The cost to its economy is greater than just lost opportunity as it extends to further damage the credibility of a relationship which the public views as suspect, in accordance with Campbell's estimation.
The oversight of international regulation is undertaken by the World Trade Organization, which brings the globe's free trade partners together to broker affairs of economic cooperation or contract. However, this has proved to be an agency with too diluted a focus to effectively maintain balance between such partners as Canada and the U.S. Campbell addresses most of the regulatory differences between the two nations as being historical and incidental in some ways, indicating that perhaps the inconsistencies are simply in need of concentrated attention. This notion accounts for the 2005 launch of a Trilateral Regulatory Commission, partnering Canada, the U.S. And Mexico in an agreement to acknowledge a central forum for regulation of trade discrepancies. Though its authority and effectiveness have both yet to come fully into form, this board represents an opportunity to streamline the commerce-related legal provisions which differ in sometimes small but deeply felt ways.
Globalization advocates in Canadian governmental leadership will tend to hoist economic indicators from the years which parallel the greatest export indexes to the United States, following the FTA and NAFTA. And there is statistical bearing for that assertion, found in places where the effects of free trade were most immediately enacted. "Studies of the early years of FTA trade show that Canadian exports grew more rapidly in sectors where tariffs were cut the most, with nonresource products growing two times as rapidly as resource-based products." (Morici, 492) From its 1989 inception to the end of its first decade, the agreement would prove to be a stimulant to the growth of the Canadian economy as a whole. Its elevation to a role as a top -- and in some years the top -- trading partner of the United States have changed the nature of its own economy. Investment from the U.S. In Canadian markets expanded and the Canadian market consistently swelled. The trend would continue with the inception of NAFTA in 1994. According to the Canadian government, from that point until "1999, Canada's economy grew by an average of 3.3%, while the U.S. And Mexican economies grew by an average of 3.9% and 3.1%, respectively." (Canada, 1)
Today, however, Canada is at the crossroads of which both Hart and Campbell speak. Already committed to free trade and economic integration with the United States, Canada's political leadership shoulders a heavy burden of defining its nation while attempting to mirror its neighbor's economic resiliency. Paul Martin had been in favor of free trade, but also feared the reprisals of a public which was resentful of American social policy, militarism and its violation of international policy. The Martin government was even vocally critical of all of these facets of its close ally's international and domestic affairs. Even so, he pursued an agenda which attempted further economic integration by homogenized legal oversight of the free trade alliance.
This has been underscored by a circumstance which illustrates the danger of such homogenization. Again, U.S. dominance must be considered a threat to Canadian independence under a move toward regulatory integration, given its easy potential to "overwhelm Canadian cultural industries, compromise the independence of Canadian foreign policy, and undermine political support for Canada's more generous social safety net." (Morici, 492) These are the formative basis for the objection which all manner of non-governmental organization have voiced to further proliferation of free trade. Environmental agencies, women's rights groups and leftist political organizations have all been critical of the government's submissiveness to an America which differs so vastly in its value system.
Ultimately, the U.S. dominance has taken the form of economic discretion not afforded to its partner. As leadership changed hands in February of 2006, with the historical elevation of Conservative Party leader Stephen Harper to Prime Minister, Canada continued to view free trade as an imperative. But Harper pronounced his willful resistance to a U.S. dominance over Canadian economic or political identity and has backed this claim with his stance in an ongoing dispute between the two nations. Despite the posturing of both the Canadian and U.S. governments, which poses a uniformly positive front over the progress of free trade, a lumber dispute that has been under contention for four years has become a key issue of defiance for Haper.
After it accused Canada of dumping softwood into its market at below-value prices, the United States imposed a tariff upon this type of lumber in order to drive its cost back upward. Under Harper's leadership, "Canada is seeking a refund of 4.5 bln usd in duties on Canadian softwood imports since May 2002, but the U.S. has balked at the demands." (AFX, 1) Its ability to impose such tariffs in spite of NAFTA's provisions and its capacity to resist Canadian efforts at reconciliation in spite of WTO oversight illustrates that its economic dominance is genuinely the most significant governing factor in the implementation of free trade. As of this month, the World Trade Organization has ruled in favor of the U.S. right to impose such a tariff, though P.M. Harper still roundly rejects this decision.
Such issues might best be addressed by the institution of a meaningful regulatory commission, so that disputes like this may be settled before differing domestic trade perspectives erupt into outright economic deadlocks. As Hart notes, this is a process which should be a comfortable fit. "Historically, regulatory cooperation between Canada and the United States has been driven by natural forces, similar to the market forces that have deepened and accelerated integration between the two countries." (Hart, 6) This notion, however, finds a sharp contrast in Campbell's observation. At least, this is true if one considers the public's interest to be a natural economic determinant. If it can be observed as such, Campbell's perspective is important. He asserts that "most people don't want Canada to move further down this deep integration road. They want to be able to elect a government that can make fundamental choices about the kind of society they want. Canadians don't want these choices foreclosed through back-door bilateral agreements and behind-the-scenes regulatory measures shaped by U.S. demands." (Campbell, 3) This speaks to the ramifications of binding two democracies to a political integration founded without democratic input.
The most pressing danger in breaking down the remaining protections between the Canadian and U.S. economies is in the fundamental conflict between free trade and democracy. Though it is denoted that free trade is meant to foster closer political identification between its partners, this is an identification which is presumed upon a relationship between industry leaders and wealthy elites.
For policy initiative to be based upon such exclusive economic identifications threatens to widen an imbalance in the distribution of wealth in Canada. This speaks to the danger of free trade's capacity to alter the social identity of its participants. That is the peril which Campbell engages in his article, clarifying the cause for division over free trade's continued intensification. Hart's article, however, must ultimately be regarded for its realism. Canada has already too deeply penetrated the waters of free trade to reverse paths now. It must instead engage the newly formed Trilateral Regulatory Commission as a medium for discourse and the attainment of balance between parties. Though the influence of the United States is far greater than that of Canada, its current preeminence as a trade partner with the largest market in the world demonstrates that it does hold some sway in the relationship. If it is capable of moving forward with free trade while defending the integrity of its social, political and ideological identity, Canada may yet enjoy an equitable market expansion into the United States.
AFX. (2006). WTO Rules Against Canada in Lumber Dispute with U.S.
Forbes. Online at http://www.forbes.com/markets/feeds/afx/2006/04/03/afx2644053.html
Anderson, a.D.M. (1995). Seeking Common Ground Canada-U.S. Trade Dispute Settlement Policies in the Nineties. San Francisco: Westview Press.
Campbell, B. (2006). Canada-U.S. Relations: Paul Martin's Dilemma. Canadian Centre for Policy Alternatives.
Canada. (2006). NAFTA Works Brochure. International Trade Canada.
Hart, M. (2006). Steer or Drift? Taking Charge of Canada-U.S. Regulatory Convergence. C.D. Howe Institute: The Border Papers, No. 229.
Morici, P. (1997). Assessing the Canada-U.S. Free Trade Agreement. American Review of Canadian Studies, 26.