Canada-US Free Trade at 20

The October issue of Policy Options from IRPP is devoted to free trade at 20 – now that we are 20 years on from the signing of the FTA with the US.

With one modest exception, the articles are all written by pro free traders – including key architects of the deal like Derek Burney, Stanley Hartt, Charles McMillan, Michael Hart and Bill Dymond. Cynics might think this reflects the editorship of Policy Options by L.Ian MacDonald, Mulroney’s former press secretary. (Mulroney’s own thoughts from his book are included as well.)

This issue is so one-sided that the magazine should be re-named Policy Option (singular.)j I remember the 10th and 15th anniversaries when Policy Options actually asked critics like myself to comment as well.

Had I been invited to contribute, I might have reflected on our rapid and swift reversion to resource-led development (vs  the view that FTA amounted to a market driven industrial strategy); the clearly evident downward harmonization of our social programs  and public services to US levels (or even below US levels in the case of income transfers); the folly of attaching our national economic fate to dwindling US fortunes; and the evident capitulation of the gang writing this issue to  the needs of US Empire. The ongoing Deep Integration/SPP project reflects the manifest failure of the FTA and NAFTA to secure Canadian sovereignty while opening the border – the avowed aim of the exercise in the first place.  After 20 years the border is “thicker” than ever in terms of our ability to equally access the US market (energy excepted), and the US demands for granting access (co-operation on the ‘security agenda’) are more strident than ever.

I hasten to add that we have to think through where we go from where we are today, not where we were 20 years ago. But regaining energy independence and greater policy latitude from the US and lessening dependence on the US market still strike me as reasonable goals.
There is one good piece in this Policy Options, by the iconoclastic Tom Courchene. He’s again calling for a fixed exchange rate or monetary union with the US which he sees as more necessary than ever if we are to accomodate a booming resource economy and a struggling advanced industrial economy within the same small national economic space.  I was always convinced of the need to maintain monetary policy independence, but one can’t help but reflect that it has mainly been used to maintain a tougher inflation target than the Federal Reserve. Courchene’s key point is that continental integration in a new global context has given us a badly over-valued exchange rate, and that we risk repeatign the job carnage of the early years of the FTA.  At least he recognizes that all is not well as the FTA turns twenty.


  • Murrary Dobbins wrote a good article on free trade with the US in 2005…

    This past Wednesday saw fierce controversy in the labour movement as
    Canadian Labour Congress (CLC) president Ken Georgetti tried desperately to
    explain to his federation members media – read CanWest – claims that he now
    supported free trade. In an email to CLC union heads Georgetti stated
    official CLC policy: “We continue to oppose NAFTA and other similar trade
    deals.” But the speech reported on, and a CLC position paper on the economy,
    were much more ambiguous. Georgetti talked of a North American economy and
    how, regarding NAFTA, it was hard to “unscramble an omelette.” The CLC paper
    said free trade had not been the “economic disaster” once predicted.

    I guess it depends on your definition of disaster. Industrial jobs have, of
    course, increased in the fifteen years since the signing of the Canada-US
    Free Trade Agreement (FTA). But there is no way of knowing how much more
    they might have increased had we not signed. We do know that we lost,
    permanently, some 280,000 high-salaried manufacturing jobs because of free
    trade. And the new jobs are lower-paying, and have fewer benefits attached.

    I would also like to know how much they attribute to our low dollar in the 90s, and how much they attribute to free trade. It must be hard to dis-entagle them, isn’t it?

  • Just to clarify, the “controversy” in question occurred three years ago. The op-ed quoted is from September 2004.

  • The words were indeed wrenched hugely out of context by the media. The paper did observe – correctly at the time – that manufacturing job losses in the early FTA period had been eclipsed by gains in the subsequent low dollar period – but went on to point out that there had been major impacts from the FTA in terms of declining job quality. My last effort to look comprehensively at the impacts of NAFTA can be found in Grinspun and Yamsie (Eds) Whose Canada?

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