PERSPECTIVE ON FREE TRADE : Canada, Mexico: a Kinship Evolves : Their similar political outlooks promise a good counterweight in any three-way free-trade agreement with the U.S.

Jorge G. Castaneda teaches international studies at the National Autonomous University of Mexico and at UC Berkeley

The announcement by North America's three governments that they will soon begin three-way free-trade negotiations had a diverse reception in Mexico, Canada and the United States. Canadian opponents of the 1988 U.S.-Canada free-trade agreement, already a numerical majority (though not a parliamentary one) are virulently opposed to Mexico's entry. American free-traders are happier with the three-nation prospect than a bilateral one. In Mexico, the news was met with joy by free trade's few enthusiastic supporters, with dismay by its even fewer opponents, and with resignation or indifference by nearly everybody else. And yet the case can be made that if free trade between Mexico and the United States is inevitable, then Canada's inclusion is better for Mexico in the long run, regardless any negative consequences in the immediate future.

There are various reasons for this. The first has to do with the dynamics of any three-way relationship: It is inherently unstable until two of the parties unite and gang up on the third. The possibility exists, of course, that Canada and the United States--two developed, largely Anglo-Saxon nations--will band together against Mexico. But it is far more likely that the single bonding trait shared by Canada and Mexico--having the United States as a neighbor and partner--will prevail, and that most of the time, the two weaker economies will ally against the stronger third one. This can only be to Mexico's advantage.

Secondly, Mexico and Canada are, in relative terms, much more resource-based than the United States. Their defense of mineral resources, particularly oil and natural gas, has been similar, a matter of critical national policy. One of the most delicate issues to be negotiated in the three-way prospective agreement will be how to deal with energy, and in the short term Canada's presence may complicate things for Mexico. Mexico's insistence on keeping oil off the agenda is simply unrealistic under present circumstances. If President Carlos Salinas de Gortari were truly adamant about excluding Mexican oil from the free-trade agreement, he would postpone the negotiations at least until the Gulf War is over and fading from Americans' (generally short) memory. But in the long run, it will be easier for Mexico to defend its oil and other natural resources against American voracity if it has Canada at its side, frequently fighting the same battles.

But the key advantages for Mexico of Canada's inclusion are more intangible and political. They involve the basic nature of Canadian society, and the type of broad agreement that the narrow-based, strictly economic agreement will undoubtedly become. As has happened in Europe, but hopefully much more quickly, economic integration will include other facets: a social charter, environmental considerations, human-rights linkages, consumer protection, labor mobility and trade-related mechanisms for settling disputes. There is far greater support for this type of extension within a free-trade agreement, and for the social-welfare philosophy that they rest upon, in Canada than in the United States. the Mulroney government is probably the most conservative of the three right-of-center administrations, but the political center of gravity of Canadian politics and society is far to the left of the United States.

Moreover, Canada is a more ideologically pluralistic, philosophically open society and political culture than the United States. In Canada there is an organized left, a center and a right; there is a strong labor movement; a large state-owned sector of the economy, and a fully developed, though hurting, welfare state. It is far more European than the United States, far more social-democratic. In light of the free-market radicalism popular among Mexican elites, this may seem irrelevant, but in the long run, once again, Mexico shares far greater ideological affinity with Canada than with the United States.

North American free trade at some juncture implies North American politics. In a certain sense this is already coming true, as the debate over the benefits, damages and features of free trade takes place in all three countries, but chiefly where the debate is freer: in the United States and Canada. Trilateral coalitions are already taking form, to support the agreement, to oppose it or to shape it in a particular way. The more diverse, more universal and more progressive inclination that Canada brings to these politics must be seen as a welcome one for Mexico, despite the risks involved and the inevitable drawbacks.

Canada's inclusion does not diminish any of the serious dangers and disadvantages that the proposed free-trade agreement entails for Mexico. But it doesn't aggravate them either, and might make Mexico's fate somewhat more controllable, somewhat less dramatic. Canada's influence is preferable to Canada's exclusion.

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