Class Notes (839,087)
Canada (511,185)
POLI 243 (112)
Mark Brawley (109)

Canada Free Trade with United States.docx

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Political Science
Course Code
POLI 243
Mark Brawley

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Canada Free Trade with United States Systemic Environment in the 1980s Trade is a priority for Canada Tied to the international economy; large proportion of economic activity of GDP is related to trade one way or another Exports, Imports Canada is going to be concerned at the broader environment at the system level to sustain trade This is not particularly true for the US US only has around 10% of its production tied up with trade Post World War II: GATT and the Auto Pact Lowering of tariffs in the United States Canada gains from this without agreements of reciprocity GATT: members were interested in lowering tariffs slowly Liberalize tariffs on manufacture goods Auto-Pact Agreement between Canada US for firms with regard to inputs The firms are interested want to integrate production Want to move parts across the border Lengthy negotiations in GATT in the 1970s Uruguay Round proves just as difficult Many countries want to pursue free trade but new members make negotiations complicated US pushing for Broader Coverage Canada has a lot of stake in GATT They need that access to the American market Canada: bilateralism vs multilateralism Bilateralism gave a bargaining advantage to the United States If it was one vs one, US holds sway Therefore, Canada preferred multilateralism It evens out the table Having GATT gives a multilateral approach Reduce leverage of the United States Canada wants to improve trade disputes more of a legal process than a political dispute If you go to court, you have to make a case but procedure and rights are definitive Political process  persuasion is part of the process but it rests on power Depends on votes Multilateral approach is killer Legal process: fairness and equality of states Trade is becoming a more important issue for US US hopes to liberalize agriculture and services Systemic Factors at Work Canada is prepared to approach the United States A one on one deal makes sense Mitchell Sharp’s advice after Nixon Shocks 1984 Election: Conservatives win but trade not an issue yet Brian Mulroney makes trade an issue in 1988 Decision making in Canada Macdonald Commission Liberal government set up a Royal Commission Wanted to talk about trade Economic ties between different parts of the country Commission reports that bilateral trade deal is actually a good idea Something that Mulroney can use Tory preferences Tie the hands of future governments? Canadian Manufacturers Association Business Council on National Issues Lobbying Group Economics of Trade Liberalization in this case What is to be gained at this point from having free trade These countries have similar factor endowments, levels of technology Not a s
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