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Canada leader breaks campaign promise, will implement NAFTA


TORONTO -- Breaking a campaign promise, Prime Minister Jean Chretien declared yesterday that Canada will implement the North American Free Trade Agreement on Jan. 1.

After failing to get the Clinton administration to reopen NAFTA to correct concerns of his newly installed Liberal government, Mr. Chretien opted to accept side deals and assurances from U.S. and Mexican officials as enough to clinch the deal.

"I am very satisfied with the progress we have made," Mr. Chretien told a news conference in Ottawa, though he acknowledged that NAFTA is still not "a perfect situation" for Canada. In fact, U.S. and Canadian interpretations of several disputed NAFTA provisions and side issues remain far apart.

Chief among Canada's concerns is to protect its energy reserves. Critics fear NAFTA would lock Canada into allowing its reserves to be gobbled up by the giant U.S. market, even in times of shortage, if the pact takes effect as written.

Mr. Chretien contends that his government has addressed that concern by drafting a unilateral declaration setting limits on Canada's obligations to export energy under the pact.

But the U.S. administration appeared to take a different position on energy, suggesting that any unilateral declaration would not undermine or change provisions of the agreement itself.

"The energy positions of NAFTA are clear," said U.S. Trade Representative Mickey Kantor in a statement.

"The United States has no doubt that Canada will continue to be a fully reliable energy supplier as it provides for Canadian energy security."

Beginning Jan. 1, NAFTA would unite Canada, Mexico and the United States in a continent-wide open free-trade zone. It would be potentially the world's largest market, comprising 360 million people and well over $5 billion in annual production.

But free trade opponents immediately accused Mr. Chretien of betraying his campaign promise to renegotiate NAFTA to add adequate codes defining subsidies and dumping, a more effective dispute-resolution mechanism and the same energy protection as Mexico negotiated to protect its resources.

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