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By Annette Baker Fox

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Throughout the regional free trade negotiations the government had Page 23 been able to save these systems, which strongly favored Quebec. The GATT final act included "tariffication" of such arrangements. " Albeit by French intransigence, Canada did succeed in excluding "cultural industries," just as it had done despite American pressure in both the Free Trade Agreement and NAFTA. The preponderant American role in Canada's foreign economic policy dates only from World War II. Previously, Canada's trade with Britain had been of greater importance, but with the decline in British fortunes and especially since Britain joined the European Common Market in 1972, Canada's trade with Britain has greatly diminished in significance.

Although the federal government handled the conscription problem much more tactfully and sensitively in World War II, the memory of the differences lingered Page 12 and not just in Quebec. However, by the time the cold war developed and Louis St. Laurent, about to become prime minister, began to press for some defensive arrangement with Western Europe, differences between the province and the federal government over global alignment policy had more or less disappeared. " Status, more than substance, has been at stake; and the controversy has centered on who was to decide rather than on what was to be decided.

In fact, the two economies are so integrated that if one country tries to retaliate for a perceived trade injury to some segment, another segment is likely to be harmed in return. Nevertheless, the degree of harm is uneven, and Canada may sometimes suffer unintentionally when the United States makes a retaliatory move toward some more distant country. Small wonder that for Canadian foreign economic policy the central concern is the United States. After the Tokyo Round of tariff reductions in GATT in 1979, about 60 percent of American exports to Canada and about 80 percent of Canadian exports to the United States were admitted without duty.

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