CANADA

Raising the stakes on free trade

EHILARY MACKENZIE December 16 1985
CANADA

Raising the stakes on free trade

EHILARY MACKENZIE December 16 1985

Raising the stakes on free trade

CANADA

The parchment invitation imprinted with Time magazine’s logo described the Chicago event as part of a program to stimulate “discussion, debate and enlightenment.” Two previous performers in the U.S. newsmagazine’s distinguished speakers program had been President Ronald Reagan and the 1984 Democratic vice-presidential candidate, Geraldine Ferraro. Last week it was Brian Mulroney’s turn. And at the University of Chicago the Prime Minister seized the opportunity to promote proposals to negotiate freer cross-border trade and investment. At the same time, he stressed in the strongest terms so far that essential Canadian cultural and social features “are not at issue in these negotiations.” Declared Mulroney: “Our political sovereignty, our system of social programs, our commitment to fight regional disparities, our unique cultural identity, our special linguistic character—these are the essence of Canada.”

Mulroney’s foray into the heartland of American protectionism—the Chicago venue was his choice—took place only days before Reagan was expected to ask Congress formally to approve free trade negotiations with Canada. And although major U.S. news organizations gave little coverage to the speech, it partly fulfilled the sponsor’s purposes by stimulating heated discussion and debate in Canada.

But parliamentary critics in Ottawa—and in the provinces—complained about a lack of enlightenment. In the Commons and in a special Senate debate on the culture issue, opposition members protested that Mulroney still has not made clear whether specific Canadian cultural industries—publishing, broadcasting and film-making —will be protected from American competition in the trade talks expected to start next year. Said Liberal deputy external affairs critic Lloyd Axworthy in the Commons: “It is time the government spelled out what it means by ‘protecting cultural sovereignty.’ ”

In a response to the charges, Deputy Prime Minister Erik Nielsen declared: “The cultural sovereignty of the coun-

try and its languages will not be bargained away. The Prime Minister said that if there is any danger of that, there will be no deal.” Indeed, Mulroney stressed the importance of Canada’s cultural sovereignty in a passage that he repeated in French and which was clearly intended as much to reassure Canadians as to instruct his Chicago audience of 1,000 students, teach-

ers and businessmen. Said Mulroney: “In the United States you cast the net of national security over more areas than we; in Canada we cast the net of cultural sovereignty more widely than you.” He added that the purpose of a new trade agreement would be to raise incomes, job opportunities and living standards on both sides of the border. Declared the Prime Minister: “If we and our American partners cannot strike a deal that will achieve these goals, a deal will not be struck.” Mulroney stopped short of declaring that his government would refuse even to bargain about Canadian laws and

regulations governing the cultural industries. Among those measures: Bill C-58, a 1976 law opposed by Time and other foreign publications that prevents businesses from claiming tax deductions on the cost of advertising in non-Canadian journals, as they can in such Canadian magazines as Maclean's. In his introduction of Mulroney in Chicago, Time's editor-in-chief, Henry Grunwald, pointedly denied Canadian press reports last month that said that the newsmagazine is courting Mulroney as part of a campaign to gain more favorable treatment in Canada.

The reports noted that Mulroney has been featured twice in the past 15 months on covers of Time in Canada-one of which, dealing with Mulroney’s election as Prime Minister, appeared in the U.S. edition—and cited the Prime Minister’s selection as a Time distinguished speaker. Said Grunwald of the report: “I resent the suggestion and find it strange.” For his part, Mulroney seized on the theme of the Time cover stories to stress the importance of Canadian trade to the United States. He told the audience that the prime minister of Japan had been on the cover 15 times. But, said Mulroney, Canada’s trade with the United States is “50 per cent o greater than America’s comy merce with Japan.” Without directly mentioning Canada’s 1984 $14.3-billion-a-year surplus in cross-border trade and the protectionist pressure that it has helped to generate in the United States, Mulroney said that both countries would suffer economically unless trading patterns are stabilized in a new agreement. Said Mulroney: “Obviously, then, it would be a mistake for U.S. congressmen or businessmen or workers to underestimate the importance of the economic relationship with Canada.”

Despite that admonition Mulroney conceded that the trade talks may never succeed because of the increasing protectionist sentiment in Congress and among some labor unions and businesses. In a question-and-answer session following his speech, Mulroney said: “It may be that it won’t work out.

It may be that the protectionist sentiment to which you refer will jettison this initiative.” He also acknowledged that Canada’s federal-provincial tensions over the trade talks could cause delays. Referring to disputed interpretations of last month’s agreement on full provincial participation in the trade negotiations, Mulroney remarked, “It will take a little more time than if just two people got together in a hotel room in Maryland and negotiated a deal.” But he said that involving the provinces would “bring a lot more credibility and sunshine to the process.”

But in Canada the dispute over provincial participation persisted in Parliament and in provincial legislatures. Meeting in Montreal on the day after Mulroney’s speech, Quebec premierelect Robert Bourassa and Ontario Premier David Peterson jointly claimed the right to veto any federal accord with Washington that impinges on provincial jurisdiction, which includes mineral and energy resources and internal business activity. But in Washington, Thomas D’Aquino, president of the Canadian Business Council on National Issues, said at the Johns Hopkins Center for Canadian Studies that the Mulroney government “will have to play hardball” with the provinces to head off a situation where 11 Canadian governments are trying to negotiate a new trade pact with the United States.

In the Canadian Senate, where a special debate on the cultural aspects of the trade issue began on Wednesday afternoon and finished early on Thursday morning, Conservative Senate Leader Duff Roblin insisted that whatever is negotiated “will be because we intend to strengthen our culture.” But Senator Keith Davey, a longtime active advocate of cultural sovereignty and Bill C-58, declared, “The scary thing about this Tory government is not just its love affair with everything American, from Rambo to Boeing, but its branch plant mentality; its apparent willingness to do anything, including giving away the store, to curry favor with the United States.”

As the Senate debate was under way in Ottawa, Mulroney was recalling for his Chicago audience how as a boy soprano in Baie Comeau, Que., he used to sing the song Dearie for the Chicago newspaper and newsprint baron Col. Robert McCormick—who tipped Mulroney $50—when the businessman was visiting forestry properties in Quebec. Said Mulroney: “It was in that way that the Mulroneys became the first Canadian family to benefit directly from American foreign aid.”

-HILARY MACKENZIE in Chicago

EHILARY MACKENZIE