Wednesday, July 19, 2000
The Halifax Herald Limited

Economies open to trade are ones that will prosper

By Brian Lee Crowley

FORGET ABOUT the union of Atlantic Canada. That was an idea that suited the technology, the politics and the economy of the 19th century. Today, at around 2.5 million people, in an awkward corner of North America, any internal changes we can make will be too little, too late and would distract us from the relationship-building that can make a difference.

The annual meeting this week in Halifax of the New England Governors and Eastern Canadian Premiers points the way to the future. History, geography and technology now dictate that we think in terms of a far larger region: Atlantic Canada, Quebec and New England. Let’s call it Atlantica.

Freer trade is the key to Atlantica’s emergence. Compare the Taiwans, the Hong Kongs, the South Koreas, and the Singapores with the Cubas, the Burmas and the North Koreas of this world. Compare the Argentina or Brazil or India or Ireland of today with the same country a mere 10 or 15 years ago. Economies open to trade are the ones that prosper.

In a world of freer trade, success means identifying your main strengths, and not holding on to the industries of the past. In such a world, Atlantica has some very distinct advantages. Two-way trade between Canada and the U.S. is the largest in the world, a billion dollars worth every single day of the year. Over 300,000 trucks enter Maine alone from Canada every year, about a 50 per cent increase in only five years.

This region is the meeting place of Europe and North America. Already some 40 per cent of the world’s trade takes place between these two trading blocs, and that trade is already slated to grow tremendously.

Montreal and Halifax are two of the great seaports on the Eastern seaboard and in the era of post-Panamax shipping, Halifax can grow enormously as one of the few ports able to accommodate these behemoths without dredging.

This region’s transport infrastructure will flower, as Halifax improves its rail and road links to Montreal and, south and west, through Maine and the rest of New England, as truck and air traffic increase, and as more and more of the region and the continent see Halifax not merely as a port of entry, but also as a port of exit toward Europe. Fast-ship transhipment technology will allow Boston and Montreal to benefit from Halifax’s natural strengths, too. Then there is the region’s future as an energy giant. The St. Lawrence basin’s hydrocarbon potential is huge, and both natural gas and petroleum are flowing in prodigious quantities today from the very few holes that have now been brought into production.

The pipeline that already links Nova Scotia to Boston is the symbol of Atlantica’s potential. It is no accident that it was built, not to take that gas into the industrial heartland of Canada, but to help us re-establish vital links with our historic partners in New England, creating opportunities throughout the region. And it’s not just oil and gas: Nova Scotia Power has just bought a power utility in Maine.

The greatest obstacles to realizing the dream of a highly integrated regional economy at the confluence of Europe and North America are political. NAFTA reduced, but did not eliminate, the economic effects of the border.

For we can only realize the benefits I’ve outlined if, for example, some of New England’s excellent banks can extend their activities into Atlantic Canada and Quebec, breaking the stranglehold of Canada’s too-centralized banking system on our region.

It can only come if authorities on both sides of the border are willing to look at transport infrastructure as an integrated regional whole, rather than as the tail ends of our respective national transport systems.

It can only come if we reintroduce vigorous competition in air travel by allowing all airlines to operate freely on both sides of the border.

It can only come if we demand that our political leaders complete the market-opening actions they’ve started, but not finished. NAFTA remains incomplete. We are treading water on negotiations for a free trade zone linking the EU and NAFTA – a zone that would tear down the transatlantic barriers that stand between us and opportunity. And in this election season, it is clear that political forces hostile to freer trade are more powerful in the Washington political establishment than they have been for decades.

Atlantica is an historic opportunity to make a quantum leap into a distinctive economic vocation that draws on all our natural strengths and talents, one that sees our future in building closer ties beyond Atlantic Canada.

But it will not occur simply because it can. We have to work to make it happen.

Brian Lee Crowley is president of the Atlantic Institute for Market Studies, a public policy think-tank in Halifax.
Email:
BrianLeeCrowley@aims.ca