The current renegotiation might be doomed, but the vision of a liberal, prosperous western hemisphere that originally drove NAFTA won’t go away soon.
While there’s plenty of excellent commentary on the facts of the current NAFTA negotiations, those of us who were around for the first edition in the early 1990s can’t help comparing the two periods from a longer-term perspective. Like so many aspects of our world now, the political context of the talks today is dramatically different from that of a quarter-century ago.
- In the 1990s, Washington was engaged in creating the World Trade Organization, adapting to development of the European Union and encouraging liberal reform in Latin America. Today, rather than being anchored in this wider multilateral system, White House policy is — to repeat a common description — transactional. This is another way of saying that the NAFTA countries do not share a strategic vision of what kind of world they are trying to build together.
- The present White House is more or less in chaos, or at any rate can easily slip back into it at any time. The investigation of its possible ties to Russia, for example, could well lead the US administration into uncharted political waters even during the short projected period of these negotiations.
- Unlike the Mulroney government, the present Canadian government is, generally speaking, not primarily interested in economic policy, the sources of national wealth or international affairs. Its focus is on a domestic social and environmental agenda. This is reflected in its attempt to insert Indigenous and environmental themes into the NAFTA arena.
- There is less analytical foundation than there was 25 years ago for the objectives of the talks. Little time or effort was given to data gathering, academic study, modelling or expert discussion before going to the table. That’s the work that sets the stage for successful policy. (One might blame this absence on the unexpected arrival of Trump and his trade policy in the White House — but such work is too seldom done anyway, or, if it is done, it may not be integrated into government actions.) The Trans-Pacific Partnership talks and other negotiations may supply useful templates, but analytical work on the North American trilateral context and experience was probably also lacking in the preparation for these discussions.
Factors like these create far more obstacles than opportunities for the NAFTA renegotiations, and they make it even harder than it was in 1990-91 to be confident that these talks will lead to anything better than a contrived, sham win for the US President — if they produce even that result.
At the same time, there are big and fruitful post-NAFTA and western hemisphere integration agendas waiting to be explored. Liberal economic policies and pro-democratic reforms can be actively rewarded and deepened and reinforced — an aim that originally drove NAFTA and the Free Trade Agreement of the Americas concept. Those possibilities haven’t been destroyed yet by President Trump (or President Maduro, or anyone else) and won’t go away soon. And the factors listed above can change. Above all, and however it occurs, there will one day be a change in the US administration.
Whatever happens (or doesn’t happen) at the NAFTA table over the coming months, we must keep possible future worlds in mind, and help keep the door open to them:
- Canada should collaborate and build trust with players in the US and in Mexico — especially those who can imagine better things and might be around in four to eight years to pursue them with us.
- We should develop teamwork among the stakeholders on the Canadian side, and particularly the linkages between Ottawa and the business sector. The present government very much needs to do this anyway, for the sake of better policy-making across the board.
- We can take this time to build up the analytical foundations for Canadian economic policy in the western hemisphere. This is a piece of the world where Canada is close enough — and a big enough player — to make a macro-difference. For example, academics at the University of Ottawa and the University of Alberta have made a start on the useful project of assessing the value of a customs union for North America; we need more such scholarship.
The last time our countries explored a post-NAFTA deal was when officials in all three countries invested substantial effort in the North American Initiative (also known as the North American Security and Prosperity Initiative and by other designations) in the wake of 9/11. My book Strangers with Memories: The United States and Canada from Free Trade to Baghdad examines, among many related topics, how and why that quest failed. NAFTA succeeded the first time on the basis of a grand shared vision. But a decade later, the North American policy landscape was a mess. Among its other problems, the North American Initiative of the early 2000s never aligned well with Washington’s new, security-obsessed world view.
This time the long-term outlook seems more favourable. The landscape is certainly a mess today. NAFTA’s renegotiation might be doomed by White House obsessions and conduct. But with all the ups and downs, the progress and the reversals, the right lessons about liberal economic policy are being learned and will hopefully continue to be learned in Washington, Mexico City, Brasilia, Buenos Aires and Ottawa too.
The grand shared vision of a liberal, prosperous western hemisphere shouldn’t be counted out just yet. There are things we can do to keep the possibility alive. And those things — like building trust with neighbours, strengthening government-business links and building knowledge of our policy options — would be well worth doing anyway.
This article is part of the Trade Policy for Uncertain Times special feature.
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