Editorial Trade deal better than no deal at all

The mining industry in Canada has reason to feel happy about the eleventh-hour free trade agreement that has been hammered out between the U.S. and Canada. Generally speaking the industry, which exports about 80 per cent of its product, with roughly 60 per cent of that going to the United States, has been interested from the start in any kind of pact that would promise security of access for those products to U.S. markets.

The trade deal, preferable as it is to no deal at all (a situation that seemed likely as the Oct 5 deadline drew near) is a step in the right direction as far as security of access goes. But it has yet to leap the hurdle of Congressional approval in the U.S., a process which means the deal could not be implemented in any case before the first of January, 1989. And, with the degree of protectionist sentiment that has emanated in recent months from that body, there are no absolute guarantees in any event that it will okay the package.

Nor is there unanimity in Canada itself that the free trade deal is, broadly speaking, a good thing for this country. It has been greeted with concern and derision by both opposition parties at Ottawa, which view it as a threat rather than a boon to the country, by labor groups envisioning a great loss of jobs to Canadians, and by many who see it as a threat to national sovereignty. Indeed, one of Canada’s leading newspapers, in an unusual move, ran a front page editorial decrying the deal. Meantime, the Mining Associat ion of Canada, representing most of the producers for whom continued trade links with the U.S. are a vital concern, notes that what the trade pact does, in the longer term, is offer hope of improvement for the mining industry in trade situations that in the short term are likely to continue to have severe effects for the industry.

An alarming example was the recent imposition by the U.S. of duties (up to 85 per cent) on Saskatchewan potash. That was a horrendous move, and one that Saskatchewan Premier Grant Devine was quick to repudiate.

The free trade deal doesn’t automatically level that playing field. Instead, potash producers here would put their case after implementation of the pact to the new bi-national commission which has been set up under the pact as a binding dispute-settling mechanism, one of the key items in all of the negotiations. Appeals to that body would take the place of judicial review, in both countries.

Meantime, Canadian potash producers would still have to go to U.S. courts for redress against those very punitive duties.

What the Canadian government did not get as yet in the trade deal (and something the mining industry wanted to see) was an agreed set of rules governing the dispute-settling mechanism that has been established.

George Miller, President of the Mining Association of Canada, says that while the free trade agreement in no way clears the decks in the U.S. for the Canadian mining industry in the short term, it is a positive development in its reach toward more secure access to U.S. markets.

And, as Clayton Yeutter, U.S. trade representative himself acknowledges, secured access to those markets will prove a tremendous benefit for Canada. The mining industry here couldn’t agree more.