Plan B Rhetoric as a Plan C Strategy

Plan B Rhetoric as a Plan C Strategy Canada and Québec: The NAFTA Question Jesse Male

With the specter of the separation of Québec lingering constantly on the Canadian political landscape, there are those who think that the government should begin to examine the process of separation and the appropriate stances that the rest of Canada (ROC) should take on many issues, including the membership of Quebec in the North American Free Trade Agreement (NAFTA). However, before we can discuss the stances that the ROC might pursue we need to determine whether or not it is wise to have a stance in the first place.

The idea that Canada needs to prepare strategies for a post-secession of Québec environment is known as Plan C, and was first advocated by Alan C. Cairns in "Looking into the Abyss: The Need for a Plan C", a paper written for the CD Howe institute. It was called Plan C in reference to the policy that the Government has adopted of "Plan B", which is a policy of bluntly informing Quebecers of the costs of separation and of examining the legality of the separation of Québec. In this framework Plan A would be the policy of seeking to provide Québec with concessions in order to keep them as a contented member of the Confederation.

In examining whether or not the Government should switch from Plan B to Plan C, one is examining whether or not Canada should begin to prepare for its own dissolution. A switch from Plan B to Plan C is ultimately a statement by the Government to the Canadian people, and to the Québeçois in particular, that Canada thinks Quebec might actually separate. It would also be a statement that the populace should prepare for what was now being considered a likely future outcome. Thus Plan C should not be an official policy of the Government of Canada.

The point of this paper is, however, to consider such a contingency plan for the case of NAFTA. In doing so several assumptions must be made about the rest of the scenario of secession. First it must be assumed that ROC has reconstituted itself and is ready to negotiate with Québec. Secondly, it must be assumed that ROC wants to negotiate with Québec -- that is the separation process must have been conducted in such a manner that ROC is not too angry to deal with Quebec. If it is assumed that these two very important issues are already solved then it is possible to proceed.

As Marcel Côté notes "many in Québec perceive the promised land through rose-colored glasses." In all likelihood the transition to sovereignty will not be so easy, "admission [to NAFTA] would in no way be legally guaranteed or automatic, and the American response to a Quebec request would be conditioned by the attitude of Canada towards Quebec sovereignty in general and by Quebec-Canada economic relations in particular". That the NAFTA accession process involves more parties than just Canada and Quebec is obvious; all three existing members must accept any new member. As part of Plan B, the Canadian Government has been fond of pointing out that aside from whatever it decides might be its stance on the accession of Quebec to NAFTA, there exists a large degree of uncertainty in the results of reopening NAFTA negotiations. Furthermore, it will require a long time just to begin the process of negotiation, as explained by the Honourable Mr. Paul Martin, Minister of Finance, in a speech he gave to the Association des professionnels en développement économique du Québec:

"First of all, Quebec could not seek entry to NAFTA until, for one thing, it had officially separated, and then after it had become a member of the World Trade Organization. Fulfilling these two conditions could take a minimum of two to three years, not counting the time required -- several more years -- to pass the obstacle course of the American Congress." If Québec does reopen the NAFTA accession process, it will find itself in a far worse position than it currently enjoys. It is unlikely to get "Fast Track" authority from Congress, meaning that any agreement would be examined provision by provision on the floor of the US Congress. Every protection it was able to get from being a part of Canada would no longer apply. This would mean renegotiation of areas of the treaty that have long irked the Americans. This would include agricultural policy (including milk production), protection of cultural industries, the preferential access to the American market enjoyed by the clothing industry, the Province of Quebec's ability to preferentially prefer in its procurement process, regional development policies, and most importantly the entire NAFTA dispute resolution mechanism.

The American desire to remove the dispute resolution mechanism has been quite vocally stated by American legislators.

"We believe that ... (the) dispute settlement mechanism should not be extended in future trade agreements to any other country, including the present NAFTA accession negotiations with Chile... The United States should not agree to extend this ... system to any other country." This would mean that Quebec would be a junior partner in NAFTA. It would not have the same rights and privileges as the preexisting members would. Furthermore, any firm that wanted to export to the rest of North America and wanted those protections against dumping and countervailing duties, which are easily protected with the dispute settlement mechanism but not under the old method of going through the American court system, would not want to locate or remain located in Quebec.

What has been shown here is that irrespective of the wishes of ROC and Quebec after separation, the negotiations for NAFTA accession will be greatly affected by the involvement of the United States, and that the US will not accept a status quo NAFTA agreement that maintains all of Quebec's current privileges under the treaty. ROC, is also unlikely to want to maintain the status quo with Quebec. The NAFTA agreement will almost certainly be the limit to which ROC maintains an economic union with Quebec. Any attempt to negotiate a further economic union beyond NAFTA would likely bring the US into negotiations as well, based on the example of the creation of NAFTA in which Canada intruded into American and Mexican negotiations on free trade.

ROC (especially Ontario and the Maritime Provinces) is likely to want to have Quebec be a member of NAFTA. ROC however, will not jeopardize it's $165 billion in annual exports made to the United States in order to stabilize its $33 billion in annual trade with Quebec. In "Beyond the Impasse: The Economic Dimensions of a Canada-Quebec Partnership", Kenneth Norrie and Michael Percy review the post secession environment. The following excerpt is a large portion of their conclusion:

"Our conclusion is that the concept of a continuum of economic integration options possibilities breaks down at the point where a federal arrangement becomes a confederal one. The choice set after political secession effectively becomes a single point: common membership in NAFTA, perhaps with some ad hoc bilateral arrangements dealing with specific Canada-Quebec issues. This off-the-shelf option is an appealing short-term response by Canada given the uncertainty and confusion that would attend Quebec secession. It is also an effective enough integration framework, however, that once in place the incentive to look to a Canada-Quebec partnership will wane. There is little chance that Canada and Quebec would seek to nest a special bilateral partnership within this broader framework." What this means is that the negotiations on the entrance of Quebec to NAFTA will be the focal point of the future economic arrangement that ROC will have with Quebec.

Inevitably, ROC will side with the US on most of its agenda to change Quebec's rights in NAFTA. With Quebec gone Canada will not feel the need to protect its dairy industry, and will in fact find itself preferring that Quebec not have those protections either. ROC will also be glad that Quebec will no longer (since it is a nation and not a sub-national unit) have the right to preferential procurement. ROC will however side with Quebec on the issue of protecting culture, but it might not be enough.

"Today, as we speak, there are forces in Washington that would like to renegotiate NAFTA's cultural provisions -- provisions that protect Canada's, as well as Quebec's cultural industries. Canada can stand up to the pressure because NAFTA has already been negotiated and ratified. This would not be the case if Quebec had to negotiate membership. For those who think language would protect Quebec from American pressure, they should recall the fierce fight the United States had with France recently over protection of that country's cultural industries -- a fight that the United States does not consider over. And they should consider whether a separate Quebec -- a much smaller economy than France, a country seeking accession to NAFTA, a country that would need trade with the United States much more than the United States would need trade with it -- would be able to withstand such pressure." The best situation for both Canada and Quebec is to continue being united. It preserves the status quo that has been successful and avoids not only the pain of a messy separation but also the issues of trying to deal with the American Congress to negotiate an accession to NAFTA for Quebec.

In conclusion the definition of Canada provided in "The Doubter's Companion: A Dictionary of Aggressive Common Sense" a book that was written by John Ralston Saul, perhaps the most famous Canadian intellectual and the husband of Her Excellency the Right Honourable Adrienne Clarkson Governor General and Commander-in-Chief of Canada, is useful in understanding Canada,

CANADA

1. So complicated that nobody knows how it works, which causes Canadian social scientists to talk about it all the time, which causes foreigners to say it's boring because nothing ever happens.

2. The most decentralized country in existence, which causes Canadians to complain constantly about the power of the central government.

3. Administered under the third oldest constitution in the world, which causes Canadians to insist that it has never worked and must be changed.

4. The only major country in which the two leading western cultures have managed to live peacefully together for several centuries, causing Canadians to insist that they cannot live together.

5. Burdened by the laziest élite of any developed nation; people who have made their fortunes by selling off the country's resources and by working for more energetic foreigners. They are most comfortable on their knees, admiring those from larger countries who have purchased them.

6. A country where 95 per cent of the land is north of the major cities, which causes its urban inhabitants to treat their hinterland as an embarrassing and backward region, while pretending that they themselves are situated hundreds of miles to the south, somewhere between New York and FLORIDA.

References

"Notes for an address by the Minister of Finance and Minister responsible for the Federal Office of Regional Development (Quebec), Paul Martin, to the Association des professionnels en développement économique du Québec" http://www.fin.gc.ca/newse95/oct17spe.html. Finance Minister's Office: Quebec, Canada. October 17, 1995.

"Loss of NAFTA'S Protection and Use of the Canadian Dollar Doomed to Failure: the Dead-end for Quebec's Separation" http://www.fin.gc.ca/newse95/oct17pre.html. Finance Minister's Office: Quebec, Canada. October 17, 1995.

"Notes for an address by the Minister of Finance, The Honourable Paul Martin, presented to l'Association des MBA du Québec" http://www.fin.gc.ca/newse95/95-074e.html. Finance Minister's Office: Ottawa, Canada. September 26, 1995.

Cairns, Alan C. "Unity Link - Looking into the Abyss: The Need for a Plan C" http://www.uni.ca/cdhowe8.html. Unity Link: Ottawa, Canada. September 30, 1997.

Côté, Marcel and Johnston, David. "If Québec Goes... : The Real Cost of Separation." Stoddart Publishing: Toronto, Canada. 1995.

Young, Robert A. "The Secession of Quebec and the Future of Canada". McGill-Queen's University Press: Montreal PQ & Kingston ON, 1995.

Norrie, Kenneth and Percy, Michael. "Beyond the Impasse (Sortir de l'impasse): The Economic Dimensions of a Canada-Quebec Partnership," Policy Options (Options Politiques), March 1998.

Saul, John Ralston. "The Doubter's Companion: A Dictionary of Aggressive Common Sense." Penguin Books: Toronto, Canada. 1994.

Return to Drake Undergraduate Social Science Journal Home Page