The Canadian experience demonstrates the potential value of a free trade agreement with North America, writes assistant editor FRAN O'SULLIVAN.
Prime Minister Helen Clark and US President George W. Bush might seem unlikely partners to dance the Nafta tango.
Helen Clark is, after all, an architect of New Zealand's anti-nuclear stance. George
W.'s kitchen cabinet is stacked with advisers such as George Schultz, the former US Secretary of State who pushed uppity New Zealand out of Anzus and into the deep freeze.
But former Canadian Prime Minister Brian Mulroney believes just two people hold the key to New Zealand's accession to the North American Free Trade Agreement - or a straight bilateral deal with the US - Helen Clark and George W. Bush. "With great goodwill on both sides, they can do it."
Three days into a whirlwind tour of New Zealand - which takes the former Canadian PM back to his campaigning days - Mulroney has focused the minds of politicians, business players, academics and bureaucrats on the economic benefits of joining the world's richest free trade pact.
The extraordinary economic dividend Canada has achieved from joining Nafta is compelling to all those who have this week heard the Mulroney message: Exports up from $C100 billion ($163 billion) a year to $C360 billion. Imports increased from $C86 billion to $C268 billion.
The relationship between Canada and the United States is now worth $C700 billion - and is still growing. Most importantly, the Canadian mindset has changed and, notwithstanding vocal home-grown critics such as anti-globalist poster girl Naomi Klein, Mulroney's countrymen now rejoice in the transformation of their resource-based economy to a high-technology platform.
Mulroney emphasises that he is not here to tell New Zealand or its Prime Minister what to do: "I do not mean to intrude in any way in your national debate but a Canadian perspective may be of some interest."
He senses New Zealand is at the crossroads. A big win like Nafta could be the circuit-breaker which will unlock enormous future prosperity.
Sure, New Zealand's defence stance is an issue for the US: No getting away from it, the architect of Nafta says upfront. It will be difficult - nothing is ever a given.
But if Clark makes access to Nafta her number-one national priority, rallies this country's best negotiators and business allies behind a compelling strategy, and, most importantly, goes to Washington herself and personally puts New Zealand's case to President Bush in a one-on-one meeting, then she may just pull off the greatest economic prize in New Zealand's history.
After all, it's not so long ago that the United States and the Soviet Union - the world's two superpowers - were locked in a Cold War.
New Zealand, on the other hand, has stood firm alongside the United States and the Allies in two world wars to make the world safe for democracy. This is the history which Clark could draw on when making a case for New Zealand to join Nafta.
"They can't force you to change your policies and you can't change theirs," says Mulroney. "But how many other countries have the record of clear achievement in defending democracy that New Zealand has demonstrated?
"If the New Zealand Prime Minister decides this is what she wants to do, there are a whole group of people in trade negotiations who would be happy to share the benefits of their vast experience with New Zealand."
The next eight to nine months will be most important.
That is all the time left in the narrow window George Bush can exploit to secure fast-track "trade promotion authority" and get some free trade deals underway before his political capital starts to erode as congressional elections impinge.
Due to lack of congressional support, many nations, including Chile and New Zealand, have signed agreements with other Asia-Pacific nations, while the US has been losing out on markets that would further enrich the American economy.
For New Zealand to get onto the Washington radar screen - either to pursue Nafta, as Mulroney suggests, or to strike a direct bilateral free-trade deal with the United States - it must move fast and harness advocates with strong credentials such as former New Zealand Prime Ministers Mike Moore and Jim Bolger.
Moore's position as director-general of the World Trade Organisation - and the Washington doors that Bolger has already opened for New Zealand using his cachet as a former Prime Minister - are assets that Clark could usefully exploit.
In his own case, Mulroney rode over the objections of his Trade Minister and appointed a negotiator reporting directly to himself, empowering him to do whatever it took to get a deal with the United States, then to expand that to Nafta.
Harnessing business support was also vital.
In Canada's case, Mulroney created a series of advisory groups under the acronym Sagits - sectoral advisory groups on international trade. He also drew on the support of the Conference Board and the Chamber of Commerce.
The New Zealand business community this week welcomed Mulroney's message and were captivated by his compelling communication skills, but Trade Negotiations Minister Jim Sutton was cautious. Sutton is concerned that longstanding dairy issues - particularly with Canada - might pose an insuperable hurdle for a New Zealand push into Nafta.
Mulroney acknowledges the concern, but is adamant that New Zealand has more chance of overcoming that obstacle within a broader trade pact framework than on a bilateral basis. He told the Canadian New Zealand Business Association yesterday that it was easier to put everything into a bigger pot - apply leverage and make the trade-offs. "No agreement is perfect," he notes.
Canada was riven with anti-American sentiment when Mulroney became Prime Minister in 1984 after leading his Progressive Conservatives to the biggest majority in his nation's history. Years of Trudeau-mania ignited a generation. But Canada paid a high economic price.
When Mulroney began knocking on President Ronald Reagan's door and pressing for a free-trade deal with the United States, the knockers said getting into bed with such an elephant would have only one consequence. "In reality the bed is now so big there's room for everyone."
Mulroney's nine years as Prime Minister were some of the most turbulent in the country's history. Two gut-wrenching attempts to bring Quebec into the constitution; the Free Trade Agreement with the United States and later Nafta negotiations; financial deregulation; the imposition of a goods and services tax; all these combined to erode his enormous political capital as an extraordinary level of sheer emotion took hold.
The free-trade agreements were at the core of the Conservatives' economic policies and a key reason for the intense public hatred the party generated. When economic recession kicked, Mulroney became the target of quick allegations: "Too cosy to the US President" ... "selling out Canada's needs and aspirations to American mega-corporations" ... This is just a taste of the swirling emotions and hostilities which eroded his own power base.
Mulroney stepped down as party leader and Prime Minister. Months later his successor, Kim Campbell, went to the polls: The Conservatives were wiped out - their House of Commons seats reduced from 155 to a mere two.
Distilling and protecting their political legacies is a common preoccupation with former Prime Ministers. In Mulroney's case, despite the political wipeout, he can draw rare pleasure from a McGill University Study which ranks him as Canada's best post-war leader on his management of the economy.
Even more so, that the man who succeeded him as Canada's Prime Minister, Jean Chretien, is ranked "dead-last."
Chretien campaigned on a promise to abolish both the free-trade agreement with the United States and the Nafta deal. But after taking office and meeting President Bill Clinton, he announced Nafta would proceed and the free-trade agreement would remain unchanged.
Mulroney was the third of six children of Irish-Canadian ancestry. Born on the small town of Baie Comea, Quebec, on the north shore of the St Lawrence River - where his father was an electrician - Mulroney parlayed his fluency in French and strong personal charm to penetrate Canada's rigid social hierarchy.
Mulroney quit politics in 1993 but still provokes strong passions among his countrymen.
Now senior partner in the Montreal-based law firm Ogilvy Renault, Mulroney is a director of companies ranging from international printing giant Quebecor, to Barrick Gold and Archer Daniels Midland, one of the world's largest grain producers.
He has forged strong links with the media industry: He is chairman of Sun Media, publisher of the Toronto Sun and newspapers throughout Canada, and also chairman of Forbes Global.
He is also a member of that distinguished cast of statesmen whom Sir Anthony O'Reilly has assembled to serve on the international advisory board of Independent News & Media, owner of Herald publisher Wilson & Horton, and holds similar advisory positions with a number of prestigious US companies. His visit to New Zealand this week came at Sir Anthony's invitation.
"I've had my share of popularity," says Mulroney.
"The unpopularity comes when you have to do important things. And I guess you have to decide whether you'll be popular, or, whether you want to effect important structural change.
"Witness the assaults on me for the Free-Trade Agreement. I was demonised, called a traitor, lacking in principle, sucking up the Americans ... that takes a toll.
"But ask me now ten years later, 'Was it the right thing to do for Canada ?'
"Yes it was. And it may be for you."
Herald features
Our turn
The jobs challenge
Common core values
href="http://www.nzherald.co.nz/storydisplay.cfm?reportID=57032">The knowledge society
Official website:
Catching the Knowledge Wave
The Canadian experience demonstrates the potential value of a free trade agreement with North America, writes assistant editor FRAN O'SULLIVAN.
Prime Minister Helen Clark and US President George W. Bush might seem unlikely partners to dance the Nafta tango.
Helen Clark is, after all, an architect of New Zealand's anti-nuclear stance. George
AdvertisementAdvertise with NZME.