Canada - Law Firms Good Neighbors Make Good Trading Partners

Saturday, October 1, 2005 - 00:00

Editor: Ambassador Giffin, would you tells us something about your career?

Giffin: I worked at the U.S. Senate as Chief Counsel and Legislative Director for Senator Sam Nunn of Georgia. I then returned to private practice in Atlanta with the predecessor firm to McKenna Long & Aldridge, where I remained for 17 years until I took my post as U.S. ambassador to Canada in 1997. After four years in Ottawa, I returned to Atlanta and private practice with McKenna Long.

Editor: Please tell us about the highlights of your experience as American ambassador in Ottawa.

Giffin: My experience in Ottawa was terrific. It helped, I think, that I had a considerable Canadian background and experience of my own to bring to the job. I grew up in Canada - my father was born there - I graduated from high school in Canada and came to the U.S. to attend college.

Canada is our country's largest trading partner, so there is plenty to attract the ambassador's attention. Every day, thousands of people cross the border, in addition to billions of dollars in trade. The U.S. has a presence at six Canadian airports - customs and immigration pre-clearance - something quite unique and the only arrangement of this kind in the world.

Our engagement with Canada is both bilateral - country to country - and multilateral, where we sit at the same table with Canada and others in such forums as NATO, NAFTA, the G-8, the OECD, and so on. The ambassador is fully engaged on both fronts.

There were many highlights, but probably the most significant day for me was the opening of a new U.S. embassy in Ottawa, which President Clinton attended. This was, and is, the only time that an American President has dedicated an embassy, and I think the occasion spoke volumes about the relations between the two countries. The same day as the embassy dedication, President Clinton went on to Mt. Tremblant where he made a speech on federalism at a conference dealing with many of the political considerations that relate to the separatist movement in Quebec. It was a remarkable speech, and one that constituted an eloquent statement in favor of a united Canada. Of course, when one is representing the United States abroad it is important to avoid meddling in internal political issues of the host country. That can be perceived as a very unwelcome intrusion. President Clinton made it clear, however, that the unity of Canada is a matter of enormous importance to the United States, and he indicated to me that where our country has a real stake in the outcome of some domestic debate in another country it is crucial to have, and project, a coherent policy to address it.

Editor: How has your experience as ambassador to Canada affected your practice since rejoining McKenna Long in 2001?

Giffin: It has affected my practice in significant ways. First of all, those years in Ottawa opened my eyes to the globalization of commerce. As a consequence, my practice today has become much more international in scope. My particular focus is hemispheric rather than on Asia or Europe, and I suspect this derives from my participation in the evolution of NAFTA and the hemispheric free trade discussion generally. I continue to spend at least a third of my time in Canada, as a result of personal relationships and in connection with my commercial and professional responsibilities. My service in Canada has forever changed the focus of my practice.

Editor: When we last spoke you shared with us your thoughts on a number of issues affecting trade between the two countries. For starters, would you give us an overview of this trade?

Giffin: For Canada, this trade has enormous implications. About 86 percent of the country's exports come to the U.S. As recently as the early 1970s, when that figure was about 70 percent, Prime Minister Trudeau spoke about the need for Canada to diversify its markets so as to avoid so much dependence on a single purchaser of Canadian goods and services. From the American perspective, about 25 percent of our exports go to Canada, which makes the country our single largest trading partner. Indeed, Canada is the largest trading partner of 37 of our individual states. It is a huge commercial relationship, and economic growth and literally millions of jobs on both sides of the border depend upon it.

Editor: And the trade issues between the U.S. and Canada?

Giffin: The U.S. still maintains severe duties on lumber imports from Canada. This dispute has gone on for over a century, but we do need to resolve it. Billions of dollars in duties have been collected on imported lumber in what is thought to be an equalization of the playing field for American lumber producers, but it also is an increase in the price of lumber for American consumers. Most recently, the final level of appeal under the NAFTA process concluded that the U.S. was improperly applying its own laws. The U.S. response has been to ignore the NAFTA decision. This is not a good place for our country to be, particularly in light of our advocacy that all nations must adhere to the rule of law. This is an issue that ought to be resolved, and quickly, in Washington.

In 1995 we agreed upon an open skies arrangement with respect to airline traffic. This is something of a misnomer because, while it liberalized the traffic regime between the two countries then in place, it continues the inefficient situation where, for example, an Air Canada flight to Atlanta cannot go on to pick up passengers in Miami for the return flight. Continental cannot fly from Newark to Toronto, pick up passengers and then fly on to Vancouver. This is also true with respect to freight carriers like UPS and FedEx. This makes no sense and needs to be addressed.

Another issue that received considerable attention was the shutting down of the border to Canadian beef for almost a year. This resulted from the discovery of a couple of cows with mad cow disease in Alberta. The border has now been reopened, but the impact of this affair on the Canadian beef industry has been catastrophic. I have to point out that when a couple of cases of the disease were found on our side of the border, the American beef industry did not think it presented a big problem for exportation.

Editor: These cases seem to turn more on political issues than legal.

Giffin: That is essentially my view. In the lumber situation, where our government says that it will ignore the decision of the NAFTA tribunal, that response undercuts the credibility of NAFTA across the board. That is very unfortunate. At some point we are going to be in a position where we want to argue the validity of NAFTA rulings, and the present situation is not helpful to that end.

Editor: For a variety of reasons - not the least of which is the large differential in personnel costs, including healthcare costs - a number of American employers and foreign employers with a U.S. presence are moving their operations from the U.S. to Canada. Obviously, that is good for Canada but represents a loss of American jobs.

Giffin: I do not believe that this is going to become a source of serious friction between the two countries. There is no question but that the cost to employers of healthcare for their employees is becoming a major issue in many U.S. industries, and the automobile and airline sectors have been particularly affected. The Canadian healthcare model does provide Canada with a certain competitive advantage in this regard, but it is one that is paid for by the Canadian taxpayer, both corporate and individual. In making comparisons between the two systems, it is important to go through the entire equation.

Editor: Will you share with us your thoughts about the partnership being forged between Canada and the U.S. on national and international security?

Giffin: In the post-9/11 world the efforts to forge a collaborative North American approach to security have been very positive. When you have two sovereign countries addressing a problem like this, there is a need to find a middle ground, an area of compromise where the particular security issues of each side are subordinated to the greater good. This is a continuing process, but it is happening. I would suggest that Canada's reaction to the Hurricane Katrina disaster reflects a collaborative process that has evolved over many years. The Prime Minister was scheduled to call President Bush to complain about the U.S. response to the NAFTA lumber case we have been discussing. The call took place after the hurricane had hit, and Prime Minister Martin deferred his complaint to ask the President what Canada could do by way of disaster relief. Canada has sent naval vessels, divers, helicopters, and food and supplies to the area. And, of course, it is interesting that, in response to a U.S. disaster, Ottawa has often been able to deploy its people more quickly than Washington.

Editor: How do you see the relationship in the security area evolving? Are there areas where we can improve our cooperation?

Giffin: There is always room for improvement. We can enhance the ways in which we work together, and I think the limitations tend to be more political than operational. Our militaries can work well together, and the degree to which joint operations become a reality is largely a question of the comfort level for such undertakings in Ottawa and Washington. In this connection, we have come a very long way since I was ambassador in Ottawa. I expect that this progress will continue.

Editor: And the relationship generally. How do you see this evolving?

Giffin: The relationship between Canada and the U.S. is always going to be good, in my view. It is a relationship that does not depend upon the political leadership of the two countries, but rather derives from the fact that the citizens of each country perceive each other to be friends and neighbors. There have been times when the relationship was better than it is today. I am reminded, however, of the Canadian response to Hurricane Katrina. And to the steps Canada took on 9/11 to welcome hundreds of overseas flights en route to the U.S. and to provide those passengers with food and shelter for days. In 1998 a huge ice storm crippled the eastern part of Canada, and the U.S. military and American volunteers came to help. I believe that all of these episodes reflect a deeply-held sense on the part of each of our peoples that we have been, and continue to be, extremely fortunate in our neighbors.

Please email the interviewee at ggiffin@mckennalong.com with questions about this interview.