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Christopher Sands

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Can This Friendship be Saved?

Posted: 11/07/2012 5:19 pm

Barack Obama won, and will serve a second term as 44th president of the United States. But Canada may be a winner too.

In the 2012 U.S. elections the most important issue for Canada was the same as for most American voters: how to get the U.S. economy growing again. Nothing would solidify Canada's tentative recovery like the U.S. economy roaring back to life, boosting commodity prices and sales of Canadian manufactures and services.

Perhaps the biggest obstacle to a U.S. economic recovery in the past year has been uncertainty. Investors and families have wondered: what is going to happen to health care? Are energy prices going to keep rising? What about taxes -- with record deficits and debt, they look likely to go up, but by how much and who will pay? And if federal spending cuts are coming, how will they affect me?

Politics have made this uncertainty worse in 2012. The election took on new importance as the moment when Americans would make a choice, and as a consequence, the uncertainty would fade. Investors could again assess risk. Employers could weigh the cost of hiring again. Individuals and families could consider whether to spend or save, go back to school, retire, or take that postponed vacation.

Now the direction is at least more clear. President Obama will eliminate the Bush era tax cuts, and wants to raise taxes for the wealthiest Americans. As he said last year, President Obama believes that the way out of the U.S. fiscal crisis is to raise taxes and to cut spending on popular programs.

Obama has pledged to revisit approval for the Keystone XL pipeline and is likely to grant this approval in the first few months of 2013. The Keystone pipeline is only one of several pending infrastructure projects that are needed to bring Canadian energy exports to U.S. markets -- thousands of miles of pipelines and new power lines are necessary. While the sitting and permitting of this infrastructure is debated, bottlenecks will ensure that energy prices will likely remain high.

Obama has also pledged to push for the full implementation of the Obamacare health reform. There will be future court cases challenging various aspects of the reform, particularly the mandate for insurance coverage for birth control and abortifacient drugs.

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  • Indonesian school children erupt into cheers on hearing the announcement that U.S. President Barack Obama had won the U.S. presidential election at SDN 01 Menteng elementary school to which Obama once attended in Jakarta, Indonesia, Wednesday, Nov. 7, 2012. Obama attended the school when he was a child while living in Indonesia. (AP Photo)

  • Cyclists ride on a beach passing by a sand sculpture congratulating U.S. president Barack Obama for a second term in office in Puri, India, Wednesday, Nov. 7, 2012. Obama captured a second White House term, blunting a mighty challenge by Republican Mitt Romney as Americans voted for a leader they knew over a wealthy businessman they did not. (AP Photo/Biswaranjan Rout)

  • Sarah Obama

    Sarah Obama, step-grandmother of President Barack Obama, waves her walking cane towards supporters in celebration before speaking to the media about her reaction to Obama's re-election in the U.S. presidential election in the garden of her house in the village of Kogelo, western Kenya, Wednesday, Nov. 7, 2012. (AP Photo/Ben Curtis)

  • Students hold a poster of U.S. President Barack Obama as they watch the US election vote counting at SDN 01 Menteng elementary school where Obama studied in Jakarta, Indonesia, Wednesday, Nov. 7, 2012. Obama attended the school when he was a child while living in the Southeast Asian nation. (AP Photo)

  • An American supporter of President Barack Obama holds a flag and sports a T-shirt which has a portrait of Obama and a phrase that reads 'Bangalore has hope' during a screening of U.S. elections coverage organized at a restaurant over breakfast in Bangalore, India, Wednesday, Nov. 7, 2012. Obama captured a second White House term, blunting a mighty challenge by Republican Mitt Romney as Americans voted for a leader they knew over a wealthy businessman they did not. (AP Photo/Aijaz Rahi)

  • U.S citizens celebrate U.S. presidential election results in Mumbai, India, Wednesday, Nov. 7, 2012. President Barack Obama captured a second White House term, blunting a mighty challenge by Republican Mitt Romney as Americans voted for a leader they knew over a wealthy businessman they did not. (AP Photo/Rafiq Maqbool)

  • A Kenyan supporter of U.S. President Barack Obama cheers as he watches a broadcast showing that Obama has won the U.S. presidential election for a second term, Wednesday, Nov. 7, 2012. Obama won re-election Tuesday night despite a fierce challenge from Republican Mitt Romney, prevailing in the face of a weak economy and high unemployment that encumbered his first term and crimped the middle class dreams of millions. (AP Photo/Sayyuid Azim)

  • A U.S. citizen reacts as he watches the live telecast of U.S. presidential election results in Mumbai, India, Wednesday, Nov 7, 2012. Barack Obama captured a second White House term, blunting a mighty challenge by Republican Mitt Romney as Americans voted for a leader they knew over a wealthy businessman they did not. (AP Photo/Rafiq Maqbool)

  • An empty champagne bottle and glasses are left after President Barack Obama's victory was announced Wednesday, Nov. 7, 2012, in Shanghai, China. Obama won re-election Tuesday night despite a fierce challenge from Republican Mitt Romney, prevailing in the face of a weak economy and high unemployment that encumbered his first term and crimped the middle class dreams of millions. (AP Photo/Eugene Hoshiko)

  • Villagers ride motorcycles and wave branches to celebrate Obama's re-election, in the village of Kogelo, home to Sarah Obama the step-grandmother of President Barack Obama, in western Kenya Wednesday, Nov. 7, 2012. (AP Photo/Ben Curtis)

  • U.S. embassy staff, Iraqi guests, and ambassadors listen to the speech of U.S. re-elected President Barack Obama at the U.S. Embassy in Baghdad, Iraq, Wednesday, Nov. 7, 2012. (AP Photo/Khalid Mohammed, Pool)

  • Barack Obama

    A man reads a Spanish newspaper with the smiling portrait of U.S. President Barack Obama on his front page, in Pamplona northern Spain, Wednesday, Nov. 7, 2012. It is announced early Wednesday that Obama has been re-elected to be U.S. President for next four years. (AP Photo/Alvaro Barrientos)

  • Indian Muslim students pose for photographs near cutouts of U.S. President Barack Obama, background right, and Republican candidate Mitt Romney during an event organized by the U.S. Embassy in Chennai, India, Wednesday, Nov. 7, 2012. Obama captured a second White House term, blunting a mighty challenge by Romney as Americans voted for a leader they knew over a wealthy businessman they did not. (AP Photo/Arun Sankar K.)

  • Indian students react to results on television networks during an event organized by the U.S. embassy at the landmark Imperial Hotel in New Delhi, India, Wednesday, Nov. 7, 2012. Obama captured a second White House term, blunting a mighty challenge by Republican Mitt Romney as Americans voted for a leader they knew over a wealthy businessman they did not. (AP Photo/Kevin Frayer)

  • President Obama supporters gesture and celebrate upon hearing the presidential election results on Wednesday, Nov. 7, 2012, in Singapore. Obama won re-election Tuesday night despite a fierce challenge from Republican Mitt Romney, prevailing in the face of a weak economy and high unemployment that encumbered his first term and crimped the middle class dreams of millions. (AP Photo/Wong Maye-E)

  • U.S. Ambassador to Japan John Roos, center, and Japanese high-school students celebrate reports that President Barack Obama won the presidential election at the U.S. Embassy in Tokyo Wednesday, Nov. 7, 2012. (AP Photo/Itsuo Inouye)

  • Indian students react in front of photographers next to a cardboard cutout in the likeness of U.S. President Barack Obama after he was projected as the winner during an event organized by the U.S embassy at the landmark Imperial Hotel in New Delhi, India, Wednesday, Nov. 7, 2012. Obama defeated Republican presidential candidate Mitt Romney for a second term. (AP Photo/Kevin Frayer)

  • U.S. citizens Jaspal Singh, right, and Jane Ludin break into a dance as President Barack Obama's win becomes certain, during a live telecast of U.S. presidential election results organized by the U.S. Embassy in New Delhi, India, Wednesday, Nov. 7, 2012. Obama captured a second White House term, blunting a mighty challenge by Republican Mitt Romney as Americans voted for a leader they knew over a wealthy businessman they did not. (AP Photo/Saurabh Das)

  • Indian students have their picture taken next to a cardboard cutout of President Barack Obama after he was projected as the winner of the U.S. presidential election during an event organized by the U.S. Embassy at the landmark Imperial Hotel in New Delhi, India, Wednesday, Nov. 7, 2012. Obama captured a second White House term, blunting a mighty challenge by Republican Mitt Romney as Americans voted for a leader they knew over a wealthy businessman they did not. (AP Photo/Kevin Frayer)

  • A young woman poses for a photo with a cutout of President Barack Obama, right, beside a cutout of Republican candidate Mitt Romney, left, during an election night event organized by the U.S. embassy in Skopje, Macedonia, early Wednesday, Nov.7, 2012. President Barack Obama won re-election Tuesday night despite a fierce challenge from Republican Mitt Romney. (AP Photo/Boris Grdanoski)

  • A shop assistant watches US President Barack Obama speaking on TV screen in Moscow TV shop, Russia, Wednesday, Nov. 7, 2012. Obama defeated Republican challenger former Massachusetts Gov. Mitt Romney. (AP Photo/Mikhail Metzel)

  • A U.S citizen reacts as she poses for the media after watching the live telecast of U.S presidential election results in Mumbai, India, Wednesday, Nov. 7, 2012. President Barack Obama captured a second White House term, blunting a mighty challenge by Republican Mitt Romney as Americans voted for a leader they knew over a wealthy businessman they did not. (AP Photo/Rafiq Maqbool)

  • Guests watch live television coverage showing the victory of U.S. President Barack Obama, Wednesday Nov. 7, 2012, in Shanghai, China. (AP Photo/Eugene Hoshiko)

  • Palestinians at a barber shop watch a televised speech by U.S. President Barack Obama after his vicotry, in the West Bank town of Jenin, Wednesday, Nov. 7, 2012.(AP Photo/Mohammed Ballas)

  • A Muslim woman poses for a photo with a cutout of President Barack Obama during a victory celebration for Obama in the U.S. presidential election in an event hosted by the U.S. Embassy in Jakarta, Indonesia, Wednesday, Nov. 7, 2012. (AP Photo/Tatan Syuflana)


The president's critics will place their hopes on another dimension of the U.S. election: Congress. Overshadowed by the presidential contest this year, control of Congress will affect the outlook for Obama's second term. He hopes to get Congress to pass some politically difficult legislation, new taxes to budget cuts. Working for his agenda on Capitol Hill will be difficult, as many on Capitol Hill will view Obama as a "lame duck" and the president struggled to get Congress to work with him in his first term. Congress will likely preoccupy Obama for a time, and international issues will get less attention -- especially non-crisis relationships like the one between the United States and Canada.

An early indication of the bilateral relationship over the next four years will come with Obama's first post-election meeting with Prime Minister Stephen Harper. Will Obama commit to press ahead with the Beyond the Border and Regulatory Cooperation negotiations, Harper's perimeter security agenda? Or will changes in the Obama cabinet and other priorities divert presidential attention from this initiative? And how can the two leaders get the process to yield clearer results and win greater popular support?

The answers matter. The two best kept secrets in Washington are the degree to which Canadians have been rooting for a post-election American economic turnaround, and the extent to which that turnaround is dependent on removing the barriers to trade with the United States largest export market, Canada. Border and regulatory cooperation, new infrastructure, and a new focus on regional competitiveness vis-à-vis Asia and Europe are the right direction. Will Obama lead America there?

 
 
 

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