Magazine article Behind the Headlines

Globalization and Distinct Societies: Trade Policies in the 1990s. Are Contemporary Trade Agreements Best Understood as the Latest Expression of the Familiar Imperial Urge?

Magazine article Behind the Headlines

Globalization and Distinct Societies: Trade Policies in the 1990s. Are Contemporary Trade Agreements Best Understood as the Latest Expression of the Familiar Imperial Urge?

Article excerpt

Not so many years ago trade policy was a relatively straightforward business. It dealt with trade in goods and focussed on barriers at borders - tariffs, quotas, customs administration - and on agreements to ensure that governments treated imported products in the same manner as those produced at home.

That was the essence of the matter. Predictable terms of entry to foreign markets and progressive liberalization, combined with `national treatment,' were the central, driving principles of trade policy. Over time, the implementation of these principles provided the basis for the extraordinary growth in world trade since World War II.

Canada benefited from these arrangements, and there was seldom any argument about the merits of the process or the benefits it brought. In the early years of the General Agreement on Tariffs and Trade, federal ministers and officials rarely consulted with major industries that were directly affected, and this seemed to cause little concern across the country. Successive rounds of GATT negotiations were routinely approved by the government with scant public or political debate. Trade disputes were fewer and less contentious than they are today.

The situation today is strikingly different. Scarcely a day goes by without press reports dealing with trade policy - disputes between trading partners, new regional or global negotiations, or its intrusion into sensitive areas of domestic politics. What was once largely the private preserve of trade negotiators and a limited number of interested business people is now featured on radio call-in shows. Trade policy was the central issue of the 1988 Canadian federal election.

In a transformed world, the ambit of international economic negotiations is far broader than ever and reaches deep into the freedom of national governments to make decisions and to man-age their societies independently. What has brought about this change? An admittedly partial list would include:

The increase in international trade that resulted from the success of the GATT has led to greater interpenetration of national markets. More exports are possible and more imports are available. We have become increasingly dependent on each other for what we want to sell and buy; at the same time producers have become more conscious of competition from other countries.

Many more countries have come to share in the growth of international commerce. While this has increased opportunities, competition from new and often highly efficient producers has become more intense.

A dramatic growth of international business in services and an increasing overlap with trade in goods has brought to the fore issues related to the need for a presence in foreign markets and to the terms and security of international investments.

As the flow of international trade in goods has increased with the decline in border barriers, and as trade in services has taken on greater importance, businesses and governments have become increasingly aware of the extent to which domestic regulations and policies of one kind or another may impede business opportunities in foreign markets.

Underlining these developments is the ongoing technological revolution in production methods, information

systems, and communications based on computers and electronics.

These changes have brought with them one other major shift: a relative decline in the once dominant position of the United States in the world economy. The confidence that American business - more accurately production and jobs in the US - would always benefit from liberalizing trading arrangements has been shaken. The reaction in the US has combined pressures for protection with a determination to use its economic clout to force entry into foreign markets - a combination defended by the rhetoric of the `level playing field' and backed by American laws that not only permit, but sometimes require, unilateral action by the United States. …

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