Canada has enjoyed a century and a half of peace with the U.S. And thanks to the prosperity that has come with good relations, over a third of our total wealth is derived from U.S. markets. Hollywood has been in business most of this century, but we are still around. Can you imagine the outrage in Toronto and Vancouver if, as some

Americans propose, the US were to ban offshore production of Hollywood films? If the entertainment industry is our most serious threat, why did Ottawa licence giant ears on our southern boundary to capture popular programmes from the US television networks and carried them by cable into virtually every Canadian household? We know why. Canadians wanted them.

The truth is there are probably no two nations in the world which, thanks to shared values and cultural affinities, have enjoyed a more enduring friendship. This probably explains why Canadians tend to think of foreign policy as relating to everything in the world - the U.N., the Third World, the Commonwealth - except the United States. Many of us take our relations with the US for granted. We believe that the U.S. has an obligation to be nice to us whether or not we are nice to them. But if our political survival does not depend on relations with the US, our prosperity does. That is why the greatest foreign policy challenge for Canada is the management of our relations with the US.

Because of the enormous disparity between our size, wealth and power, there is a profound asymmetry in our respective foreign policies; the Americans' biggest foreign policy challenge is assuredly not the management of its relationship with Canada. This places Canada in a particularly vulnerable position. Our vulnerability is further enhanced by two other asymmetries.

While there is a high degree of economic integration between our two countries, there is absolutely no political integration. Consequently, unlike in the case of the European Community, there are no common political bodies which can guarantee Canadian participation in US decision-making and thus help ensure fairness.

The third asymmetry compounds the effect of the other two. At the Canadian national level, political power is concentrated in the federal cabinet while in the US it is far more dispersed, even atomised. US Senators and Congressmen exercise power analogous to the executive in a parliamentary system; they routinely initiate legislation and administrative actions in response to protectionist-minded special interests. The devastating history of measures taken against our softwood-lumber is particularly illustrative. Yet one must not lose sight of the fact that the President wields far greater influence with the Congress than any foreign power could ever aspire to.

While threats to our economic and other interests can arise from within the executive branch (e.g. split-runs and new restrictions on defence contracting), most disputes, from softwood to Helms-Burton, seem to originate in the Congress and associated regulatory bodies. Such threats are not only deeply damaging; they are almost never definitively resolved. For this reason, Canada cannot be merely responsive; notwithstanding the risks, it must make itself part of the US internal process.

Thus, the supreme Canadian challenge is to manage relations not just with "the government of the United States", but with a highly fragmented system of governance in the most powerful nation in the world.

What does this mean for the actual conduct of our relations with the United States?

First and foremost, the relationship must be the constant preoccupation of the Prime Minister. History has shown that, aside from our constitutional problems, getting relations right with the US is the biggest political challenge of a Canadian Prime Minister. He cannot delegate his relationship with the most powerful single player in the US system. There is no better way - sometimes no other way - to engage the President than through personal relations. No Canadian leader recognized the truth of this more than Brian Mulroney whose hands-on diplomacy delivered agreements on free-trade, acid-rain, and Arctic sovereignty.

Second, Canadian-US relations must also be the constant preoccupation of the Canadian foreign minister. Surprisingly, the effort to master the intricacies of the US political system has not been a priority of most Canadian foreign ministers; they have relegated the issues to the second-tier. An exception was Alan MacEachan, foreign minister in the last Trudeau Cabinet, who was responsible for the innovative practice of conducting intensive quarterly meetings with his counterpart George Shultz.

Third, there must be vigorous central supervision and control in Ottawa. This can only be exercised by the Prime Minister in Cabinet. Only in this manner can priorities be determined and damaging or marginal initiatives stopped. It is difficult to believe there was a firm hand at the controls when the Heritage Minister initiated legislation on split-run advertising and excluded the Americans from a conference of cultural Ministers in Ottawa which she convened to consult on how to limit US cultural influence. To snub your neighbours even as you try to cut deals is a disastrous strategy.

Fourth, Canada must be ready to explore arrangements and mechanisms for addressing disputes with the U.S. It is remarkable there have been so few. As the smaller power, this is certainly not to our advantage. In the past, various mechanisms have been created and disappeared -- for example, joint Cabinet Committee meetings.. Some have not been effective, but others have, such as the NAFTA trade panels, the International Joint Commission and foreign ministers' quarterly sessions. Also important was the agreement (now defunct ?) to conduct annual official visits of the President and Prime Minister to our respective capitals.

Formal arrangements ensure the more powerful partner focuses on issues of the other. Moreover, they can gear up powerful bureaucratic engines for this purpose. By binding the US to consultative arrangements, we can reduce the number of surprises, and by creating binding dispute mechanisms, we can reduce arbitrariness in the political process of both countries. There are encouraging reports that Foreign Minister Axworthy is examining ways to achieve a better conflict resolution process and a new high-level forum to address disputes. The challenge will be to convince the US to agree.

Fifth, Canada should deploy a "multiplicity of instruments" in our dealings with the US at the federal and state level. The complexity of the US political system, the power of individual legislators and the vast array of political players should encourage us to deploy as many channels into the US system as possible, including ministers, parliamentarians, provincial leaders, business executives, senior officials, lobbyists and others. Canadian influence cannot be too widely spread. This raises the risk of inconsistent messages on Canada's part, as well as difficulties in timing, co-ordination and management. But increased risks are worth taking, provided there is a single location in the Canadian political system where all aspects of the relationship come together. It is to the credit of the Chrétien Government that it has given strong support to the Canadian Ambassador in Washington and his staff in managing the relationship and influencing the direction of Canadian policies.