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Canadians Bitterly Split Over Benefit of New U.S. Free Trade Agreement

February 07, 1988|KENNETH FREED | Times Staff Writer

TORONTO — To some Canadians, a free trade agreement with the United States is an eviction notice. "It will mean the Americanization of Canada," Barbara Sanger said, "crime in the streets, violence, unemployment, homeless people."

But to Larry Zolf, free trade will bring openness, prosperity and a more dynamic life. "Whenever I hear the silly fears about free trade, I want to run out and hug an American," he said.

The views expressed by Sanger, an Edmonton secretary, and Zolf, a Toronto political journalist, are extreme but not unusual as Canadians search for the meaning of the arrangement signed Jan. 2 and expected to become law in both countries early next year. It is a debate that each side agrees will determine both the economic and cultural future of the nation.

The debate also dredges up issues that have bedeviled Canada virtually throughout its history--currents of anti-Americanism and troubling self-doubts about Canadian viability as a nation and society.

And, according to Mitchell Sharp, a former minister of external affairs and an expert on international trade, "The debate is splitting the country in a very dangerous way. It is a fundamental and pervasive division."

From the language of the two sides, it seems so.

"There will be no Canada within a generation if the (agreement) is allowed to proceed," said Mel Hurtig, an Edmonton publisher and one of the most fervent opponents of free trade with the United States. "The result will be, at best, a colony or trust territory."

Margaret Atwood, a Canadian novelist whose works are best sellers in the United States, said the agreement threatens "to fragment and destroy the country."

John Turner, the leader of the opposition Liberal Party, asserted that the agreement is "a monumental disaster" and that he "will tear up" the pact if he heads the next federal government.

Not all of the ranting comes from critics of the agreement. Prime Minister Brian Mulroney, the architect of the deal, has characterized Hurtig, Atwood and their allies as "intellectual terrorists."

And University of Toronto political economist John Crispo charged the opponents with being "anti-American, left-wing and narrow-minded nationalists" who engage in "fear-mongering tactics."

Former Nova Scotia Premier Gerald Regan takes a milder tone in criticizing the doom-sayers but was still sarcastic when he asked, "Does someone suggest that we would no longer have Highlands dancing in Cape Breton? Will our fiddling championships be taken away? Will the Americans kidnap (Cape Breton singer) Rita MacNeil?"

Two Years to Complete

On the face of it, the document that has sparked this bitter and sometimes irrational argument is a mundane if long and complicated commercial arrangement, full of arcane economic language about tariffs, dispute resolution mechanisms and market access.

In brief, the agreement, which took two years to complete, calls for phasing out over 10 years all tariffs on goods and most services crossing the border. That will be a relatively easy task since the United States already allows in more than 90% of all Canadian imports duty free while Canada imposes taxes on only 15% of its American imports.

Among the agreement's more controversial aspects are those that allow the United States greater investment opportunities and access to Canadian energy resources, including provisions that require Canada to sell gas and oil to Americans at the same price that prevails within Canada. Furthermore, the agreement stipulates that in the event of another oil shortage, Canada may not cut supplies to American customers at any greater rate than to domestic customers.

For the Canadians, the agreement's major gains are relatively secure access to the American market, which is more than 10 times larger than their own, and a quasi-judicial system that will resolve disputes over such trade issues as selling at less than production costs or unfair government subsidies. Trade disputes between the two countries are currently adjudicated by U.S. agencies such as the Commerce Department. Canadians complain that they are no more than supplicants in the process and that most of the rulings go against them.

While the sums involved are great--more than $120 billion a year in two-way trade--the treaty would not seem to be the stuff of drama or national soul-searching; but in Canada it is and always has been.

This is not the first free trade agreement between the two countries. A treaty was signed in 1856 but it lasted only 11 years before the Americans canceled the deal under pressures from U.S. grain farmers.

According to Abraham Rotstein, an economics professor at the University of Toronto, the abrogation of the agreement was one of the major factors in the founding of Canada in its modern form in 1867.

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