Assessing the Free Trade Debate

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Assessing the Free Trade Debate

On October 4, 1988, Canada and the United States signed the Canada–United States Free Trade Agreement (FTA). The agreement phased out most tariffs and trade barriers between Canada and the United States over a 10 year period. Aditionally, it exporting reduced regulations, prohibited export taxes on energy, extended national treatment for US business operating in Canada and vice-versa, and created dispute settlement panels. The deal helped remove trade out of the growing protectionism among both US and Canadian politicians, while protecting Canadian “cultural, regional development and farm marketing boards.”

This paper will examine the political debate that developed over the implementation of the deal. Proponents of the FTA, the Progressive Conservatives in Canada and President Reagan the United States, both argued that the deal would be economically beneficial to both countries. While the Liberal Party and New Democratic Party in Canada and members of the United States Congress argued against the FTA, they had distinctly unique reasons for opposing the deal. In Canada, the detractors focused their attack on the effect the FTA could have on Canadian sovereignty and culture. In the United States, criticism was less defined by partisan politics and focused on the protection of important local industries.

The Canadian Debate

Politically, the main proponents of the FTA were the Progressive Conservatives (PC), led by Prime Minister Brian Mulroney. When running for the PC leadership, Mulroney was against free trade. He claimed it was like “sleeping next to an elephant... it’s terrific until the elephant twitches and if he rolls over, you are dead.” But as early as 1985, Mulroney con...

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...o be reduced to US standards.” This would prevent the Canadian government from building a nation that was “more egalitarian, more community orientated, not so individualistic and not so subject to market forces.”

Instead, Broadbent advocated for a larger role of government in the economy. He wanted the government to directly invest into areas that would “restructure and reshape the private economic sphere.” He wanted more “controls on foreign investment, an aggressive domestic industrial strategy and nationalist energy policies.” Broadbent proposed Canada work for expanded GATT regulations and to negotiate piecemeal deals with the US to allow certain sectors freer access to the US market. Overall, both Turner and Broadbent argued that the FTA would not only damage the economy, but more importantly disassemble Canada’s independence and social safety net.
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