The Continental Quickstep

In the introduction to Does North America Exist? Governing the Continent after NAFTA and 9/11, Stephen Clarkson relates how, over the several years he worked on this long investigation of the effects of the North American Free Trade Agreement on our continental life together, his “nearest and dearest” took to calling it his “big, boring book.” I’m sorry, but with all due respect to Professor Clarkson, who has written several books—especially when his co-author was the late Christina McCall—that were big and not at all boring, when an author provides a reviewer with an opening like that, it is almost professional negligence not to use it. At 471 pages of text and 83 pages of notes, plus an index, this is indeed a big book. I’m sorry to say I did not find it a very interesting one.

In part, the problem is the fragility of the premise. North America obviously does exist. We all learned about it in grade school. Many of us have since visited many parts of it. It appears to be more than an epiphenomenon. If you kicked it, your toe would hurt. On the other hand, the North America most of us still think about consists of Canada and the United States. By contrast, the North America that concerns Clarkson adds the third, newest, most southerly partner, Mexico. The purpose of his lengthy exploration is to discover whether this tripartite North America exists “in any way similar to the [European Union], with its increasing political, economic, sociological, and cultural integration.”

Clarkson and the many student contributors he credits with having helped him write the book adopt a sensible strategy of looking first at how NAFTA’s essentially feeble institutions have evolved (not very much) and then at how different North American sectors—energy, agriculture, steel, textiles, banking, pharmaceuticals, defence and the border—operate under the agreement. Their goal is to try to determine how both government and governance, including the influence of non-governmental organizations and citizens’ groups, have evolved in North America since 1994. To decide how closely ties bind, it is obviously necessary to check many strands. Covering all these many areas as well as a ponderous set-up and some unnecessary duplication (why is the story of the Mexico-U.S. trucking dispute told twice?) is the main reason the book is long.

After several years of investigation, what do Clarkson and his team conclude? That in fact North America is not following smartly in the footsteps of the European Union. Is anyone surprised?

To be sure, the number of Canadians who say their primary identity is North American has doubled since NAFTA came into being. Whereas 3 percent of us used to think of ourselves this way, now 6 percent do. That is a start. If it doubles again in another 15 years and then doubles again after that, well, before the century is through we all will have been converted. But one senses a lack of momentum. Most Canadians I know have little interaction with Mexico except sometimes on holiday, think little about Mexico and consider Mexico part of North America only on formal occasions when the subject of NAFTA comes up and we understand we are now supposed to refer to Mexicans as fellow North Americans, although this is the only occasion on which we do. I do realize my prejudices reflect the fact I do not work in manufacturing. A member of my family who does now visits Mexico regularly as part of his company’s work. Co-workers from Mexico occasionally visit the plant in Ontario. When they do, relations are friendly, not fraternal. As the polls confirm, most Canadians do not think of Mexicans as their North American brothers.

That North America does not exist is or at least should be unsurprising. During the negotiation and ratification of NAFTA, we market-oriented types who supported it—“neoconservative globalizers,” as Clarkson would call us—argued that it would not be a new constitution, not even a new economic constitution, for North America. In fact, we believed and said, our countries could trade with each other without adopting each other’s laws, customs, cultures or values or, for that matter, as Canada-U.S. relations had proved for half a century, without even liking each other overly or knowing much about each other. It was mainly the opponents of NAFTA who feared homogenization through continentalization, that minor league version of globalization. But it seems, as Clarkson’s book demonstrates exhaustively, we were right and they were wrong. (Just a word on neocons: Clarkson is to neoconservatives what Joseph McCarthy was to communists. He finds them everywhere. Even Brian Mulroney, brokerage politician par excellence, supposedly was neo-conservative. If only we neocons—classical liberals is what we really are—were as many or as influential as he believes.)

A second reason North America’s non-existence is unremarkable is that unlike in Europe over the last 60 years, when NAFTA was constructed there was, except perhaps among a small group of eccentric latinophiles, no desire whatsoever among North Americans to create a North American community. To Canadians, NAFTA was mainly a diplomatic inconvenience. After much stressful internal argument, we had just negotiated exclusive free access to the United States market for ourselves, joining Israel as the only state privileged in this way. Then along came Mexico trying to horn in on our deal and also acquire favoured access to the U.S. market. What use is privilege if everyone has it? The first-best solution for us would have been to somehow scuttle the U.S.-Mexico deal. We decided sabotage either was against our style or would not succeed and then calculated that a three-way deal was better than a hub-and-spoke arrangement in which the U.S. had free-trade access to each of its neighbours, but each of its neighbours had free-trade access only to the United States. Probably for ease of elocution more than anything else the agreement became known as the North American Free Trade Agreement, with its catchy abbreviation “NAFTA,” rather than the “Canada-Mexico-U.S. Free Trade Agreement.” Thus did Mexicans become North Americans. But if no one really wanted a political and social North America to exist, it is hardly surprising that it does not. (Our first child was born just as NAFTA was being negotiated, and for a while during the happy blur of imminent first-parenthood, my wife and I toyed with the idea, if it were a girl, of calling her “ALENA,” the rather musical French equivalent of NAFTA. Thank God for us and for her that she turned out to be a boy.)

Speaking of acronyms, Clarkson’s book begins with six and a half pages of them, including the NDWC (North Dakota Wheat Commission), the OIE (Office of International Epizootics) and the Ley Federal del Trabajo (LFT). (And people say government is in decline!) This is scholarship above and beyond the call of any reader’s compelling interest. There is also a little later on, a handy, if overassiduous, glossary of terms: was it really necessary to define bilateral and trilateral?

One obviously is not opposed to scholarship, the best of which is often extremely detailed. But the tone of Clarkson’s scholarship is off-putting. In the very first mention of the United States in the 25-page introduction, it is referred to not by its real name but as “the capitalist world’s colossal champion.”

I realize some may find it rich for an economist to complain about jargon, but in his introduction Clarkson defines the three terms he uses to describe the “power system” that the three NAFTA countries constitute. The alternatives are bleak: “imperium,” “hegemony,” “autarchy.” A country is autarchic if in general or in given sectors or situations it is “not connected with the other members of its system.” If you are not standoffish in this way, your other two choices are hegemony, as either the hegemon or the hegemonee, or imperium, either running the imperium or being imperiumed. The distinction is that a hegemon, as sinister sounding a beast as the dementors that plague Harry Potter, gets its way without threatening violence, usually by “generating a willing consensus with the system’s other, weaker members about how the system should operate.”

Autarchy, hegemony or imperium. That’s it. Not much of a choice, really. You are either off on your own, Garbo-like, or dominated in one way or another. Is there no room for three reasonably sovereign states, two of which at least have reasonably comparable political and legal traditions and values, to agree from time to time on parallel and occasionally even overlapping policy processes and institutions without this being a case of one dominating the other? Take the concept of “national treatment,” which is a cornerstone of international trade agreements. To many people, whether they are the stronger or weaker member of a power system, the idea that countries may regulate foreign or domestic goods or investors as they wish, but should not generally—many exceptions are allowed, in fact—treat foreigners differently, will seem a perfectly reasonable institutional immunization against the beggar-thy-neighbour policies whose potential virulence many of us did not fully appreciate until they began to spread again this winter. Do we really believe so only because our U.S. hegemon wants us to?

Given both the dire warnings about NAFTA issued at the time from Clarkson’s side of the political spectrum and his book’s carping leitmotif and long buildup about hegemons, imperia and subjugation, its conclusion that NAFTA has had essentially benign effects on power relations in North America is almost astonishing—and, of course, satisfying to those of us who predicted free trade would allow our three countries to get on with their internal affairs largely uninterrupted. Among Clarkson’s more surprising minimalist conclusions:

Even NAFTA’s infamous Chapter 11, which, as the chant went, “gave rights to corporations,” gets off relatively lightly. True, it started badly with the Metalclad decision, in which an international tribunal awarded compensation to an American company of that appropriately sinister name that had fallen afoul of Mexico’s environmental regulations and claimed it had effectively been expropriated. (The company argued it had received clearance from the Mexican federal government, which has jurisdiction, but the state government had interfered.) Since then, however, much to the hegemon’s surprise, Mexico and Canada have treated turnabout as fair play and have brought their own Chapter 11 cases against the United States, which had expected its firms would be the only complainants, seeking redress against arbitrary Mexican actions. In the end, Clarkson concludes, “a series of investor-state panel rulings has taken the steam out of the protests against Chapter 11.” In the street lore of these things, Chapter 11 is the blackest passage in this blackest of trade deals. But it turns out to have been applied so benignly that now the steam has come out of the protests. We are a long way from the 1990s, Toto.

Even so, Clarkson concludes regarding Chapter 11 that “the record illustrates how NAFTA has created a hegemony in North America, with the dominant power’s norms having been accepted and applied by its weaker neighbours.” Really? Whenever the subject of Chapter 11 comes up at debates or public meetings, I enjoy shocking audiences by reading them its operative paragraphs, which comprise only 69 words. Chapter 11 says the three NAFTA governments may expropriate businesses if they wish to, or undertake actions that are “tantamount to expropriation,” but they can only do so for a public purpose, on a non-discriminatory basis, in accordance with due process of law, and with compensation at fair market value. Hands up, I say, anyone who opposes any of those qualifications.

Yes, “tantamount to expropriation” is a potential loophole. But for the rest of it, these investor protections make great good sense and are perfectly consistent with longstanding principles of British and Canadian justice. Three modern countries could probably come to that conclusion quite independently of which has the bigger army, smarter weapons or more pervasive electronic media. But I suppose that’s just my inner hegemon talking.