"The Deal" is Signed: Now What?
The Canada-U.S. Free Trade Agreement is now a fact. Proponents and opponents fought hard and made diametrically opposite predictions about the impact of this Agreement. What do such divergent judgments suggest to us about the future of the FTA?
Realistically, neither side can be absolutely certain about its predictions. Neither a rosy future nor the destruction of Canada is assured. There is an element of faith involved in approving the FTA—as in all other decisions made by individuals, communities, or entire nations. Life is too complex and, ultimately, beyond our control for mere mortals to speak with absolute certainty about the future.
To predict that the FTA will produce only gains in jobs, investment and the standard of living is to ignore the fact that there will be losers as well as winners. For example, several spokespersons for the furniture and textile industries have already announced investment and employment cutbacks because of the gradual elimination of protective tariffs. As FTA opponents predicted, some companies may well invest in the U.S. instead of in Canada as a result of the Agreement. This means that some workers will lose their jobs and may have to retrain or even relocate. It will not be a success story for everyone. A sense of realism and modesty is therefore in order on the part of those who support the Free Trade Agreement. I believe that the following evaluation got it just about right:
If the agreement is examined in the context of the GATT relationship and the formation and operation of other regional trade groups, and as an attempt to settle a variety of particular bilateral economic and trade issues, it is neither as awe-inspiring as some proponents claim, nor as cataclysmic as some opponents portray it: but it is nevertheless of major importance in the history of Canadian-American economic and trade relations. (Murray G. Smith and Frank Stone, Assessing the Canada-U.S. Free Trade Agreement [Halifax: Institute for Research on Public Policy, 1987], p.5)
Similarly, FTA opponents should be cautious and moderate in their claims. Some have predicted that the FTA will cause Canada to be absorbed into the "American empire." They claim that the Agreement "betrays" our nation by elevating the market (which they believe is driven by selfishness and greed) to a predominant position in society. They defend a view of Canada in which the state plays the dominant role, both as the provider of a social safety net and as the manager of the national economy. They have been very quick to blame any plant shutdown or company cutback in Canada on the FTA, while ignoring any reports of companies expanding their Canadian operations as a result of the Agreement.
Many FTA opponents have vowed to continue their fight to have the Agreement cancelled at the earliest opportunity. For example, Maude Barlow, chairperson of the Council of Canadians, claims that the Conservative election victory occurred because "of corporate buying of votes" and predicted that the war over the FTA will resume "all over again during the next federal election campaign." "We will absolutely continue the battle," echoes David Orchard, head of the Citizens Against Free Trade. Trade unionists and the New Democratic Party are also determined to keep on fighting. Not only can we expect continued rancour on the Canadian political scene, therefore, but we can be sure that the conflicting views of labour and management on the FTA will present an additional obstacle to more harmonious labour relations.
At a conference sponsored by the Economic Council of Canada late last year, Thomas Kochan, an expert on labour relations at the Massachusetts Institute of Technology, argued that labour and management need to change their attitudes and practices in order to meet the competitive world of the future. "Labour," said Kochan, "will need to become more of a champion of innovation and adjustment at the workplace, and play a broader role in management and governance of the enterprise. Management in turn will need to accept a broader role of workers and their representatives in the enterprise in return for the changes in the human resource policies and practices it needs to compete in contemporary markets" (Globe & Mail, December 6, 1988, p. A6).
At the same conference, Judge Rosalie Abella, current chairperson of the Ontario Labour Relations Board, predicted more trouble ahead for labour relations in Canada. She foresees increasing "politicization, polarization" and "a titanic conflict for survival" caused by the impact of the FTA.
Such polarization between labour and management in Canada may well prove to be more of a hindrance to successfully meeting the challenge of freer trade with the U.S. than is the content of the Agreement itself.