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Talking trade

NAFTA renegotiations reveal a delicious irony among Canadians

By Dennis Gruending


Those old enough to recall it will remember that the 1988 federal election turned into an epic battle over the proposed Free Trade Agreement (FTA) with the United States. The ruling Conservatives and corporate Canada promoted the FTA and predicted that without it, Canada would become a stagnant economic backwater. But the Liberal and New Democratic parties, as well as labour and most civil society groups opposed the deal, warning that the country risked becoming a 51st state and losing our sovereignty, including our distinctive cultural industries and cherished social programs, such as medicare.

Because the vote was split, with a majority of Canadians supporting two parties who opposed the deal, then-Prime Minister Brian Mulroney and his Conservatives went on to win the election. By 1994 — when there was an aura of inevitability about trade liberalization and globalization, in general — the FTA was superseded by the North American Free Trade Agreement (NAFTA), which was extended to include Mexico. But that changed in 2016, when Donald Trump became a candidate for the U.S. presidency, and said that NAFTA was "the worst trade deal ever made" on behalf of the U.S. and that, if elected, he would tear up the deal. 

Since winning the U.S. election, Trump has indeed demanded that NAFTA be opened for renegotiation. And trade officials from the U.S., Canada and Mexico are now in the midst of tough, acrimonious talks. The Americans are demanding, for example, that automobiles produced in any of the three countries contain at least 50 percent American materials, such as steel or aluminum, if vehicles are to qualify for duty-free trade in the U.S. Because the industry has become highly integrated under NAFTA, company and union officials say that meeting such demands would cause a major disruption.

Meanwhile, the NAFTA renegotiations have revealed a rather delicious irony among Canadians. Business leaders and financial journalists, who touted the deal so ardently in recent years, are now saying that Canada could get by quite nicely without it. David Emerson, a former finance minister and corporate leader, said that the demise of NAFTA could even have a “silver lining” because it would prod Canada to diversify its trading relationships toward countries, such as China and India.

For their part, labour and civil society activists, who once opposed the deal vociferously, are now cheering for an updated NAFTA that would include a better deal for workers, women, Indigenous peoples and the environment. “NAFTA is not a fair deal,” said Jerry Dias, the president of Unifor, Canada’s largest union, and advisor to the Liberal government’s negotiating team. Dias added that he wants the deal to be improved.

In hindsight, what’s clear is that NAFTA never delivered on the inflated promises of its promoters. But despite the dire warnings of its opponents, the sky didn’t fall either. Canada still has medicare and the CBC, after all.

Today, however, almost everyone appears to agree that we would be better off to walk away from NAFTA than to be bullied into making painful trade and investment concessions to a United States under Trump.



Author's photo
Dennis Gruending is an Ottawa-based author, blogger and a former Member of Parliament. His work will appear on the second and fourth Thursday of the month. His Pulpit and Politics blog can be found at www.dennisgruending.ca.
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