Free-Trade Federalism: Negotiating the Canadian Agreement on Internal trade

Paul G. Thomas is the Duff Roblin Professor of Government at the
University of Manitoba, the author of Parliamentary Reform Through
Political Parties, and the co-author of Canadian Public Administration:
Problematical Perspectives.

This scholarly study of the 1993–94 negotiation process among federal,
provincial, and territorial governments that produced the Agreement on
Internal Trade (AIT) is intended for academics and government officials.
The sources for the study are confidential interviews, documents, and an
extensive literature review. In nine chapters the authors seek to
provide a detailed analysis of how internal trade got on the agenda, the
dynamics of the negotiations, the contents of the Agreement and, to a
lesser extent, the prospects for its implementation. Developments are
interpreted through the metaphor of free-trade federalism. The overall
argument is that the AIT and the Free Trade Agreement/North American
Free Trade Agreement constitute the fourth and fifth pillars of
Canada’s political and economic order. The other pillars are
cabinet-parliamentary government, federalism, and the Charter of Rights
and Freedoms. In contrast to many critics, the authors see the AIT as an
important advance in reducing barriers to the free movement of capital,
goods, services, and labor within Canada. Negotiations are described as
a complex interplay of interests, ideas, structures, timing, and
personalities, so it is impossible to describe in a sentence why the
AIT’s provisions emerged the way they did. Disagreements were mainly
over general rules versus exceptions to the principle of free trade.
Negotiations took place on both a general and a sectoral level. Some
provinces were more willing than others to sacrifice control over
various policies within their jurisdiction. For provinces like Manitoba
the issue was one of economic efficiency, but for Quebec there were
broader implications for federal–provincial relations. Even though the
book is successful in capturing the complex interplay of factors
involved with the adoption, only a minority of readers will find the
account riveting.