Iron Triangles and Revolving Doors: Cases in U.S. Foreign Economic Policymaking

By Raymond Vernon; Debora L. Spar et al. | Go to book overview

2
Negotiating the U.S.-Canada Free Trade Agreement

On December 31, 1988, President Ronald Reagan and Prime Minister Brian Mulroney of Canada signed an agreement that restructured the bilateral economic relationship between their two countries, the largest twoway trading partners in the world. The agreement removed most tariffs, attempted to remove barriers to trade in a variety of service sectors, and created a new bilateral dispute settlement mechanism. Reaching an agreement had not been easy.

Throughout all phases of the negotiation, the issue had been of much less importance to the United States than to Canada. In the United States, free trade with Canada was one aspect of a larger commercial policy, important because specific private interests stood to gain or lose and because an agreement would affect U.S. efforts to initiate a new process of global trade negotiations. But in Canada, free trade with the United States was linked to questions of national sovereignty, cultural independence, and the survival of national industry.

The governments were also fundamentally different in terms of structure and process. In the United States, the chief negotiator of the agreement had little authority over other government agencies. As a result, agencies and individuals involved in the negotiation held a variety of viewpoints. In addition, Congress had to ratify the agreement, shaping the perspective, tactics, and success of the U.S. team. In Canada, by contrast, the chief negotiator reported directly to the Prime Minister and commanded the elite of the Canadian civil service. Parliamentary government operated with relative unity between the executive and legislative branches. Yet the Canadian government had to manage public opinion carefully, for the issues were of great public interest and concern.

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