U.S.-Canadian relations are at a turning point. Negotiations aimed at reaching a comprehensive trade accord between the two countries have entered a final phase. To be considered by Congress, a draft treaty must be ready by October. A successfully concluded pact will be an important step forward in consolidating cooperation between the two North American neighbors; moreover, in a world rampant with protectionist tendencies it will provide an effective example of liberalizing international trade. Conversely, failure to reach a mutually satisfactory agreement will not only be a distinct setback in bilateral relations between Ottawa and Washington, but will also encourage nationalist and protectionist trends. Whatever the outcome of the trade talks with the United States, it will have profound consequences for Canada, reaching to the very heart of the country’s politics.

For the United States, close economic ties with its largest trading partner are important; for Canada, with three-quarters of its trade going to the United States, they are essential. But the present negotiations also have a symbolic significance. The success or failure of the talks will affect the overall climate of relations between the two countries on such issues as acid rain, Arctic sovereignty and cooperation in North American air defense. Indeed, the outcome of the trade negotiations may influence the countries’ readiness to cooperate on various global issues, both within NATO and in the broader realm of East-West relations. Last but not least, since the trade issue is likely to play a major role in the Canadian elections that are expected in 1988 or early 1989, the outcome of the negotiations may determine the pattern of Canadian-American relations for a number of years to come.


The massive electoral victory of the Progressive Conservative Party under Brian Mulroney on September 4, 1984, promised to bring an end to the increasingly unpleasant friction between Canada and the United States. Since 1980 a number of differences over both bilateral and global issues had marred relations between the two North American neighbors. Canadians were embittered by the continued disputes over both Atlantic and Pacific fisheries, and the lack of attention paid by the Administration of Ronald Reagan to controlling acid rain pollution of lakes and forests north of the border. Americans were irritated by what they viewed as the nationalist measures of the Liberal government of Pierre Elliott Trudeau: the establishment of the National Energy Program, designed to "Canadianize" the oil and gas industry through a retroactive nationalization of 25 percent of any oil discovery; and moves to strengthen the Foreign Investment Review Agency, which monitored and regulated foreign investment. As a result of American pressure both these initiatives were considerably diluted, but criticism from Washington continued, highlighting the basic differences in approach to the proper role of the state in the economy.

The United States was also disappointed by what it considered Canada’s unsatisfactory contributions to the defense of both North America and Western Europe. Even after the Liberal government substantially increased its defense outlays in the late 1970s, the image of Canada as an ally not pulling its weight persisted in Washington. There were, moreover, marked differences over various global issues, notably over the deterioration in East-West relations. Prime Minister Trudeau looked back with nostalgia to the era of détente, a view that set him apart not only from President Reagan, but, after changes of government in Britain, West Germany and France, from other major NATO leaders as well.

Finally, the two men did not get along well. Trudeau was openly critical of Reagan’s sharp anti-Soviet rhetoric, and Reagan had little use for Trudeau’s fall 1983 "peace initiative." This effort by the prime minister to use personal diplomacy to bring the nuclear powers to the negotiating table was virtually doomed when he received only lukewarm support from Washington.

It is thus not surprising that the Reagan Administration could barely conceal its satisfaction with the outcome of the 1984 general elections in Canada. The Progressive Conservative government appeared to be more attuned to Washington on both domestic and foreign policy. During the preceding campaign Mulroney was highly critical of how the Liberals had handled Canadian-American relations. He pledged not only to introduce a "new era of civility" in North American affairs, but also to provide the United States with greater support in global policy. He promised to enhance Canada’s military capability and to increase Ottawa’s contribution to NATO.

The two men, moreover, appeared to get along well at their two White House meetings in 1984. The first was in June, while Mulroney was still leader of the opposition; the second was held just a week after he became prime minister. The timing of the visits underlined the importance the new Progressive Conservative government attached to relations with the United States. On the latter occasion, the two leaders agreed to hold annual reunions to review and improve relations between the two countries.


Early in its tenure the Mulroney government showed its eagerness to live up to its campaign pledges. The offending sections of the national energy program left untouched by the Liberal retreat in the early 1980s were eliminated; the Foreign Investment Review Agency was symbolically renamed Investment Canada, and its operations were sharply curtailed. In a speech to the corporate community in New York in December 1984, Mulroney grandly declared that Canada was "open for business again."

The new government also wanted to expand free trade with the United States. This proposal was not entirely novel: in 1983 the Liberal government began exploratory negotiations with Washington on a series of trade pacts in limited sectors of the economy—using as a model the 1965 Auto Pact, which had created a continental free market in automobiles. During his short tenure as prime minister in 1984, Trudeau’s successor, John Turner, seemed prepared to continue this policy. But the Progressive Conservatives embraced a more sweeping approach. Taking their cue from President Reagan’s own campaign promise of 1980 to conclude a "North American accord" between the United States and its two neighbors, the Conservatives proposed to negotiate a comprehensive and formal bilateral trade pact.

Mulroney also appeared ready to make good his election promise to enhance Canadian defense. To boost the morale of the Canadian armed forces he ordered that the distinctive uniforms of the three services—eliminated when they were integrated by the Liberals in 1966—be restored. The Canadian contingent in Europe was increased by 1,500. And Defense Minister Robert Coates was dispatched to Washington and London to explain the new direction in defense to Canada’s most important allies.

The culmination of this initial spurt of activity came at the summit meeting between Mulroney and Reagan in the city of Quebec in March 1985. It appeared to confirm all the predictions of a closer relationship between the two neighbors after years of estrangement. "We are more than neighbors or friends or allies," declared President Reagan, setting the tone for the meeting. "We are kin who together have built the most productive relationship between any two countries in the world today. . . . For the United States there is no more important relationship." The atmosphere in Quebec was warm, even jovial. It had been dubbed the "Shamrock Summit," not only because it fell on St. Patrick’s Day, but also because both leaders liked to stress their common Irish ancestry.

There was a substantive side to the summit, however. Two major agreements were signed. One was a fisheries treaty that resolved the long-standing dispute on the West Coast. (Shortly afterward, by a decision of the International Court of Justice that both sides accepted, the boundary dispute that had plagued the Atlantic fisheries on the East Coast was settled.) The other agreement concerned the modernization of the North American Aerospace Defense (NORAD) surveillance system in the far north. Ottawa agreed to pay about 12 percent of the estimated $7 billion needed to overhaul NORAD, including a new radar warning system to replace the aging Distant Early Warning (DEW) Line. Mulroney and Reagan agreed to postpone action on acid rain, airborne sulfur and nitrogen oxides, by appointing a panel of special envoys to report back before the next summit. The leaders also declared their intention to expand trade by removing the few remaining tariff barriers and agreed to resist the mounting protectionism on both sides of the border.

The key symbolic objective of the Shamrock Summit—to demonstrate the strength of Canadian-American friendship—was thus largely achieved. In no small measure it was helped by the excellent personal chemistry between the two leaders. The relationship between President Reagan and Prime Minister Mulroney stayed close and warm at their next two summits in Washington in March 1986 and in Ottawa in April 1987. Yet even the leaders’ good intentions were not enough to solidify the new relationship. During their talks in Washington, divergent national interests reasserted themselves, especially over free trade and acid rain. Nor were the leaders able to come to an agreement on sovereignty over the Northwest Passage, which Canada claims are internal waters. For its part, the United States, which regards the passage as an international strait, has consistently rejected the Canadian claim. The Americans are concerned that by conceding Canada’s position, they would implicitly recognize similar claims on other waterways by other coastal states. Thus, when a U.S. Coast Guard icebreaker traveled the passage without seeking permission from the Canadian government in the fall of 1985, the matter came to a head.

The Ottawa summit of last April was the most politically charged. Both leaders were in trouble at home, and wanted to emerge from the meeting with the best possible image. It was Reagan’s first visit abroad since the Iran-contra revelations, and he was eager to demonstrate that he remained an effective player in foreign affairs. He succeeded in this endeavor: his speech to the Canadian Parliament was an accomplished performance, and his response to heckling by some members of the New Democratic Party (NDP) was smooth and witty. For Mulroney the summit was an occasion to improve his own sagging popularity. Two years after their landslide victory, the Progressive Conservatives were not doing well: a series of scandals in the cabinet and the prime minister’s tendency to avoid contentious issues, or occasionally to reverse himself on them, had eroded the government’s credibility and popularity. In the polls, the Progressive Conservatives fell behind both the Liberals and the New Democrats in popular support. Moreover, the opposition parties were effectively using the snail’s pace of trade negotiations with the United States, the reluctance of the Reagan Administration to implement fully the recommendations of the special envoys regarding acid rain, and the Arctic sovereignty issue to discredit the government.

By early 1987 Reagan was evidently trying to help Mulroney as much as he could. In January Vice President George Bush was dispatched to Ottawa, where he received what he described as an "earful" of highly publicized Canadian complaints about the state of the relationship. At their April summit, Reagan went out of his way to praise Mulroney—even attributing to the prime minister the original idea of an economic accord between the two countries—but offered no real concessions. The two leaders promised to accelerate negotiations on free trade and Arctic sovereignty, but they did not go beyond that.


From the outset, the Progressive Conservative government was committed to expanded trade with the United States. Prime Minister Mulroney very much identified himself with this objective; in many ways it has become his personal quest. It was not only because Mulroney genuinely likes the United States and was favorably impressed with the Reagan Administration. He also believed that closer economic bonds with Canada’s powerful southern neighbor were indispensable to the country’s future well-being. In a world economy increasingly composed of large trading blocs, a free trade agreement would give Canada unrestricted access to the largest and most technologically advanced national economy. Mulroney, moreover, was committed to a bilateral approach to trade negotiations: multilateral trade talks, he felt, would not stem the impact of American protectionism on the Canadian economy quickly enough.

While the Conservatives had a grand design, the specifics remained vague. It was only after a chief negotiator was appointed in November 1985 that the Canadian side started to address itself to the concrete issues. On the American side progress was also slow. Before the Reagan Administration could commit itself to the negotiating process it had to overcome the hurdle of Senate approval for "fast-track" negotiations, which promised that the final agreement would be either approved or rejected in toto without amendments. This was only obtained in April 1986, and with the narrowest margin, in the Senate Finance Committee. But the fast-track procedure requires that the negotiators submit an agreement to the Senate by October 1987. Considerable barriers still exist that could preclude reaching a trade agreement by the deadline. At the present stage of negotiations the major problems are the American demands for unrestricted flows of investment into Canada and Canada’s insistence on a binding mechanism to resolve future disputes.

In Canada, public opinion polls indicate that the idea of a free trade agreement enjoys the support of a slight majority. Ultimately, of course, the accord will be judged on its substance. Yet even if the terms of the agreement are favorable for Canada, there are staunch opponents of closer economic ties with the United States who are unlikely to be won over. They include nationalists, labor union activists and those in business whose interests will likely suffer. Reinforcing this is a widespread concern among many Canadians that closer economic ties with the United States will culminate in a formal political union of the North American neighbors. It was precisely for this reason that when the last free trade agreement was put before the voters by Sir Wilfrid Laurier’s Liberal government in 1911, it was roundly defeated.

Canada’s federal system also poses a problem for Mulroney. The provinces have a constitutional role in economic development issues, and can argue that the federal government cannot take sole responsibility for negotiating an international agreement that might alter their economic structures. The federal government rejected the provinces’ demands that they be given a seat at the negotiating table, although it keeps them informed of the progress of the talks. Nonetheless, there are still murmurs of apprehension from provincial premiers. Particularly in the two largest provinces, Ontario and Quebec, worries persist that a free trade agreement will cause severe economic dislocation as the branch-plant economy which has been nurtured behind tariff walls collapses under the weight of an influx of cheaper American goods.

Indeed, a select committee of the Ontario legislature has formally recommended that if Ottawa negotiates a free trade agreement that damages Ontario’s economic interests, the provincial government should "veto" it. It should be noted that the provinces have no formal veto power over international agreements entered into by the federal government. But they can refuse to implement those provisions that impinge on their constitutional powers. Thus, the Mulroney government faces the embarrassing possibility that it may not be able to implement those portions of a trade accord that deal with nontariff barriers within provincial jurisdiction.

Finally, since the Progressive Conservative government initially did not clearly think through what it wanted in a trade agreement, Ottawa kept adding to a list of items that it considered nonnegotiable. These included social welfare programs, the 1965 Auto Pact, cultural protection policies, the taxation system, and the level of the Canadian dollar. As the list grew, the impression was conveyed that what Canada really wanted was to gain secure access to the huge American market without giving much in return.

Understandably, Washington has taken the position that if Canada wants unfettered access to the U.S. market, Ottawa will have to offer significant concessions too. As it happens, the items that the American negotiators are interested in overlap largely with those the Canadians consider nonnegotiable. This places Mulroney in a serious predicament. He cannot put more than 40 years of social welfare legislation, the Auto Pact or protection for Canadian culture on the negotiating table.

In his quest for a free trade agreement, Mulroney has not been helped by policy developments in the United States. Just days after Peter Murphy, the American negotiator, and Simon Reisman, his Canadian counterpart, launched the negotiations in May 1986, American protectionist interests rudely thrust themselves into the picture. With Reagan’s approval, the United States imposed a 35-percent countervailing tariff on cedar shakes and shingles imported from Canada on the grounds that the American industry needed protection against subsidized Canadian producers. Mulroney was furious at the move—publicly calling it "bizarre"—and retaliated with minor tariffs on American books and computers. Nevertheless he rebuffed opposition calls to suspend the trade talks. In October 1986 the Mulroney government was embarrassed again by the threat of another punitive tariff imposed on Canadian softwood lumber exports. Although the dispute was eventually settled by a compromise, the episode added to bitterness in Canada.

In promoting free trade with Canada, Reagan also faces serious domestic constraints. It is unlikely that the protectionist mood of the present Congress will change substantially any time soon. Often it is not explicitly directed at Canada, but reflects a general annoyance with American trading partners, including Japan and Western Europe. The president remains personally committed to the process. After the 1986 Washington summit he made it explicit that he considers the conclusion of a trade agreement with Canada one of the top priorities of his Administration. Indeed, it seems to rank only second in importance to a U.S.-Soviet arms control pact. Yet as Reagan’s term comes to a close, his ability to expend political capital on behalf of a free trade agreement with Canada is likely to decline. The narrow Senate vote over the "fast track" procedure and the president’s consent to the imposition of tariffs on Canadian exports suggest that even firmer commitment on his part will be needed to overcome the protectionist interests so strongly entrenched in Congress.

These obstacles in the United States have had an evident effect on the Canadian prime minister. In the October 1986 "Speech from the Throne" outlining the government’s intentions for the next year’s parliamentary session, Mulroney carefully downplayed the free trade negotiations. After the lumber dispute he even mused aloud about the feasibility of an agreement with the United States. Nevertheless, the prime minister persisted in his efforts. When the pace of the negotiations visibly slowed in the spring of 1987, he pressed the issue with President Reagan, not only in Washington, but also during a special session at the Venice summit.

Mulroney has persevered because he knows that if a trade accord is not reached by October, or if it is rejected by Congress, he will be hard-pressed to explain the failure of the policy which was so central to the Progressive Conservative program. In such circumstances, he will have little political choice but to blame the United States for the failure. Such an explanation by Ottawa may in turn provoke anger in Washington.


One of the contentious bilateral issues continues to be acid rain. On the Canadian side it became highly politicized in the early 1980s as a result of the insistence of the Reagan Administration that, before any remedies were adopted, further research was needed to determine the nature of the problem. In the United States there was little sympathy for Canada’s environmental concerns, particularly since the Reagan Administration could point to Canada’s spotty record in dealing with its own sources of acid rain.

In frustration the Liberal government of Pierre Trudeau adopted unusually strident tactics. Officials gave distinctly undiplomatic speeches excoriating the Reagan Administration’s approach to environmental issues. They were not alone in their anger; even the opposition Progressive Conservatives accused Reagan of "perpetuating hokum" on acid rain.

Acid rain assumed a symbolic importance for the Conservative government. Since Mulroney had preached the benefits of friendly ties to the United States, he had to show some progress in actually reducing the harmful effects of sulfuric and nitrogen oxides. In order to demonstrate his seriousness on acid rain, and to encourage the Americans to move along the same lines, in early March 1985 his government adopted a $300-million (Canadian) program to eliminate all Canadian sources of acid rain by the mid-1990s. Considering that most of the pollution comes from the United States, it was a substantial commitment. The next step, then, was clearly up to the Americans. At the Shamrock Summit, Reagan delivered. Although no concrete measures were adopted, the president shifted American policy considerably by conceding an important symbolic point: for the first time, he publicly acknowledged that acid rain was a problem. The leaders agreed to appoint an envoy from each country, giving them a year to draft a plan of action to address this problem.

The two appointees—former Secretary of Transportation Drew Lewis and a former premier of Ontario, William Davis—faced a difficult task. Those in Canada whose livelihoods were affected by the damage, and others for whom the acid rain issue assumed symbolic importance, continued to press the Mulroney government to protect Canadian interests. In the United States, however, there were strong pressures to resist the costly measures needed to alleviate the problem. In particular, companies and public utilities in Appalachia and the Midwest hardest hit by recession were increasingly vocal in making their opposition known to Congress.

Although Lewis and Davis were convinced by their study that the problem of acid rain had to be addressed, they shrewdly recognized that a report that was not sensitive to the political imperatives in the United States was doomed to be rejected by both the president and Congress. Therefore, they adopted a minimalist position that called for $5 billion in initial spending by the United States on clean-coal technologies, further research and continued bilateral discussions. These recommendations were embraced by Mulroney and Reagan in 1986. This removed the issue from the forefront of the bilateral agenda, and muted somewhat the stridency of the opposition in Canada.

But by the winter of 1986-87, when still no funds were forthcoming on the American side, there was a renewed outcry from the opposition in Canada. This time the Conservatives had little choice but to join the chorus of protest. Last March, before the Washington summit, the Reagan Administration finally allocated $2.5 billion for acid rain research. The Mulroney government hailed it as a victory for Canada; the opposition parties, however, were less impressed, noting that this fell well short of what was needed to protect the Canadian environment. At the April 1987 summit the prime minister proposed concluding a formal pact on acid rain. What was novel about Mulroney’s suggestion was that he envisaged the participation of Canadian and American legislators representing all political parties in negotiations from the start. Reagan promised to consider it, although his aides were quick to point out that he had only agreed to the general principle, and not to any specific course of action.

The prospects of resolving the controversy over acid rain during the final year of the Reagan presidency are thus not good. Opposition in Congress remains considerable, and it is unlikely that the president will have sufficient incentive or clout to overcome it. To make matters worse, the issue is caught up in a more general debate over clean air legislation in the United States. Congressional proponents of action on acid rain are divided between those who favor research and those who want strictly legislated limits on emissions—including many members of Congress from the Northeast, which is also affected by acid rain. From the Canadian point of view such a constellation of forces may produce an outcome that will be the worst of both worlds. Should Congress reject Reagan’s research program and fail to enact new clean air legislation, Canada will be back where it started. Acidity will continue to poison lakes and forests in Ontario and Quebec—as well as U.S.-Canadian relations.


The Conservative government came to power with a strong commitment to improving the fighting capability of the armed forces. Mulroney immediately announced a major review of defense policy which would culminate in a White Paper. However, the review process dragged on for over a year without much progress. Only when Perrin Beatty, a young and energetic cabinet member, was given the defense portfolio in the summer of 1986 did the work on the new statement of government policy begin in earnest.

In the meantime, the Mulroney government followed a policy not much different from its predecessors. Although the Progressive Conservatives had promised a dramatic increase in outlays on defense, Mulroney’s record was actually less robust than that of the Trudeau government. In their last years in power, the Liberals had increased defense outlays by three percent annually after inflation; in the first two years of Conservative government defense spending increased by only two percent. The prime minister offered as justification for this reversal the sorry state of the economy inherited from the Liberals.

In June 1987 Beatty finally issued the White Paper on defense, the first since 1971. It is a coherent document, reflecting a traditional NATO military perspective. It presents a convincing case for the maintenance of strong defenses for the protection of Canadian territory and North American airspace, and for fulfilling Canadian obligations within NATO. Although the White Paper recommended that Canada terminate its commitment to reinforce Norway in the event of hostilities, Canadian forces in West Germany are to be modernized. The new policy also calls for substantial strengthening of the reserves and for an impressive array of new equipment: battle tanks, helicopters, long-range patrol aircraft, fighter jets, patrol frigates and minesweepers. The most expensive items on the list are ten to twelve nuclear-powered submarines, ostensibly to protect Canadian claims to sovereignty in the Arctic.

The Conservatives have promised to spend C$186 billion on defense in the next 15 years. However, considering that the present annual defense budget amounts to some C$10 billion, it is not a dramatic change. This figure represents an increase of a little more than three percent annually—only slightly more than the Liberal outlays in the early 1980s. Furthermore, there is considerable public opposition to the proposal to purchase nuclear-powered submarines to assert Arctic sovereignty, particularly when the government has already committed itself to spending as much as C$800 million for a polar icebreaker for the same purpose. It is thus likely that the C$12-billion submarine program will eventually be dropped.

The entire defense program will be carefully scrutinized by the opposition. The New Democrats, who are still formally committed to withdrawal from NATO and NORAD, oppose the expansion; left-wing Liberals, who have a strong aversion to anything nuclear, oppose the addition of nuclear-powered submarines to the Canadian arsenal. Even among the Conservative Progressives there is some opposition to the defense program: Secretary of State for External Affairs Joe Clark, for example, reportedly is not altogether happy at the prospect of an expansion of the armed forces at a time when Canada is avidly supporting arms control and disarmament in East-West relations. Finally, the long implementation phase of the program means that a succession of finance ministers will have an opportunity to review the ongoing costs of expansion. Thus, while it has made the debate on defense more concrete, the White Paper represents only a first, tentative step.

Conservative policy reflects a deep Canadian ambivalence about defense issues. On the one hand, there exists a broad consensus about Canadian participation in NATO and NORAD. A Gallup poll taken in April 1986 indicated that only 26 percent of Canadians favored neutrality. On the other hand, there is also a general uneasiness about stationing nuclear weapons on Canadian soil. This aversion cuts across all segments of Canadian society, from the peace movement and members of Parliament from all parties who want the government to declare Canada a "nuclear-free zone" to the strong advocates of increased spending on conventional defense, such as the Business Council on National Issues.

Thus, when Reagan and Mulroney signed the agreement on modernizing the DEW system in Quebec in March 1985, there was widespread Canadian concern that the revitalization of northern defense would lead to the reintroduction of nuclear weapons in Canada. Such fears were not dissipated when visiting U.S. Secretary of Defense Caspar Weinberger acknowledged in a Canadian television interview that the United States might eventually want to place antiballistic missile launchers in Canada.

It was also at the Shamrock Summit that the matter of Canadian participation in the Strategic Defense Initiative was first raised. At first it seemed that SDI would be warmly embraced by the Mulroney government. The minister of national defense, Erik Nielsen, echoed Reagan’s argument that SDI would rid the world of nuclear weapons, and Mulroney spoke glowingly of the thousands of jobs that would be created by SDI contracts. However, the Conservatives soon reversed themselves.

In the summer of 1985 opposition to Canadian participation in SDI coalesced and hardened. The peace movement was joined by a number of prominent clergy, academics and labor leaders who publicly expressed their reservations, as did Canada’s major newspapers. In the House of Commons both the New Democrats and the Liberals strongly criticized the government’s desire to proceed with a parliamentary review of foreign policy that would force SDI to the top of the foreign policy agenda by threatening to boycott the review. The government relented, and so a special parliamentary committee spent the summer examining SDI. When their report was issued in August, it reflected the split over SDI: the Liberal and NDP members maintained their firm opposition, and even the Conservative members were divided. Claiming that more information was needed before any conclusions could be drawn, the committee recommended, in the words of the chairman, an "interim no" on SDI.

In the circumstances the Mulroney government had little choice but to decline the invitation to participate in SDI. A positive decision would have subjected the Conservatives to heavy domestic criticism, and a continued controversy in the country on the issue would have been more detrimental to the improved climate in Canadian-American relations than a polite refusal.

The refusal was qualified. In his letter to Weinberger, Nielsen stressed that, in light of Soviet advances in ballistic missile defense, American SDI research was entirely prudent. And in an improbable attempt to salvage some of the economic spin-offs, Nielsen stressed that while the Canadian government would not participate, Canadian firms were free to bid on SDI contracts. For all its politeness, however, the Mulroney government’s decision on SDI was a clear rebuff to the Reagan Administration. The United States was not looking to Ottawa for involvement in research—the Americans hardly need it—but rather political support from its closest ally.

The SDI debate sensitized Canadians to the possibility of becoming entangled incrementally in Washington’s ballistic missile defense schemes; it also sharpened Canadian doubts about the impact of SDI on East-West relations. When the NORAD agreement came up for renewal in the spring of 1986 the Canadian government suggested that a new version should include a special clause indicating that NORAD conformed to the requirements of the 1972 Anti-Ballistic Missile Treaty. While the United States refused the request, it did not deter Mulroney from asserting that the new agreement in no way violated the ABM treaty. Likewise, in an address to NATO parliamentarians gathering in Quebec in May 1987, the prime minister strongly reasserted Canada’s opposition to possible violations of the second Strategic Arms Limitation Treaty and the ABM treaty. He warned, moreover, that the development of SDI, by integrating defensive and offensive weapons systems, may create the impression of preparations for a preemptive strike and thus destabilize the present system of deterrence. He pleaded with both superpowers to avoid such an outcome.

After three years, therefore, Mulroney has not brought about a major shift in defense policy. Instead, the Conservative government’s military posture is exhibiting traditional Canadian attributes: a reluctance to make the necessary financial sacrifices to provide substantial increases in defense spending; support for nuclear deterrence but an uneasiness about nuclear weapons themselves; and a continuing concern about potentially destabilizing developments in American strategic doctrine.


Similar patterns have emerged in Canada’s global policy. During the election campaign in 1984, Mulroney promised that Canada under a Conservative government would be a "super" ally of the United States and that Ottawa would give Washington the "benefit of the doubt" in its international initiatives. However, a traditional orientation was evident from the outset. Mulroney’s choice for secretary of state for external affairs was former Prime Minister Clark, from whom he had wrested the party leadership in 1983. While the choice was no doubt politically motivated, it had considerable implications for foreign policy. Clark had been much impressed by Trudeau’s "peace initiative," and in a confidential memo before the election he advised Mulroney to follow a similar course. Evidently the new prime minister agreed, for in his first address on foreign policy he sounded much like Trudeau. Reducing the threat of war, he declared, "is the greatest and most important challenge facing governments anywhere in the world." This line was consistently reiterated in subsequent years. Thus Canada’s position on a range of international issues is today no closer to the United States than it was before 1984.

In East-West relations Canada has continued to advocate the reduction of tensions through diplomacy and arms control. Although Canada was the last of the Western allies to remove the sanctions imposed against the U.S.S.R. in the wake of the Soviet invasion of Afghanistan, dropping them only in September 1986, relations between Ottawa and Moscow have steadily improved under the Conservatives. In the spring of 1985 Clark visited the U.S.S.R., and in the fall of 1986 Soviet Foreign Minister Eduard Shevardnadze paid a return visit to Ottawa. In the spring of 1987 Clark also went to Poland, Hungary and the German Democratic Republic. In their contacts with the Soviets and the East Europeans, Canadian officials have managed to balance their desire for dialogue on global issues and bilateral matters with concern over human rights violations. Fortunately for the Conservatives, this course coincided with a general improvement in U.S.-Soviet relations, evident especially after the Geneva summit between President Reagan and General Secretary Mikhail Gorbachev in the fall of 1985. In this way the gap between Canada and the United States over East-West relations has narrowed.

On a range of regional conflicts the Mulroney government has often taken a stand distinctly different from that of the United States—further evidence of the basic continuity in policy from the Liberals to the Conservatives. This is most clearly seen in regard to Central America. Like many of America’s European allies, Canada has tended to attribute turmoil in the region to indigenous social and economic conditions. The Mulroney government has been openly critical of the Reagan Administration’s encouragement of the contras, and has consistently supported the Contadora process. Ottawa also refused to follow Washington’s lead in imposing sanctions against Nicaragua in May 1985; instead, development assistance to Managua has continued.

The two North American leaders also sharply differ on the issue of South Africa. Reagan has remained steadfastly committed to an evolutionary approach in dealing with that country, and, even after suffering a defeat on this issue at the hands of Congress, he has remained opposed to economic sanctions against Pretoria. By contrast, Mulroney has been a strong advocate of sanctions as a means of expressing displeasure and concern over the lack of progress in dismantling apartheid. In 1986 he took the lead on this matter in the Commonwealth, even though his efforts were largely frustrated by Margaret Thatcher. As a visible sign of Canadian support, Mulroney visited several of the African Frontline States in early 1987. He raised the issue without much success at the Venice summit, and will do so again during the Commonwealth meeting and the francophone summit, which are to be held in Canada in the fall.

Finally, Canadian statesmen have advocated a greater role for the United Nations in mitigating regional conflicts, particularly in the Middle East and the Persian Gulf. In doing so Canada has continued its strong support for the United Nations; indeed, it has urged the United States to maintain its commitment—both moral and financial—to the world body. Symbolically, the Mulroney government did not follow the recent American and British action of withdrawing from the U.N. Educational, Scientific and Cultural Organization (UNESCO), instead advocating a reform of this organization from within.

The degree to which the Conservatives have pursued a traditional line in foreign policy can be clearly seen in the results of a formal foreign policy review initiated by Secretary Clark. An initial statement of policy directions issued in a 1985 Green Paper, it largely reflected the Conservative election platform of the year before. Among other objectives, it stressed the importance of trade and of close links with the United States. However, when the Green Paper was reviewed by a special joint committee of the Senate and the House of Commons in 1986, the parliamentarians recommended moderating this initial thrust, as the title of their report, Independence and Internationalism, emphasized. In a formal response to the committee in early 1987, Secretary Clark distinctly embraced that more traditional line.


The adoption by the Progressive Conservatives of a middle-of-the-road approach in external relations is good politics. While elections in Canada are rarely fought over foreign policy issues, it appears that the government’s principal objective is to stay as close as possible to the consensus on international affairs that exists in the country, and thereby preempt opposition on foreign policy issues. So far, the government has been effective in this strategy. The SDI issue has been defused, the question of acid rain has been delayed, and an agreement on the Arctic is likely to be reached. A probable accord over the use of the Northwest Passage would uphold Canada’s sovereignty while granting the United States an exemption (in this way barring other states, notably the U.S.S.R., from using it). Among these issues, free trade is exceptional, for while formally it is an external matter, it touches on manifold domestic issues. As such, it remains critical to Canadian politics.

Despite the dramatic size of the Conservative victory in 1984, the government’s popularity declined drastically in the first two years. This was due mainly to a perception of both incoherence and incompetence. By mid-1987, however, the Conservatives were able to claim a few successes, notably a sweeping package of constitutional changes negotiated with the provinces—called the Meech Lake Accord. Its most attractive feature is that it has brought Quebec back into the constitutional framework. As a result, even though the Conservatives remained in third place in the public opinion polls, their popularity began to rise. If an appealing trade agreement with the United States can be reached (and there is speculation that the prime minister may call an early election on the issue), it is possible that the Conservatives may stage a comeback.

The Liberal Party maintained a clear lead in the polls during 1986, but recently its popularity has been declining. One key reason for this is that the party is openly divided over several national issues, and John Turner, who was reconfirmed as leader in November 1986, has been unable to restore party unity. The Liberals are badly divided over the Meech Lake Accord. While Turner supports the package, the accord has been bitterly denounced by Pierre Trudeau and other prominent party members. Their criticism is that in order to bring Quebec back into the constitutional framework, the federal government moved too far toward decentralization. Particularly disturbing, in their eyes, is the enhanced power of the provinces in the constitutional amending process.

On foreign policy, the divisions are just as pronounced. An influential wing of the party is opposed to closer economic links with the United States; instead it favors broader liberalization of international trade within the framework of the General Agreement on Tariffs and Trade. Some Liberals are also wary of close defense ties with the United States, advocating a termination of cruise missile testing in Canada.

The main beneficiary of the low popularity of the Conservatives and the divisions among the Liberals has been the New Democratic Party. By the summer of 1987 the NDP had moved ahead of the Liberals in some polls. The party’s increasing popularity was also reflected in its sweep of three by-elections held in July. Even in Quebec, which has traditionally shunned the party, support is strong, helped no doubt by the refusal of the NDP to oppose the Meech Lake Accord. However, the New Democrats’ stand on foreign policy issues diverges radically from the Conservatives. They oppose the idea of a free trade agreement in particular, and closer economic links with the United States in general. On defense issues the official party platform of 1985 commits the NDP to a withdrawal from both NATO and NORAD, reaffirming its traditional stand. Yet it is likely that now—when the party is closer to power—the parliamentary leadership will moderate that position and bring it more into line with the views of the majority of Canadians.

For Mulroney and the Conservatives, therefore, it is essential that a trade pact be concluded with the United States, and that it be on terms that can be readily embraced by a government seeking reelection. The obstacles to such an agreement are, as we have argued, formidable. Domestic political realities on both sides of the border are pushing the two governments further away from the spirit of goodwill and compromise so essential for trade liberalization.

Mulroney and Reagan face a historic opportunity to forge a new North American relationship that would not only stem the tide of nationalism on both sides of the border but would also help to push back the rising tide of protectionism globally. Brian Mulroney is deeply committed to bringing the two countries closer together, but he is not willing to pay any political price for it. And certainly neither of the two opposition parties will make the Americans a better offer.

As for Ronald Reagan, this will be the last chance to bring about such a historic change in North America. The price of an agreement with Canada for the United States is modest. Economically, both countries will benefit in the long run. And politically, this would involve the recognition by the Americans that Canadians, although the closest of allies and friends, are a different people, with their own distinct traditions and their own particular vision of the world.

Shortly before the Ottawa summit the U.S. ambassador to Canada, Thomas Niles, claimed that the state of Canadian-American relations was excellent. At one level, this is an appropriate characterization: there is an ongoing dialogue between the two governments, and it is being constantly expanded. Contentious issues are discussed with candor and an obvious willingness to mitigate differences. On the other hand, Mr. Niles’ statement masks an important reality: nationalist sentiment on both sides of the border threatens to disrupt the relationship. Should the trade negotiations derail, these sentiments could become inflamed. And as electoral campaigns on both sides of the border heat up in the next year, there will be an even greater need for mutual understanding and restraint.

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  • Adam Bromke is a professor of political science at McMaster University, Hamilton, Ontario, and a columnist on international affairs for The Toronto Star. Kim Richard Nossal is an associate professor of political science at McMaster and author of The Politics of Canadian Foreign Policy.
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