Free trade a good deal for us all

Canada’s watershed free-trade agreement with the United States has had so many public-relations liabilities, it’s a wonder anyone but economists and chief executives of exporting firms speak well of it a quarter-century after the deal was cut.

Put your ear to the ground, or to the partition next to the water cooler, and what you likely hear is talk of unemployment and the export of manufacturing jobs, or grumbling about softwood lumber battles or maybe the expression of vague fears about water exports.

The currently shaky reputation of free trade’s chief Canadian architect, former prime minister Brian Mulroney, doesn’t help either.

The reality is that the 1987 Canada-U.S. Free Trade Agreement was an enormous success, and will guarantee Mulroney a positive place in history long after memories of the Airbus scandal and the Meech Lake fiasco have faded.

Since the original deal, and the subsequent 1993 NAFTA expansion to include Mexico, exports of Canadian-produced goods and services have more than tripled and annual investment by Americans in our country has risen sharply.

Here in Alberta, research by the University of Alberta’s Centre for Western Diversification paints a similar positive picture: in addition to the bonanza of resource exports, sales of spinoff manufactures such as plastics and machinery have boomed in the last 25 years, to cite but two examples.

But aggregate statistics seem far removed from individual lives and like many policy choices, free trade’s reputation suffers from the fact that there is no easily accessible way of comparing today’s Canada with the country we’d have if we’d stayed on the old protectionist path.

Back in the 1980s, the debated merits of free trade were as much about avoiding decline as about promoting growth. But since we can’t know what it would have been like on the road not taken, many Canadians inevitably blame free trade for the failure of their own incomes to rise.

Similarly, the era of free-trade deals has also been an era of manufacturing jobs shipped overseas and of the Canadian dollar appreciating because of strong resource prices. The connection of these things to the 1987 deal might be tenuous, but that hasn’t saved liberalized trade from getting a bad reputation among people who might well have been worse off without it.

Finally, problems always get more attention than successes. As disputes over softwood lumber have demonstrated, the dispute-resolution system has not eliminated bullying as a tool for protecting domestic industries. The truth, however, is that impartial mechanisms created by the 1987 and 1993 deals did level the playing field, making noisy showdowns more rare.

Furthermore, how many free-trade skeptics include in their analysis the role that lower-cost imports have had in improving our standard of living?

How many remember the regulatory reforms that made it much harder for U.S. authorities to concoct impediments to imports of products from canola oil to natural gas?

And standing further back, how many of us pause to contemplate how much expanding trade on a global basis has improved the standard of living of billions of people?

By so doing, it has made the world a safer place, at least when it comes to superpower confrontation — and let Albertans never forget that it has created voracious customers for our resources that bids fair to make our province a booming national leader for decades to come.

Yes, the memory of Mulroney and Ronald Reagan singing about smiling Irish eyes may be a bit hard on the tummy. But the blarney with which free trade was sold does not change the fact that it was an excellent transaction.