Talking Across the Fence
The opening of negotiations on the establishment of a free-trade agreement between the United States and Canada comes just in time to remind those in Congress, fascinated with protectionism, that there is a constructive and better alternative to tariff walls.
Behind what Vice President George Bush has characterized as “the protectionist juggernaut now sweeping through the United States Congress” is serious economic distress. High unemployment in the Rust Belt, in wood-product regions and in textile and apparel production centers is essentially a consequence of profound changes in the world economy--changes that require painful readjustments to new forms of competition. But it has been politically easier for members of Congress to blame the problems on unfair foreign competition and to offer the palliative of protection, which at best can provide short-term relief from the symptoms, rather than the strong medicine of industrial reorganization that is the only cure, the only way to assure long-term employment and economic vigor for the nation.
Trade between the United States and Canada runs at more than $120 billion a year, the largest trading partnership in the world. Much of that trade already is free, led by the Automotive Products Trade Agreement that has created a binational auto industry.
This booming relationship has had its problems and its disputes, and has created its share of dislocations on each side of the frontier. Those problems will be at the heart of the negotiations now commencing. The task for the negotiators, Peter Murphy for the United States and Simon Reisman for Canada, is so complex that experts estimate that the dialogue may run for years.
The risks of failure, of more intense protection and the trade wars that those measures generate, have already been demonstrated by President Reagan’s May 22 decision to impose a penalty duty on Canadian cedar shakes and shingles, and by the subsequent retaliatory Canadian duties on a variety of products. The end result is a loss for both nations at a cost out of all proportion to the problem of domestic shake producers whom the President sought to protect.
As Canadian Prime Minister Brian Mulroney argued so eloquently, “The best means of assuring job security on both sides of the border is the reduction of trade barriers to new markets in Canada and the United States.”