2

Explaining NAFTA (1991–1993)

My Calgary Herald colleague Peter Morton and I were treating ourselves to a steak at Hy’s, in the late ’80s Ottawa powerbrokers’ “lunchroom,” when I noticed we were seated beside Simon Reisman, former deputy minister of finance and later chief negotiator of the Canada-United States Free Trade Agreement (FTA). I could hear snatches of conversation between him and his lunch companion which touched on interpretations of some passages of the Torah. It was a gentle exchange on an obscure topic for me, and quite at odds with Reisman’s well-known aggressive manner. Reisman had the physical presence of a British bulldog, and this civil exchange with someone who was evidently a family friend revealed another facet of one of Ottawa’s most powerful civil servants.

This was not the side of the man I knew. Most memorably in the fall of 1987, I was the target of a more characteristically pugnacious Reisman sally during a news conference to release the highlights of the just-negotiated FTA. Just negotiated, I say. Several days had followed the conclusion of the talks at midnight on October 4 leaving a vacuum for speculation about what the agreement actually contained.

At long last, a news conference was called on October 8 in the Government Conference Centre where Reisman spoke to a thin “elements of the deal” document which outlined the agreement’s key measures. What caught my attention was the energy provision that guaranteed that the United States would receive – during any rationing of energy due to future market shortages – the same proportion of energy supply accorded Canadians. That is, Canada would not be allowed to reduce sales to the US market to protect supply for Canadian domestic needs.

The news conference was packed. The press corps filled most of the available seats in the room, which at one time served as the main lobby of the Ottawa train station and is today the temporary home of the Canadian Senate. Reisman was installed on the long dais at the end of the hall flanked by other federal officials. I considered myself lucky to be recognized to ask a question, and I immediately drew attention to what appeared at first glance to be a ceding of Canadian sovereignty over energy resources. Reisman’s response was forceful, dismissive and derisory. “It’s just boilerplate,” he declaimed. Nothing more than what Canada is obliged to do under the International Energy Agency (IEA) agreement, one of numerous multilateral conventions. I didn’t buy it, but his assertions had to be checked, which delay would further impede public understanding of the FTA. After months of lengthy negotiations and several days after the deal’s official announcement, the surprise disclosure of the unanticipated energy chapter represented a terrible lapse in government communications, and it became one of the major targets of the simmering opposition to the free trade deal.1

I had this incident very much in mind, when Peter Daniel called me to his office to tell me that he was putting me in charge of developing and implementing the communications plan for the negotiation of the North American Free Trade Agreement (NAFTA). In responding to Peter, I emphasized that in, my opinion, the communications of the FTA had been badly fumbled. Much of the suspicion that had arisen about the deal stemmed from the mystery that had surrounded the details after its announcement. As was later described in a history of the FTA talks by three of its participants: “The period from October 4 to December 11 [when the text was published] . . . took on a surreal quality . . . Deadlines came and went. Days became night and weekends evaporated into the following week . . . The drama was played out against the background of an increasingly sceptical audience, while the battle for the hearts and minds of Canadians appeared to be going to the opposition. The delay in producing the final text did not help the cause.”2 In the understandable absence of a definitive final text, the agreement would have been better received had a complete description of its provisions been released upon signature. I was impressed when Daniel agreed with me and said that we would seek to accomplish just that with the NAFTA, should negotiations succeed. And from that moment at the beginning of March in 1991 until the successful conclusion of the talks in August 1992, my team and I worked to achieve that very concrete and feasible objective.

It was April before the government’s chief negotiator was announced. John Weekes, who was brought on board after serving several years as Canada’s ambassador to the GATT (General Agreement on Tariffs and Trade, the precursor to the World Trade Organization), could hardly have been more different than Reisman. He was gentlemanly and collegial, and in a career almost entirely taken up with trade policy assignments, was perhaps Canada’s foremost expert and practitioner in the field. The way Weekes was to structure the NAFTA negotiations office reflected the specialized – and, to many, arcane – features of the trade policy craft. In addition to specialists on “market access,” in which tariff reductions and elimination were the goal, there were also experts on trade remedies, dispute resolution, investment and services. There were other experts, some recruited from the departments of industry and agriculture, on specific sectors such as autos, textiles and clothing, and agricultural products. The NAFTA team was a large interdepartmental organization recruiting a substantial pool of talent that befit an enterprise charged with no less than negotiating the trade rules for three economies comprising more than 350 million people. What was significant for me was that Daniel had prevailed in preserving independence for the communications function within the overall structure. Daniel guarded for his branch all responsibility for drafting the communications strategy and conferred directly with Weekes as an equal. As competent as trade policy mandarins are in their field, communications could have become a hostage to an overweening obsession with fine details that would make the public affairs program less manageable.

The NAFTA communications office was not huge. The group, which was responsible for liaising with the trade specialists, articulating the strategy and generating the content, represented no more than five people, although we called constantly on the general services offered by the trade and corporate communications services divisions.3 I didn’t know it at first, but the three years of negotiations that would last ultimately until January 1994 would become a period of almost interminable days of near-monastic dedication. I had never worked such long hours before, nor have I since. Our tiny suite of offices sandwiched in a second storey corner of the C tower from which we could only see, over a gravelled roof, other offices in the B and D towers, contributed to the cloistered atmosphere. On the north side of the Pearson complex, our offices were in shadow for most of the year. Only during the summer months did a thin ray of sunshine between 1 and 3 pm penetrate the gloom.

The lack of receptivity of Canadians to the NAFTA was hardly encouraging. The original FTA had only been formally in place since 1989 and although some positive results of that deal were beginning to appear, the overall attitude of the Canadian public was deeply negative. Starting in the second quarter of 1990, the Canadian economy had fallen into a recession, and according to a March Angus Reid poll commissioned by External Affairs to help guide our communications strategy, 62 per cent of respondents blamed the FTA. By August 1991, Canadians’ confidence in the government to guide the economy had sunk to 35 per cent. Some 72 per cent believed they had been personally hurt by the FTA. Curiously 46 per cent supported the negotiations for the NAFTA, but that relatively high level of support did not last long. By March 1992, it would sink to 29 per cent. The opposition of the public was characterized by the attitude: “If the FTA is bad, the NAFTA can only be worse.”

Why was the government then pursuing this initiative? In the early ’90s the conviction that globalization was inevitable and that all governments must seek to harvest its benefits was prevailing economic wisdom, sweeping up governments in all bands of the spectrum, right, centre and left. But opposition was vocal and vehement and would grow over time, led particularly by an array of “civil society” organizations, which not long after would so disrupt WTO negotiations in Seattle, Washington in 1999 that negotiators would literally flee the bargaining tables. Nonetheless, the mainstream consensus was that governments should facilitate the benefits of an increasingly global economy by striking down trade barriers while acting, if necessary, to mitigate negative impacts on previously protected, inefficient industries. This was certainly the underlying inspiration for the NAFTA and all subsequent trade agreements Canada pursued.

The NAFTA had its own particularities. The negotiations as first conceived by the United States were to have aimed at a bilateral deal only between the US and Mexico, and the Canadian government had become alarmed that preferential access by Mexico to the US market could undermine the hard-won gains of the original Canada-US FTA. Canada, therefore, proposed that we be included in a trilateral arrangement. After some initial pushback, particularly from the US, Mexico and Washington consented. A factor in President Bush’s agreement was the warm relationship he had with Prime Minister Mulroney over the latter’s efforts to rally international support for the UN-sanctioned Persian Gulf War. But there was a further important factor.

Both Canada and the United States saw a trade agreement with Mexico from the perspective of geopolitical security. A more developed, more prosperous Mexico would make the North American continent more secure, and less prone to poverty-induced problems of crime, illegal migration, and even political instability.

This theme formed part of the lengthy and detailed communications plan that I was asked to draft. After extensive consultation with the office of Trade and Industry Minister Michael Wilson as well as the civil service negotiators in what was called the Office of Trilateral Trade Negotiations (OTTN), the plan was presented and approved by cabinet along with the NAFTA negotiating mandate. In addition to calling for a detailed package of negotiating results once a deal was struck, the communications plan also recommended an ongoing series of public briefings on the issues at stake.

That perhaps-too-optimistic commitment to public outreach faltered in the early going. Part of the resistance came from Canada’s ambassador to Washington, Derek Burney, who had been Prime Minister Mulroney’s chief of staff and one of the key architects of the original FTA. In a diplomatic cable sent to the Department on June 5th, 1991 Burney said: “I am troubled by the high profile we seem to be giving NAFTA negotiations in Canada . . . Our primary objective in transforming the United States – Mexico negotiation into a trilateral negotiation was, and is, defensive – essentially to ensure that Canadian exports and Canadian attractiveness as an investment location are not damaged by US preferential treatment granted to Mexico or by emergence of different rules for trade and investment.”4 External’s assistant deputy minister for United States relations before the start of the FTA negotiations, Burney generally subscribed to a foreign policy “realism” that put the United States wholly in the centre of Canadian foreign policy

The pre-eminence of Canada-US relations in Canada’s foreign policy ought to be obvious, but it’s an orientation that can smother other perspectives. And in this instance, the relative advantages of improving Canada’s wider trade and foreign policy interests gave way to a preference for a much lower profile in a defensive posture. Burney was extremely critical of holding the kick-off negotiations in Toronto and advised against giving the talks too much momentum pending US elections in November 1992.

Burney’s was not the only voice counselling caution about overselling the NAFTA. Michael Wilson, who had left the ministry of finance to become a kind of “super” minister responsible for both Industry Canada and International Trade, seeing the negative public attitudes about the government’s economic management during the ongoing recession, thought that pitching the NAFTA as only one element in the new “Prosperity Agenda” would have the benefit of deflecting attention from the NAFTA talks. (The “Prosperity Agenda”, like so many grandly labelled undertakings built more on rhetoric than actual programs, was difficult to pin down and would eventually evaporate towards the end of the government’s electoral term). Other initiatives within the NAFTA negotiating mandate, to introduce for instance an accession clause that would allow other countries – such as Chile in particular – to join the NAFTA, lost momentum as the talks shifted toward the defensive, low profile stance that Burney and other realists advised.

That said, our NAFTA communications team with Daniel’s support remained committed to the goal of ensuring a full and detailed communications package the instant the talks were concluded. The critical path for our project became clear after talks were held in Zacatecas, Mexico from October 26 to 27, 1991.

Keeping a low profile was not necessarily in the domestic interest of the Mexicans. While abiding by an agreement not to reveal important details of still-ongoing talks, the Mexican trade minister Jaime Serra Puche had his own political imperative in inviting the other delegations to his hometown of Zacatecas for the Mexican-hosted negotiating round. Serra wanted attention to highlight Mexico’s role as an emerging player in the international economic policy field and to enhance the ruling party’s credentials for Mexico’s elections in July 1993. (The Partido Revolucionario Institucional had held a hammerlock on Mexico’s politics since the 1910 revolution but maintaining its esteem with up-until-then quiescent voters was still important).

The talks were convened in an elegantly refurbished bullring, the Quinta Real. The hotel had won an award for architectural restoration, and its beautifully appointed rooms were remodelled galleries that used to be part of the “backstage” of the ring itself, which was preserved as a grand plaza. Freed on this occasion from my behind-the-scenes role of tracking negotiations outcomes and translating them into non-specialist language for the eventual communication package, I was tasked to liaise with Canadian media in the absence of Wilson’s regular press secretary John Fieldhouse. The assignment could not have been more propitious as it turned out that this round was the one to establish the goals and timeline for the conclusion of the talks.

I participated in a morning session of the three delegations led by Wilson, Serra and Carla Hills, the United States Trade Representative. My pitch to offer up some semblance at least of the positively emerging features of the negotiations was politely declined in favour of simply conveying the three delegations’ commitment to achieving a mutually satisfactory agreement. We would at least sincerely express the view that no issues were impeding the countries from reaching a deal. And the outcome at Zacatecas was precisely that: “agreement on a timetable for moving to ‘phase two’ of the negotiations including preparation of an initial draft text.”5

It is a decidedly awkward predicament for an ex-journalist charged with the duty of offering less-than-open commentary to former media colleagues about the state of government business, while abiding by officially approved “media lines”. A participant in an outreach session I led after the conclusion of NAFTA once suggested that I hadn’t been able to decide whether to “run with the fox or hunt with the hounds.” At Zacatecas, I seemed to manage this bit of contortionism well, since the headlines following the Zacatecas sessions proclaimed the negotiations as having advanced positively, without criticism of the absence of information about substantial content.

Not revealed in the post-Zacatecas headlines was that the three countries had made key breakthroughs. For all three countries, a vision emerged on how rules-of-origin on autos would work. And each of the countries, offered some flexibility where they had previously taken hard lines: Mexico gave critical ground to opening its energy sector; Canada gave something on opening the garment market while giving the home-grown industry time to adjust; and the US agreed to consider limits on US small-business set-asides and “Buy America” provisions. Most relevant for me was that the three ministers had agreed to conclude negotiations by the summer of 1992. Henceforth our orders were clear. We must assemble the communications package, tracking all key and evolving issues and incorporating them in background material to be ready for press by the summer deadline.

Our work intensified. Beyond describing the agreement provisions in detail, we needed also to explain its effects on all sectors of the economy. For this we would need to rely on Industry Canada, for most sectoral expertise had been shifted from International Trade in recent re-organizations. This was not easy at first. Since the FTA negotiations, the government had been reluctant to make forecasts about what the effects of free trade would be. While offering overall positive assessments of the future, there had been a deep reluctance to make quantifiable estimates. This applied equally to identifying which would be the sectoral impacts of opening the markets.

I had numerous face-to-face meetings with Terry Ford, director of Industry Canada’s sectors branch, most of which ended with a quiet resistance to participating in this sector-by-sector analysis. But I persisted, and he eventually yielded to my appeals and agreed to enlist his team in drafting these key documents. Ford’s assistance was indispensable, and in the final weeks before the deal, he took time, while staying at his summer cottage, to direct the work of his staff in the CD Howe Building in downtown Ottawa to provide the granular detail the communications package would need.

As importantly, we needed to ensure Minister Wilson’s office was happy with the emerging package. What followed was a dogged series of meetings between Daniel, me, Wilson’s executive assistant Sheila Riordan and several of the many NAFTA specialist negotiators, to draft layperson’s language summaries of virtually every chapter of the agreement. These meetings were nightly at times. Once drafted, each summary would go through numerous “iterations” before arriving at a satisfactory result. This was in the era before e-mail, and it is still vivid in my memory, how I would take the well-worn path, often several times an hour, carrying the latest drafts, from our NAFTA communications offices through the concrete service stairway and the grey-carpeted corridors three floors above to the minister’s office atop Tower B. As necessary as this oft-repeated mission was, one could not always be guaranteed a welcome reception. Riordan, who could be friendly, was sometimes stressed by her lynchpin role and could become impatient and abrupt. Still, her blessing was required before our work would eventually be presented to Wilson. From time to time, in our subsequent careers, Sheila and I have run across each other, and our mutual labours over NAFTA in 1992 are among past struggles now fondly remembered. Riordan eventually went on to become the senior political program manager, the diplomatically designated “minister,” in Canada’s embassy in Washington.

When I did manage to escape headquarters during those interminable months, it was to attend “focus groups” organized by our pollsters. Focus sessions attempt to take the public pulse in a more flexible and nuanced way than strict “question-and-answer” polls. Ten to twelve people, with a variety of demographic backgrounds, are invited to meet in a studio-like setting to discuss around a table the topic that the poll sponsor wants to explore. The polling company provides a facilitator to lead the discussion, and sponsor representatives watch the exchange from behind one-way glass. We asked Angus Reid to conduct several sessions across Canada. I attended several in Ottawa and Winnipeg. These sessions only confirmed me in the determination to produce clear “lay” descriptions of the results of the deal. Economic literacy is not a strong suit for many Canadians. Some focus group participants would become muddled while trying to grapple with the difference between exports and imports. But participants showed a readiness to trust the government if its spokespersons were able to answer their questions in non-specialist language.

The NAFTA talks concluded in a several-week-long negotiating round in Washington DC in July and August, during which time we were on the phone day and night with senior negotiators to track every change – addition or omission – to the evolving agreement. On several occasions we were told to expect the conclusion overnight, but usually that warning would dissolve around 9 or 10 pm. But on Wednesday, August 12, 1992 in the early evening hours, we were advised that indeed the agreement would be completed that night.

I had managed to leave the office early that day and was in a local park working on a community tree-planting project when I received the message. The editors and translators, who had also left for the day, were recalled and what ensued was an all-night marathon involving continuous phone calls with our negotiating team in Washington to get final details, make final edits and translations, format the documents and produce several hundred multi-page packages to be available for the media the following day.

The final product6 had none of the graphic embellishments or pages of narrative normally associated with government releases on major initiatives. Its format was simple, on plain paper stock and produced by a standard-issue photocopier. But it was fit for purpose – a detailed document to outline the content of the NAFTA, to answer as many questions as we could conceive, and to quell wasteful and erroneous speculation about what Canada’s negotiators had agreed to. At 1 pm on Thursday, August 13, the package was presented at a news conference by Minister Wilson in the National Press Gallery theatre.

The following afternoon, several of my colleagues and I were celebrating at a pub in Ottawa’s gentrified Glebe district. I distinctly remember hearing on the radio the results of an early poll of reactions to news of the NAFTA deal. Remarkably, 55 per cent of those polled were favourable to the deal. It was the height of summer; the weather in Ottawa was sunny and bright; perhaps Canadians were in a holiday mood. Nonetheless, I felt vindicated for the insistence I had placed from the beginning, informed by my earlier FTA experience, on preparing a full information package for the moment the agreement was reached. And I later noted with satisfaction that from that moment on, in polls on the NAFTA, support rarely dipped below 50 per cent again and would generally trend higher signalling that a significant change had taken place in how Canadians viewed free trade. It took another 18 months for the NAFTA to become law. This included further negotiations on labour and environmental side deals after Bill Clinton was elected US president later that year. And when Jean Chrétien was elected the following year, his incoming Liberal government insisted on some “comfort language” on trade dispute mechanisms, energy and water. Yet the NAFTA that would become the handbook of North American Trade for the next 25 years was completed in all its core provisions that summer of 1992.

The NAFTA would stand the test of time. Despite the tense negotiations in 2018 with the Trump administration for a revised agreement, most of the essential provisions of the NAFTA were preserved in the newly wrought Canada-Mexico-United States Trade Agreement. Although containing, among other adjustments, more restrictive automotive rules of origin, the agreement still enshrined duty-free trade on the vast majority of the three countries’ goods. The all-consuming process to impeach Trump pursued by Congressional Democrats put approval of the revised NAFTA into limbo for months, but it was eventually ratified by Congress and following similar legislative approvals by Canada and Mexico, the new agreement went into force on July 1, 2020.

The original NAFTA epitomized the commitment to free trade and market-oriented solutions to economic management characteristic of the international liberalism of the time. Notwithstanding the fact Canada escaped relatively unscathed, its renegotiation was the consequence of a newly protectionist stance of the United States quite at odds with most previous Republican administrations. But the Trump administration’s penchant for waging economic warfare with arbitrary imposition of tariffs exemplified by its trade confrontation with China, portended a new era in world trade built more on raw national interest than multilateralism. It has been accepted as a given for years that for Canada, a modest-sized economy compared to the United States, the European Union and China, multilateralism – and a trading system governed by rules rather than economic power alone – is in the national interest. But some believe that the painstakingly constructed international trading system is in trouble and may not be able to be saved from current trends. I was surprised to encounter one of the Department’s retired chief economists at an event in Ottawa in February 2020 proclaiming that the ideal of the multilaterally regulated global market was now old hat. I remembered distinctly that John Curtis had been devoted to the then-orthodoxy of progressively freer trade under agreed trade rules when he oversaw the GATT negotiations that founded the World Trade Organization. In remarks after a speech in Ottawa by Chile’s ambassador to Canada, Curtis contended that the old vision was now dead. Ambassador Alejandro Marisio had just concluded a speech vaunting the Canada-Chile free trade agreement and both countries’ efforts to continue opening borders in the Pacific Alliance and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.7 But Curtis emphasized that teaching his students that bargaining sector-by-sector for national competitive advantage on a largely bilateral basis, rather than for progressive removal of trade barriers multilaterally, will be the name of the game from now on. If Curtis is right, and the old orthodoxy is passé, Canadian tradecraft has a rocky road ahead.