Last week, Canadian opinion leaders celebrated the 25th anniversary of his Free Trade Agreement
with the US; the FTA that eliminated nearly all Canadian and US tariffs,
created a non-binding dispute settlement system, and provided national
treatment for each country’s investors. This deal is not simply widely praised
and sparsely reviled; it’s treated as a kind of final settlement in Canada-US
economic relations.
After two centuries of progress and retrenchment, Canada’s
place on this extraordinary continent appears settled: overseas, we’ll burnish
our brand and sign trade deals; at home, we’ll tinker.
Like the sunny memories of Reagan’s economic policies by
Reaganites, numbers don’t adequately express the FTA’s positive impacts. Kevin Lynch,
once Canada’s highest-ranking civil servant and now Vice-Chairman of the Bank
of Montreal, believes the real stuff is intangible:
“Free trade helped Canada to grow up, to turn its face out
to the world, to embrace its future as a trading nation, to get over its
chronic sense of inferiority."
“'It caused a sea change in
attitudes,' he believes. The courage needed to take that free-trade ‘leap of
faith’ equipped governments to tackle other seemingly insurmountable
challenges: Establishing the goods and services tax, eliminating the deficit,
reducing corporate taxes.
“Most important, FTA convinced
Canadian governments, Canadian businesses and Canadians generally that this
country had the knowledge and confidence to compete in any market.”
As it is in the US, bravado in Canada is also a sure sign of
paralysis.
The right and the left see how little Canada’s economy has
changed for the better. (Both Kevin Lynch and Jim
Stanford, an economist with the Canadian Auto Workers union, accept
that Canada’s productivity, just 74% of US levels, is actually slipping further
behind the "declining" USA.) Nevertheless, neither protectionists nor free
traders make much effort to either undo or outdo
what Mulroney put in place.
"Trade diversification" has become the center of the action,
the drug of choice by incrementalists in Washington and in Ottawa. At the same
time, entrenched bureaucracies manage a Canada-US border that inhibits
innovation, competition, and enterprise in both countries—as well as Canada’s
security globally.
Currency unification, the physical elimination of the
border, and, for instance, a common regime to manage the environment are
European ideas, too radical for serious consideration in the New World.
Pros in Ottawa accept that Brian Mulroney pushed Canada
about as far as Canadians would go. Indeed, on the constitution, he proved to
them how dangerous it would be to try to improve on the success of the
country’s last great closer, Pierre Trudeau.
This is a debasing form of respect for the good works of a
different time.
Having given thanks, now let’s face it: the "coming of age" gift
of the Mulroney-Trudeau years has been turned into a political straightjacket—a
limiting sense of what’s possible in the very business of what is possible.
In fact, North Americans are stuck a generation behind European
efforts to make their continent a more productive, efficient, and competitive
economy. Furthermore, Canada’s constitution still includes two undemocratic and
colonial institutions—at the very top.
Canadian optimists should stop watching for moves by the
Chinese government to turn China into a law-abiding market democracy and
waiting for the children of Canada’s last generation of politicians to stir
their hearts.
No comments:
Post a Comment