Brian Mulroney divided and reshaped Canada through free trade with the United States

Brian Mulroney led the Progressive Conservatives to power when I was early in my journalism career. But his political life was never something I covered in detail. His decision to negotiate a free trade agreement with the United States transformed Canada’s economic history and nevertheless took over a large part of my professional life for several years.

Mr. Mulroney died Thursday at age 84 in a Florida hospital after a fall at his home. Alan Cowell wrote a detailed obituary of Mr. Mulroney that documented his many significant accomplishments, but also the allegations of financial malfeasance and influence peddling that followed his tenure. These allegations tarnished his reputation, even among his former supporters, and contributed to the eventual demise of the federal Progressive Conservative Party.

(Read: Brian Mulroney, the prime minister who led Canada to join NAFTA, dies at 84)

I reported on free trade negotiations primarily from Washington. Unlike in Canada, where it often seemed as if every molecule of political and public debate was absorbed by the talks, the negotiations there barely registered.

Nothing in my professional experience has polarized Canadians as much as Mr. Mulroney’s move toward closer economic integration with the United States. Whatever the economic benefits of free trade, Canadian industry at the time consisted largely of secondary, often inefficient factories producing a limited range of products to evade import duties of up to 33 percent. on manufactured products. Workers in these factories, as well as the communities that depended on them, were rightly concerned that shipments from their parent companies’ larger, more efficient U.S. factories would eliminate their jobs under free trade.

(The automobile industry was the exception. In 1965, Canada and the United States reached an agreement allowing American cars to enter Canada duty-free in exchange for continued production in Canada, most of which part was then shipped to the United States.)

Mr. Mulroney’s decision to promote free trade represents a reversal of the Conservative Party’s legacy. Early in Canadian history, tariffs were relatively low and primarily intended to raise money for the government. In an era without an income tax, tariffs were effectively a sales tax on imported goods. But John A. Macdonald, Conservative leader and the country’s first prime minister, campaigned successfully in the 1878 election on what he called national politics, a key element of which was the imposition of high tariffs to create an invisible wall around Canada to protect its industries. This lasted more or less a century, until Mr. Mulroney arrived.

One of Mr. Mulroney’s selling points for a free trade agreement was the possibility that it could end seemingly perpetual trade disputes like the one over Canadian softwood lumber exports to UNITED STATES.

Although Mr. Mulroney and President Ronald Reagan made a big public display of their friendship, the talks did not go smoothly. When I met with a group of reporters on a Sunday morning in October 1987 in an ornate meeting room in the U.S. Treasury building, it was far from certain that a deal would be announced. But a deal had been reached, and it included a system for resolving trade disputes, the main sticking point, although it wasn’t exactly what Mr. Mulroney had promised.

The following year, the federal election was fought around free trade and Mr. Mulroney won.

The later addition of Mexico to the creation of the North American Free Trade Agreement – ​​and the globalization of trade that followed after the agreement that created the World Trade Organization reduced many tariffs around the world – has left the free trade agreement between Canada and the United States in the shadows of history.

But the original free trade agreement had profound effects, both good and bad, on the Canadian economy. Jobs have effectively disappeared. Since 2001 study by the National Bureau of Economic Research in Cambridge, Massachusetts, found that in Canadian industries that had been hit by the largest tariff reductions, jobs fell 15 percent between 1989 and 1996. During the same period, imports from the states United States of products previously blocked by high tariffs have soared. 70 percent.

On the positive side, at least in economic terms, the study found that in sectors formerly protected by tariffs, labor productivity – what factories earned for each hour of work – increased at an annual rate significant compound of 2.1 percent. Increased productivity generally helps lower prices for consumers and, of course, benefits factory owners and investors.

Canada has not become, as Mr. Mulroney’s critics feared, the 51st state after free trade. But the deal failed to deliver on some of its promises. The dispute over softwood lumber continues to drag on decades later. And not all communities benefited from the rebound in jobs and factories that ultimately benefited the economy as a whole.

(Read: This city once made much of what Canada bought. But not more.)

Moreover, as Alan details in Mr. Mulroney’s obituary, free trade and several other major changes he brought to Canada during his tenure as prime minister were ultimately pushed aside in public memory. The cause was a story directly involving Mr. Mulroney that I covered: his acceptance, as an investigation revealed, of “envelopes stuffed with cash” in three meetings with a German lobbyist in the fields of arms and aviation.


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Originally from Windsor, Ontario, Ian Austen was educated in Toronto, lives in Ottawa and has reported on Canada for The New York Times for two decades. Follow him on Bluesky: @ianausten.bsky.social.


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