Canadian Independence in an Asymmetrical World Community: A National Riddle
| DOI | 10.1177/002070207402900402 |
| Date | 01 December 1974 |
| Published date | 01 December 1974 |
| Author | Grant L. Reuber |
| Subject Matter | Article |
GRANT
L.
REUBER
Canadian
independence
in
an
asymmetrical
world
community:
a
national
riddle
It
is
a
platitude
nowadays
to
say
that
countries
are
highly
inter-
dependent
and
daily
growing
more
so.
No
country
sees
inter-
dependence
as
a
goal
in
itself.
Rather
it
is
seen
as
a
cost
to
be
paid
to
obtain
a
variety
of
economic,
political,
social,
and
cultural
benefits.
At
what
point
the
cost,
in
terms of lost
independence,
exceeds
the
gains
made
possible by
greater
interdependence
is
obviously
difficult
to
say.
In
the
end
it
becomes
largely
a
matter
for
collective
political
judgment,
reflecting
a
spectrum
of
differ-
ing
opinions
that
shifts
with
changing
circumstances.
All
this
applies
to
the
relationships
among
most countries.
As
far
as
Canada
is
concerned, the
thesis
of
this
paper
may
be
sum-
marized
as
follows:
two
features
primarily
distinguish
Canada's
international
interdependence
-
one
is
the
degree
of
bilateral
interdependence
with
the
United
States
and
the
second
is
the
asymmetry
in
this
relationship.
These
features
increase
the
costs
of
interdependence
for
Canada
compared
to
what
they would
be
in
a
more
diversified
and
symmetrical
world.
At
the
same
time,
Canada
reaps
particularly
large
benefits
from
its
interdependence.
Changes
in
the
world
economy,
as
well
as
in
Canada,
during
the
past
decade
have
complicated the
age-old
national
riddle
of
how
to
reduce
the
costs
of
interdependence
while
maintaining
or
in-
Professor of
Economics,
University
of
Western
Ontario, London, Ontario;
author
of
Private
Foreign
Investment
in
Development
(1973).
An
abbreviated
version
of
this
paper
was
presented
at
a
meeting of
section
it
of
the
Royal
Society of
Canada
held
at
Toronto
on
5
June
1974.
I
wish
to,
acknowledge
the helpful
comments
made
on -an
earlier
draft
of
the
paper
by
C.E.
Beigie,
I.
Brecher,
P.
Dobell,
H.E.
English,
T.N.
Guinsburg,
A.F.W.
Plumptre,
R.J. Wonnacott,
and
several
government
officials.
The
author
alone
is
responsible
for
what
is
said.
536
INTERNATIONAL
JOURNAL
creasing
the
benefits
gained.
In
the
process,
the
difficulty
of
developing
acceptable
policies
has
increased.
Simple-minded
nationalistic
policies
that
merely
reduce
trade,
capital
flows,
and
other international
exchanges
reduce
the
benefits
of
interde-
pendence much more
than
the
costs.
What
is
needed,
and
may
be
feasible
to
a degree,
is
a
set
of
policies
that
reduce
the
costs
of
interdependence
while
opening
the
way
to
even
greater
benefits
-
in
short, an
attempt
to
manage
interdependence
in
a
more
deliberate
fashion
than
in
the
past.
Although
this
paper
focuses
mainly
on
economic
interde-
pendence, the
issue
is
greatly
influenced
by
political
concerns.
Consequently,
it
will
have
something
to
say
about
the
non-
economic
consequences
of
economic
interdependence
but
the
impact of
Canada's
interdependence in
political,
social,
and
other
areas
will
not
be
considered;
nor
will
a
variety
of
special
topics,
such
as
energy,
despite
their
obvious
importance
within
the
context
of
this
paper.
DEGREE
OF
ECONOMIC
INTERDEPENDENCE
AND
ASYMMETRY
At
present
about
70
per
cent
of
Canada's merchandise
trade
(exports
and
imports)
is
with
the
United
States.
In
round
num-
bers,
trade
in
goods
and
services
with
the
United
States
is
just
under
2o
per
cent
of
Canada's
Gross
National
Product
(GNP);
and
this
proportion
is
roughly
twice
as
large
if
one
excludes
services
from
the
comparison
and
considers
only merchandise
trade
in
relation
to
goods-producing
industries.
Moreover,
as
Professor
Jacob
Viner
observed
more
than
a decade
ago,
such
figures
-
large
as
they
are
-
understate
Canada's
dependence
upon
foreign
trade,
especially
with
the
United
States.
They
fail
to reflect
adequately
the
dependence
of
Canada's prosperity
upon
foreign
commercial
policies,
which govern its
access
to
foreign
markets.
They
also
fail
to
reflect
Canada's
commercial
policies
which
affect
the
level
of
Canadian
production
costs
and
have
some
influence
on
foreign
commercial
policies
vis-4-vis
Canada.
In
recent
years
Canada
has
had a favourable
balance of
mer-
chandise
trade
with the
United
States.
This
has
been
more
than
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