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Tough Trade Talk
10/03/2005

There's an article in today's Globe and Mail about some controversial statements a Liberal MP has made about our trading relationship with the USA.

Apparently, MP Marlene Jennings said: "Let's embarrass the hell out of the Americans in front of other countries that they are attempting to negotiate with on new binational trade agreements." And also: "They want to expand their markets and other countries are going to be leery if they see that America's best trading partner, closest neighbour, is saying, 'We're having problems getting the United States to respect this [free-trade] agreement.' I don't think that this would play very well for the Americans. Let's take it to their own backyard. Let's take it down into the States, into the districts of these U.S. senators and these representatives..."

Conservative trade critic Belinda Stronach and finance critic Monte Solberg both slammed Jennings and Solberg even suggested she should be kicked out of caucus. However, I see a big difference between these remarks and others in the past that have been called "anti-American".

A trade treaty is a contract, but the United States has shown itself to be not very committed to these obligations. In fact, while trade is generally good between the two countries, it would seem that the United States has a tendency to arbitrarily change the rules when a domestic interest is powerful enough.

Why do they do this? The question is more like, "why not?" The USA is powerful enough in its relationship with Canada that it can pick and choose which treaty obligations it will obey or ignore. Canada is in a fairly weak position here.

We don't have much we can use by way of ammunition when we feel a trade agreement has been violated. However, one traditional way to encourage a contract signatory to live up to his obligations has been to spread the word about his unfaithfulness, thus making it more difficult to enter into other contracts. The price to be paid for not honouring contracts is that it becomes harder to convince others to enter contracts with you.

Frankly, I don't really think Jennings' strategy will accomplish anything. On the other hand, what, besides being nice, do the Conservatives suggest we do? And what makes them think that being nice will change anything?

UPDATE, March 11: Jennings has had to apologize.


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