SPECIAL REPORT

THE SECOND TIME AROUND

OTTAWA HAS TO RESELL A TRADE DEAL

GLEN ALLEN August 17 1992
SPECIAL REPORT

THE SECOND TIME AROUND

OTTAWA HAS TO RESELL A TRADE DEAL

GLEN ALLEN August 17 1992

THE SECOND TIME AROUND

OTTAWA HAS TO RESELL A TRADE DEAL

It was an emotional and often bitter singleissue election campaign—one unlike almost any other in recent memory. Conservative Prime Minister Brian Mulroney told voters that the Free Trade Agreement (FTA) he had signed with the United States on Jan. 2, 1988, would bring Canadians jobs and lower tariffs. Opposition leaders insisted that the accord would compromise the nation’s sovereignty and economy. Mulroney’s Conservatives prevailed in that November, 1988, election. But now, they face the prospect of fighting an election in which the North American Free Trade Agreement (NAFTA) is a major issue. And with many Canadians blaming job losses and plant closures on the first deal, voters may be slow to embrace a second. Said Gordon Ritchie, an Ottawa consultant who was deputy negotiator for the government in striking the original agreement: “In voters’ minds, NAFTA is carrying all the baggage of the FTA.” As a result, senior Tory strategists are now developing a plan that they hope will help them

to guide the new agreement through Parliament some time this fall and sell it to the people in an election expected in mid-1993. The challenge is a major one. Beyond the widespread belief that the FTA has been economically harmful, many members of the labor movement express concern that under NAFTA, Canadians will lose even more jobs to cheap Mexican labor. As well, big business, which eagerly supported the FTA, is less interested in promoting NAFTA because of the relatively small-scale trade with Mexico—or the likelihood of any significant increase.

Mobilized: In addition, the opposition parties and nationalist and environmentalist groups are better mobilized since the FTA. Said one well-connected observer of the NAFTA talks, who asked not to be named: “As far as selling it is concerned, unless [International Trade Minister Michael] Wilson comes away with a miracle, there isn’t a hope in hell.” Still, other analysts said that the Tories may still be able to convince Canadians that the deal is both need-

ed and timely. “It is definitely sellable,” said Conrad Winn, a political scientist at Carleton University in Ottawa. “They just haven’t sold it yet.”

One group clearly determined to attack the sales pitch is labor. Indeed, labor leaders, citing recent polls, said that they were still optimistic about killing the accord, especially if the government chooses to fight an election on the issue. Other survey results, however, indicate that anti-NAFTA sentiment can be swayed relatively easily. Carleton’s Winn, whose polling firm, Compas, questioned 1,500 Canadians on the NAFTA issue in June, said that opposition to the deal declined when the advantages and drawbacks were clearly explained to them.

Rislclnde6percentoth;sepolledsaid that the risk involved in making a deal with Mexico was overridden by the possibility that NAFTA would lead to further trade with other parts of Latin America. As well, 48 per cent of respondents said that NAFTA could help Canadi ans influence Mexico's labor and environmen tal practices. Added Winn: "This suggests that a huge proportion of the opposition is reflexive and superficial-or a desire to thumb their noses at the government." Another factor may help the government to win support for the accord: the Liberals are clearly divided on the trade issue. Such party luminaries as Lloyd Axworthy, Herb Gray and Sheila Copps have been vocal in their opposi tion to the existing FTA and the NAFTA. Other influential Liberal MPs, including Montreal's Paul Martin and trade critic Roy MacLaren, say that they favor free trade in general, although they have specific reservations about NAFTA. Said MacLaren: "We accepted the ar gument that Canada should be at the NAFTA table for the obvious reason that all investment would flow into the United States if it were the only country that had access to markets."

As for the NDP, it is clearly determined to fight NAFTA, which it portrays as the evil stepchild of the FTA. In Calgary last week, NDP Leader Audrey McLaughlin called for a fall election on the issue. Said McLaughlin: “That way, we can get out of two bad trade deals at the same time.”

Although the government has been almost paralysed by the constitutional issue, many Tories say that leadership in the political marketing of NAFTA will come from Wilson. Robert Layton, the Quebec Tory MP who is chairman of the PC party caucus, told Maclean’s that fellow caucus members had voiced “no major concerns” about the promotion of NAFTA. Said Layton: “I think most of us feel we are in good hands with Mike.”

Indeed, Wilson has already taken steps to prepare for the coming political battle. In a June memo, he told MPs that they had “an important challenge to resell free trade” and urged them to “show why Canadians have nothing to fear from the NAFTA agreement.” But disenchanted voters say that they have heard that argument before. Once bitten, they may well be more than twice as shy.

GLEN ALLEN

Ottawa