A TRADING NATION: CANADIAN
TRADE POLICY FROM COLONIALISM
TO GLOBALIZATION, by Michael Hart.
Vancouver: UBC Press, 2002. Hardcover,
pp. 576, $85; paperback edition November
2002.
First, a word on our author. Michael Hart is not just the holder of the Simon Reisman Chair in Trade Policy, Norman Paterson School of International Affairs, Carleton University, and a leading Canadian authority on trade policy. He is also a former trade official from DFAIT/DEA with a solid grounding in the dark arts (textiles negotiations), and-more pertinently for the purposes of this review-one of that breed of trade policy wonks that can tell you not just what they are doing, but why they are doing it, who has done it before, and whether or not it will work.
And now, we pause for a brief commercial announcement. Michael has given Canadians a remarkably complete survey of the history and political economy of Canadian trade policy. This fills a gap in the shelves of serious analysis of trade issues and should be high on the reading list of students and practitioners alike. It is also a highly enjoyable read, no surprise to those who know his earlier works (a hint: there are some gems strewn among the nearly 60 pages of footnotes, ample reward for the diligent). Michael has kept his natural proclivity for forthright expression largely in check, doubtless in the interests of academic impartiality, but the effort must have been considerable, and I for one relished the moments when he let rip. It is invigorating to see the muddled efforts of the Atlee Government and its successors characterized as, “Two decades of floundering and inept British foreign and economic policy” ’, even if Michael’s perceptions are coloured by the major negative implications of these policies for Canada. And European views of apparent American insensitivities to domestic realities such as the Common Agricultural Policy are well summarized as “obtuse myopia”; in fact, I think the expression deserves wider circulation. Complementing all this are the illustrations, which range from election posters through photographs of momentous occasions right the way through to contemporary political cartoons (my favourite). They are well chosen to help bring the subjects to life. However, I do have to retract one thing I said at the book launch for A Trading Nation: the material would not, on reflection, lend itself to being made into a music video.
Michael comes at his subject from the historical, political and institutional perspectives rather than the economic, a point to which I shall return. Santayana said something to the effect that those who cannot remember the past are condemned to repeat it, and after reading this history of Canadian trade policy I am beginning to believe it. Geography, population and politics have anchored Canada’s trade policy pretty firmly over the years. One may change the industries, but the dynamics are similar. Westerners might say we favour central Canadian agriculture now, where a couple of generations ago they would have pointed to the Ontario and Quebec manufacturing sectors; oil and gas interests have appeared in the East and West; but the business of trade policy is still one of finding balances while being buffeted by domestic and international forces. Given this reality, it is curious that Michael pays relatively little attention to the domestic players. The views of Canadian manufacturing receive attention at key points (e.g., in the 1911 election campaign; in the negotiation of the Canada-U.S. Free Trade Agreement), but the federal-provincial relationship is scarcely mentioned, even though trade policy has moved well into areas of shared or provincial jurisdiction over the past two decades, and the role of other players is barely acknowledged. I hope that the success of this work will be such as to warrant a second edition; this is one of several areas that I would wish to see further developed.
A recurring theme of this work is the inevitability of economic integration with the United States. This is not, for Michael, a source of any concern; he clearly does not see in it any sustained or deliberate attack on our sovereignty or our values, although he does not try to hide those occasions when U.S. interests collided with Canadian policy (e.g., over the Foreign Investment Review Agency). His charts of trade flows tell a story that his analysis reinforces: the United States and Canada are natural trading partners. The only time our trade pattern significantly diverged from being U.S.-preponderant was when we were shut out by U.S. protectionism while simultaneously welcomed into the British market through preferences. It comes as no surprise, therefore, that he sets little store by deliberate attempts to work against the underlying economics and redirect trade and investment flows, whether under Diefenbaker or Trudeau, though he acknowledges different motivations behind much of our contemporary regional trade agenda, especially in the Americas. I suspect Michael’s next edition will cover the history of that agenda with similar scepticism!
A couple of other insights from history still ring true. After the Tokyo Round, for instance, he says it appeared to critics that the central focus of Canadian trade policy was systemic and bureaucratic rather than economic and political. That changed, of course, with the “triple whammy” of Canada-U.S. free trade, the Uruguay Round, and NAFTA, but critics are again posing the question in light of the current multilateral and regional negotiating agendas. It begs a question that does not receive as much analysis as I should have liked: who is Canadian trade policy for? Why do we pursue strong dispute settlement provisions and other systemic goals that constantly seem to boomerang on us? What, in brief, are the lines that connect “systemic and bureaucratic” to “economic and political”?
In his early chapters, Michael answers the basic question authoritatively in his analysis of the balancing act of Canadian trade policy: it is for Western agricultural exporters and Eastern manufacturers. Alas, this analysis is not carried through to the present day, when trade policy seeks to advance a far wider array of interests. It is a pertinent criticism, however, as long as the trade policy community does not point out the links between a well-functioning system and the interests of business, between trade facilitation and the interests of small and medium-sized enterprises, and so on. In fact, many modern critiques of Canadian and global trade policy rest on the premise that we have not fully appreciated the links between trade and investment rules and flows and other areas of concern such as environmental protection or labour rights. Much of this debate — though not, to my chagrin, the development debate — is sketched out in a tantalizing survey of future challenges in chapter 15 (“Canada in a Globally Integrated Economy”), which contains the seeds of many fascinating future books and articles. My reproach may just be a case of déformation professionnelle in me: I had hoped for more on the issues that occupy the minds of current practitioners.
Another historical insight that struck me with peculiar force is the difficulty in building and maintaining support for reform, whether domestically or internationally. “Twas ever thus, apparently; negotiating outcomes that may be highly desirable from the perspective of building a better world order may have limited political appeal, especially when short-term pain is threatened under promise of very long-term gain. That, however, is more or less where we find ourselves right now, at least on the multilateral front (the FTAA and other regional activities do offer clearer and nearer-term economic benefits). How GATT Director-General Sutherland built constituencies for the Uruguay Round package belongs to another book, of course, but perhaps time will allow Michael to answer that question for successive Canadian trade ministers facing sceptical colleagues and concerned publics. I suspect that he will begin his analysis with his shrewd observation that the emerging political economy of international trade is shifting from “equality of opportunity” to “equality of results”; support will increasingly be withheld until concrete results are in sight, and given the pace of change in the international economy, we will have quite a challenge to surmount.
I was disappointed, I confess, by a certain unevenness in Michael’s treatment of more recent trade policy. He gives fairly short shrift to the influence of Canadian ideas at various times and in various ways (e.g., in helping inscribe services on the GATT agenda; in experimenting — not always successfully! — with innovations in our bilateral trade agreements with Chile and Costa Rica; in developing models for labour and environmental cooperation). The detail and insights taper off markedly towards the end of the book: the Canada- U.S. free trade negotiations and the GATT Uruguay Round are well covered, for instance, but NAFTA receives a scant four pages in one chapter and a few paragraphs in another, while the rest of the regional agenda scarcely warrants a mention. If you’re really into this stuff, it’s like coming to the end of a great mystery novel and reading, “The door creaked gently as the murderer slipped into the room. And they all lived happily ever after!”
I also have to say that A Trading Nation is neither by nor for economists, which may of course commend it to many readers. I cannot in fairness reproach Michael, as a non-economist, for not venturing into the economic analysis of the impact of trade and trade policy on Canada. He has certainly tried to invoke the authority ot others, in particular in his analysis of mid-twentieth century protection and its impact on the Canadian economy. Perhaps he could inveigle an economist colleague into co-writing another book about the costs, benefits and purposes of certain policies we now pursue; without being polemical or predictable, I suspect they could nonetheless come to some surprising conclusions about what we are doing in trade and investment policy, and in international business development. I don’t wish to tip my hand too much, but suffice it to say that I wonder whether the title of the book’s final summary chapter, “From a Trading Nation to a Nation of Traders”, really tells the truth!
View the original scanned pages →
Originally published in bout de papier, Vol. 19, No. 3 (2002-2003) — Fall/Winter 2002/2003 // Automne/Hiver 2002/2003, pp. 19–20. Read the rest of this issue →
