Deep integration with U.S. not such a bright idea--study

June 26, 2003

OTTAWA--The "Big Idea"--a bargain that would see Canada giving the U.S. a strong North American security perimeter and greater access to our energy resources in return for supposedly secure access to the U.S. market--threatens the space we need to pursue needed economic, environmental and social policies, according to a new CCPA study.

Why the "Big Idea" is a Bad Idea, by senior CLC economist Andrew Jackson critiques proposals for still deeper economic integration with the U.S., discusses the economic costs and benefits of economic integration to date, and argues that Canada needs to retain room to manoeuvere in terms of economic policy if we are to build a more sophisticated and environmentally sustainable economy.

Jackson explains that the Big Idea not only poses threats to the expression of distinctive Canadian values on defence, international affairs, and immigration and refugee issues. It would also limit our necessary ability to shape industrial development, to control our energy sector, to move towards a more environmentally sustainable economy; to levy taxes at the level needed to maintain a distinctive Canadian social model, and to limit the impacts of international trade and investment agreements on our social and cultural policies.

According to Jackson, the Big Idea distracts attention from our real problems: the failure of corporate Canada to innovate and to invest adequately in research and development, workers, skills, and new plants and equipment; and the threat to social policies brought about by constant invocations of the need for "competitive" taxes.

"A more sensible approach to Canadian industrial policy would be to retain and expand our room to manoeuvre under the current WTO rules while exploring possibilities for closer North American co-operation in the few very closely integrated sectors where we have joint interests," Jackson says.

Jackson concludes that "the alternative to deeper integration is not a rejection of close trade and investment ties with the U.S., but more active shaping of those links in the interests of Canadians."

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