Canadians Offended by Trade Deal, Not America

OTTAWA — Brian Mulroney, before he became prime minister of Canada in 1984, said that he would never enter a free-trade agreement with the United States. A year after he took office, he changed his mind and opened and successfully concluded negotiations with the U.S. government. The U. S. Senate and House of Representatives approved the deal, as did the Canadian House of Commons, in which Mulroney’s party had an overwhelming majority. But the Canadian Senate refused to act until the people of Canada had an opportunity to express their views in a general election.

That election campaign has now drawn to a close with the Progressive Conservative Party, which backs the agreement, and the Liberal Party, which opposes it, in a dead heat for seats in the House of Commons. The central issue is the proposed free-trade agreement, which, according to the polls, half of Canadians oppose and only about one-quarter approve.

If, after the election Monday, the free-trade agreement fails to gain approval in the Canadian Parliament, what happens? Technically speaking, nothing happens. Relations between Canada and the United States remain as they are now, harmonious and excellent. We will continue to be stout allies within NATO and in North America. We will continue to be each other’s greatest trading partners and ready to do even more business with each other.

There is some talk about renegotiating the agreement. This would be unwise and probably abortive. The better course, passionately advocated by Liberal leader John Turner, is the multilateral approach followed by both our countries since the end of World War II. This approach has enormous benefits to the world at large, as well as to the economic welfare of the Canadian and American peoples. For example, 80% of goods passing our common border are free of tariffs as a result of previous multilateral General Agreement on Tariffs and Trade negotiations.

On Dec. 5 the GATT will meet in Montreal. On the agenda will be items of the utmost importance to Canada and the United States: services, agriculture, further tariff restrictions, dispute settlement. Our two governments can enter these negotiations with common objectives and work together to achieve them. Some of the useful items in the free-trade agreement could be rescued by being transferred to the GATT negotiation and generalized for the world trading community. A GATT dispute-settlement formula would be superior to a formula that depended on the domestic law of the two contending countries, as in the Canada-U.S. Free-Trade Agreement.

If Canadians do reject the agreement it will be because, like Americans, they place a high value on their independence and identity and are reluctant to change course by entering for the first time into an exclusive preferential arrangement with their good neighbor. In no sense should it be interpreted as anti-Americanism. My long experience in public affairs enables me to say with confidence that Canadians will continue to regard Americans as their best friends and will continue to cooperate with them in the defense of freedom and in the promotion of world trade, upon which we are both so dependent.

At the outset, the Mulroney government used fear of U. S. protectionism as the principal justification for the free-trade agreement. Not surprisingly, these fears have diminished. In any event, the agreement itself does not prevent the United States from applying anti-dumping duties--the most popular instruments of protectionism--against Canadian imports.

The place to fight the battle against protectionism is in the GATT. Let us not forget that it was the determination to avoid repetition of the foolish beggar-thy-neighbor policies of the dismal 1930s that brought this highly successful trade organization into existence with strong support from both our countries.