there’s no turning back after NAFTA—that’s the market bottom. Ironically, that was something we wanted in NAFTA. We were worried they wouldn’t want our oil back in the early ’90s when it was being negotiated.”
Under the SPP, energy priorities focus on infrastructure and market access, pushing oil exports above and beyond the minimum set by NAFTA at the expense of environmental concerns. In 2006, the SPP’s Oil Sands Experts Group Workshop reported a “fivefold expansion anticipated for oil sands products in a relatively short time span,” acknowledging that “industry and governments have a vested interest to work together to ensure the successful expansion of this important North American resource.” This summer, Daniel S. Sullivan, the U.S. Assistant Secretary for the Bureau of Economic, Energy, and Business Affairs, announced that “the Administration has moved to streamline and modernize the permitting process” for petroleum pipelines.
An even more contentious issue is that of bulk water exports, the process of selling fresh water en masse to the United States. Water has been sold to the United States in smaller quantities, and bulk exports have almost occurred—in 1998, Sun Belt Water Inc. filed a Chapter 11 challenge against British Columbia’s efforts to prevent it. Liberal and Conservative leaders alike have dismissed the possibility. According to an aide, Harper plans to “strengthen our ban” during the next parliamentary session. “I’m not aware that the Americans have ever asked us to export water to them,” Hart says. “This is a fear that some people have bandied about for many years […] The reason they haven’t [bulk-exported water] is because the United States only has a water problem in the Southwest, and that’s so far away from Canada that it’s [too] astronomically expensive to even think about.” (It’s worth noting that Sun Belt Water was, as its name suggests, established to supply the Southwest).
But close observers like Andrew Nikiforuk, journalist and author of the report On the Table: Water, Energy and North American Integration, suspect that bulk water trade is developing, and the SPP is instrumental in making it happen. The connection isn’t immediately obvious, but like the SPP itself, doubts multiply the more one investigates. A leaked 2006 report from the North American Future 2025 Project (involving prominent think tanks with connections to the SPP) discusses the threat of global water shortages, stating that “Canada possesses about 20 per cent of the earth’s fresh water […] policymakers will benefit from a more proactive approach to exploring different creative solutions beyond the current transboundary water management agreements.” According to NDP MP Peter Julian, the document was circulated before an SPP meeting in 2007. Large-scale water exports would indeed be profitable, and Canada, with the world’s largest supply of fresh water, would logically serve as North America’s provider. But supplies inevitably run dry, and once exports begin, our obligations under NAFTA will ensure a leaky faucet.
In the meantime, there seems to be a lack of SPP-specific updates, and a date has yet to be publicized for a fifth summit. Reasons for its demise vary from left to right: Trew and Gordon attribute its apparent expiry to popular opposition, much like the Free Trade Agreement of the Americas and the Multilateral Agreement on Investment before it. Hart claims its aims were “modest” to begin with.
Whatever the case, the principles driving the SPP are far from extinct, and the policy changes it set in motion—as well as the corporate advisory body it christened—are unlikely to sink with the ship. Hart has been working on a new Canada-U.S. proposal to be unveiled in January 2009. “We’re working on seven or eight themes where we think there are Canadian interests that need to be pursued, and where we think there will be U.S. interest. So we’re defining what we think are the parameters for engaging the United States on those issues. And that includes the border, it includes regulations, and includes the broader theme of competitiveness. It deals with energy, with such things as arctic sovereignty, security, defence cooperation—the whole gamut of Canada-U.S. issues,” he says.
There are hopes that an Obama Administration will deliver the final blow to the partnership’s proceedings, or at least slow the pace of further integration talks. Almost immediately after the American election, the Fraser Institute (a conservative think tank) released a report critiquing Obama from the right. It addresses the SPP, which “appears to have run out of steam,” and recommends that Harper “take the opportunity to renew efforts to open bilateral discussions on trade and border issues.”
“The SPP is one of those shadowy things [where] nobody knows the extent of how far along the road we are,” says Israelson. “If you take the innocent explanation, it’s simply a little negotiating mechanism to further the interest of some sort of continental cooperation. If you take it at its most sinister, some people contend that it’s a secret plot to integrate Canada into the United States. I think that’s a little bit of hyperbole. Everything’s changed since November 4. We have a new administration coming in with very, very different objections than the old administrations, very different ideals about energy policies […] I think we’re about to see the United States get very serious about that. Less than 24 hours after the election, Canada said we should do something about carbon emissions together, which Canada has never done before.”
Lefties can take heart in the fearful reactions of right-wing think tanks like the Fraser Institute. Fair trade advocates rejoiced, and proponents of trade liberalization fretted over Obama’s statements during the primaries about renegotiating NAFTA. Others dismiss them as a non-issue, especially in light of a contradictory memo that surfaced afterwards. “It has only piqued the interest of journalists,” Hart says emphatically. With Rahm Emanuel—who marketed NAFTA to Congress and earned millions as an investment banker— as Chief of Staff, it doesn’t seem likely that Obama will make any fundamental changes to North American trade. But hopes remain that Obama will steer trade policy in a direction friendlier to the environment, civil liberties, and workers. If so, our own leaders will have to compromise. Obama—with his hopeful constituency—won hordes of supporters for his apparent earnestness and transparency. Dealing in talks as wide-reaching and nebulous as the SPP seems out of his public character. “I really do think that the world changed on November 4,” Israelson says. “It’s not going to be night and day, and suddenly everything is fine and we’re going to be holding hands and dancing in the fields—but it’s going to be different in that the rest of the world has confidence in that administration. They like them, they are willing to give them a chance, and listen a bit, and vice versa.”
