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Today in Canada’s Political History: Canada and USA Reach Free Trade Agreement

  • Arthur Milnes

  • October 3, 2021

Many – rightfully – argue that Prime Minister Brian Mulroney’s greatest legacy is his reaching the famed Free Trade Agreement with the United States on this date in 1987. After tough negotiations with the Reagan Administration -- who will ever forget the disputes, often played out in public, between Canada’s Chief Negotiator Simon Reisman and the USA’s Peter Murphy? -- it all came down to the final weekend and last day of the talks.  The American team refused to budge on Canada’s demand to become the only nation on earth to have its own trade dispute mechanism in place for both countries.  In stepped Canada’s Prime Minister. I’ll let the 18th Prime Minister, via the most recent issue of Policy Magazine and an interview with their editor, L. Ian MacDonald, describe what happened as the clock ticked down.

“Look, at the last night of the trade negotiations in 1987 when Jim Baker called me and told me that everything was done but he couldn’t get the independent dispute settlement mechanism. I said: “Jim, you know full well this is a deal-breaker for me. Canada’s not going to go into a relationship of free trade with a country 10 times our size unless we have an independent manner of resolving our disputes and we’re not going to go before the American courts, we are going to get killed,” Mulroney continued. “You are telling me we can’t do it, fine, I’m going to call President Reagan at Camp David right now and I’m going to ask him the following question. ‘How is it, Ron, that you can do a nuclear arms reduction deal with your worst enemy, the Soviet Union, but you can’t do a free trade agreement with your best friend, the Canadians?’” And Baker said: “Prime Minister, can you give me 20 minutes?” Within minutes, he was in the Canadian negotiating room in the Treasury Department and he had a piece of paper handwritten and he threw it on the table and he said: “There’s your goddamn independent dispute settlement mechanism, now can we get this up to Congress before the fast-track authority expires at midnight?”

Of course, Canadians still had to ratify the FTA in the 1988 general election, but that incredible story is for another day. caption id="attachment_584178" align="alignleft" width="273" Prime Minister Brian Mulroney and President Ronald Reagan at the White House/caption Arthur Milnes is an accomplished public historian and award-winning journalist.  He was research assistant on The Rt. Hon. Brian Mulroney’s best-selling Memoirs and also served as a speechwriter to then-Prime Minister Stephen Harper and as a Fellow of the Queen’s Centre for the Study of Democracy under the leadership of Tom Axworthy.  A resident of Kingston, Ontario, Milnes serves as the in-house historian at the 175 year-old Frontenac Club Hotel.

Arthur Milnes is an accomplished public historian and award-winning journalist. He was research assistant on The Rt. Hon. Brian Mulroney’s best-selling Memoirs and also served as a speechwriter to then-Prime Minister Stephen Harper and as a Fellow of the Queen’s Centre for the Study of Democracy under the leadership of Tom Axworthy. A resident of Kingston, Ontario, Milnes serves as the in-house historian at the 175 year-old Frontenac Club Hotel.