National Differences and the NAFTA

NO DOUBT MANY OF THOSE WHO WITNESSED the demonstrations against the meeting of the World Trade Organization (WTO) in Seattle, Washington, in November 1999 gave some second thoughts to where they stand in relation to the seemingly inexorable progress toward worldwide trade liberalization. Certainly many of the journalists commenting on the events in Seattle seemed to conclude that globalization was not perhaps the juggernaut it had been made out to be. Nevertheless, a case can be made that 'one postponed agenda does not a complete reversal make.' More specifically, Canadians in particular are naive if they see too much ground for solace - or indeed alarm, if their sympathies ran more toward 'the suits' than the sea-turtles - in the first meeting in the Millennium Round of trade negotiations.It is well to remember that Canadians, Americans, and Mexicans have already constructed for themselves the 'rule-bound trade regime' that the WTO was attempting to extend across the entire globe. It is called the North American Free Trade Agreement (NAFTA). In fact, few Canadians realize that much of the new agenda for world trade - as well as the recent Multilateral Agreement on Investment, also 'postponed' not long ago - adopted much of NAFTA as a template. Thus, the claim of the Seattle protesters that the WTO was about to homogenize the world should give even longer pause to Canadians: if NAFTA-inspired and NAFTA-based proposals before the WTO had the potential to bring about the 'disappearance of difference' among roughly 125 countries, what is the potential for the 'preservation of difference' in the three countries already governed by NAFTA?An examination of this question should first attempt to place NAFTA and the WTO against the background of the efforts of the United States since the end of the Second World War to make the markets of other countries as accessible as possible to American goods, services, and capital. It should also attempt to show how the kinds of access to the Canadian (and Mexican) markets that the Americans sought and got under the terms of NAFTA have the capacity to undermine Canada's fundamental political and economic traditions. Finally, it should show how the potential for Canadian-American homogenization is already being realized, as some of the NAFTA provisions for policy harmonization among its members come to be implemented.AMERICAN POST-WAR ECONOMIC LEADERSHIPSylvia Ostry recently published an excellent historical overview of the American quest since the Second World War for open access to the markets of other countries.(f.1) Her book, essentially an account of the role of American leadership in both the post-war and post-cold war trading systems, has a lot to say about the fundamental issues that have divided, and continue to divide, the United States from its major economic partners in Europe, Asia, and North America. Even more significantly, it shows clearly what the United States has most wanted to see done about these issues, and how it set about accomplishing its aims.Ostry underscores the deeply rooted and pervasive differences between the United States market system and those of its major trading partners in Western Europe and Asia, and she demonstrates how some of the most serious conflicts among them over the years have flowed from those differences. The disputes have intensified as the main agenda for trade negotiations has shifted away from an emphasis on tariffs and toward the various national policy and regulatory regimes designed primarily in response to domestic concerns. Such asymmetries are not new; they are deeply embedded in the political, social, and cultural differences among the various industrial societies that dominate the world trading system.The bulk of Ostry's book shows how the disjuncture between the American and Japanese market systems at the beginning of the post-war trading regime foreshadowed the principal clashes between the United States and its major trading partners at the beginning of the post-cold war trading system. …

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