Canada's culture is to cave

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Brian Mulroney pauses at a Vancouver television studio where he was taping CTV's Question Period while campaigning in B.C. in 1984. (CANADIAN PRESS ARCHIVES)

Twenty-three years ago, on Nov. 21, 1988, Brian Mulroney's Conservatives won their second majority government and signed the Canada-U.S. Free Trade Agreement (subsequently the North American Free Trade Agreement), although a clear majority of Canadians -- 52 per cent to 43 per cent -- voted for parties opposed to it.

Neither Mulroney, nor his successors, nor the big business lobby that spent $5 million helping him "sell" free trade by branding its opponents "liars," have delivered on their promise to gain Canada "secure access" to the U.S. market.

Instead, the U.S. got everything it wanted, while Canada and Mexico, which sought constraints on U.S. power as well as "secure access," got neither.

Canada failed on all its "free trade" objectives. It couldn't get a subsidy code or a dispute settlement mechanism. It can't get exemptions from repeated "Buy America" programs. To win a U.S. contract that receives federal money, a Canadian company must have all its sources in the U.S.

But Canada gave the Americans national treatment for their investment here, abandoning a national industrial strategy of its own.

A new book by University of Toronto political economist Stephen Clarkson and Yale University PhD student Matto Mildenberger, entitled Dependent America? How Canada and Mexico Construct U.S. Power, concludes the scale of the U.S. "win" is total.

And now, the border is becoming higher and thicker than ever before.

"In the next 10 years, Canada is being disintegrated by U.S. policy in the sense that it's being distanced and integration is being stopped," Clarkson said in an interview. "We can still pump as much oil and gas as we can and still sell as many trees as they'll buy... but I think the thrust of what's happening is that Canada will become more of a hewer of wood and drawer of water for China and Europe."

Without NAFTA, the U.S. economy would be markedly smaller and less competitive vis-à-vis the rest of the world today, the book says.

In 2010, Canada and Mexico accounted for almost 27 per cent of total U.S. exports and 24 per cent of its imports. This is slightly more than U.S. trade with all 27 countries in the European Union and considerably more than its trade with China.

The willingness of Canada and Mexico to harmonize their immigration policies and intelligence capacities with the U.S. has pushed America's defence perimeter to the frontiers, reducing its exposure to terrorist threats.

Also without NAFTA, the U.S. could not have transformed the previous General Agreement on Tariffs and Trade into the intrusive and muscular World Trade Organization, complete with NAFTA's pioneering -- and deeply anti-democratic -- investor-state provision empowering corporations to subvert democratic governance by using lawsuits to force changes in laws.

Thanks to their markets, their abundant renewable and non-renewable resources and their labour supplies, Canada and Mexico are by far the largest external sources of U.S. power.

Yet, state the authors: "The paradox of North America's skewed development is that, although Canada and Mexico make extraordinarily large contributions to the U.S.'s economic strength and homeland security, they have virtually no influence in Washington's corridors of power."

America's triumph is due not only to Washington's "sustained efforts over decades to neutralize any possible dependency it might have on Canada or Mexico" but also to Washington's success in blunting the capacity of the two countries to take actions prejudicial to American interests.

Washington has outmanoeuvred its neighbours at every turn. "Institutionalizing its two bilateral relationships with CUFTA and NAFTA was a masterstroke of U.S. agency," the authors write. "The government resolved long lists of irritants by transforming its ad hoc complaints into general rules that constitutionally bounded Canada and Mexico's behaviour." Meanwhile, the Americans rejected all attempts by the two smaller nations to put boundaries on U.S. trade and economic behaviour.

Washington not only consistently resists establishing transborder governance institutions that could give Canada and Mexico a voice in making policies for North America. It even routinely declines to comply with important judicial rulings it loses.

Canada has always exhibited a supplicant's behaviour towards the U..S., Clarkson says. In 1986-88, Canada was manipulated by its economic elites.

"Cultures develop over time and we go back to our colonial relationships. We've always been an extension of empire, we identify with its needs," he continues. "We deal with other countries as if we are a country. But not the U.S. We have a different negotiating culture when we deal with Washington. We're willing to give up, to cave in... It's our culture."

Frances Russell is a Winnipeg

author and political commentator.

Republished from the Winnipeg Free Press print edition November 9, 2011 A11