Canada Falls in Line on NAFTA


No barrier remains to the North American Free Trade Agreement coming into force on New Year's Day. The legislatures of Canada, the United States and Mexico ratified it. What remained was the refusal of the new Liberal Party prime minister of Canada, Jean Chretien, to "proclaim" what a lame-duck Conservative parliament enacted. But after NAFTA's uphill victory in the U.S. House of Representatives, Mr. Chretien lost his ally in this business. If he was going to obstruct, he was going to do it alone and in a spotlight. That was not for him.

Mr. Chretien's dilemma was the same as President Clinton's earlier. Each ran, with the support of NAFTA opponents, against incumbents who had negotiated NAFTA. Both were closet supporters but claimed reservations that would need to be addressed before they could sign on. Each, in power, initiated dialogue with a semi-willing NAFTA partner that was unwilling to reopen the text of the treaty. Each claimed victory, allowing each to climb on board the train leaving the station.

In Mr. Clinton's case, Mexico was enticed into side agreements on environmental and labor standards that probably do not significantly improve the protections previously in place. In Mr. Chretien's, the three countries agree to spend two years negotiating technical definitions of dumping and unfair trade. This is something that Canada and the United States pledged to do in 1989 and failed to accomplish. Canadians find U.S. enforcement capricious.

Two other Canadian demands were equally fudged. Canada won agreement that it controls the use of its natural water sources. This addresses a fear of Canadian nationalists looking at the insatiable thirst of the U.S. desert West. Canada wanted, failed to get, and unilaterally asserted, its right to control energy exports in an emergency, as Mexico has done. They are coming from different places. Mexico is slowly freeing itself from a state oil monopoly that restricts the economy but has been central to patriotic rhetoric. Canada hosts a private-sector oil industry of great vigor that resists interference from Ottawa.

Anyway, it's over. A good deal of political interdependence in the three countries exists, though none is declared. The U.S. House of Representatives' decision affected the choice of Mexico's probable next president and took away Mr. Chretien's ability to stall when Canadian business wants full speed ahead. It seemed anti-climactic after the struggle in the U.S. Congress, but Mr. Chretien's announcement Thursday was the final assent that makes NAFTA a done deal.

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