Column / Don Newman

It has been around longer than Canada has been a country. It has usually been contentious. In one election where it was an issue, Canadians rejected it convincingly. In another, 77 years later, Canadians gave their approval. And in the last 35 years, Canadians have grown to accept it, even like it, and worry that it might disappear.

The “it” of course is free trade. Explicitly, free trade with the Americans. 

Modern free trade with the Americans has been around since 1989, when the Canada-US Free Trade Agreement went into effect after a bruising election campaign in which the Progressive Conservatives of Brian Mulroney staked the fate of their government on a deal that took two years to negotiate with the Republican administration of Ronald Reagan. The Liberals and leader John Turner claimed acceptance of the deal would be the beginning of the end of Canada. Turner waged “the fight of his life” but fell short of victory. The Tories won a majority of the seats in the House of Commons and Free Trade was adopted, even though together the Liberals and the New Democratic Party had more votes in the historic election of Nov. 21, 1988.

From that contentious beginning, the Canada-US deal was expanded three years later in 1992 to include Mexico and the agreement was rechristened as the North American Free Trade Agreement, or NAFTA. Since then, none of the disastrous calamities that were predicted have befallen Canada and free trade has grown to be seen as central to the country’s economic well being. So much so than when then US President Donald Trump threatened to tear up the treaty in 2017, it took a full-court Canadian effort to renegotiate the deal, which emerged with a new name; CUSMA – the Canada-United States- Mexico Agreement.

It wasn’t particularly noticed at the time of those negotiations but around us geopolitical and international relations were changing, and even before the Russia-Ukraine war the future of free trade was becoming cloudy. The Americans and the Chinese were threatening and sometimes imposing tariffs and quotas on each other’s exports. Trump had decided to draw a line under China’s predatory trade practices. China was been admitted to the World Trade Organization in 2001 on the promise that access to the multilateral trade organization would bring the country more in line with the norms of the rules-based order.

That belief has been proven wrong. As have other ideas that bringing China into international systems would make the country more like a democracy. Particularly since 2012, China has been developing a harder line with potential trading partners, quickly increasing its military capabilities and becoming a competitor with the rest of the world rather than a partner.

Canada has 15 free trade agreements with 49 countries. Most are definitely second-tier agreements, although a couple have the potential to grow into more substantive arrangements, like the Canada-United Kingdom agreement and CETA, the free trade agreement between Canada and the European Union.  In fact, they and a beefed up CUSMA almost certainly have to be the future of where trade is headed.

Vladimir Putin’s reckless invasion of Ukraine has isolated his country from the world’s economic mainstream. It has had a similar effect on countries like China who are supporting Russia and stirring up potential conflict with its determination to bring Taiwan under Beijing’s control. Trade with China, which has driven a lot of the world’s economic growth in this century is quickly becoming problematic. So,  too, is trade with Russia and the countries within its sphere of influence. The Russian attack has also had the effect of reinvigorating the North Atlantic Treaty Organization and its membership.

What we should be recognizing in the current geopolitical landscape is the outline of the future of free trade. An economic grouping of the North American Free Trade countries with the European Union and Britain. Plus, a working alliance with the non-China countries of the Pacific Rim are where the future lies. 

The world order that came into being following the fall of the Berlin Wall has lasted about 30 years. Something resembling a new Cold War is taking its place. Democracies prevailed in the last Cold War in part by having the right organizations and infrastructure in place. To prevail in the new Cold War, we must quickly do the same again.   

Contributing writer and columnist Don Newman, an Officer of the Order of Canada and Lifetime Member of Parliamentary Press Gallery, is Executive Vice President of Rubicon Strategy, based in Ottawa.