August 29, 1988 (33rd Parliament, 2nd Session)

Mr. Johnston:

Madam Speaker, I think the question is highly hypothetical. How do we know what the reaction will be on either side of the border if the agreement should fail? I think the reasons for its failure would be important, but implicit in the Hon. Member's question is that there would be hostility and lack of trust, that we would essentially revert to where we were, that the protectionist forces might increase, and that Canada would not have the benefit of the so-called side-swipe provision which is in the agreement. I suppose that is a possibility.
Another possibility is that there could be a change of administrations on both sides of the border and another look would be taken at an agreement in a different form. It is a hypothetical question. My own preference would be that it not fail, but that there be a very strong commitment on both sides to improve it in some of the areas I have touched upon.
That ties in with a third question as well, what would be the impact on the Auto Pact if the agreement were to fail. Of course, the Auto Pact is terminable on one year's notice. Again, the question presumes an underlying hostility. I think the real issue is that in business and commerce, by and large, as the Hon. Member knows, if an agreement is operating to the advantage of both parties, it is unlikely to be terminated. On the other hand, if it is operating only to the advantage of one party, then it is very likely to be terminated, irrespective of this particular agreement.
That was the point I made earlier in regard to the sovereignty argument. If this agreement operates dramatically to the benefit of the United States and to the detriment of Canada, a future Canadian Government will be in a position to terminate it and to receive a mandate from the Canadian people to do so.
The Hon. Member asked if we would have any chance of getting sector by sector agreements if the agreement were to fail. I said earlier that I basically favour sector by sector agreements. Who would not favour sector by sector agreements? I suppose it is what one would call cherry picking, if
August 29, 1988

one could get away with it, but it has to be done on a reciprocal basis.
When we sought agreements on urban transport, steel, informatics and agricultural implements, the four areas that we last tried to do sector by sector agreements on, we were quickly told by the United States administration that it was not interested. I am not so sure that the failure of this agreement would have any impact one way or the other. I think the difficulty is that sector by sector is a non-starter, would be frowned upon by GATT, and very likely would not be approved by the requisite two-thirds of the membership.