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Is the U.S.-Canadian Trade Agreement Pro-Consumer?
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14149 |
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Section : |
CURRENT ISSUES
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| Issue
Date : |
1 / 1988 |
2,677 Words |
| Author
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Sheldon L. Richman
Sheldon L. Richman is director of public affairs for the
Institute for Humane Studies at George Mason University. His
analyses of trade issues have been published in the Washington
Times, Journal of Economic Growth, and the Wall Street Journal. |
After 16 months of negotiations between the world's busiest trading partners, the last-minute agreement to liberalize trade between the United States and Canada was nearly aborted for one reason: Canada does not trust the U.S. Congress.
Can Canada be blamed? In the last few years, several hundred protectionist bills were introduced in the House and Senate; this year is no exception. At this moment, there is pending in the Congress a major piece of protectionist legislation that includes the notorious Gephardt amendment, which would mandate retaliation against countries that have large trade surpluses with the United States. (That is, the dollar calue of what they buy from us is smaller than the dollar value of what they sell to us.) Canada is one of those countries. Canadians also feel their products, such as lumber, hogs, and fish, have been discriminated against under existing American "fair trade" laws, which penalize foreign producers for low prices and alleged subsidies by their governments. So Canadian jitters about Congress' antitrade mentality is understandable.
Ironically, the method devised to calm the Canadians may itself prove to be a major barrier to congressional approval of the pact. The agreement is the product of compromise; it has something to offend almost everyone. Although it is called a "free trade agreement," there are too many exceptions for it to truly qualify for that term. Nevertheless, read provision by provision, there is something to cheer about. The agreement significantly reduces or eliminates barriers to trade in agriculture, investment, energy, and other products and services over ten years. Its consequences, if ratified by Congress, will be wide-ranging and dramatic. Increased trading opportunities
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