FREE TRADE

A CUTTHROAT DEAL?

Talks with Mexico complicate Canadian attitudes

BRENDA DALGLISH January 7 1991
FREE TRADE

A CUTTHROAT DEAL?

Talks with Mexico complicate Canadian attitudes

BRENDA DALGLISH January 7 1991

A CUTTHROAT DEAL?

FREE TRADE

Talks with Mexico complicate Canadian attitudes

Frank Hidasi is among the two per cent of Canadians surveyed in the Maclean’s/Decima poll who cited free trade as the country’s most important issue. And he opposes it. The 70-year-old retired tool-and-die maker from Peterborough, Ont., said in a follow-up interview that by signing the Free Trade Agreement with the United States, “the government cut the throat of Canadian labor.” Added the spirited Hidasi: “We got peeled like a banana.” Hidasi, who emigrated from Hungary 33 years ago after spending a year in a Soviet prison camp, said that free trade is part of a plan by a pro-business government to reduce labor costs and increase profits. The country should abandon the accord with the United States and not even consider making a similar arrangement with Mexico, he said. Added Hidasi: “I’m worried for the new generation, not for me.”

The free trade agreement has always received a cool reception from Canadians, although they gave Prime Minister Brian Mulroney a clear electoral mandate in 1988 to implement the deal. Now, however, a majority of those surveyed say that Canada should withdraw from the agreement (questions 24 and 25 in the poll text, page 32). Indeed, 55 per cent of the respondents said that Canada should invoke a clause in the agreement that would allow Ottawa to abandon the FTA with six months’ notice, compared with 40 per cent who preferred to maintain the accord intact.

Opinions on the free trade agreement vary significantly according to demographic and geographic factors. Senior citizens (64 per cent) and those who have not graduated from high school (60 per cent) were more likely to say that they want out of the agreement. Among those more likely to want to keep the deal were respondents with annual household incomes of $75,000 or more (55 per cent) and those with a university education (46 per cent). Regionally, the strongest support for the FTA is in Alberta (51 per cent), British Columbia (47 per cent) and Quebec (44 per cent). Opposition

is strongest in Ontario, where 64 per cent of respondents favored ending the agreement.

The issue becomes more complicated when Canada’s anticipated involvement in free trade talks between the United States and Mexico is raised. Presented with four options involving Mexico, the respondents expressing outright opposition to the FTA—and to any negotiations with Mexico—dropped sharply to 33 per cent. Another 31 per cent said that the trade pact with the United States should be reopened for new negotiations while Canada goes ahead with talks with Mexico. Seventeen per cent

chose to keep the current accord with the United States, but stay out of the Mexican negotiations. Only 15 per cent of respondents favored keeping the FTA intact and negotiating with Mexico—the federal government’s preferred option.

Overall, just 32 per cent of respondents— those who chose the last two options—supported the current FTA. But many among the 31 per cent preferring to renegotiate the FTA presumably support free trade in principle,

even though they say that the actual agreement with the United States should be better. Decima Research Ltd. president Allan Gregg, whose firm also polls for the federal Conservatives, says that his Decima’s polling consistently shows that, while there is broad support in Canada for ensuring a place in the world trading system, many Canadians “find the changes that are necessary very threatening.” The more prominent the free trade issue becomes with the Mexico talks, he added, “the more aggravation the government can expect.” Shirley Carr, president of the Canadian Labour Congress, which wants the government to cancel the FTA, said that she is not surprised by the poll’s results. “Canadians know that they’re paying a very high economic price for this agreement,” Carr said. As for negotiating an agreement with Mexico, where workers earn about 60 cents an hour, Carr added: “It’s great to make all that stuff at cheap prices, but what happens if there is no one left with any money to buy it.” For his part, Gordon Ritchie, one of the senior Canadian officials who negotiated the FTA, says that Canadians do not understand the implications of terminating the accord or reopening it for a new round of negotiations. The agreement cannot be improved, he said, and the Americans would not react kindly to seeing Canadians reject it. Said Ritchie: “The American protectionists would get a very strong card to play. We would be hurt, there is no question.” Still, Ritchie said that he is encouraged by one of the poll’s findings. Even during the traumatic post-signing adjustment period and with a recession, four out of 10 people still support the FTA, despite the fact that much of Canada’s biggest trade advantage—an undervalued Canadian dollar—has been wiped out. Those results are well below the 75 per cent who favored the concept of free trade when Maclean ’s first asked the question in the 1985 annual poll. But then, Canadians were far more confident on all fronts half a decade ago.

BRENDA DALGLISH