Why Canada and the U.S. Should Merge, Eh?
It's past time for the two countries to eliminate their border
By DIANE FRANCIS
Dec. 6, 2013 5:51 p.m. ET
When Americans think about Canada—and that doesn't happen often—they usually think of us as the nice, predictable guy next door who never plays his stereo too loud. Even Rob Ford, Toronto's ranting, crack-smoking mayor, has barely dented our squeaky-clean image.
But Americans shouldn't just think more about Canada. They should consider building on the two countries' free-trade deal and forming a more perfect North American union. It is past time for the U.S. and Canada to eliminate their border—either by creating a customs and monetary union or, more radically, by merging outright into a single nation-state or a European Union-style partnership.
Such a merger makes perfect sense. No two countries on Earth are as socially and economically integrated as the U.S. and Canada. They share geography, values and a gigantic border. Their populations study, travel and do business together and intermarry in great numbers. If they were corporations (or European states), they would have merged a long time ago. And each has what the other needs: The U.S. has capital, manpower, technology and the world's strongest military; Canada has vast reserves of undeveloped resources.
Of course, even the most mild-mannered Canadian may sputter at the prospect of being swallowed up by the U.S., and Americans may wonder about the wisdom of absorbing their huge neighbor. But it needn't be so radical. Nobody is proposing that Canada become the 51st state.
Like modern businesses, modern nations must constantly recalibrate their economic and political models. The smartest people in a room prevail until a smarter group comes along. And unless winners adapt, they eventually lose out, in economic and political life as in nature. Today's U.S. or Canada could become tomorrow's Portugal or Greece. In the competitive and interconnected world of the 21st century, countries that stand still will be left behind.
The two North American neighbors increasingly find themselves staring down the barrel of state capitalism, as practiced above all by China, whose state-owned enterprises and sovereign-wealth funds have made a concerted effort to capture markets and resources. In October, the International Monetary Fund's World Economic Outlook database forecast that by 2018, China's economy will be bigger than that of the U.S.—and Asian economies will be bigger than those of the U.S., Canada, Germany, Britain, Italy, France and Russia combined.
If Canada and the U.S. were to join forces, the tables might well be turned. The North American neighbors would become an even more formidable superpower, with an economy larger than the European Union's and a land mass bigger than South America's. The new union would top the world in energy, minerals, water, arable land and technology, and all of it would be protected by the U.S. military. Size matters.
Canadians have traditionally bristled at the thought of falling under the sway of the U.S., but without a deeper cross-border partnership, we face some grim existential challenges. With its small, aging population and relatively small economy, Canada lacks the resources to develop and defend its gigantic piece of real estate. Through a series of aggressive buyout attempts and transactions, China has targeted Canada's resources and empty landmass. In 2007, Russia used a small submarine to symbolically plant its flag on the ocean floor beneath the North Pole and underscore its claim to a large swath of the resource-rich Arctic, and Russian President Vladimir Putin has been pushing the U.N. to affirm his claims to the region.
The U.S. faces serious challenges of its own. It must create millions of jobs for its relatively young population, and even as its political system grows more sclerotic, it must compete for markets, resources and Arctic access with the aggressive practitioners of state capitalism.
Truth be told, the merger of the U.S. and Canada is already well under way. As many as one in 10 Canadians (more than 3 million people) live full- or part-time in the U.S., and an estimated
1 million Americans live in Canada. As of 2010, U.S. enterprises controlled about 10% of Canada's assets, 17% of its revenues and 13% of its corporate profits, according to Statistics Canada. Canadians bought more goods and services from Americans than did the 340 million people living in the European Union—a population 10 times as large.
A still deeper integration could drive major economic growth. Canada's hinterland is largely without infrastructure or development, even though it contains enormous untapped natural resources. Political disputes have also stranded some of the world's most promising hydroelectric and tidal power prospects in the Canadian provinces of Quebec, British Columbia, Manitoba, Newfoundland and Nova Scotia.
Despite the powerful logic of a U.S.-Canada merger, the obstacles remain daunting. Both countries are divided politically and heavily regionalized. To execute so audacious a move would require a level of statesmanship now lacking in both countries.
But remember, the Europeans pulled off something far more dramatic, uniting populations that shared no language and had slaughtered one another for centuries. Other recent examples of deeper integration include the Eastern Caribbean Economic and Monetary Union and the Economic Community of West African States. They all did it by opening their borders to trade and travel—while at the same time leaving governments intact.
Opinion surveys about an outright merger are scant, but as far back as 1964, a poll showed support from 49% of Canadians. In 2007, the World Values Survey Association, a research network of thousands of social scientists, found that about 77% of Americans and 41% of Canadians said they would opt for political union if it meant a better quality of life. In 2011, another poll by Harris/Decima showed that 65% of Canadians backed greater integration with the U.S. and supported a plan to eliminate the border by blending U.S. and Canadian customs, immigration, security and law enforcement efforts.
Those who oppose such a merger are on the wrong side of history. When the North American Free Trade Agreement passed in 1987, the U.S. and Canada (along with Mexico) began a mutually beneficial process of integration that now needs strengthening. Untended, the border has become clogged, damaging trade and tourism. And the wolves are at the door. Just this year China, Inc. picked off a large Canadian oil company and a large American food processor and exporter, without promising either country any reciprocal buyout privileges in China.
Serious discussion of a merger should be a top priority for both the U.S. and Canada. The continental neighbors need one another more now than ever before, and the status quo grows less viable by the day.
—Ms. Francis, a dual Canadian-American citizen, is the author of "Merger of the Century: Why Canada and America Should Become One Country," published by HarperCollins.
http://online.wsj.com/news/articles/...38301861025662
Why Canada and the U.S. Should Merge, Eh?
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