GUEST COLUMN — A thumbs-up for NAFTA

Four out of five Canadians believe in Canada’s presence at the negotiating table with the U.S. and Mexico for a North American Free Trade Agreement (NAFTA).

Job creation in Canada has continued to expand since the U.S.-Canada Free Trade Agreement was signed. Higher Canadian unemployment is the result of the recession, high interest rates, a high Canadian dollar and the financing of Canadian government deficits.

Trade liberalization has been the principal catalyst for economic growth in Canada since 1945 and has fostered the development of the Canadian resource industries. They depend on markets and market access to the major industrial markets in Asia, the Americas and Europe. Current trade liberalization pressures, while painful for some in the short run, are improving Canadian business competitiveness through adoption of responsible environmental management consistent with sustainable development.

Stepping back from trade liberalization might appease free trade critics but would impede economic growth and investment. Protecting non-competitive elements of Canadian society does not provide products and services Canadian citizens will buy.

No industry, and least of all the mining industry, has prospered in a protectionist environment whether it be in Canada, the U.S., Mexico or elsewhere. In fact, the protection around the Mexican mining industry has been the principal reason for its under-utilization and under-development. The potential for the mining industries of North America in a common trading community is substantial. Mineral exploration, resource development, environmental management and development, metals marketing in North America and globally, and technology development and sharing, will all receive a boost when the three territories are opened up for joint ventures, equity association and partnership collaboration. The Canadian mining industry is optimistic about its ability to be a helpful partner in the process. The time is truly right for a NAFTA. Jaime Serra Puche, Mexico’s secretary of commerce, has defined five requirements for sustainable economic growth: — The government of a country must be able to govern with consistent market-driven economic policies focused on long-term performance requirements. These policies need continuity and support from the private sector responsible for business investment, expansion and renewal. — The market to be served by business operating in the economy of a country must be of sufficient size to provide for optimum efficiency, cost competitiveness, productivity, quality commitment and service to the customer. — Technology development must be fostered and each society must be encouraged to use technologies appropriate to its resources; more sophisticated societies need to concentrate on advanced technologies that are not labor intensive, while less sophisticated societies need to concentrate on technologies to utilize an abundant labor supply. The merging of these interests can create great economic strength as within the same market there is a variety of choices on technology and the appropriate use of the right labor market.

— In each economy, business needs to focus on a market niche with a product suited to the combination of technology and labor available, focused on adding to customer options rather than simply competing in a “me too” way. — Finally, the signal from government must be consistent in the support of policies designed to foster business investment and expansion providing appropriate rules which remain in place to promote the process. The combination of Canada, the U.S. and Mexico clearly can meet these tests. These are reasons for Europe 1992 and collectivism among the Asian tigers: Hong Kong, Singapore, Taiwan and South Korea. Mexico, the U.S. and Canada have the ability to be a business unit fully competitive in every respect of business on a global basis.

— William Deeks is Noranda Inc.’s global business adviser and former chairman of The Mining Association of Canada’s trade committee.