Whether you are shopping at the Georgian Mall or downtown, almost all of the products that you see available for purchase are affected by Canada’s various free trade agreements. Economic development in Canada over the past three decades has been significantly shaped by this policy direction of open borders.
In recent weeks, there has been serious talk of opening up the North American Free Trade Agreement (NAFTA) that dictates the terms by which Canadian, American, and Mexican products can be produced and traded throughout all three nations. There is little concrete understanding of the extent to which these negotiations will affect NAFTA. However, the Federal Government’s recent appointment of high profile political figures to a NAFTA Advisory Council, indicates the high potential of monumental change.
These talks no doubt reinvigorate the age-old question: is free trade worth pursuing?
This is one of the toughest political questions to answer. Up for debate can be the effectiveness of sector specialization in the international economy, increased economic inequality, improved living conditions, job creation, national identity, environmental protection, and regulations around investor-state dispute settlement mechanisms, to name but a few.
There are so many factors that contribute to an individual’s personal interpretation of whether Free Trade, and by association NAFTA, is perceived to be ‘bad’ or ‘good’. This is not a black and white issue. Rather, this is an issue which can be depicted by a grey paint swatch with shades ranging from darkest to lightest.
However, despite these intricate complexities, there is one argument for free trade that cannot be disputed. This argument, which outdates our current era of free-trade prevalence, is rarely considered during present day trade negotiations.
Cordell Hull, the longest serving US Secretary of State, wrote in his 1948 memoirs:
“A revival of world trade [would be] an essential element in the maintenance of world peace. By this I do not mean, of course, that flourishing international commerce is of itself a guaranty of peaceful international relations. But I do mean that without prosperous trade among nations any foundation for enduring peace becomes precarious and is ultimately destroyed.”
According to Hull free trade was not solely an economic driver. It would be vital in initiating peace within the international community, which at the time was recovering from World War two.
Among the reasons made for this argument was that one country would not be able to justify employing violence against another country and market that it depended on for economic sustenance. Additionally, trade would facilitate dialogue between nations, providing more opportunity for peaceful negotiation.
This perspective on Free Trade became very significant in shaping our international community. The advocacy of this approach by Hull and others influenced American Foreign Policy and led to the establishment of the European Coal and Steel Community (ECSC), the predecessor of the European Union (EU).
In his academic report entitled Trade Liberalization: Cordell Hull and the Case for Optimism, Dr. Douglas A. Irwin, reflected on the success of free trade in establishing Peace.
“After sixty years, we sometimes forget what a great success [this] vision was. In the immediate postwar years, the future of Western Europe was highly uncertain. Many countries could have turned autocratic and antidemocratic or could have fallen into the Soviet sphere. Yet the integration of the Axis powers… into the community of nations proceeded without much problem. Economic integration helped reestablish growth and thereby fostered political stability and secured the democratic political changes in each country. In particular, the success of this program in Western Europe, where the binding of French and German economies has made a war unthinkable, stands out.”
The establishment of Free Trade played an instrumental role in creating world peace and stability following an era of international conflict. When considering this fact, free trade becomes a goal worth pursuing.
Accepting a lop-sided NAFTA deal for free trade’s sake would be an error. However, in a world that is seemingly becoming more adversarial, it is important that we as Canadians go into these negotiations remembering the essential role that free trade plays in promoting international peace and stability.