FREE TRADE

Opening the door

KEN MACQUEEN January 6 1986
FREE TRADE

Opening the door

KEN MACQUEEN January 6 1986

Opening the door

FREE TRADE

Free trade is the latest star in the long-running revue called economic renewal. For years it languished as an aging bit player with a spotty history of major roles dating back almost as far as Confederation. But all that changed in 1985 when Prime Minister Brian Mulroney made pursuit of freer trade with the United States a major priority. Mulroney’s decision, with the backing of President Ronald Reagan, catapulted the issue into the spotlight. Indeed, respondents to The Maclean ’s/Decima Poll offered Mulroney a broad measure of support. Asked if they backed attempts to “negotiate a more open trading agreement with the United States,” 75 per cent said it was a “good idea” or a “very good idea.”

But that enthusiasm is fragile. Asked to react to the prospect of an agreement “which was good for most parts of the country but caused harm to your own province,” support shrank; 55 per cent said they would “oppose” or “strongly oppose” such an agreement. Similarly, there was a sharp contrast in how Canadians perceive freer trade with the United States. A majority (61 per cent) felt their province would be “helped greatly” or “helped somewhat” by an agreement. Yet when asked if “a more open trade agreement would result in more jobs,”.54 per cent said it would result “in about the same number we have now” or “fewer jobs.” Said Bruce Anderson, senior research consultant for Decima: “It’s kind of a ‘show me’ situation, with most people wanting and tending to believe it will be beneficial.”

Confidence: At the same time, there, was significant concern about the abilities of Canadian negotiators. While 61 per cent said they were “confident that we will bargain firmly and effectively” with the United States, 37 per cent agreed with the counterargument that Americans are better bargainers. One respondent’s skepticism was typical. A federal employee from Saskatchewan declared, “The United States will want the better deal, and Canada will be worse off.” The poll was conducted between Oct. 30 and Nov. 3, about one week before Mulroney named Sol Simon Reisman, an Ottawa consultant and retired top-level federal trade negotiator, to oversee a team preparing a Canadian negotiating position.

For most of the 1,575 Canadians surveyed, freer trade held the promise of economic renewal through bigger markets and more jobs (page 38). Respondent Wayne Loehr, a 39-year-old teacher from Edmonton, said part of the appeal was in a greater array of American products that would flow into Canada. Said Loehr: “I’m tired of getting things years after they’ve been introduced in the United States. If there were no trade boundaries, we would be able to get more products.” But Shawn Borry, a 21-year-old economics student in Peterborough, Ont., warned that free trade could benefit Canada only if the impact on weaker Canadian industries were cushioned. And he cautioned that Canadian business style may prove a serious disadvantage. Said Borry: “We often have the wait-and-see approach, whereas a dynamic manner is the whole basis for the American system.”

Fears: Those more likely to say that the trade initiative is a good, or very good, idea are a diverse lot. They include high-income earners (86 per cent compared to the national average of 75 per cent) and young upwardly mobile professionals (80 per cent). And faced with chronically high levels of unemployment, 18and 19-year-olds also said that a trade agreement is a good idea that could create jobs (84 per cent).

But the figures also suggest the Conservative government must resolve a number of nagging public fears and divisions among various regional and socioeconomic groups before it reaches an agreement with Washington. Among those most concerned that their province would be “harmed greatly” or “harmed somewhat” were Ontario respondents (29 per cent as opposed to a national average of 20 per cent), retired people (30 per cent) and those with elementary school education (26 per cent). Those who identified their households as lower class were the most likely to be worried that Canada would be out-bargained by the Americans (47 per cent as opposed to a national average of 37 per cent).

The answers revealed many paradoxes. As expected, respondents from heavily industrialized Ontario—which accounts for almost two-thirds of the $150 billion in annual trade between the two countries—were less enthusiastic about free trade (67 per cent believe that free trade is a “good idea” or a “very good idea”) than residents in Alberta, with its resource-based economy (87 per

As you may know the Prime Minister has announced that Canada will try to negotiate a more open trading agreement with the United States. In your view is this a:

Very Good Idea - 18%

Good Idea -57 %

Bad Idea - 16%

Very Bad Idea -6 %

Different estimates have been made about the effects such a Canada-U.S. trade agreement would have on jobs in Canada. In your view, do you think a more open trade agreement will result in more jobs, about the same number of jobs, or fewer jobs?

More Jobs -44 %

Same Number33%

Fewer - 21%

If an agreement were worked out which was good for most parts of the country but caused harm to your own province would you strongly support, support, oppose, or strongly oppose that agreement?

Strongly Support3 %

Support -40 %

Oppose -39 %

Strongly Oppose-16%

cent). But Ontario respondents were also the most likely to say they would “support” or “strongly support” an agreement that hurt their province but benefited the country as a whole (52 per cent as opposed to a national average of 43 per cent). By contrast, 83 per cent of Quebec respondents said that freer trade was a good or very good idea but they also displayed the least support

It has also been suggested that different parts of the country would be affected differently. Thinking about your province, do you think it would be:

Helped Greatly - 15%

Helped Somewhat46 %

Neither Helped nor Harmed-17%

Harmed Somewhat-14%

Harmed Greatly - 7 %

for a deal that would hurt their province while helping the country as a whole (27 per cent compared to the 43per-cent national average).

For Mulroney, free trade offers a daunting dilemma. On one hand, there is the lure of possible economic benefits from open access to 235 million U.S. consumers. On the other, it invokes a traditional Canadian fear that closer economic ties could harm Canadian culture and identity. In a speech on the issue delivered Dec. 4 at the University of Chicago, Mulroney warned that he would never bargain away political sovereignty, cultural and social programs or equalization grants to poor regions.

Urgency: Public fears about the perceived threat to cultural identity are well recognized by the external affairs department, the ministry leading preliminary trade discussions. A secret departmental report dated Oct. 10 (Maclean's, Nov. 11) advised that Canadians remained unconvinced that a stronger economy through free trade “would enhance sovereignty across the board.”

The external affairs memorandum may have been based on the findings of a survey of public opinions on trade and foreign policy commissioned by the department in July. That poll—also conducted by Decima— found that 52 per cent of those surveyed thought Canada would benefit from removing trade barriers between the two countries. But while Canadians considered trade expansion important, Decima added, “clearly the public generally do not place the same urgency to the issue as the government,” mainly because a majority remained unconvinced that any U.S. protectionist measures would include Canada. Five months later The Maclean ’s/Decima Poll also concluded that free trade ranked below unemployment, the economy, government spending and world peace.

Passionate: The external affairs findings contrasted sharply with the position proposed in a politically explosive letter to Industry Minister Sinclair Stevens in August from Canada’s ambassador to Washington,

Allan Gotlieb. The secret correspondence urged the government to weaken a program by Communications Minister Marcel Masse to protect Canadian publishing from foreign control. Gotlieb urged the government to allow the takeover of the publishing firm of Prentice-Hall Canada by the U.S. communications conglomerate Gulf & Western Industries. He warned that resistance to the takeover would be seen in the United States as “a harbinger” of Canada’s intention to protect other sectors from trade negotiations. But some Canadians hold passionate views on the subject. Respondent Judy Wiebe, a 45-year-old Calgary mother of 10, said she worried about the possible American takeover of Canadian publishers. “What will happen to our Canadian authors?” she asked.

For the nation’s 10 provincial premiers, the issue also is fraught with perils. One early challenge has been to secure a voice in the negotiation process. During the November federal-provincial conference in Halifax, the premiers wrested an agreement from Mulroney for “full participation” in trade negotiations. But it remains unclear whether they will be able to participate at talks, have veto power over any agreement or will merely have a consultative role. Implicit in the November agreement was a concern that Ottawa has not shared its strategy or its goals with the provinces. Said Ontario Premier David Peterson: “There are still far more questions than answers: about what we want to achieve, how we intend to achieve it and what we must be prepared to give up.”

It is that uncertainty, shared by a significant portion of respondents in The Maclean’s/Decima Poll, that opponents of free trade hope to exploit. The federal New Democratic Party, for one, is attempting to form a common front of unions, farm groups and cultural agencies now fighting various aspects of a trade agreement. For

Some people say they are nervous about Canada entering into these negotiations because they feel that the Americans are better bargainers than Canadians and therefore we will end up with a poor deal.

Others say that they are confident that we will bargain firmly and effectively with the Americans and we will get the best deal possible. Which of these two points of view best reflects your own?

Nervous - 37%

Confident - 61%

his part, International Trade Minister James Kelleher told Maclean’s that “none of the foes of our initiative is coming up with any alternate schemes to solving our trade problems.” But as The Maclean’s/Decima Poll indicated, unless those questions are addressed the government risks undermining vital public and provincial support for its trade initiative.

-KEN MACQUEEN in Ottawa