On Canada and Trade
Morton, Desmond
Like Americans, Canadians will be going to the polls later this year. When they do, chances are that the biggest issue on their minds will be a treaty with the U.S. that most Americans have never...
...In 1986, the middle fifth of all U.S...
...By 1983, that number had risen to 9.4 million...
...Trade Agreement of 1988 represents the most drastic surrender of Canada's economic sovereignty to a foreign power since Confederation in 1867...
...There are some simple answers...
...What is at stake in the trade debate in Canada is not jobs, tariffs, or countervailing duties...
...No deal...
...If Mulroney was not for free trade, he was certainly for the United States...
...Virtually everything Canada wanted from the agreement is missing...
...This is equal to the highest percentage of poor who worked since 1968...
...families received 4.6 percent of the total national family income, the lowest percentage since 1954...
...Canada, under Liberals and Conservatives, had more and more truck and trade with the Yankees...
...In 1986, whites represented 69 percent of the poor...
...Mulroney cited 1911 because that was the year Conservatives routed a Liberal government for daring to negotiate free trade with President William Howard Taft...
...Mulroney's Conservative party was once the political core of Canadian anti-Americanism...
...After a generation out of power, Mulroney and his party wanted to enjoy their spoils...
...A Conservative devised Canada's labor relations system— one reason why 38 percent of Canadians, compared to 18 percent of Americans, belong to unions...
...business lobbies label Canadian competition as unfair, their evidence has often included government-financed unemployment benefits or Ottawa's job-creation programs in depressed regions...
...Short of socialist-style controls— which most Liberals shunned—they could do nothing...
...With all the power of their wealth and most of Canada's privately owned media behind them, the Conservatives and their business allies still don't believe that they can win majority support for their ideology...
...For Hispanic children, the poverty rate was 37.7 percent in 1986...
...The Conservative victory looked like a one-term wonder...
...It's not hard to see why Reagan would sign the deal...
...Murphy smiled...
...Twenty-five million Canadians know that jobs and prospects depend on decisions made in a pressure-sensitive Washington...
...If the U.S...
...The gap between poor and rich American families is widening...
...Like "free gifts" and a free lunch, free trade sounds good...
...What Canada's right-wingers can't do, economic pressure from the U.S...
...never had it reached as high as 40 percent...
...financial service giants will no longer have to set up operations in Toronto or Calgary to get Canadian business...
...The Reagan Revolution, with help from Britain's Margaret Thatcher, told Canada's right-wingers to stand up for their rights...
...Why would half of Canada go along...
...The money that lets British Columbia loggers and Ontario auto workers share an American life-style comes from foreign trade...
...Canadian right-wingers could hardly believe how wonderful it will be...
...No one argued that Canadians were in a revolutionary mood...
...Children constitute the poorest age group in the United States...
...Americans with good memories may recall a Reagan pledge in 1980 to create a North American free-trade area to match the European Common Market...
...In 1986, after four consecutive years of economic recovery, the number of working poor had fallen only slightly, to 8.9 million...
...In recent years, the fastest growing group among the poor has been the working poor, not the welfare poor, whose ranks have remained level in the period...
...In 1986, nearly one-third of poor families did not receive any medical benefits from the U.S...
...The working poor are a significant and rising proportion of the poor...
...If Mulroney had campaigned on down-sizing government, privatizing government-owned businesses, and turning universal social programs into charity for the needy, he would have been beaten...
...Figures adjusted for inflation represent purchasing power in 1986 dollars...
...Most of the poor people in the United States do not receive welfare payments...
...In 1985, reporting to Mulroney, MacDonald urged a comprehensive free-trade deal with Washington backed by a binding disputes-settlement arrangement that would safeguard Canadians from U.S...
...It leaves Congress as free as ever to slap future duties on imports from Canada, though the process would have to pass through an innocuous hoop...
...In 1985, according to the Physicians' Task Force on Hunger, about 20 million people in the United States, including 12 million children, went hungry at some point each month...
...negotiator, Peter Murphy...
...Five to seven years down the road, when Canada is fully locked into a continental economic system, Americans will have the whip hand in deciding just how much "socialism" they will tolerate north of the border...
...That year, Prime Minister Pierre-Elliott Trudeau's Liberals had been reelected with a mandate to make Canada energy self-sufficient and to tighten up on foreign investors so that they would help Canada as well as themselves...
...His family owed its livelihood to the American corporation that built his hometown of Baie Comeau...
...Most of today's homeless people are not deinstitutionalized mental patients...
...Many Americans are going hungry...
...Most Canadians, like most Americans, are not right-wing Republicans...
...On January 2, 1988, President Reagan scribbled his signature on a twelve-hundred-page trade agreement that, in his usual style, he proclaimed to be "good for Canada and good for the United States...
...If the trade deal goes through, Canadians lose control over their resources, including oil and natural gas—no small matter in a large, cold country...
...Maybe they should...
...Hugh Segal, a top Mulroney strategist, gave a polite version of the argument in the Toronto Globe and Mail: "Free traders, conservatives, proponents of a market-driven shift in balance, see a Canada where the role of government is offset by international economic realities that force a competitive framework upon all enterprises in this country...
...Its mixture of banks and multinationals found protectionism tiresome...
...Many poor families do not have health care coverage...
...Not since 1968 had the NDP support in polls outrun its two rivals...
...Action makes enemies...
...By the 1980s, 80 percent of Canada's merchandise trade was with the United States— currently more than $200 billion a year, with a modest surplus for Canada, enormously offset by an outflow of capital in dividends, royalties, and fees to American head offices...
...In the campaign he blamed Trudeau's antipathy to Reagan for U.S...
...lobbies...
...In 1979, 6.5 million working people fell below the poverty line...
...The Reagan White House was willing to go along...
...Senate, Reisman walked out...
...For eight months during 1987, a federal election would have given a clear majority to the New Democratic party...
...A year later, on his way to a sweeping election victory, Mulroney dismissed any such deal as a partnership of an elephant and a mule...
...Nor did free trade seem appealing to Trudeau's right-wing opponents, the Conservatives...
...Saskatchewan's Potash Corporation, nationalized years ago by an NDP government, seemed an "unfair" competitor to free-enterprisers from Nevada...
...The Conservatives got into real trouble only when they cut social spending—beginning, unwisely, with the elderly...
...protectionism...
...Trudeau had always found economics boring...
...TORONTO, ONT...
...In Quebec, all that remains of the left-wing nationalism of the 1970s is a language law that transferred power to French-speaking business executives, as right-wing, orthodox, and greedy as their counterparts anywhere...
...So why do Mulroney and the Conservatives feel like winners...
...q SPRING • 1988 • 147 Poverty Who are the poor...
...families received only 16.8 percent of the total national family income, the lowest share recorded for this group since 1947...
...The 1986 poverty rate for white Americans was 11.0 percent, the poverty rate for blacks 31.1 percent, and for Hispanics, 27.3 percent...
...Canada, Reisman promised, would get a great deal, complete with a tamper-proof disputessettlement mechanism that would make Canadians rich for a hundred years...
...In Canada, it flew like a lead balloon...
...Enter free trade, from an unexpected corner...
...His sources told him that Mulroney wanted a deal at any price...
...it is whether a Conservative government and its business allies can use a comprehensive trade deal to flatten out the differences between a free-enterprise, market-driven United States and the social democracy Canadians have quietly built for themselves over the past forty years...
...The poverty rate for black children under eighteen years of age in 1986 was 43.1 percent, more than three times the rate for all Americans (13.6 percent...
...It would be no contest...
...Within hours, Mulroney had phoned Reagan, cornered U.S...
...The NDP's leader, Ed Broadbent, had an even tougher program for liberating Canada from U.S...
...SPRING • 1988 • 145 Reports from Abroad Dependence on a single partner for their prosperity began to terrify Canadians as America grew more protectionist...
...The Tory slogan that year was "No truck nor trade with the Yankees...
...Until the "second shoe" drops, Canadian Conservatives can reassure Canadians that their cherished social programs are safe...
...Like a lot of campaign talk, it faded fast...
...In 1986, the proportion of the poor who fell into the "poorest of the poor" category (those with incomes below half the poverty line) reached its highest level, 39.2 percent, in more than a decade...
...In August, voters in Newfoundland, the Yukon, and the Ontario industrial city of Hamilton gave the NDP a clean sweep in parliamentary by-elections...
...For Canadians, it certainly was...
...That kind of majority leads to inertia...
...Farmers have a higher poverty rate than the rest of the country...
...This is up from $39.5 billion in 1980 and from $32.1 billion in 1977...
...From Who Are the Poor?, by Michael Harrington Published by "Justice for All" 148 • DISSENT...
...When he won the Conservative leadership in 1983, with strong right-wing backing, Brian Mulroney dismissed free trade with the U.S...
...Paradoxically, what Canadians liked most about the NDP was its role as defender of social programs and the humane values that in their eyes, distinguished Canada from the United States...
...Opinion polls turned sour...
...Fed up with the Liberals, fearful of the NDP, it was all 50 percent of Canadians wanted to hear...
...Time and the Tories have changed...
...Conservatives and their business allies have a more private and much more important reason for taking the trade deal at any price: the specter of socialism...
...When U.S...
...The "poorest of the poor" group is growing...
...Over two-thirds of the homeless are not suffering from severe mental and emotional problems...
...food processors, for example, have declared that they could fill the Canadian market by running an extra shift or two at their nearest U.S...
...Postrecession recovery, all by itself, created enough jobs to cut unemployment by a few points...
...Senate ratifies the deal, Americans, who already own about half of Canada's major industries, will be free to buy the rest...
...By the 1960s, they owned more of it than Canadians...
...No disputes-settlement mechanism...
...Most of the poor in the United States are white...
...They can add some clerks in Hartford or Chicago...
...As an American trade negotiator told a Canadian counterpart, "Just about everything your government does up there stinks of socialism...
...Anything to distract voters from Mulroney's tricky image...
...over the next generation may accomplish...
...Mulroney's Conservative party in 1984 was no longer traditional Tory but a Canadian clone of the Republicans...
...It created Canada's tariff wall in 1879 to please its business backers...
...ultraright...
...A more fascinating story is why Canada's government not only signed a seemingly disastrous 144 • DISSENT Reports from Abroad agreement but insisted on it, against the advice of its top negotiator, and why Brian Mulroney and his Conservatives have solid backing for the deal from seven of ten provincial governments, most Canadian newspapers, virtually every Canadian business organization and half the Canadian electorate...
...In western Canada, polarized between left and right, years of battling the New Democrats made Conservatives eager for the ideological hard line they could import, along with oil company executives and gospel preachers, from the U.S...
...To avoid talking about it, he appointed a would-be successor, Donald S. MacDonald, to devise an economic strategy for Canada...
...Conservatives were the people who gave Canada a nationalized railway, state-owned broadcasting, and the first big regional development programs...
...At the end of September 1987, only days before the deadline set for fast-track approval by the U.S...
...The middle class is receiving a smaller share of the national income...
...If American voters ever took any interest in Canada, Republicans could campaign on the trade deal as an even sweeter triumph of Reagan diplomacy than the arms limitation treaty with Gorbachev...
...that most Americans have never heard of...
...corporate domination...
...Children of color bear a disproportionate share of the poverty burden...
...Every public policy that might affect trade or an American economic interest in Canada, with the exception of "cultural industries" and the brewing business, will be open to American scrutiny and potential veto in the name of the "level playing field...
...People of color of all ages are disproportionately poor...
...In 1986, 28 percent of the homeless population were families with children...
...Mulroney's advisers were delighted...
...His happiest childhood memory was being summoned to sing Irish ditties for Colonel McCormick whenever the Chicago Tribune proprietor visited his corporate colony...
...Meanwhile, in Ottawa, Canada's Conservative prime minister assured his fellow Canadians that this was a great historic occasion...
...Air Force...
...Someone gave him the label "Lyin' Brian," and it stuck...
...blacks represented 28 percent...
...Isn't that great...
...Tariff and other trade barriers between the two countries will vanish, wiping out hundreds of thousands of Canadian jobs in service and manufacturing industries...
...Medicaid, the health insurance program for the poor, covers 42 percent of poor families...
...A fair number of his ministers turned out to be bumblers...
...Developing resource wealth into secondary industries would make long-term sense, but in contemporary Canada that kind of thinking is limited to New Democrats and the odd Liberal...
...The poverty gap (the amount by which the incomes of the poor fall below the poverty line) rose to $49.2 billion in 1986...
...right-wingers deplored...
...The agreement guts the 1965 U.S.-Canada Auto Pact by wiping out its enforcement mechanism...
...include just about every universal social-insurance program Canadians have developed, from government-run universal health insurance to an unemployment insurance program that ranges from maternity benefits to relocation grants...
...Poor people are getting poorer...
...Once in office with •a huge parliamentary majority, he promised the Wall Street Journal that "good relations, super relations, with the United States will be the cornerstone of our foreign policy...
...The poverty rate on the farm in 1986 was 19.6 percent as compared to 13.4 percent in nonfarm America, These figures represent only a slight improvement over the 1985 figures of 20.3 percent and 13.8 percent, respectively...
...That kind of talk kept the Liberals ahead of the New Democrats (NDP), Canada's social democratic party...
...The facts would shock most Americans...
...Simon Reisman, the bad-tempered diplomat who had negotiated the 1965 Auto Pact, was summoned from retirement by a handsome per diem and paired up with a seemingly callow U.S...
...Reisman shouted, swore, hammered the table...
...At midnight, October 4, there was no binding disputes146 • DISSENT Reports from Abroad settlement mechanism or much else but there was a deal...
...plants and closing down their Canadian subsidiaries...
...Some Tories are still a trifle pink but not many...
...In 1986, 20.5 percent of all children lived below the poverty line...
...22.1 percent of all children under the age of six were poor...
...As in the United States and Britain, the right-wingers see themselves as revolutionaries, imposing market discipline on people silly or evil enough to think that workers have earned a right to their jobs and to a secure old age, that medical care and drugs should go to the sick, not the wealthy, or that the building industry should build homes, not tax shelters...
...Don Blenkarn, a Conservative MP, put the argument in a simpler way: "When this deal goes through, you socialists are fucked...
...government...
...banks and financial institutions, so far limited by Canadian law in the Canadian market, will be free to move north...
...Though MacDonald termed it "a leap of faith," he had no better idea...
...Mulroney got 211 of 282 seats, an almost unprecedented majority...
...Until the 1980s, Canada's Tories could share credit, in their brief periods of power, for many of the programs U.S...
...and other races represented 3 percent...
...failure to act on Canadian concerns ranging from acid rain to Arctic sovereignty...
...So will U.S...
...His special task was putting its Canadian iron ore subsidiary out of business...
...Only one-third of the 32.4 million poor people in this country receive Aid to Families with Dependent Children (AFDC), the principal public assistance program for poor families with children that is commonly known as "welfare...
...MacDonald and his commission held hearings, toured the world, and gave employment to scores of academic economists who, true to their orthodoxy, proclaimed that Canada's salvation lay in a common market with the United States...
...As compiled by American Reaganauts, those bumps on the "level playing field" they want between Canada and the U.S...
...Instead, he claimed that the social programs were "a sacred trust," promised "jobs, jobs, jobs," and pledged to end regional bickering...
...Through the spring, summer, and fall, polling organizations found the NDP ahead of the Liberals and far ahead of Mulroney's Conservatives...
...In Ottawa, Canada's biggest corporate lobby, the Business Council on National Issues, was instantly on board...
...Canada's hospitals, universities, and other public institutions, almost exclusively nonprofit and publicly financed, will face competition from U.S.-based private-sector counterparts...
...In 1986, 32.4 million people lived below the poverty line as compared to 24.7 million people in 1977...
...By the 1920s, Americans owned more of Canada than the British...
...In 1986, 41.5 percent of all poor people over the age of fourteen worked...
...In 1986, the poorest fifth of all U.S...
...In the 1970s, Trudeau's Liberals occasionally tried to shift Canada's dependence on trade with the U.S...
...service industries...
...That's why the trade deal with Washington mattered so much...
...Politically, the neatest part of the current trade deal is what some commentators have called its "second shoe...
...Experts differed on the reasons...
...Regions with resources to sell—Quebec with hydroelectricity, Atlantic Canada's fish and potatoes, Alberta's oil and gas, British Columbia's lumber—are terrified of U.S...
...The number of poor people in the United States is higher now than in any year in the 1970s...
...Then it turned out that Mulroney, who had won election points by denouncing political patronage, was a devotee of rewarding cronies and a poor liar when caught in the act...
...Treasury Secretary James Baker, and shipped his own trade and finance ministers to Washington...
...After years as a lawyer representing companies in labor disputes, Mulroney's last job before entering politics in 1983 was with the Hanna Corporation of Cleveland...
...Canada loses jobs, sovereignty, and the right to protect her energy reserves against future world crises or cartels...
...The Canada-U.S...
...Conservatives believe that Canadians can be sold on cheaper cars and blue jeans or the dream of selling widgets from Winnipeg to NASA or the U.S...
...At the same time, the wealthiest fifth received 43.7 percent of the total, the highest percentage ever recorded, and the top 5 percent received 16.7 percent, more than the total income share of the bottom two-fifths of the population combined...
...and Canadian negotiators will have up to seven years to decide what constitutes an "unfair subsidy...
...Mulroney's credentials as a 100 percent proAmerican were open for display...
...as an idea that had been rejected back in 1911...
Vol. 35 • April 1988 • No. 2
