A Trading Nation: Canadian Trade Policy from Colonialism to Globalization (review)

This political history of Canada's trade policy is a well-researched, monumental undertaking covering all of Canada's trade history. Its particular strength, however, lies in the coverage of the more recent past, since the 1950s. Three studies of the history of Canada's trade policy are generally regarded as obligatory reading for new students and are regularly consulted by seasoned researchers: Perry's Taxes, Tariffs and Subsidies; McDairmid's, Commercial Policy in the Canadian Economy; and Young's Commercial Policy. The most recent of these is Young's study published in 1957 as part of the Royal Commission on Canada's Economic Prospects. Hart's book is now added to that list both on grounds of coverage and quality of argument.

The early part of this book covers the tariff history of the nineteenth century, including that of the colonial period. Since Hart's writing style is lively, the account of these early years is worth the read, even for those familiar with the territory. Even for those who are more interested in twentieth-century policy it is an essential, and easily digested, precursor to the modern policy era and its issues. This is not to argue that there is nothing new in the early chapters. I was pleased to see Hart's use of economic history research on the Cayley/Galt Tariffs of 1858-9 making the important economic distinction between nominal and effective tariff protection. In some substantial measure these tariffs, imposed during the 'Reciprocity' years, did much to mark out Canada's policy direction and, critically, ingrained US policy makers' suspicions of Canadian motives.

When reading, I for one had to keep reminding myself that this is a book about policy and its formation and not a history of Canadian trade - and this can hardly be a criticism. The author ably manages to present the key movements in Canadian trade patterns without inundating us with details to which only an economist could warm, and thus keeps a clear focus. However, it might have been useful to be clearer analytically on the conflicting benefits and costs of policy changes to interests within Canadian society, principally consumers' and producers' welfare. Such a distinction would have helped, for example, in explaining why the Macdonald Commission was such a pivotal event in recent policy making. It was not simply that the commission employed a host of academic economists or that the tenor of the times was emphasizing market outcomes. The Macdonald Commission detailed the welfare costs of trade protection like no other public analysis has ever done. It is not that Hart ignores these issues, but that they could have been more explicitly drawn.

One of the strengths of Hart's analysis is his ability to capture the views of those, particularly in the United States, negotiating with, or simply reacting to, the Canadian policy makers. The chapter on negotiations leading up to the Free Trade Agreement ( FTA) of the Mulroney years is a case in point. The sheer play of the events is captivating when viewed from both the Canadian and US perspectives. The unexpected and apparent reversal of the US negotiators that broke the logjam threatening to end the FTA negotiation is still the stuff of high drama. So too, the author manages to incorporate the Canadian regional forces at work and analyse how they mapped into a federal government framework of trade policy.

This is a political history, and that is its most fascinating contribution. The text takes us through the high and low politics of the various governments, their cabinets and prime ministers. The theme is pursuit of the answer to the question, Where in the political agenda does trade policy lie, and how does that general agenda determine the policy-making posture? Again, it is the Diefenbaker to Mulroney years that are the most interesting. Hart captures the spirit of Diefenbaker's anti-American, but inarticulate, attitudes and his bumbling attempts to...