Locked In? Canada's External Constitution under Global Trade Governance

Abstract

The negotiation of supranational trade regimes may well be considered by historians as one of the most pregnant developments which brought the twentieth century to a highly polarized close. At one pole, the specialized community of trade experts hailed the treaties that set up global and continental institutions as giant steps forward in establishing the universal rule of economic law, with a direct, trade- and investment-expanding impact on the world's economy (Jackson 2000; Trebilcock and Howse 1999; Ostry 1997). Global theorists who welcomed the cosmopolitan possibilities opened up by globalization embraced the new realities with enthusiasm and imagination (Held 1995). At the other extreme, the prime consequence of economic liberalization was seen in its power-constraining effects on the world's nation states. Environmental non-governmental organizations, for instance, took to attacking the World Trade Organization (WTO) or North American Free Trade Agreement (NAFTA) as powerful forces sapping the capacity of national policy regimes to achieve ecological sustainability (Shrybman 2002). In the minds of the identifiable political minority that is overtly hostile to globalization, a deep distrust of global institutions segues to a sense that, as mouthpieces for the United States, they release transnational corporations (TNCs) from democratic control (Klein 2000). As they come to grips with the vast array of issues raised by globalization, two groupings of social scientists have an established claim for our attention. International relations (IR) scholars address the trade-offs states make when signing treaties. In return for a necessary loss of formal sovereignty, governments calculate that they extract specific benefits from participating in the new continental or global organizations (Pauly 1997; Gilpin 2000). Major discrepancies between the autonomy lost and the benefits expected could depend on where a particular state is located in the global hierarchy. Hegemonic states might increase the scope of their authority if the rules further their interests, while peripheral states might find their plight worsened if they are deprived of their legislative capacities to extract benefits from foreign capital. These IR interests overlap with those of political economists who study the interactions between states and markets, assessing the extent to which corporations might have increased their autonomy from governments and how this shift of structural capacity might have impinged on the disparities between the very strong and the very weak. (Strange 1988). Situated within this general debate, this article takes Canada as exemplary of states in the middle of the power hierarchy that can be called semi-peripheral since they are neither fully dominant nor fully dominated. To understand how the special characteristics of semi-peripheral countries such as Canada have been affected by the intergovernmental economic agreements that transformed the meaning of global governance in the 1990s, we first have to differentiate the old from the new in the international political economy. Old was the way that international relations have always been determined by the power disparities--structural, financial, military, scientific, and ideological--that differentiated those who made the rules by which the rest of the world operates from those who had to follow them. Old also included the world order comprised of hundreds of international organizations (IOs) established by intergovernmental treaty to deal with specific transnational functional problems. Some of these IOs formalized the power ascendancy of the United States in the global distribution of forces, a situation that was particularly true of the major international financial institutions (IFIs) that made up the Bretton Woods system (Moon 2000, 343). Canada's semi-peripherality in this second half of the twentieth century could be seen in its ambidextrous behavior, illustrating the broad border zone it occupied between the very strong and the very weak. …