Brexit Paradox: US and Canada should merge economically and militarily

by Diane Francis

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The Three Amigos met this week in Ottawa with an exceedingly messy Brexit and rising U.S. protectionism as worrisome backdrops.

The meeting was more about optics than substance, but there was one clear and expensive request buried President Barack Obama’s speech: “NATO needs more Canada.”

Whoops.

The media has not picked up on this because Canada has gotten used to outsourcing its defense to the United States. But those days are going to come to an end, especially given that Obama – a relatively un-jingoistic president – bluntly stated this to the House of Commons.

What the President was referring to was the fact that the U.S. continues to do all the heavy lifting for NATO (and NORAD) and only five of 28 NATO members have committed 2 per cent of their GDP to military spending – the avowed goal. The US spends 3.3 per cent of its GDP on defense. Canada is one of the laggards spending only 1 per cent.

To put Obama’s “request” in dollars, Ottawa would have to double its current defense spending in 2015 of US$15.7 billion to US$31.4 billion. By comparison, France earmarks 1.8 per cent of its GDP for defense and Britain 2 per cent.

The NATO average is 1.43 per cent and just to match that average, Canada would have to increase its defense spending by another US$6.7 billion for a total of US$22.4 billion. This, by the way, is less than Australia spends annually or US$23.6 billion which amounts to 1.9 per cent of its GDP.

For Canada, that would represent a significant budgetary increase and would not be very popular, but Washington believes this is long overdue. And, to be blunt, to not accede will guarantee that Canada’s defense spending will become a bilateral issue whether Donald Trump or Hilary Clinton wins this fall.

If Trump wins, Canada will get an invoice. If Clinton does, Canada will face considerable pressure to pony up.

Spending more is not unreasonable, by the way. The world is more dangerous. There is terrorism but the most malevolent force in the world is Vladimir Putin, not ISIS, who has thousands of nuclear warheads and has dramatically increased the size of his military. He also declared that the entire Arctic is “Russian” and intends to control Arctic shipping lanes in future.

Putin now occupies 9 per cent of Ukraine, one third of Georgia, a chunk of Moldova and is aiding and abetting an Armenian-Azerbaijani conflict as well as the Syrian genocide by supplying arms and armed forces to Bashar al-Assad. He is destabilizing the European Union, and NATO, by co-opting European politicians and influencers and contributing to the flood of migration into Europe. He applauded Brexit.

Add to this is the fact that the new normal is a multipolar global economy driven by the United States, the European Union and China. Each of these engines of global growth will become more militarily vigilant and better defended against state-sponsored terrorism, religious-based terrorism, unfair trade practices and massive influxes of refugees fleeing failing states.

At the same time, their societies will increasingly be riven by homegrown terrorism, technological unemployment and free trade. All these trends will hollow out their middle classes.

This means that Canada and Mexico, prospering along with their dynamic neighbor, are not going to enjoy business as usual. Trump will rip up NAFTA, forcing a better deal for the U.S. with Canada and building a wall against Mexico. Clinton will also adopt more protectionist policies to please the left flank of her party, led by Bernie Sanders and the unions.

Canada, out of the direct line of fire, must still heed the signs and prepare for a reconstituted NAFTA no matter what. By the way, I believe the best course of action for Canada is deeper economic integration with the U.S. as soon as possible, including militarily. Obama hinted at a “partnership in the Arctic” and frankly the two should create a NORAD Navy with the Canadian Navy as part of the U.S. Navy. Canada’s navy is capable but woefully inadequate to look after the world’s largest coastlines, and the Arctic is patrolled by the United States already, not Canada. Development in the North is non-existent and the Americans could help there too.

To not collaborate is disastrous. Britain has committed the nation-state equivalent of Hari Kari by narrowly voting to quit the European Union and will become an economic orphan. It may be partitioned if Scotland and Northern Ireland or even Wales secede to remain part of the EU. Of Britain’s total 64 million population, about 9 million live in these three “Celtic” regions and all voted overwhelmingly to remain in the EU.

Britain will hobble along but half its resource revenues would leave if Scotland goes. London will also find its pre-eminence ebbing as multinationals and foreign exchange/stock market operators move their EU headquarters to Amsterdam, Frankfurt or Dublin.

The sun will begin setting on Britain unless the referendum is restaged and reversed. It will become a cautionary tale to countries that think they can go it alone in this day and age without the blessing and beneficence of either Brussels, Washington or Beijing.

Everyone must heed the future world order. To think otherwise is folly.

First published in National Post

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