Canada Awaits Details Of NAFTA Bill Before Giving Nod
CANADIAN Prime Minister Jean Chretien may want to embrace the North American Free Trade Agreement (NAFTA). But he is awaiting the fine print in the bill now before the United States Congress and the reaction of Canadian businesses.
President Clinton sent Congress legislation on NAFTA last Wednesday. The next day, Mr. Chretien was sworn in as Canada's 20th prime minister. He immediately signaled that he is leaning toward NAFTA by choosing free-trade advocate Roy MacLaren as his trade minister. Yet as favorable as Mr. MacLaren's appointment would appear to be for NAFTA's passage, Chretien has wide political leeway to push Mr. Clinton to satisfy a laundry list of Canadian concerns at the Seattle summit Nov. 19 - two days after the scheduled vote in Congress.
If NAFTA passes Congress, Chretien may still hold out to show Canadians he is not caving in to the US. Polls show three-fourths of Canadians dislike NAFTA. Even its business proponents are wavering. A delay in Canadian implementation of NAFTA, or even a decision to walk away from it, is not unthinkable.
``This government is clearly not looking for an excuse to kill NAFTA but would prefer to address its concerns to make NAFTA acceptable,'' says Gordon Ritchie, Canada's former deputy trade negotiator and one of the architects of the 1989 Canada-US Free Trade Agreement. Mr. Ritchie is now a consultant in Ottawa.
Still, he says: ``The US administration has appeared willing to buy votes by offering up Canadian scalps. Chretien will have to get advice as to whether the NAFTA legislation is so offensive that it is unacceptable. He could still choose to walk.''
During his election campaign, Chretien waved his promises to the Canadian people - a red book of policies that included five problems with NAFTA: The absence of codes defining what constitutes an unfair subsidy and unfair ``dumping'' of products; the need for a more efficient dispute-resolution mechanism; and the lack of provisions on energy trade that safeguard Canadian energy supplies in the same way Mexican energy is protected.
Throughout the campaign, critics derided as unrealistic Chretien's idea of renegotiating the hard-won NAFTA pact. Clinton has said that he will not reopen NAFTA. But there is widespread belief that something less than a full-blown renegotiation would satisfy Chretien. A letter of intent, for example, promising to negotiate the points he is concerned about might suffice.
Chretien could maintain leverage by delaying ``proclaiming'' NAFTA. Canada's previous Parliament approved NAFTA, but did not take the last technical step of proclaiming it into law.
ANOTHER reason NAFTA's acceptance has fallen into doubt in Canada is that its strongest supporters - the business community - have come to see it as of potentially questionable value.
In the run up to Clinton's final draft of the NAFTA legislation, some Canadian business groups have become alarmed by the president's ``wheeling and dealing'' to gain votes. They fear the legislation Congress may adopt will be its own restrictive version of NAFTA, subjecting Canada to endless trade squabbles.
Thomas d'Aquino, president of the Business Council on National Issues, made public an Oct. 26 letter to Canada's deputy minister for international trade condemning, among other things, American proposals to make the rulings of impartial binational panels subject to review by US courts.
After the final draft of the treaty was released Friday, Mr. D'Aquino said first indications were that the Clinton administration had moderated earlier harsh drafts. But he said he would reserve judgment until this week, after the text had been studied.
Both the government and industry say that the US has unfairly challenged binational panels that have ruled on trade spats under the 1989 Canada-US Free Trade Agreement. Chretien says he would not adopt NAFTA if it permitted US industry and Congressional legislators to gang up on panel decisions.