Free Trade

Few public policy issues have stirred political passions on both sides of the Canada/US border as free trade did in the late 1980s. Negotiated between Canada and the United States in 1987, the Free Trade Agreement became the dominant issue in the November 1988 Canadian federal election, perhaps the most dramatic and divisive campaign in the second half of the twentieth century. Ten years after implementation of the agreement, the McGill Institute for the Study of Canada organised a major conference to renew the discussion of free trade and consider its economic impact. It also marked the fifth anniversary of the North American Free Trade Agreement by expanding the discussion to include the impact of NAFTA on Mexico, as well as the NAFTA side agreement on the environment. Free Trade provides a historical framework for ongoing discussion of economic and environmental issues. While there is empirical evidence on trade flows - they increased dramatically in both directions - the debate on related issues continues. The impact of free trade on jobs and manufacturing productivity, the effectiveness of dispute settlement, the growth of foreign direct investment, the absence of adjustment programs, and the consequences for social programs are all issues for spirited discussion. Many of the leading actors in shaping both the FTA and NAFTA participated in the conference, including former Prime Minister Brian Mulroney, former President George Bush, former U.S. Treasury Secretary and Secretary of State James Baker, former Canadian Trade Ministers John Crosbie and Michael Wilson, former U.S. Trade Ambassadors Clayton Yeutter and Carla Hills, as well as former Mexican Trade Minister Jaime Serra Puche. Other senior officials included Canada's Derek Burney and Simon Reisman. Donald S. Macdonald, chairman of the landmark Royal Commission that recommended the "leap of faith" of free trade, gave the keynote address. A Royal Bank of Canada impact study, "Two Cheers for the FTA," provided a baseline for discussion by a panel of eminent economists from all three NAFTA countries, and strong defences of positions against free trade included presentations by Andrew Jackson of the Canadian Labour Congress (CLC), Jim Stanford of the Canadian Auto Workers (CAW), and Gerald Larose of Quebec's Conseil des syndicats nationaux (CSN). Participants from the provinces included former Ontario Premier Bob Rae, while NAFTA and the environment were considered by a panel led by former Quebec Premier Pierre Marc Johnson and joined by Quebec Liberal Leader Jean Charest. Other participants included Jean Anderson, Laurent Beaudoin, Fernando Clavijo, Thomas d'Aquino, William Dymond, Francis Fox, Jonathan Fried, Michael Hart, Stanley Hartt, Richard Lipsey, Victor Lichtinger, John McCallum, Peter McPherson, Jacques Menard, William Merkin, Simon Potter, Charles E. Roh, David Schorr, Charles Sirois, Guy Stanley, Yvonne Stinson, Peter Watson, William Watson, L.R. Wilson, and Paul Wonnacott. Free Trade: Risks and Rewards is an important reminder of why the issue was so passionately debated at the time and why it remains important. L. Ian MacDonald is a Montreal-based columnist and communications consultant. His previous books include From Bourassa to Bourassa: A Critical Decade in Canadian History and Mulroney: The Making of the Prime Minister.