The United States and Canada have now entered a new and more difficult period in their relations with one another. The “Nixon shock” of August 1971 struck Ottawa as well as Japan; conversely, Canadian reluctance freely to supply energy, particularly oil, to the United States has jarred Americans used to taking access to Canadian resources for granted. The extremely high degree of societal interdependence between the United States and Canada ensures that Canada will be strongly affected by American policies. As the two societies experience rapid socioeconomic change, there are bound to be struggles over how to adjust and who pays the price of adjustment. Government regulations are likely to increase on both sides of the border.

The major difference between Canadians and Americans on the subject of their relationship is in the intensity of their perceptions. There is bound to be conflict between a people who regard the relationship as critical and those who have scarcely noticed the other country. Firmly fixed in the Canadian view is the idea that a special relationship has come to an end. When the British contemplated the end of their special relationship with the United States, they were interested in an alternative—association with the European Economic Community (EEC). The problem for Canadians is that no alternative association seems clear, attractive, or promising. In light of their relative comfort in the energy crisis of 1973, however, the need for any special relationship has seemed less urgent.

Primary attention has been paid in much of the writing on public attitudes on foreign affairs to opinions about official interstate relations and foreign policy. One of the merits of the transnational politics paradigm is that it calls attention to the possibility that intersocietal relations may condition or influence the climate as well as the agenda of interstate relations. For the public opinion analyst, the paradigm invites attention to the relative degree of importance assigned by publics to intersocietal as contrasted to interstate relations and how changes in attitudes toward one sector may influence the climate in which relations in the other sector are conducted.

Canadian anxiety about increasing involvement with the American economy is partly based on a deeply rooted conviction that economic dependence necessarily brings political dependence in its wake. That conviction was at the bottom of the Canadian rejection of proposals of reciprocity with the United States in the general elections of 1891 and 1911. It has also been explicitly recognized as an underlying rationale of Canadian policy toward the United States in the Department of External Affairs's recent paper on Canadian-American relations.

As events since October 1973 have again underscored, security of supply and price of energy resources have enormous strategic and economic implications for any industrialized country. Nevertheless, trade in energy resources between Canada and the United States has not always been closely managed by the central governments that are responsible for national security and economic development. In fact, the energy trade involves a wide variety of actors that continually seek transnational contacts and alliances of opportunity to further their own self-interest almost as if the national border did not exist.

Transnational relations involving parent companies of United States multinational enterprises with subsidiaries in Canada have begun to interest not only the social scientist but also the politician and businessman. What is the effect of such transnational relations on the economic resources and performance of each country? What political means are used to influence corporate behaviour? What is the effect of the constitutional system on such transnational relations? What are the ways in which the countries reacted to resolve certain related interstate conflicts?

Multinational private enterprise is perhaps the most prominent transnational organization active in world politics today. Increasing attention has been paid to the challenge to state sovereignty posed by multinational enterprise, either as an autonomous actor or as an instrument in interstate conflict. This question is of particular relevance to Canadian-American relations, because of the central role of foreign-owned (and especially American-owned) firms in the Canadian economy. This essay assesses the impact on the host Canadian government of the 27 identifiable cases of politicized conflict that have been generated in Canada by the activities of United States-owned multi-national enterprise from 1945 through 1971, and which are publicly known to have occurred.

The governments of Canada and the United States are playing very active roles in negotiations to define the law of the sea, which has been the subject of international conferences in 1958, 1960, and that beginning in December 1973. These provide the framework for a study of US-Canadian relations in the uses of the sea. Three perspectives may be adopted to understand the political processes involved in law of the sea relations: (1) the state-to-state model, (2) the bureaucratic politics approach, and (3) the transnational systems perspective.

This article examines the United States-Canadian defense issue area from a transnational and transgovernmental perspective, and attempts to develop conceptually the transgovernmental dimension through empirical application. The first part delineates those factors that encourage transnational and transgovernmental activity in the defense issue area. The second part considers pure intergovernmental transactions, referring to United States-Canadian dealings in which there is no transnational or transgovernmental activity. Because we know so little about how these dealings occur, this section examines pure intergovernmental transactions as a three-stage issue flow: preprocess, process, and postprocess. The third section identifies and examines the dynamics of mixed transactions, referring to intergovernmental flows having transnational or transgovernmental activity that does not essentially alter the outcomes of the flows. The fourth part identifies transformative transactions, referring to intergovernmental flows that become transnational or transgovernmental flows (or the reverse) through the involvement of new actors that significantly alter the outcomes of the flows. In summation, the fifth section considers those factors militating against transnational and transgovernmental activity in the defense area.

The concept of a transnational system applies well to a study of labor in North America. For one thing, the chief characteristics of the labor market and of the institutions, procedures, and practices of labor relations are broadly similar in Canada and the United States as compared with other parts of the world. Although such similarities are not alone sufficient to suggest a system, there is also a persistent structure of relationships and interactions in labor matters extending across the boundary between the two countries. American investment in Canada and the so-called international unions are at the heart of this structure of relationships. Other segments of labor, whether organized in trade unions or unorganized, are connected with the heart of this transnational system through the continental flow of economic transactions.

In this essay I suggest a newcomer to the list of types of transnational relationship discussed in this volume. This is the relationship that arises from the use of a common-property natural environment. These relations are not new, of course, and have led to conflict and accommodations at various levels for centuries, as Innis's work on the codfisheries testifies. As world population grows and technology broadens, both demand and capacity to exploit these international common property resources in ways that will harm other users have also increased. Yet international law has not been able to devise rights of tenure for international property as efficient as those for, say, agricultural land. This resulting lack of suitable concepts of ownership (or sovereignty) has, therefore, been one source of the loss of control by central governments that is frequently mentioned in the transnational relations literature.

Although ours is an age of transnational economic and political forces, itis even more an age of intense and intensifying nationalism. In fact, taken as a whole, the twentieth century has been a time of political fragmentation and disintegration. Much of the handiwork of political integration that characterized the nineteenth century has been undone and much else is under severe strain. The empires and multiethnic states that formerly provided order and unity over much of the globe have been destroyed. Once stable societies like Belgium, Canada, and the United States have become subject to severe internal strain. Yet despite the prevalence of this phenomenon, very few political scientists have studied from a systematic perspective the process of political disintegration.

Preceding essays have documented the dramatic growth of transnational relations between Canadians and Americans and have emphasized the development of new issue areas—private, local, regional, and national—between the two countries. As these relations expand in scope, complexity, and occasionally conflict, we would expect to see a corresponding growth in Canadian-American institutions to provide mechanisms for policy coordination, bargaining, and conflict resolution. The increase in formal governmental institutions between Ottawa and Washington has indeed been notable, but we must not conclude that these institutions constitute the core of the intergovernmental relationship. The informal and formal communications between federal government bureaucracies and between officials of the states and provinces are no less important; hence, the essay will focus not only on the bilateral institutions but also on the phenomenon that Nye and Keohane have called transgovernmental relations, that is, the non institutionalized relationships between subunits of governments and the activities they undertake that remain reasonably immune from central control (see their preceding essay in this volume).

Traditionally relations between nations, including Canada and the United States, have been analyzed in terms of the interaction between the executive branches of the two governments. This approach used to reflect relatively accurately the actual state of affairs. It is still broadly consistent with the constitutional allocation of powers, particularly in Canada. While the president of the United States must seek congressional action in order to declare war and Senate action to ratify treaties and to confirm ambassadorial appointments, these powers in Canada fall within the prerogatives of the crown, and constitutionally no parliamentary approval for decisions by the executive branch in any of these areas is required.

For a majority of Québécois whose mother tongue is French, transnational relations with the United States are like palm trees. They are known to exist elsewhere but are rarely talked about and much less seen. This apparent neglect, which contrasts markedly with the almost frantic attention now accorded to Canadian-American relations in anglophone Canada, does not imply that Québécois are unaware of the economic, cultural, and political proximity of the United States or that significant transactions across the Québec-American border do not take place. They do occur, but they are not always readily apparent.

Canadian-American relations have tended to bore statesmen and scholars who long to be where the action is. According to one scholar, “study of Canadian-American relations tells one almost nothing about the big problems facing the world,” while in a classic essay Arnold Wolfers used the unguarded border as an example of “indifference to power.” If we view world politics with “realist” assumptions that unified states are the only actors, force is the major source of power, and solving the military security dilemma is their overwhelming objective, then Canadian-American relations are indeed dull.

Without a counterpart for any other country there is in the United States government a deputy assistant secretary of state for Canadian affairs, a post created in December 1972. This, like the lower-level Office of Canadian Affairs established in 1965, was an institutional recognition of the increasing importance of Canadian-American relations. Were these offices also harbingers of increased state-centric attention to relations between the two countries, which until then had been subject primarily to transnational and transgovernmental management of affairs? Or were they rather recognition that in addition to the uniquely complex web of transborder relationships outside of or at levels below those dealt with by high political authorities, state-centric relations were increasing because of the importance of and increase in unofficial and bureaucratic transactions?