Federalism and the Evolving Cross-Border Role of Provincial, State, and Municipal Governments

THE EVOLUTION OF A MODERN BILATERAL RELATIONSHIPIn his introduction to first American Assembly volume dealing with Canada-US relations, John Sloan Dickey emphasized that book aims at a better understanding of relations in time, place, and human affairs that add up to phrase each of us uses with such unconscious ease: 'the United States and Canada,' or vice versa.' Nevertheless, coverage of bilateral relationship in this excellent volume is dominated by decisions made and actions taken by representatives of national governments in Ottawa and Washington, DC. The second volume, which appeared two decades later, does occasionally go beyond respective national beltways, with Gordon Robertsoris chapter discussing how Canadian federalism, especially unfolding events in Quebec, might eventually affect crossborder ties.2 Other chapters deal with influence of economy, culture, and environment on Canada-US relations.Thus, second volume puts somewhat less emphasis on importance of Ottawa-Washington relationship, and this is not too surprising, because between publication of first book in 1964 and second in 1985, Robert Keohane, Joseph Nye, Jr., and others had begun to write about complex interdependence and growing networks of international ties which go far beyond relations between national governments. Indeed, Keohane and Nye highlighted Canada-US relations in 1977, labelling these ties quintessential model of complex interdependence, defined by the absence of force, lack of hierarchy among issues, and presence of multiple channels of contact between societies.' For Keohane and Nye, three types of cross-border interactions are prominent in contemporary world of international relations. The first is interstate interactions, typified by official exchanges between representatives of national governments. The second is transnational interactions which involve at least one nonstate actor such as a corporation, a labour union, or a church organization. The third is transgovernmental interactions which include at least one governmental entity or representative not linked directly to leadership of a national government. In this chapter, we will focus primarily on this latter category which was largely ignored in first two American Assembly volumes and which merited only one sentence in Keohane and Nye's own study of Canada-US relationship.DOCUMENTING MULTIPLE CHANNELS OF INTERACTIONCanada and United States share a 4,ooo-mile border and another 1,500mile border separating Alaska from British Columbia and Yukon. The evolving cross-border relationship, which affects 32 million Canadians and 295 million Americans, is as complex and diverse as any in world, evincing many of features of globalization emphasized by Keohane in following statement: Interdependence refers to a state of world, whereas globalization describes a trend of increasing transnational flows and increasingly thick networks of interdependence.4 The overall complexity in bilateral relationship is illustrated in figure 1.In economic terms, United States and Canada maintain largest bilateral trading relationship in world, with two-way trade in goods and services in range of US$1.2 billion per day, up over 150 percent since 1988, year before Canada-US free trade agreement (FTA) went into effect. US foreign direct investment in Canada, a type of investment which provides Americans with control over management of companies operating in Canada, surpassed $192 billion in 2003, with US-owned companies accounting for over 10 percent of Canada's gross domestic product (GDP) and providing 1.16 million jobs for Canadian workers.5 Canadian foreign direct investment in United States stood at $105 billion at end of 2003, with more than 470,000 Americans working for Canadian majority-owned non-bank enterprises. …

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