Both the Mexicans and the Americans had been initially reluctant to include Canada in the NAFTA negotiations. It was only because of the strong, personal support from presidents George H.W. Bush and Carlos Salinas that we gained a seat at the table We were determined to safeguard the benefits from the Canada-U.S. free-trade agreement (FTA). The results indicate that this was the right decision at the right time for Canada and for our North American free-trade agreement partners as well.
In 20 years, NAFTA became the world’s largest trading bloc, with a combined GDP of roughly $19-trillion (U.S.). Accounting together for almost $7-trillion in exports and imports, the three have become what former U.S. secretary of state George Shultz characterized as a “global powerhouse.”
Canada’s trade with Mexico has increased sixfold since NAFTA. Investment has doubled since the 1980s. Some 2,600 Canadian companies have offices and operations in Mexico. Tourism has more than doubled in the past decade to more than 1.5-million visitors a year.
One disappointment has been that, instead of using NAFTA as the template for trade expansion by the bloc, each North American entity has taken individual strides on free-trade negotiations – separately with countries in the hemisphere like Colombia and Chile; separately again with the EU and now with the Trans-Pacific Partnership (TPP).
There is a sense, too, that the U.S. has moved away from the spirit of NAFTA with tighter border procedures along with Buy American restrictions and labelling requirements that handicap exports of Canadian beef. Some of these were spawned by the events of Sept. 11. Other forms of protectionism relate to the economic recession that ravaged the U.S. and many global economies in recent years.
As my good friend George H.W. Bush has said, America “simply cannot retreat from the world; we cannot withdraw into a ‘Fortress America’; we cannot give in to the selfish voices of isolation and the timid voices of protectionism.” The best tonic of all now would be confirmation that the U.S. economic recovery is real.
There is considerable scope for much more in North America. We need a more coherent negotiating strategy on trade. Just think how much better we would be as a united force using the highly integrated nature of our three economies, the human capital of almost 500-million people and our abundance of resources such as energy and agriculture as leverage to contend with China and other major economies.
We might also give new vigour to the vision of “Free Trade for the Americas.” The NAFTA partners should start by bringing together those in the region with whom they have separate FTAs – e.g. Chile, Colombia, Central America and Caricom. Similar joint action would make sense with the EU and would strengthen NAFTA’s negotiating leverage all around.
There is an overriding need to ease movements of people and goods across our shared borders. Too often, the efforts dissipate before the ink is dry on trilateral communiqués. The Canadian government has made major expenditures to upgrade security and surveillance capabilities along the border. It has also tightened refugee and immigration policies partly to alleviate U.S. security concerns. It is time that these investments delivered concrete dividends.
There is also a huge opportunity for greater integration of our energy resources, especially with the policy reforms just introduced by Mexico. By planning in concert we could make notions of North American “energy independence” a reality. Lower energy costs, including from shale gas reserves, will boost the efficiency of other industries in our three economies. But this will not happen by osmosis. We need to implement plans for needed infrastructure – pipelines, ports and electricity grids – if we expect to turn this resource to our mutual advantage.
We should address shared concerns about environmental and climate change issues without jeopardizing the economic interest of any one partner. The challenges cry out for a pragmatic, joint approach rooted in analysis, not emotion.
The trilateral approach will never be a universal method for managing relations as complex as those between the U.S. and Canada nor those between Mexico and the United States. Canada has bilateral issues and concerns with the U.S. that are different from those of Mexico. Regrettably, the trilateral summits have not helped manage these differences.
The best way for the three leaders to rejuvenate the spirit of NAFTA during its third decade would be to tackle bilateral disputes with a sense of urgency while simultaneously charting a more concerted, North American trade and economic strategy. The goal should be to deepen pragmatically the integration of our three economies. It is not just a matter for governments. The business community and the public at large should be energized to prompt greater attention to the benefits we can each derive from closer collaboration. The fact that we share a common outlook on global issues provides a solid foundation for resolve.
Bismarck once said that “a sign of the statesman is one who recognizes fate as she rushes past and grabs on to the hem of her cloak.” The time for that kind of statesmanship in North America is now. Wednesday’s trilateral summit in Toluca, Mexico, provides the opportunity.
The Right Honourable Brian Mulroney was prime minister of Canada from 1984 to 1993.