COVER

PAINFUL HISTORY LESSON

FREE TRADE PROVOKES CLASHES ON THE CAMPAIGN TRAIL

MARY JANIGAN November 21 1988
COVER

PAINFUL HISTORY LESSON

FREE TRADE PROVOKES CLASHES ON THE CAMPAIGN TRAIL

MARY JANIGAN November 21 1988

PAINFUL HISTORY LESSON

COVER

FREE TRADE PROVOKES CLASHES ON THE CAMPAIGN TRAIL

It was a nervous inquiry from a panic-stricken woman. Eighty-four years old, alone in her senior citizen’s apartment in downtown Ottawa, Winnifred Curley called her son Paul last week to discuss the Canada-U.S. free trade deal. Would it destroy medicare, she asked. Would it decimate her federal old-age pension? Paul Curley, the former federal Conservative party’s national director, soothingly replied that her pension was safe, that her medical benefits were secure. But, like many rueful Conservatives, he has now experienced the emotions that the issue of free trade can evoke across the nation. “The Liberals and the New Democrats have distorted reality,” he angrily told Maclean’s. “Free trade has become the issue—and the opposition parties’ lies have scared people.”

For the Conservatives, the 1988 election campaign has become a painful lesson in Canadian history. Time after time, since 1854, Canadian governments or their original British colonial masters have reached out hesitantly to the United States for a tariff-reduction agreement. Time after time, those approaches have awakened passionate arguments against the agreements, scuttling prospective deals in 1911 and 1948. For that reason, when Prime Minister Brian Mulroney and President Ronald Reagan agreed to “give the highest priority” to the elimination of trade barriers in March, 1985, the Conservatives treated free trade as a simple economic issue. Anxious to avoid emotion, determined to soothe Canadian nationalists, they did not discuss the specific effects of the agreement on Canadian sovereignty.

In the final week of the election, perhaps inevitably, the issue has moved from reason to passion, from economics to nationalism. Indeed, the vivid arguments have dominated the Canadian election campaign (page FT22). Since Mulroney clashed with Liberal Leader John Turner and NDP Leader Edward Broadbent over free trade in the televised debates, the Conservatives have slipped to second place in their own polls—and went into the final week fighting to retain a minority government.

Last week, concerned Tory strategists questioned their decision to downplay the specifics of the deal—detailed in the following 16 pages—after the agreement was reached on Oct. 4, 1987. In an attempt to stem the slide, party strategists also attempted to shift the focus of the campaign onto another issue: the credibility of Liberal Leader John Turner and

his caucus colleagues. As a senior Conservative told Maclean’s, “If the focus stays upon free trade, it will be pretty tough for the Tories.” In contrast, the opposition parties were equally determined to keep public attention squarely on the free trade deal. Throughout last week, in virtually every speech, Turner cited controversial passages in the agreement. Then, in soothing tones, he assured his audience that Canada-U.S. relations would remain stable if the deal were cancelled. But he had to fend off growing demands from opponents to spell out the cost of his campaign promises in an effort to keep the focus on trade. Said the Liberals’ chief financial officer, Michael Robin-

son: “Unless the issue changes, it bodes well for John Turner and the Liberal party.”

For their part, some New Democratic Party planners admitted that many voters now view the Liberals as the leading opponents of the free trade deal—largely because the NDP did not fight the agreement from the outset of the campaign. To recover flagging momentum and to gain the support of voters opposed to free trade, Broadbent vehemently attacked Turner as a secret conservative, a leader who would not defend average Canadians’ interests against U.S. and Canadian corporate interests. As Lome Bozinoff, the vice-president of Gallup Canada Inc., told Maclean’s: “The NDP is get-

ting forgotten. It has become a battle of the titans, Mr. Free Trade versus Mr. Anti-Free Trade. And everybody knows who those two are.”

With its clear divisions and its fiery rhetoric, the trade debate of 1988 reflects the soulsearing emotion that has, in part, moulded the identity of generations of Canadians. The first Canada-U.S. agreement, the Reciprocity Treaty, was signed in 1854 to ensure free trade in unprocessed products, including fish and farm produce. Twelve years later, the United States

terminated the accord, largely because of U.S. anger at British support for the Confederate forces in the Civil War.

That cancellation raised an issue that has been posed for 122 years: is it in Canada’s national interest to enter a comprehensive trade agreement that gives it open access to the massive American market? In 1878, Conservative Prime Minister Sir John A. Macdonald proclaimed his so-called National Policy of protective tariffs. He swung the Tories behind free trade in 1888 but eventually returned to a protectionist position when public opinion seemed to be turning against him. In 1911, his successor, Liberal Prime Minister Sir Wilfrid

Laurier, again returned to the free trade theme and he forged an agreement for lower tariffs. He was soundly defeated in the ensuing election. Almost 40 years later, in 1948, Liberal Prime Minister Mackenzie King concluded a draft agreement with the United States but cancelled it, fearing charges that he was an anti-British continentalist.

No subsequent government dared to reach out as firmly to the United States until the Conservative victory in 1984. Determined to forge closer relations, Mulroney told the Eco-

nomic Club of New York in December of that year that “Canada is open for business again.” And free trade negotiations began in May, 1986, concluding in October, 1987, after hundreds of meetings involving hundreds of officials. In the United States, Congress met for little more than a day before it passed legislation to implement the deal. Then, on Sept. 28, Reagan signed it in a brief ceremony, and Canadian implementing legislation died in the Senate when Mulroney called the Nov. 21 election.

Still, the Conservatives were always aware that they were treading on dangerous political ground. From 1985 to the election campaign,

Tory strategists carefully concentrated on the economic benefits of the agreement, citing general statistics that promised prosperity. But those statistics paled when Turner and Broadbent peppered Mulroney with emotional rhetoric and detailed questions during the televised debates.

Last week, Conservative strategists told Maclean ’s that their soft approach may have been a mistake. Perhaps they should have called a referendum on free trade before the election, they said. Or Ottawa could have admitted that there were problems with the agreement—and then have undertaken to solve them. Said a senior strategist: “There is an argument, for example, that we should have brought in adjustment policies to help workers who will lose their jobs with free trade. But it was too late to act when cabinet ministers considered those issues during the election.”

Free trade, in turn, has been a major benefit to the Liberals. Prior to the televised debates, Liberal polls showed that Canadians simply did not believe Turner was competent. Still, there was growing unease about free trade: a Gallup poll released on Oct. 25, hours before the English-language debate, showed that 42 per cent of Canadians opposed the deal while 34 per cent favored it. Liberal strategists told Maclean sthat when Turner performed well in the debates, he provided an outlet for that fear. Said Robinson: “Usually television debates are focused upon personality. What made this debate for us was that John Turner’s support became issue-driven, linked to free trade.”

The debate was a setback for the NDP. Maclean ’s has learned that NDP polls prior to the campaign showed that the party would gain few votes with an anti-free-trade platform. The reason: voters regarded free trade as an economic and managerial issue—and they did not have high regard for the party’s capacity to manage the economy.

As a result, Broadbent emphasized other issues, such as the environment, throughout the first weeks of the campaign. Even after the debate focused attention on free trade, Broadbent stubbornly stuck to his own agenda: throughout the following seven days, he spoke about old-age pensions, minimum corporate taxes and house construction. On Nov. 1, at an emergency meeting in Ottawa, 10 NDP strategists resolved to attack free trade as the fondest desire of corporate Canada—and to dismiss Mulroney and Turner as the spokesmen for the corporate establishment. Still, Broadbent delayed: he did not use his strategists’ tough approach until Nov. 7. Said a discouraged senior planner: “Now, all that we can hope for is to pull a few voters who slipped away to the Liberals back to us with a strong attack on Turner.”

Canadian history has repeated itself. Once again, free trade has dominated an election. Once again, economics has confronted emotion. And, once again, Canada’s politicians have learned that history is always a guide to the present.

MARY JANIGAN