Chrétien calls for global free trade - PM explains radical conversion

By Julian Beltrame, The Ottawa Citizen, 10 April 1997

WASHINGTON -- Prime Minister Jean Chrétien gave his most detailed explanation to date of his conversion from free trade critic to unabashed enthusiast yesterday in a free-wheeling discussion of philosophy and policies that will shape his upcoming re-election bid.

Speaking to about 800 people at the National Press Club, Mr. Chrétien appeared to be road-testing many of the themes he will flesh out in the campaign he is expected to launch soon.

"I was skeptical like many others about the free trade agreement, (particularly) when it was a bilateral one with America. We're afraid of you guys, you're big and we're small," he said.

But the North American Free Trade Agreement has brought massive economic benefits for both Canada and the U.S., he said, adding that global free trade will be the engine of economic growth.

Mr. Chrétien pointed out that two-way trade between Canada and the U.S. increased 45 per cent during the past four years and many Canadian firms have become competitive world-wide as a result of the opportunities created by the global economy.

"Of course, there is some disruption. Some factories were affected in my own district. It's inevitable, but at the same time others have replaced them," he continued. "Some go and some come, but the best survive and you become more competitive."

Mr. Chrétien's comments here appeared designed to anticipate attacks from Conservative Leader Jean Charest that he and the Liberal party once opposed the free trade agreement with the U.S.

The Tories issued a list of questions for the prime minister yesterday in which Mr. Chrétien's flip-flop on the issue is called "opportunistic," though a "good thing."

Mr. Chrétien told his Washington audience that his trade missions to Asia taught him to be confident that Canadians will prosper as the country moves to expand its trading relations in Latin America and the Asia-Pacific.

"I'm not pessimistic about the 21st century because you have one billion 200 million people in China and they will develop a middle class; they will need to buy all sorts of products and both you and I will be there selling.

"We (Canada) can sell them North American technology even in French."

Mr. Chrétien said establishing trade and political links with Asian countries is the biggest challenge facing Canada and the U.S. He noted that already five of Canada's 10 largest trading partners are in Asia.

Mr. Chrétien also had assurances for the 600,000 anglophones living in Quebec, urging them not to abandon the province in fear, saying their rights will be protected by the federal government.

"Quebec is their province and they should stay there," he said. " We will use the Canadian Constitution to protect their rights."

He said the majority of Quebecers will continue to reject the separatist option if they are asked a direct question -- "Do you want to separate from Canada?"

Under the guise of underlining the differences between Canada and the U.S., the prime minister bragged that Canada had gone from having the worst fiscal record next to Italy prior to his coming to office, to the best with a deficit of less than two per cent of gross domestic product. Canada would have a budget balance in 1998-99 fiscal year if it calculated deficits like the U.S., he said.

But the critical test for governments are what they do with the freed-up funds that once went to debt servicing, he stressed.

"I believe that governments in Western countries will be judged not only on their ability to get their fiscal house in order, but also on the priorities they choose once they have fiscal room to act."

He said his government's priorities are alleviating child poverty, allocating resources to research and development and infrastructure to create jobs, and modernizing "our cherished public health-care system."

Asked to comment on his friendly relationship with U.S. President Bill Clinton in view of his charge that former prime minister Brian Mulroney was too cozy with past U.S. president's, Chretien gave short shrift to the suggestion.

"Good and not cozy," he responded. "Good and not cozy."

And in an effort to draw a sharp line of distinction between Canada and the U.S., the prime minister challenged U.S. politicians who continually bad-mouth the United Nations.

"I will take the UN in Montreal tomorrow," he said, pointing out the world body brings more economic benefits to its home base New York than the $1.4 billion in back dues the U.S. Congress refuses pay. The remark drew wide applause and laughter.