Editorial Free trade — There are no guarantees

The Canadian mining industry wants and needs a free trade deal with the United States, but the outlook for it wasn’t much improved by the meeting on the subject the other day in Ottawa between Prime Minister Brian Mulroney, and the provincial premiers.

With just a couple of weeks to go before the Oct 5 deadline for a draft agreement on free trade, the portents emerging from the meeting were not looking good. Though all of the premiers could be said to favor a free trade deal, to varying degrees, most came away from the meeting shaking their heads over the prospects for its realization, and declaring there are important areas of disagreement that seemed unlikely to be resolved. Ontario Premier David Peterson, for instance, fresh from his landslide election victory in the province, and determined that there could be no trade deal with the U.S. that touched the auto pact, or that didn’t include an acceptable and binding mechanism for settling trade disputes, came away unsatisfied on either point.

One of the premiers especially, Grant Devine, of Saskatchewan, has particular reason to want to see striking of a free trade agreement, because he’s more aware than most of the extent and even ferocity of protectionist sentiment in the U.S. at this time. Just a few weeks ago, in response to the complaints of U.S. potash producers, the U.S. Department of Commerce ruled that Saskatchewan, (the world’s biggest exporter of that commodity) was dumping potash into the U.S., and imposed duties of up to 85.2% on the Saskatchewan product.

Understandably disinclined to sit still for that, Mr Devine went to New York the day before the first ministers’ meeting in Ottawa, and told a fertilizer industry trade association there that the U.S. move would hurt thousands of U.S. farmers by raising fertilizer prices. “The entire U.S. agricultural industry will pay through the nose,” he said. “Does it make sense for America?”

The same might be said of uranium, of which Canada is also the world’s leading producer. We’ve said before in this space that it’s likely U.S. uranium miners would be putting pressure on our $1-billion industry, and if this happens, once again it would be the U.S. consumer who would end up paying.

Even Mr Mulroney, who has laid much of his political stock on the line in his eager pursuit of a free trade deal, came away from the Ottawa meeting with less than enthusiasm for the prospects. “There are many important stumbling blocks,” he said.

The provincial premiers are due to meet again in Ottawa before the Oct 5 deadline. We hope what they hear then will be more affirmative. Meantime, at least one ray of hope emerged from the U.S. itself the other day, with the news that the prestigious Wall Street Journal was urging support for a free trade deal with Canada. Such an accord, the Journal trumpeted, would be a “rare burst of sunshine” in a troubled trading world. Amen to that.