Foreign Affairs Minister Chrystia Freeland misses the point about American power

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Prime Minister Trudeau and Minister Freeland speak with media regarding the American steel and aluminum tariffs in Ottawa. Photo: Adam Scotti/PMO

Foreign Affairs Minister Chrystia Freeland was recognized last week as Diplomat of the Year by the American establishment magazine Foreign Policy.

In her Washington, D.C. speech Freeland referred to the U.S. as the leader of the free world and concluded her remarks suggesting that Canada and "our friends in the world democracies" were "shoulder to shoulder" and were "strongest with America in our ranks and, indeed, in the lead."

Freeland was content to invoke the "rules-based" international order established after the Second World War as the standard for conduct of international relations.

The reality she left unstated is that over the past seven decades the dominant feature of world politics has been the exercise of American hegemonic power.

U.S. military power has underscored postwar politics, beginning with the period when the U.S. was sole possessor of nuclear weapons. When it dropped the atomic bomb to conclude the war against Japan, the U.S. sent a clear signal to Russia, its wartime ally, and the world, that America had the intention and the means to advance and protect its interests worldwide.

American militarism -- cloaked when appropriate as anti-communism -- has been the main feature of postwar world politics. U.S. war-making, bombing and outright invasion of other countries has been continuous from before the major Korean engagement in 1950 until Afghanistan today.

From a humanitarian perspective, bloated U.S. military spending -- now in excess of $1 trillion per year -- represents the most doubtful allocation of resources in the history of the world.

American business interests prevailed in the creation of postwar trading and finance institutions. As the predominant power, the U.S. set the agenda and approved the rules.

Led initially by the U.S., a plan to pursue full employment and improved living standards through international commerce culminated in approval in 1948 of the Havana Charter and the decision to create the International Trade Organization (ITO). Ultimately U.S. president Truman decided to kill the new organization and the Havana Charter rather than seek approval from the U.S. Congress.

In place of the ITO, nations were encouraged to join the U.S.-led eight-member General Agreement on Tariffs and Trade (GATT).

The Americans aimed to have trade restrictions replaced by numerical tariffs. This "trade liberalization" meant that U.S. exporters could calculate the cost of entering a foreign market and pay the tariff -- if exporters decided goods could still be sold at a profit -- instead of having to negotiate entry for every product with other governments.

Nations were able to set their own tariffs to nurture their own industries. But admission to the GATT implied that nations accepted (and could emulate) the American regime of protectionist trade remedy legislation.

For countries anxious to sell products abroad, the reality was that joining the GATT meant accepting that American protectionist laws governed trade.

This multilateral "rules-based" trading regime worked to American advantage. When in the 1980s other nations showed resistance to including services trade, intellectual property, and investor rights in a regime where these would be subject to American protectionist law, the U.S. decided to break with the GATT and proceeded to arm twist first Israel (which resisted strongly) and then Canada (which did not) into signing so-called free trade agreements that protected U.S. patents and intellectual property, investor rights, and services trade.

The American trade and investment agenda was driven by its global corporations. Largely as a result of corporate lobbying, the World Trade Organization was established in 1995 as a successor to GATT, with a mandate to promote globalization.

Now to howls of rage around the world and within the American establishment but with considerable support in Congress and across the U.S., the Trump administration has mounted a protectionist attack on its trading partners.

In this fragile trade climate, Foreign Affairs Minister Freeland told her American audience what it wanted to hear: the U.S. had played and could play again a beneficial role in the world.

At some point, Canada needs a government that will connect the dots between made-in-U.S.A. international rules and world economic inequities, and instead of hoping for enlightened U.S. leadership will join with other countries to create a just world economic order.

Duncan Cameron is president emeritus of and writes a weekly column on politics and current affairs.

Photo: Adam Scotti/PMO

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