The Gut Issue

By Daniel Benjamin

"I happen to believe you've sold us out," snapped John Turner, leader of the Liberal Party.

"You do not have a monopoly on patriotism," retorted Prime Minister Brian Mulroney, head of the Progressive Conservatives, or Tories. "I want to tell you I come from a Canadian family, and I love Canada, and that's why I did it, to promote prosperity, and don't you impugn my motives."

"Once a country yields its economic levers, once a country yields its energy . . ."

"We have not done it."

"Once a country yields its agriculture . . ."

"Wrong again!"

"Once a country opens itself to a subsidy war with the United States . . ."

"Wrong again!"

". . . then the political ability of this country to remain as an independent nation -- that has gone forever, and that is the issue of this election."

With Canada's balloting set for Nov. 21, last Tuesday's impassioned exchange between John and Brian in an Ottawa television studio easily bested anything between George and Michael. The key issue during the emotionally charged three-hour debate was the Canada-U.S. Free Trade Agreement signed by Mulroney and Ronald Reagan in January and passed by the U.S. Congress. The agreement, which has yet to be approved by the Canadian Senate, has propelled to the surface profound and often submerged anxieties over Canada's self-image and its relationship with its neighbor to the south.

As the two men shouted and pointed fingers, demonstrators outside the studio waved placards reading FREE CANADA, TRADE MULRONEY. Turner, driving his argument home, declared, "We built a country east and west and north. We built it on an infrastructure that deliberately resisted the continental pressure of the United States. For 120 years we've done it. With one signature of a pen, you've reversed that. It will reduce us, I am sure, to an economic colony of the United States."

Turner, 59, the man who lost the Prime Minister's office to Mulroney in 1984, was drawing blood. In trying to defend the agreement, Mulroney only aggravated his wound. "Mr. Turner, the document is cancelable on six months' notice. Be serious. Be serious."

The statement was literally true. But in pointing out how easily Canada could escape from the pact, Mulroney made a clear misstep. Throughout the campaign, the 50-year-old Prime Minister had cast the agreement as essential to his country's prosperity, and it was instantly apparent to the viewers that the pact could not be vital and disposable at the same time. The exchange crystallized a nag of doubts about the pact and about Mulroney himself.

Whatever the prospective economic gains, many Canadians fear the elimination of tariff and trade barriers with the U.S. will mean a far more portentous loss -- namely, national sovereignty. Canadians have long been worried that free trade would mean a kind of integration with America's economy that would wrest self-determination from Canadian industry. As far back as 1911, the government of Liberal Prime Minister Sir Wilfrid Laurier fell over a free-trade agreement -- an episode that gave birth to the slogan "No truck nor trade with the Yankees."

In 1988 the issue dominates all debate between Mulroney's Conservatives and the two major opposition parties, the Liberals and the New Democrats, who are led by Ed Broadbent, 52, and also oppose the pact. Tussles over such subjects as the Tories' plans for a $8 billion fleet of nuclear-powered submarines or the multitude of corruption scandals that have plagued the Mulroney government are only incidental entertainments amid the imbroglios over free trade. And because the issue touches the core of Canada's sense of itself as a nation and its psychic separation from the U.S., the topic is dangerously flammable, an invitation to a spark.

Extinguishing that spark will be no small task, since Mulroney called the election in part to force passage of the trade pact in the Liberal-controlled Senate. Though Mulroney sought to turn the race into a referendum on his leadership, the trade issue has not only dogged him but has also put him in a seemingly contradictory situation. While he is running as the man who led Canada into an era of sunny prosperity, he is also campaigning on the claim that free trade is the sine qua non of Canada's economic future.

The paradox has bent the collective mind of the electorate into a pretzel. Before last week's debates, the Progressive Conservatives had looked like a good bet to win a majority in the House of Commons for a second consecutive term. A Gallup poll estimated that the Tories would claim roughly 40% of the vote -- enough to win 193 of the House's 295 seats -- with the New Democrats running at 29%, and Liberals at 28%. But Gallup also reported that 42% of Canadians oppose the free-trade agreement, 34% support it, and almost a quarter of the country is undecided. After the debate, the respected Angus Reid poll found the race had been transformed into a dead heat, with Liberals and Conservatives tied at 35%. Opposition to the trade pact soared to 54%.

How well Mulroney fares in the postdebate politicking will depend on his ability to handle the trade issue. On a purely economic basis, many experts agree, the pact between the two countries, whose bilateral trade of $132.5 billion last year was the most of any two partners in the world, should be attractive to the public. The average tariff on American goods entering the Canadian market is 2.8% -- the figure is low because 65% of American imports pass duty free. On goods entering the U.S., the average tariff is only 1.2% (80% of Canadian imports are duty free), so Canadian consumers stand to gain more than their American counterparts from a lowering of the walls. Perhaps even more enticing are the 250,000 jobs that could be created over a decade by improved north-south trade.

The greatest benefits of the agreement, however, are harder to quantify. Competing in a more open market should force productivity gains, possibly as high as 5%. Another major plus: should protectionism erupt in Western Europe when most of it becomes economically unified in 1992, or in Asia, Canada would enjoy an assured safety in American markets.

Critics of the pact are less concerned with disproving these contentions than they are with proving that the accord will have other, unintended consequences that will harm Canadian society. Topping their list of objections is the potential effect on government social programs, which they worry will be cut as unacceptable subsidies to workers or industries once the pact goes into effect. Mulroney scoffs at the argument. Free trade, he told Toronto businessmen, "will help us create a broader pool of wealth for the new social-welfare programs in the 1990s."

Nonetheless, the fear that homogenization with the American economy will doom Canada's efforts to maintain its generous welfare provisions is widespread. It has, in fact, spawned a remarkable nationalistic backlash, which takes the form of a powerful pride in a humane community. "We're not anti-American," says Rick Salutin, a Toronto playwright and author of a widely circulated pamphlet that derides the pact. "We just don't want to be American. In the U.S., there is rabid individualism." The problem, adds Salutin, is the "Canadian business class trying to Reaganize and Thatcherize the economy. We want to go the other route."

As Mulroney's standing weakened, Reagan Administration officials grew anxious over the pact that they hoped would end a century of trade disputes. State Department officials had thought that the accord's provision for a "consultative framework" to resolve conflicts would allay Canadian fears over national sovereignty, but that seems to be having little effect. The officials emphasized that a Mulroney defeat would be bad for the trade agreement but not cataclysmic for U.S.-Canadian relations. Alluding to Peru's ruthless guerrilla group, one official joked, "None of these candidates is exactly Sendero Luminoso."

Which route would Canada take? In the aftermath of the debate, that was virtually impossible to tell. John Turner, who lately was being viewed as one of the living dead of Canadian politics, was suddenly a resurgent presence in the campaign. He had good reason to be pleased: his showing quieted much of the speculation that the Liberals would finish third in a national election for the first time. The New Democratic Party, despite Broadbent's lackluster performance in the debate, continued to enjoy its strong support -- even with unpopular policies like advocating Canada's withdrawal from NATO. And Tory spokesmen conceded that they expected Brian Mulroney's popularity to dip after his performance in the debate. For a man trying to coax a country out of an ancient fear, the setback is likely to cause more than a few Canadians to think again about the kind of relationship they have with their neighbors.

With reporting by Gavin Scott/Ottawa and Greg W. Taylor/Toronto