The focus of this chapter is on the issues surrounding NAFTA - issues
which constitute a truly revolutionary phase in both inter-American
affairs and Canadian foreign policy. While it is not clear at the time of
this writing that NAFTA will be ratified, the agreement nonetheless
represents a bold attempt at an unprecedented integration of the Amer-
icas. Emphasis will be placed upon debates surrounding hemispheric
integration. As shall be seen, NAFTA has at least as much to do with
investment, capital flows, and the role of the state as it does with trade.

Along with those concerns mentioned in Chapter 8 (i.e., Canadian
fears of heightened U.S. protectionism, the belief that economic inte-
gration did not entail political integration, etc.), the movement towards
trade areas in Europe, and to a much lesser extent in Asia, represented
an important motivating factor behind the development of CUSFTA. (It
is of interest to note that both Canada and the U.S. advised Japan and
the Asia Pacific Economic Community not to follow the same course as
NAFTA, presumably because they felt threatened by the likelihood of
such a development.) ¹ If the world was, indeed, moving towards the
formation of economic blocs, ² which, in the darkest scenario, might
focus their trade internally, Canada needed to be guaranteed access to
the U.S. market.

As the DEA recently pointed out:

Implementation of the FTA marked a significant change in attitude
toward foreign direct investment in the Canadian economy. It put an
end to a 100-year strategy of encouraging investment in Canada to serve
the Canadian market. Time has eroded the relevance of such a strategy.
Instead, Canada now competes for investment to serve the North

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