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Path: utzoo!utgpu!utcsri!sask!tubman
From: tubman@sask.UUCP
Newsgroups: can.politics
Subject: Re: market crash (seems to have changed to `free trade')
Message-ID: <917@sask.UUCP>
Date: Wed, 28-Oct-87 12:39:19 EST
Article-I.D.: sask.917
Posted: Wed Oct 28 12:39:19 1987
Date-Received: Fri, 30-Oct-87 20:38:40 EST
References: <170@bby-bc.UUCP> <1071@looking.UUCP> <5576@utcsri.UUCP> <1078@looking.UUCP> <193@tmsoft.UUCP>
Reply-To: tubman@sask.UUCP (Jim Tubman)
Distribution: can
Organization: The Computer-Guided Diagnosis Project
Lines: 39

In article <193@tmsoft.UUCP> mason@tmsoft.UUCP (Dave Mason) writes:
...
>Canada's best interests are served by MULTIlateral agreements to
>reduce tarifs around the world (i.e. GATT), and capitalizing on our
>significant good will in Britain, Europe, China, and the developing
>world.  This may create some dislocation in the next 10 years, but
>seems like a MUCH better long term strategy than tying ourselves more
>closely to an ailing elephant and hoping that it gets better & will
>toss a few tidbits our way.
>
>	../Dave


The GATT organization and the countries that are party to it are examining
the Canada-US agreement fairly closely, since it deals with many issues
(services, investment, the so-called "invisibles") that will be coming up in
the next round of GATT talks.  The problems encountered in reaching the
Canada-US deal be considered when the GATT nations begin the much more
difficult task of hammering out a multilateral agreement.

While on the subject of the GATT, it may be helpful to this discussion to
recall that under present GATT rules, a bilateral trade agreement must be
either free trade or nothing.  In particular, sectoral agreements are not
allowed.  Bob White's statements that he would like more deals like the Auto
Pact are misleading; if the Auto Pact did not exist, we could not negotiate
it today without breaking the GATT treaty.

(It is also worth remembering that either party to the Auto Pact can
terminate the deal with six months notice, and the US was starting to get
unhappy with the deal, as Canadian auto production was significantly above
the safeguard levels and Canada was running a surplus in vehicle trade.  In
their current protectionist tantrum, the good reasons for the existence of
that surplus are brushed aside.  But I digress...)

But getting back to what Dave said, yes, expanding multilateral arrangements
will, over the long term (> 25 years), be the way to go with trade.  But
even an ailing elephant will still buy the great majority of Canadian
exports for at least the short and medium term.  We cannot get around that
fact no matter what our opinion of the US is.