Economy & Trade, Headlines, North America

CANADA: Activists Coalesce Against ‘Deep Integration’ With U.S.

Paul Weinberg

TORONTO, Oct 17 2003 (IPS) - So far it is unclear if incoming prime minister Paul Martin will follow the advice of some of his business backers to integrate the country’s economy and governance more deeply with the neighbouring United States.

But a group of progressives is not waiting to find out.

About 100 left-leaning union economists, activists and university academics met here this week to counter the message being delivered by the advocates of ”deep integration” in the business community and its supporting think tanks.

It is believed that many of those advocates are rubbing their hands in anticipation of Martin’s ascension to the top of the Liberal Party and into the position of prime minister, to replace retiring Prime Minister Jean Chretien next February.

Martin, a former finance minister and millionaire businessman, is widely considered to be more business-friendly than Chretien and more disposed to cementing the current wobbly relationship between Ottawa and Washington..

”First, our bilateral relations must be conducted on a far more sophisticated basis than it has been to date,” said Martin in a speech in April.

“We must engage the Americans face-to-face at important levels of our respective political systems – prime minister and president; premiers and governors; members of parliament and members of congress; mayors, business and uunion leaders, and civil society.”

As defined by one of its chief advocates, the Canadian Council of Chief Executives (CCCE), deep integration is essentially a North American common market or customs union that would include continental approaches in a host of areas like natural resources, business and trade regulations, defence, immigration and refugees.

The proposal appears to exclude Mexico, the third partner of the current North American Free Trade Agreement (NAFTA).

Martin has not commented on the deep integration proposal, a topic that is below the political radar here.

Free trade with the United States has led business to pressure Ottawa to follow more regressive U.S.-style tax and social policies so that Canada remains economically competitive, says Bruce Campbell of the labour-backed, Ottawa-based Canadian Centre for Policy Alternatives (CCPA).

One much cited example is unemployment insurance, which, since the first free trade treaty was signed 15 years ago, has had its eligibility requirements toughened and benefits lowered in line with the less generous U.S. model.

How far Canada with its population of 30 million (1/10 of the U.S. number) will accommodate itself as the ”junior partner” attached to the larger U.S. economy was the subject of this week’s public teach-in and academic conference organised by the CCPA.

This is ”the first time”, said Campbell, that representatives of various organisations, including unions and social justice groups, have met to share research and strategies regarding Martin’s ascent and the ramifications of deep integration.

”The business community has long given up on Canada as an independent and sovereign entity,” he added in an interview.

Conference participants struck a different note from earlier, and unsuccessful, battles in the late 1980s and early ’90s to stop the initial Free Trade Agreement (FTA) with the United States and the subsequent NAFTA.

For instance, no one argued with the thesis of panel speaker Maria Banda that Canada’s economic integration with the U.S. ”is irreversible”.

But others, including Canadian Labour Congress economist Andrew Jackson, discussed creative ways to maintain distinctive Canadian policies in culture, industrial policy and the environment, even under restrictive NAFTA rules. He cited, for example, a strategy that favoured environmentally friendly products.

”The way forward for Canada is to retain as much room for manoeuvre as we can vis-à-vis the U.S., while advancing a progressive agenda at the national and international level,” Jackson argued.

”There can realistically be no return to the somewhat more insulated economic space of the late 1980s, given the realities of globalised capitalism and close continental integration in terms of trade in goods and, to a much lesser but growing extent, services.”

Representing Canada’s major companies – most of which are subsidiaries of U.S. enterprises – the CCCE began pushing deep integration two years ago because of its concern that Canadian business might be locked out of its most important market, the United States, where Canada sends more than 85 percent of its exports.

After the terrorist attacks of Sep. 11, 2001, some local U.S. politicians called Canada ”a haven for terrorists” because of its more liberal immigration and refugee policies, although all of the terrorist attackers had been resident in the United States..

Those reactions raised fears that Washington would strengthen its borders and turn ever more inward, making it harder to do business with the giant.

Today, there is little appetite among Canadian and American politicians alike for another big trade deal. More likely, says Campbell, is that Ottawa will make incremental moves towards deep integration if no opposition is mounted.

What complicates that process is that as the countries’ economies converge under the FTA and NAFTA, their social and political policies and attitudes are diverging.

At the conference, University of Toronto professor of political economy, Stephen Clarkson, author of ‘Uncle Sam and Us: Globalisation, Neoconservatism and the Canadian State’, pointed to recent actions by Chretien to reinforce that trend.

The prime minister pushed ahead with his domestic programme, which included one item to which the Bush administration openly objected – the decriminalisation of possessing small amounts of marijuana.

He added insult to injury by signalling the federal government would legislate a Canada-wide norm backing an Ontario court ruling that sanctioned the marriage of same sex partners, a prospect deeply offensive to social conservatives in Washington, says Clarkson.

Because deep integration is too abstract a concept, says Campbell, its opponents will have to target specific issues, like the much-discussed common North American defence policy that arbitrarily accepts the U.S. approach to missile defence and nuclear proliferation.

”There is a whole array of concrete areas where those flashpoints will be focused on. And that is probably how the battles are going to be fought,” he added.