NAFTA is the cornerstone of Canadian prosperity. Access to the US market is a necessity. Without NAFTA Canada would be a poorer even more isolated country. That being said, only 45 % of Canadians feel that NAFTA has benefited the country. This incredibly low number says more about Canadian nationalist philosophy, abetted by the media and politicians than it does about the reality of the world we live in.

NAFTA is a free trade area, economically based, and leaves political decision making in the hands of its member states. The EU is a customs union with various levels of political and legal institutionalism that directly impact (only partially however) its member states national activities. The EU is not at all similar to NAFTA with differing economic and political motivations creating each regional unit. NAFTA has allowed Canada to double its GDP since 1988, and increase its exports to the US and avoid through the dispute resolution mechanism, rampant US protectionism.

Why is Regionalism an important issue for Toronto?
Regionalism and Globalization are linked. Far from having a ‘world economy’ (we are not even close), the world is really composed of regional economic units – the vaunted ‘Triad’, though South East Asia is not nearly as coherent a bloc as NAFTA or the EU. In a regional world economy intra-regional trade is more important and vital to regional member states than extra-regional trade. For Canada and for Toronto, which is a city that lives primarily as a supply centre for the US market, the United States is the real focus and challenge. Toronto must become more competitive within this regional economy.

Canada and Toronto are receiving less foreign direct investment than they should, with much more FDI as a % of GDP going to the States and Mexico. There are many reasons for this, but high taxes, high debt, lower economic returns and a debilitating number of government interventionist policies preclude FDI. In fact one reason for the loonie’s demise is that Toronto and Canada lose an average of $16 Billion of net portfolio investment per annum (about 60 % from Toronto). Such a trade if not addressed will create an increasingly disadvantage and poorer Toronto within the NAFTA community. Tax reduction, debt reduction and the obliteration of monopolies and oligopolies would be a good start.