Why the U.S. and Canada should merge

Imagine, if you will, a moment in the not-too-distant future: A decades-long effort by Chinese companies to infiltrate Canadian banking and drilling firms has succeeded in securing Canada's oil and natural gas fields for pillage. At least some money from these deals trickles into Ottawa's coffers, which is more than the government can say for its oil in the Arctic, where Canada has been muscled out of its claims by extraction companies with the backing of the Russian government. A network of Chinese ports has secured the sea lines along the Northwest Passage, circumscribing Canadian sovereignty, and Canada's military, enfeebled after years of reliance on the United States, is powerless to resist. Canada effectively lapses into a vassal state, reliant on neocolonial patriarchs in Beijing and Moscow.

This dystopian scenario isn't the plot of an episode of "The Twilight Zone" or some modish alternate-history, sci-fi story — it's the threat laid out by Diane Francis, a veteran business reporter and current editor at large of Canada's National Post, in her newly released book, "Merger of the Century: Why Canada and America Should Become One Country."

While she frames the book as a "thought experiment," she believes a U.S.-Canadian union is essential to both countries' futures — that facing economic infringement, "a merger makes good business sense." She's thought it through, down to the last dollar each Canadian should be compensated for their natural resources in a U.S. buyout.

"The Russians have thrown down the gauntlet in the Arctic. . . . And the Chinese have targeted our resources, along with everyone else's," Francis told Foreign Policy by phone from Canada. They're "the wolves at the door," Francis says; she frames the situation in terms of "prey and predator" in the book.

"They're gaming the system," she said. "And I think they're brilliant. I think they're doing a great job feeding their population, frankly, and educating them, but we understand that they have an objective." Their goal is to break into the biggest, wealthiest markets: the United States and the European Union. "Canada is . . . peripheral to the United States, as Turkey is to the EU, and you'll notice that the Chinese start to do business not in the EU, but in the periphery — Bulgaria, Turkey. They just landed a big contract for their avionics, their air-traffic controls. They're building bridges; they're building roads."

Canada, she says, "is a back-door entry into the main markets that they really want to get into but are somewhat prevented from."

For now, the United States and Canada are "nations in distress," falling prey to dangerous investments while their military and diplomatic power slips relative to the rest of the world's. "Without dramatic change," she writes, "Canada will remain . . . somewhat sleepy and vulnerable. The United States will continue to go broke buying foreign oil and cheap goods from Asia, then guarding countries that could and should pay for their own protection and, while they are at it, 'buy American.' "

Francis was born in Chicago and holds dual citizenship — but she's not some American agent provocateur. She acknowledges there is a certain paranoia about American intentions north of the border. "I think it's a function of being the little guy next to the big guy and always having to worry," she says.

But there are real benefits to the merger, especially for Canada. By erasing the border, Canada would gain a military with a stake in protecting its resources from foreign incursions, and the investment capital and people to develop oil, natural gas and other mining projects in the country's undeveloped north. The United States, for its part, would have access to an estimated 13 percent of the world's remaining undiscovered oil reserves and 30 percent of its undiscovered natural gas. "The most obvious synergy," she writes, "would be matching Canada's undeveloped resource potential with America's money, markets and workers."

In particular, Francis, who is a director for Aurizon Mines Ltd., which operates a gold mine in Quebec, wants to see the United States invest in infrastructure in Canada's far north, which currently lacks the roads, ports and pipelines necessary to make resource extraction possible. "That kind of a Marshall Plan with infrastructure and so on — that would create millions of jobs, both sides of the border," she says. "The Americans should just roll up their sleeves and get on with it, because they've got the capital and they've got the market for the stuff. At the very least, there's got to be some kind of a joint venture, economically, and I say, 'Let's pick our partners.' "

It's a perspective that smacks of protectionism — though Francis objects to the word. "It's protectiveness," she stresses. "I think that investing should only be done with one test in mind, and that's reciprocity. If the Chinese can buy Smithfield Foods, then the Americans can buy the Chinese company that wants to buy Smithfield — but we can't. It's all one-way, and that's what they're doing and they're doing that everywhere. It's like, 'Heads, I win. Tails, you lose.' "

In the book, she describes a "new cold war . . . being fought on economic grounds."

Francis never coins a name for her potential superstate. If Canada's provinces became U.S. states, then they would simply be absorbed into the United States of America. But as for the other models, who knows? Canamerica reads too much like a question, while Ameri-Canada sounds slightly better.

What would a united Ameri-Canada look like? In terms of acreage, it would be the largest country in world — surpassing Russia, even all of South America, in size. Its economy would be larger than the EU's. Since each country is the other's largest trading partner, trade deficits would shrink. Canadian oversight at the Fed would bring stability to American banking. With all its energy needs met domestically, Ameri-Canada would be a lucrative petrostate, exporting oil to the developing world.

For all the benefits — energy self-sufficiency, secure borders, a cross-border maple syrup pipeline if we're lucky — the merger would not be without consequences. Francis bets that the long-term economic incentives would outweigh the baggage Canada brings with it.

But is that really the case? Would it be worth grappling with how to integrate U.S., Canadian and Qubcois laws, or trying to standardize health care across the two countries? Would Washington ever want to inherit First Nations land disputes, Quebec separatists or Justin Bieber?

And would Canadians want Washington, especially after such a case study in dysfunction this week?

It's creating "a huge emotional stir," Francis says. "The idea of the book is to start a conversation. . . . The conversation isn't that enlightening yet, but it will be." And she knows it's ambitious: She never shies away from the biggest parallels she can draw — there's that "Marshall Plan" for investment in Canada, and comparisons to German reunification or potential Korean reunification abound.

But there's an analogy Francis doesn't make. In 1985, Ibrahim Ibrahim, then a professor at Georgetown, presented a Cassandra-like proposal. With economic challenges looming in North Africa, Ibrahim suggested a three-way merger of Egypt, Libya and Sudan. Egypt's abundant population and technological development could provide the impetus to turn Sudan into a "breadbasket" for the region, Ibrahim argued, and Libya could find political unity and integration, lest it be "abandoned to the wiles of history." The plan was similar to the one Francis proposes:

"Initially, a common market would be created among the three, one in which free movement of labor and capital would be guaranteed. . . . In the second phase of the common market, the three countries would establish a formal political confederation, allowing for free trade, the integration of production, and technical integration. Only then can the three embark on a systematic, long-term plan of investment for the twenty-first century."

Like Francis' proposal, the plan was politically outlandish but economically sensible. Twenty-eight years later, after political and economic desperation have brought revolutions in Libya and Egypt, and with Sudan now partitioned but still underdeveloped, was this period of decline inevitable? The sensational, possibly hyperbolic future Francis envisions, of rising powers whittling away at Canada's — and ultimately America's — resources and sovereignty, is similarly dire.

"It doesn't have to be," she says. "I'm not trying to be alarmist, or paranoid, or conspiratorial. China and Russia are just doing business, except that they're big and organized."

"But this border is really thickening," she says, pointing to immigration disputes since Sept. 11, 2001, and a growing cross-border drug trade. Since negotiations ended on the U.S.-Canada Free Trade Agreement on Oct. 4, 1987, "we haven't moved one nudge up from just taking down a few tariff barriers." It's time for that to change, she says. So she's "starting a conversation."