Calgary Herald, Wednesday, June 04, 2003

Not-so-free trade
David Orchard isn't so far off base in identifying NAFTA's flaws

Editorial

The backroom deal that installed Peter MacKay as leader of the Progressive Conservatives has sparked a national identity crisis in the Tory party, perhaps unnecessarily.

David Orchard, whose name is often preceded with the description "anti-free trade activist," became the kingmaker when he agreed to back MacKay in the fourth ballot of the leadership selection process. In exchange, Orchard demanded neither truck nor trade with the Canadian Alliance -- a major setback to the conservative cause -- and a blue-ribbon panel to review free trade. The latter idea is not as bad as it seems.

For all the puffed-up media coverage, Orchard takes a surprisingly moderate tone on the issue of international trade. He does not say outright that Canada should scrap the North American Free Trade Agreement, but he does say there are clauses in those agreements "that are damaging our
sovereignty as a nation."

Orchard believes Canada did better under the multilateral framework of the General Agreement on Tariffs and Trade, now the World Trade Organization, and that Canada agreed to clauses in the FTA and NAFTA that turned out to be a bum deal. He has a point.

In particular, Orchard is outraged by Chapter 11 of NAFTA, which allows private corporations to sue the Canadian government for passing laws that harm their businesses -- something that wasn't allowed under GATT. Orchard cites the Chapter 11 challenge to Canada's 1995 decision to ban the sale of the gasoline additive MMT, even though California and Europe had banned the toxin. Canada settled the claim by paying the U.S. company $20 million in compensation, and backing down on the legislation.

It's one thing for a trade agreement to create a level playing field between U.S. and Canadian suppliers. It's another for the United States to use a trade agreement to strike down Canadian air pollution standards. That's not what free trade is supposed to be about.

Under GATT, trade rules were subject to international law. But under the FTA and NAFTA, Canada's exports are subject to U.S. trade law, which is increasingly influenced by powerful U.S. lobby groups. Thus, the United States can unilaterally imposed quotas on Canadian steel and hogs, tariffs on softwood lumber, wheat and durum, and still give massive subsidies to U.S. agricultural producers. One wonders whether the United States is committed to the spirit of free trade at all.

Skeptics are right to remain suspicious of Orchard's motives. He still lauds the Tories' historical protectionist stance and writes: "The Conservative party – and Canada – can survive only if it leaves behind the rush to globalization, which means Americanization." Those are hardly the words of a free-trade crusader.

But Orchard is right about this – it's time to do a review of Canada's free trade agreements with the United States. If it's possible to get a better trade deal, it's worth a try.

© Copyright 2003 Calgary Herald

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