In Between Countries: Australia, Canada, and the Search for Order in Agricultural Trade 9780773566866

Citation preview

In Between Countries Australia, Canada, and the Search for Order in Agricultural Trade

With increased interest in Canada and Australia over the last decade, students of foreign policy have produced an increasingly diverse range of scholarly material concerning the role and issue-orientation of these two countries. But until now there has been no study that bridges the mode of analysis found in the distinctive sets of comparative and international relations literature. In Between Countries fills this gap by providing a detailed study of similarities and differences between Australia and Canada relating to agricultural trade negotiations. The book explores how and why two self-identified middle powers adopted such distinctive styles in their diplomatic approaches. Focusing on a period of crucial developments in diplomacy, Andrew Cooper analyses the policies of each country, emphasizes distinctive interests and policies, and systematically compares key features of the actions of the two countries. While the book is very much policy driven, it is also firmly based on an appreciation of the distinctiveness of Australia and Canada. Cooper argues that the contemporary expression of duality in diplomatic approach can only be fully understood when set against the divergent historical experiences of the two countries. Not only has the structural, situational, and psychological location of Australia and Canada set them apart throughout the postwar period, but their pattern of political development has differed appreciably. ANDREW F. COOPER is professor of political science, University of Waterloo.

This page intentionally left blank

In Between Countries Australia, Canada, and the Search for Order in Agricultural Trade A N D R E W F. COOPER

McGill-Queen's University Press Montreal & Kingston • London • Buffalo

© McGill-Queen's University Press 1997 ISBN 0-7735-1667-0

Legal deposit fourth quarter 1997 Bibliotheque nationale du Quebec Printed in Canada on acid-free paper This book has been published with the help of a grant from the Humanities and Social Sciences Federation of Canada, using funds provided by the Social Sciences and Humanities Research Council of Canada. Funding has also been received from the University of Waterloo Social Sciences and Humanities Grant Fund. Material published previously as "Middle Power Leadership and Coalition Building: Australia, the Cairns group and the Uruguay Round of Trade Negotiations," (with Richard Higgott) International Organization 44 (1990): 589-632; and "Like-Minded Nations and Contrasting Diplomatic Styles: Australian and Canadian Approaches to Agricultural Trade," Canadian journal of Political Science 25, no. 2. (1992): 349-79 is reprinted here by permission. McGill-Queen's University Press acknowledges the support received for its publishing program from the Canada Council's Block Grants program.

Canadian Cataloguing in Publication Data Cooper, Andrew Fenton, 1950In between countries : Australia, Canada, and the search for order in agricultural trade Includes bibliographical references and index. ISBN 0-7735-1667-0 1. Produce trade—Canada. 2.. Produce trade— Australia. I. Title. HD1785.c66 1997 380.i'4i'097i C97-900676-7

To Derek and Joan Cooper

This page intentionally left blank

Contents

Preface

ix

Acronyms xiii i Middle Power Commonalities and National Differences 3 2. Divergent Followership

27

3 Hard and Soft States: The Domestic Context of Agricultural Trade 5 5 4 Hanging Separately: Coping with Uncertainty 84 5 Hanging Together: The Evolution of the Cairns Group 112 6 The Politics of Initiative in Australia

143

7 The Politics of Accommodation in Canada 8 Commitment and Convenience Notes

225

Index

269

208

175

This page intentionally left blank

Preface

The study of Australia and Canada has represented an academic growth industry over the last decade. Studies of Australian and Canadian public policy have been conducted across a wide spectrum of domestic matters. Students of foreign policy have contributed to an increasingly diverse range of scholarly material concerning the role and issue-orientation of these two countries. What has been missing is a study that bridges the mode of analysis found in these distinctive sets of comparative and international relations literature. This book tries to fill this gap. It has evolved out of my interest in Australian and Canadian political economy with specific reference to the politics of agricultural trade. At one level this interest is very much policy driven. Multilateral trade negotiations through the GATT have been dominated by the agricultural trade issue. Moreover, as demonstrated by the formation of the Cairns Group at the beginning of the Uruguay Round, the logic and importance of the comparative examination of "middlepower" diplomacy has been confirmed. At another level, however, the book is firmly based on an appreciation of the distinctiveness of Australia and Canada. While the nature of the differences as well as the similarities between the two countries is confirmed through the Cairns Group experience, it is the thesis of this work that this contemporary expression of duality in diplomatic approach can only be fully understood when set against the divergent historical experiences of Australia and Canada. Not only have the structural, situational, and psychological locations of Australia and Canada set them apart throughout the post-1945 period, but their pattern of political development has differed appreciably.

x

Preface

In writing this book I have accumulated the wide number of debts one would expect in this type of project. First and foremost I would like to acknowledge the support of the Social Sciences and Humanities Research Council of Canada. It is only with the backing of this institution that substantive research along these lines can be carried out. The people at McGill-Queen's University Press provided a model of speed and efficiency, which other publishers should emulate. I appreciate especially Professor D.H. Akenson's enthusiasm for the project. I am also grateful for permission to include in this book some material that has been published previously as "Middle Power Leadership and Coalition Building: Australia, the Cairns Group and the Uruguay Round of Trade Negotiations;" (with Richard Higgott) International Organization 44 (Autumn 1990): 589-632; and "Like-Minded Nations and Contrasting Diplomatic Styles: Australian and Canadian Approaches to Agricultural Trade," Canadian Journal of Political Science 25, no. 2 (1992): 349-79 I would also like to thank various Australian and Canadian institutions, the resources of which contributed greatly to the endeavour. These bodies include the Parliamentary Library of Australia; the National Library of Australia; the National Archives of Australia; the National Archives of Canada; and the libraries located in the Australian Department of Foreign Affairs and Trade and the Canadian Department of Foreign Affairs and International Trade. I am also appreciative of the help provided to me by a considerable number of Australian and Canadian state officials in Ottawa, Canberra, Geneva, Brussels, and Washington, DC. The generosity of an array of academics on both sides of the Pacific faciliated the exercise. The contributions of Andrew Mack, John Ravenhill, Stuart Harris, Richard Leaver, Peter Drysdale, and Hugh Collins in easing my way into the land of Oz was invaluable, as was the support in Canada of John English, David Haglund, Robert Boardman, and Lawrence Woods. At my home base, in the Department of Political Science, Joanne Voisin supplied abundant technical assistance. My main sources of academic encouragement, advice, and criticism were from Richard Higgott, Ann Capling, and Kim Nossal, a trio of individuals who have transcended the external/internal divide in their own studies of Australian and Canadian policy and politics. Each of them has made a clear and constructive contribution to this work. By good fortune I met Richard at the outset of my research trips to Canberra. His intellectual energy and warm sense of hospitality eased the jetlag and built a sense of academic community for me in Australia. Ann commented on each of the chapters with a fine combination of wit and wisdom. Her appreciation of the nuances of Canadian and Aus-

xi

Preface

tralian political history remains unrivalled. Kim shared with me the insights derived from his extended explorations of Canadian and Australian foreign policy, enlivened by both his realism and keen sense of humour. Finally, I would like to express my indebtedtness to my family. Sarah Maddocks and Charles Cooper put up with both my physical absence and mental distraction with abiding grace and tolerance. More formatively, my parents instilled in me a love of travel and learning. It is to them with love and respect that I dedicate this book.

This page intentionally left blank

Acronyms

ABARE

Australian Bureau of Agricultural and Resource Economics; formerly BAE, Bureau of Agricultural Economics ACTU Australian Council of Trade Unions ADM assistant deputy minister (Canada) AIDC Australian Industries Development Corporation ALP Australian Labor Party AMS aggregate measure of support ANZUS Australia-New Zealand-United States (security treaty) APEC Asia-Pacific Economic Co-operation ASEAN Association of South East Asian Nations AUSTRADE Australian Trade Commission BQ Bloc Quebecois CAP Common Agricultural Policy CFA Canadian Federation of Agriculture CIEC Conference on International Economic Co-operation CPI Consumer Price Index (Canadian) CSR Colonial Sugar Refining Co. Ltd CWB Canadian Wheat Board DEA Department of External Affairs (Canada); after 1989: EAITC; after 1993: DFAIT DFAIT Department of Foreign Affairs and International Trade (Canada); formerly DEA and ETAIC DFAT Department of Foreign Affairs and Trade (Australia) DFC Dairy Farmers of Canada EAITC External Affairs and International Trade Canada; formerly DEA

xiv Acronyms

EU EEP FAO FIRA FPRB FTA G-J G-77 GATT GNP GPMC IAC IDRC IMF IGA IPE ITAC ITO LDC LIFT MTN NAFTA NATO NCP NDP NEP NFF NFU NGO NIC NIEO NORAD NTB OECD PQ PRC PSE

European Union; formerly the European Economic Community: EEC; and the European Community: EC Export Enhancement Program (U.S.) Food and Agriculture Organization Foreign Investment Review Agency Food Prices Review Board (Canadian) Free Trade Agreement (Canada-U.S.) Group of Seven most industrialized countries Group of Seventy-Seven less developed countries General Agreement on Tariffs and Trade Gross National Product Grocery Products Manufacturers of Canada Industries Assistance Commission (Australian) International Development Research Centre International Monetary Fund International Grains Agreement international political economy International Trade Advisory Committee (Canada) International Trade Organization less developed country Lower Inventories For Tomorrow (Canadian) multilateral trade negotiations North American Free Trade Agreement North Atlantic Treaty Organization National Country Party (Australia); Country Party before 1975; changed to National Party in 19 8 z New Democratic Party National Energy Program National Farmers' Federation (Australia) National Farmers' Union (Canada) non-governmental organization Newly Industrializing Country; or NIE Newly Industrializing Economy New International Economic Order North American Aerospace (before 1981, Air) Defence Command non-tariff barrier Organisation for Economic Co-operation and Development; fomerly the Organisation for European Economic Co-operation: OEEC. Parti Quebecois People's Republic of China producer subsidy equivalent

xv Acronyms

SAGIT SDI TNO UNCTAD UFA

Sectoral Advisory Group on International Trade (Canada) Strategic Defence Initiative (U.S.) Trade Negotiations Office (Canada) UN Conference on Trade and Development PUnion des producteurs agricoles (Quebec)

This page intentionally left blank

In Between Countries

This page intentionally left blank

i Middle Power Commonalities and National Differences

The pairing of Australia and Canada has become a rich source for studies comparing their approaches toward the International Political Economy (IPE). Robert Keohane and Joseph Nye in their influential work Power and Interdependence used Canadian-United States and Australian-United States relations as case-studies to illustrate some of the major themes of foreign economic policy in the post-1945 era.1 In terms of substantive policy issues the two countries have been the focus of attention for detailed studies on a wide number of topics, including foreign aid, foreign direct investment, immigration, and economic sanctions.2 This interest in matching Australia and Canada has been largely informed by their image as countries possessing similar attributes and habits in the international system. A common point that runs through all of this literature is that Australia and Canada belong to a special category of countries, those that lie between the "greats" and the lesser powers. Annette Baker Fox refers to Canada and Australia as the "quintessential" middle powers.3 Another writer suggests, in a similar vein, that what "harmonizes" Canada and Australia is their selfperception as middle powers - a perception that "greatly influences policy and the implementation of policy, as well as projecting an image of the way they want to be viewed by the outside world."4 The editor of a recent collection of articles on Australian foreign policy adds: "Australia and Canada are neither great powers nor small powers; they occupy an in-between rank in the hierarchy of states and for this reason are often referred to as middle powers. Both have at times described themselves as such and have laid claim to the right, as middle powers, to a special role in world affairs." 5

4 In Between Countries

Being in the middle is the way that Canada and Australia have commonly defined themselves. The self-perception of Canada as a middle power has been particularly well honed. Developed in the context of World War II, this perspective acted as the central guide for both the ideas and the diplomatic practice during the era of Pearsonian internationalism, from the late 19405 through to the 19605. This middle power orientation was associated with the emergence of a distinctive worldview. At its core the concept of middle power diplomacy signified "a certain type and a certain content of foreign policy" based on an attachment to multilateral institutions and a collaborative world order.6 These habits epitomize the leitmotif established by Keohane for this category of countries: "a middle power is a state whose leaders consider that it cannot act alone effectively but may be able to have a systematic impact in a small group or through an international institution."7 The consensual acceptance of the symbolic and instrumental underpinnings of middle power diplomacy waned during the late 19605 and 19705. In keeping with Prime Minister Pierre Trudeau's own critical outlook, a comprehensive review of Canadian foreign policy released in 1968 argued that this long-standing way of assessing Canada's place in the international arena needed to be replaced. Contesting the relevance of the status quo, this revisionist line of argument emphasized the difficulties that the notion of Canada as a middle power presented in coming to terms with new complexities. As such the review concluded that "Canada's 'traditional' middle-power role in the world seemed doomed to disappear."8 Despite such predictions, however, the orthodoxy of middle power diplomacy displayed remarkable resilience in the expression of Canadian foreign policy. Notwithstanding his original distaste for the conventional wisdoms concerning Canadian diplomacy, Trudeau's declaratory language eventually took on many of the familiar characteristics of Canadian foreign policy. In the midst of his well-publicized initiative on disarmament and peace, for example, Trudeau proclaimed: "Preventing the spread of nuclear weapons is in the interest of superpower, middle-power and micro-state alike."9 The Brian Mulroney era was as rich in contradictions. Keen to depart from the Liberal legacy, Mulroney's Progressive Conservative government took a very different direction in many components of its foreign policy. This break was particularly evident in its warmer attitude towards the United States and a continental economic relationship. Yet amidst the controversy over this tenor and direction, the salience of the middle power perspective for Canadian foreign policy remained. The Mulroney government continued to define and interpret its actions in accordance with the fundamental tenets of middle power diplomacy. As one respected Canadian non-governmental organization

5

Middle Power Commonalities and Differences

stated on the basis of the Conservatives' record in their first term of office: "Canada's primary identification today is not that of a junior continental partner to a superpower, nor a second-tier actor in the Western Summit Seven or the North Atlantic Treaty Organization (NATO). Instead it is that of a vigorous, activist middle power."10 Australia has an equally entrenched self-image as a middle power. In the postwar reconstruction period, Australia joined Canada in demanding some form of recognition of the status of middle powers by the international community, both as a means of avoiding domination by the great powers and of differentiating between the contributions made by secondary powers. Inspired by the ideals and energy of Dr H.V. Evatt, Australia campaigned in robust fashion to shape the post1945 institutional architecture. Denouncing the veto in the Security Council of the United Nations as conferring excessive privileges on the greats, Australia advocated that the international system be made more equitable through the granting of a wider jurisdiction for the General Assembly and the elevation of the Economic and Social Council into a principal organ of the world organization.11 This self-image of Australia as a middle power diminished somewhat throughout the Robert Menzies era. In addition to his desire to distance his government from Evatt's attitudes and rhetoric, Robert Menzies had little personal or political attachment to the middle power conceptualization. In terms of content Menzies remained more attached to the older tenets of Australian foreign policy, with an emphasis on special friendships with Britain and the United States, rather than focusing upon the United Nations and other international institutions. In terms of tone Menzies's preference was for caution and stability rather than a crusading activism. While acknowledging that Menzies's preference would have been for Australian diplomacy to return to its pre-Evatt roots, however, it must be noted that Menzies did not possess full control over Australian foreign policymaking. As Coral Bell has said, "On foreign policy, Menzies emerges, on closer retrospective examination, as a surprisingly passive figure."12 Under these conditions a number of other ministers were able to leave a firm imprint on Australian foreign policy. The result was a greater sense of continuity than if Menzies alone had dominated the foreign policy dossier. Detailed scrutiny showcases the adaptation of Evatt's middle power perspective by John McEwen, to whom "practically all the work and most of the decision-making fell in foreign economic relations" in the 19508 and 19605.13 Rejecting the stark classification of countries into categories of developed and developing, McEwen argued vigorously that Australia fell into a "midway" position between the "haves" and the "have nots." By this revised criterion Australia need-

6

In Between Countries

ed to be treated in a distinctive fashion, as a "medium" or middle zone entity in the international arena.14 The broad nature of the support for this identification of Australia with middle power status was consolidated in the Gough Whitlam and Malcolm Fraser years. Prime Minister Whitlam, in a parliamentary address delivered in August 1973, stated that Australia had moved to a position as "a middle power of growing influence in the South East Asian and South Pacific regions."15 Whitlam, in common with the particular brand of diplomacy long identified with Canada, also liked to refer to Australia as a potential "bridge" in world affairs between East and West and between North and South.16 The appeal of the middle power concept continued under Eraser's prime ministership. For example one of Eraser's ministers of foreign affairs, Tony Street, pronounced that Australia had moved to the stage where it was "a significant middle power with a range and depth of relations comparable to any country, other than a handful of great powers."17 In a series of speeches in 1980 Fraser himself talked about the need of middle powers like Australia to express their views in the international arena. "The middleranking countries of the world should recognize that they have a role to play," he said. "It would be an excess of modesty on their part, indeed it would be a political and moral failing, to assume that they should be seen and not heard on the great issues."18 The revitalization of the middle power concept has been completed in the 19805 and 19908. Its prominence as a pillar of Australian diplomacy has been largely tied to the efforts of Gareth Evans as foreign minister from 1988 to 1996. Evans brought to the position an obsessiveness, a mixture of idealism and legalism, and a bent for personal diplomacy reminiscent of Evatt. Moreover he did much to publicize the notion that Australia's status as a middle power imbued it with "the capacity ... for effective action and influence."19 Yet this recasting of an older set of ideas to define Australia's changing place in the world has to be viewed as a component of a more generalized mentality embedded in Australian decisionmakers. Bill Hayden, Evans's predecessor as foreign minister, voiced these orthodox sentiments in his own public statements: "We are not a superpower. We're not even a great power. We don't have the sort of leverage that those sorts of powers have. Any role we have arises because of the interest and credibility which we've been able to establish as a medium-sized power."10 R E A S S E S S I N G THE M I D D L E POWER CONCEPT

To establish the existence of a dominant world-view is one thing; to come to an understanding of Australian and Canadian diplomatic

7 Middle Power Commonalities and Differences

behaviour by using a middle power framework is another thing altogether. The main objection to deploying the middle power concept as an analytical tool is the difficulty of utilizing this framework as a method for systematic, focused comparisons. If the middle power concept is to be operational, some elements of behaviour common to countries that use declaratory language in this manner must be distinguished. The classification of middle powers as a separate class of countries in the hierarchy of nations stands or falls not on their subjective identification but on the fact that this category of actors engages in some objectively distinctive form of activity. As John Holmes, the late doyen of Canadian foreign policy studies, has put it, the middle power concept takes on greater significance from the standpoint of a research program when "self-image" is subordinated to the evolution of a "general pattern" of diplomacy.11 The conventional method of looking at middle powers has a strong normative bias. Central to this perspective is the article of faith that middle powers act as good multilateralists or international citizens,22 and that they have the national will and capability to act in this responsible fashion. This strong sense of positive appreciation within the definition (or redefinition) of middle power diplomacy stands out in practitioners and critical commentators alike. Evans, in his overview of Australian foreign policy, gave special attention to the fact that "While middle power diplomacy is ultimately no less self-interested than any other kind, its characteristic methods are these days more often applied to a range of problems which involve the interests not of a few, but many, nations ... [Australia] has a self-interested preference for the peaceful resolution of conflict, acceptance of international law, protection of the weak against the strong, and the free exchange of ideas, people and goods."23 Prime Minister Mulroney, in the aftermath of the Gulf War, echoed these sentiments: "As middle powers, we must ensure our interests will continue to be protected by the international legal system. We must use our strengths to support a revitalized United Nations system, to improve the position of those less well-equipped to help themselves."24 Although considerably more critical of the past application of these principles, Stephen Lewis, the former Canadian ambassador to the United Nations, has been just as idealistic about the potential role of middle powers in contributing to constructive activity: I have always seen Canada and other middle powers serving as a voice to offset the major powers. I think Canada and some of the smaller members of the European Community, such as Holland, as well as Norway, Sweden, Finland, Australia, New Zealand - that whole grab bag of countries that verge collec-

8 In Between Countries tively on angelic perfection - should act as an uncompromising voice when they think the major powers are going too far, rather than behave as uncritical allies. We need a group of countries that believe in internationalism, above all, and that can be counted on to support multilateral institutions and agencies.25

Such interpretations, animated by the prevalent fear in Canadian and Australian thinking of international anarchy and lawlessness, have considerable relevance. Still the emphasis on morality and "good works" (or the necessity to do more to be on the "side of the angels") incorporated in these analyses of Canadian and Australian foreign policy has the tendency to blur as much as it clarifies. For all of its strengths the notion of good international citizenship is highly prone to distortions, ambiguity, and nostalgic mythology. Despite the implicit claim of moral superiority, neither Canada nor Australia has an unblemished record on international issues. The foreign policy performance of both countries has been censured on a number of occasions for passivity and/or abdication of responsibility in responding to international crises. On Biafra and East Timor, to name just two illustrations, the gap between Canada's and Australia's words and their deeds has led to charges of self-deception or hypocrisy. In a variety of other cases the enthusiasm on the part of Canada and Australia for interventionism on the world stage has been a source of embarrassment; that is to say the voluntaristic current in Canadian and Australian foreign policy has been construed not as helpful but as indicative of selfrighteous meddling or a "busybody" disposition/6 One alternative way forward, which avoids many of the pitfalls inherent in an idealist way of looking at middle powers, may be found in the work of Robert Cox. Cox has been among the more trenchant critics of the orthodox formulations of middle power diplomacy. Yet far from moving to advocate discarding the concept completely, he has argued that renewed attention should be paid to demonstrating its continuing value in a changing world. This means doing a better job of examining the evolving nature of middle power diplomacy through an appreciation of the historical process that led to the development of international organizations. Because this is "a process not a finality," Cox cautions that "the middle power role" should not be evaluated as "a fixed universal" but as "something that has to be rethought continually in the context of the changing state of the international system."17 From this premise Cox has endeavoured to develop a more rigorous construct of the middle power phenomenon. Broadening the parameters of the research agenda, he transforms the focus from the question of what middle powers should be doing in their diplomatic activity to

9 Middle Power Commonalities and Differences

the question of how middle powers are located in the international system. Middle powers are looked at from this perspective in terms of structure and agency18 - respectively the overall context or milieu of activity and the capacity and resources available to individual actors. Together structure and agency constitute a configuration and process of constraint and choice that shape and condition the behaviour of this category of secondary actors. To be relevant the conceptualization needs to identify the sources of initiative and restraint for the powers in the middle/9 This mode of analysis allows a better fix on the place of middle powers such as Canada and Australia in the international arena. Firstly it sheds considerable light on the manner in which these countries have been integrated into the general pattern of the IPE; more specifically it points to the way their enmeshment in the international system is linked to the nature of their relationship with the United States, the putative hegemon of the post-1945 order.30 Secondly it allows for some better insights on how the choices and actions of these particular actors influence the international system. Although in many ways constrained, Canada and Australia do retain some limited room to manoeuvre. The impact of middle actors is heavily contingent on the temporal context. When stability is the norm, under conditions of hegemony, their impact is most evident at the margins, manifested through incremental modifications and technical detail in the maintenance of a predictable world order. In these constant circumstances countries such as Canada and Australia do have the capability to bend, if not to break, regimes or other institutional forms. When a more dynamic process of change occurs though, the situation becomes more complex. Although the challenges facing Canada and Australia increase appreciably with systemic shocks or transformation, this sense of greater uncertainty can lead to enhanced opportunities as well. While the vulnerabilities imposed on individual actors may increase, so may their space in which to operate diplomatically. A good deal of the complexity in this behaviour by middle powers is captured in the dual dynamic of followership and leadership. From this perspective the position of Canada and Australia is highly significant because they represent what may be termed the archetypal system followers in the post-194 5 global system. Followership, in this sense, means that the two countries not only "went along" in supporting the architecture of that order but also shared to a considerable extent the larger vision or belief system advocated by the hegemon to underpin the system. Going along, however, did not mean unthinking and uncritical jumping aboard the U.S. bandwagon. While the followers saw the positive benefits accruing from a far-sighted form of leader-

io In Between Countries

ship, they did not take this role for granted. Unsure of the willingness and/or ability of the hegemon to operate in a consistently principled fashion, they took it on themselves to strengthen the system. This condition necessitated continual work on the part of the followers to ensure "some limits to the ambition and reach" of the powerful as well as the general compliance of other actors.31 The expression of Canada's and Australia's followership in the international system may be differentiated or compartmentalized according to issue-areas. As Peter Gourevitch allows: "Do middle size or small powers have some freedom in the international order - that is, does this situation provide some latitude for choice of policy behaviour? The answer to that question is a middling yes. Medium powers have some choices over some areas of decision. Just how much depends on what areas of decision, and under what circumstances."3Z In the geo-security relationship the room for manoeuvre has been far more restricted than in other areas. The United States, as Britain before it, has been regarded as guarantor of safety for Canada and Australia, a "protector" relationship that found formal expression in the NATO and the Australia-New Zealand-United States (ANZUS) alliances. A popular description of both Canada's and Australia's roles in traditional military security issues has been as a faithful or at least uncomplaining ally, either enthusiastically (the Americans' "chore boy"; "all the way with LBJ") or opportunistically (as an "insurance premium" against threats) going along with the United States.33 Yet this characterization of the middle powers' followership should not be exaggerated to the point of caricature.34 Exceptions to the rule of acquiescence to their great and powerful friend, under the Pax Americana, have not been uncommon. Even in the long period of conservative rule during the 19505 and 19605, Australia adopted stances different from Washington on a number of issues. Of course in some of these better-known cases (particularly the Suez crisis of 1956) this deviation represented less a disloyalty to the United States than an older attachment to Britain. In other cases however, such as the Indonesian/West Irian episode, Australia displayed a clearly autonomous stance. The Canadian experience repeats this phenomenon. As a number of revisionist studies have demonstrated, the responses of Prime Ministers John G. Diefenbaker and Lester B. Pearson to the 1962. Cuban missile crisis and the bombing of North Vietnam in 1965 do not lend much support to the notion of Canada as a passive follower. Canada was not restricted to simply moving in lock step with American initiatives.35 A better test of the ability of Canada and Australia to move with some freedom comes on the non-strategic agenda. As one student of Australian foreign policy has put it: "The primary difference between

ii

Middle Power Commonalities and Differences

a small power and a middle one lies in the latter's ability to rise above the parochial security preoccupations of the former and use its greater capabilities to pursue wider objectives on the international and regional levels."36 This question is fundamental because of the intensity of the ongoing debate in the international political economy literature about whether Canada and Australia are passive, dependent actors or more active forces with some ability to shape the world order. From what has been termed the "economic nationalist" perspective, both Canada and Australia are relegated to a subordinate position.37 Echoing the central theme of the proponents of the "satellite" theory on general foreign policy questions, this critical perspective argues that the place of Canada and Australia within the international system is dominated by the "structural" conditions of economic dependency on the United States, i.e., the level of foreign direct investment, the "branch plant" nature of the economy, the low level of research and development, and the linkage of monetary policy to the need to ensure access to sources of foreign capital. As evidenced by the experiences of the Whitlam and Trudeau governments, these conditions are taken to be so strong as to lock these two countries into a relationship of dependency or clientship, notwithstanding reformist impulses.38 This portrait of constraint, however, overlooks the opportunities available to and cultivated by Canada and Australia in the formation and maintenance of the institutional mechanisms of the postwar economic order. At the heart of this creative and constructive involvement was the adaptation by these followers of the organizing principle of functionalism. Functionalism legitimized the application of issue-specific strengths and skills possessed by individual countries. In these selected niches of comparative advantage Canada and Australia moved to take on more responsibilities on the international stage. These responsibilities in turn distinguished these middle powers from the minor actors. As described by one commentator, the hierarchical flavour of this sort of arrangement, with responsibilities being delegated according to a country's capabilities, is evident: "In Canada's view, problems of international relations could be best managed by apportioning them according to functional concern to international institutions where experts would meet together, and questions could be dealt with on their merits. Political representation should take into account both the nature of the problem under discussion and the capacity of states to contribute to their resolution. In this fashion, Canada could be expected to play an important role."39 The question of motivation must be introduced into the discussion here. As suggested above the declaratory language of moral imperative in Canadian and Australian foreign economic relations has to treated

12. In Between Countries

carefully. In the aftermath of depression and war the architects of the Canadian and Australian diplomatic approaches to the post-1945 international system were highly supportive of participatory internationalism and what Cox depicts as "an orderly and predictable world environment."40 "We always ask ourselves," wrote Lester Pearson, "not only what kind of Canada do we want? but what kind of world do we want."41 Evatt, in a similar vein, stressed the need for the governance by "justice and rule of law" in the postwar world.4i Yet the push of these middle powers to become (and remain) major stakeholders in a set of rules-oriented institutional arrangements, based on "general compromise and general compliance" rather than "lawlessness in which the prizes go to the powerful and the predatory," also meshed with their perception of their national interest,43 for their national well-being was perceived to be closely dependent on international stability. In the words of Holmes, Canadian efforts in terms of economic as well as strategic multilateralism were based on a "hard-boiled calculation of the Canadian national interest."44 Paul Hasluck, the Australian foreign minister, elaborated on this theme in a 1967 speech: "Australia is in a very different situation from many other nations ... It is easier for us to be virtuous than it is for some others because the course of virtue coincides with our self-interest."45 At one level the contribution made by Canada and Australia to international institution building and maintenance drew rewards in terms of status. By taking on selective responsibilities both countries gained not only symbolic reputational benefits but tangible benefits in terms of institutional special privileges and posts. At another level constructive internationalism allowed these middle powers greater room to shape (and sometimes bend) the institutional arrangements and rules to their own liking. Much of this activity was directed at reining in the hegemon through this system of multilateral instruments and commitments. By operating through methods of co-operation that did not rely solely on power, though, Canada and Australia could also target specific areas, allowing them to act in favour of the international order where it best suited their own material interests. While this blend often meant that these countries were generally viewed as the defenders of the status quo, it also meant that in specific cases they could move towards the forefront of reformist challenges. It is only through an appreciation of this blend of internationalism and self-interest that the contours of Canadian and Australian behaviour may be fully comprehended. For all their good works, neither Canadian nor Australian foreign economic policy was free of compromise and contradiction. Just as both of these countries "specialized" in selected issue-areas on the world stage, so were there selective gaps and

13 Middle Power Commonalities and Differences

deficiencies in their commitment to a non-discriminatory world economic order. Not only did Canada and Australia continue to have substantial levels of protectionism on specific types of imported goods; both countries also demonstrated that they were keen (as in the case of Australia's imperial preference) to preserve existing special arrangements or (as in the case of Canada's deals with the United States in the 1958 Defence Production Sharing Agreement and the 1965 Auto Pact) to cut new forms of special arrangement. While Canada and Australia therefore may be said to have shared diplomatic characteristics, they remained entirely separate in terms of the pursuit and projection of their own specific national needs and interests.46 MOST SIMILAR COUNTRIES?

The nature of the relationship between Canada and Australia complicates matters further, for the middle power lens privileges the commonalities in the diplomatic roles of the two countries. This way of looking at Canada and Australia, however, risks distorting their similarities and differences. The commonalities between Canada and Australia go far beyond those shared by other middle power countries. Many of the other countries categorized as middle powers, specifically the Nordic countries and some of the other smaller "like-minded" Western European countries such as the Netherlands, have many points in common with Canada and Australia, because of their long domestic traditions of parliamentary government and liberal democracy and their own strong traditions of multilateralism internationally. As pointed out by Peter Katzenstein, these smaller European states have maintained a strong faith in both the political and economic expressions of international co-operation and trade liberalization.47 Still, despite these similarities,48 these countries lack many of the other significant and defining features shared by Canada and Australia. These features include, at the most basic level, their histories as settler societies developed on the basis of resource extraction and foreign investment. Reinforcing this impression of Canada and Australia as "most similar countries," divergent from their European counterparts, is their overlap on a number of other criteria. Not only do Canada and Australia share the institutional and constitutional framework associated with the Westminster model, their federal governmental structures set them apart from the other countries most often labelled as middle powers. Although in many ways they remain most similar countries,49 it would be misleading to contend that Canada and Australia have evolved as some form of identical twins. In the first part of this centu-

14 In Between Countries

ry their common heritage derived from the British Empire, and their equivalent searches for nationhood provided a foundational rationale for the type of older comparative studies represented by Alexander Brady's Democracy in the Dominions.50 Still, with the passage of time, these types of bonds by themselves no longer serve as a reliable guide for thought or action. In the environment of the 19805 and 19905 the elements of policy, institutions, and policy debates that set Canada and Australia apart have become as salient as the characteristics that formerly drew them together. To concentrate too heavily on the historical pattern of political arrangements leads, therefore, to comparisons that underestimate the contemporary distinctiveness of the individual countries. The analogy of the family is useful for putting this relationship into an appropriate context. Befitting the arrangement between related individuals who have gone their own distinct ways, the CanadianAustralian relationship features an ambiguous and tension-ridden quality. As countries with closely matching attributes in the international system, their responses to the big questions in world politics reveal an analogous set of values. While still close in their cognitive mindsets and habits, the two countries nevertheless reveal different and competitive personalities when dealing with each other. For all their affinity in terms of ties and associations, the relationship between Canada and Australia has featured a mix of affection and bickering. To a considerable extent this sense of (sibling) rivalry has developed out of competition for status. Canada has perceived itself, and has been perceived by others, as the senior Dominion. Australia, in the junior position, remained resentful and suspicious of Canada's pre-eminence, especially when it appeared to exclude Australia from participation (as viewed, for example, by the invitation of Mackenzie King and not John Curtin to international conferences of World War II leaders). As Bruce Grant writes, the result has been a psychological distancing of the "younger" country from the Canadian experience: "The model closest to the Australian experience, Canada, is rarely mentioned in public debate. Australians do not wish to be told that they can learn from Canada's experience, possibly because it is too close to their own ... possibly because they feel ... competitive with Canadians."51 Far from diminishing the value of the comparative study of Canadian and Australian diplomacy, this condition testifies to the need for more systematic and multifaceted research along these lines. To be sure the task of these enterprises needs to be directed more explicitly towards capturing the essence of the dichotomy in Canadian-Australian relations as expressed in the diplomacy of the two countries. Just as Canada and Australia stand out as middle power actors because

15 Middle Power Commonalities and Differences

they exemplify a certain type of mentality and role in international relations, these two countries are equally fascinating because of their distinctive styles. Canadian and Australian statecraft diverge considerably in form, scope, and intensity. Canada has long enjoyed the reputation of a responsible role model for other middle powers.52 Throughout the so-called golden age of Canadian diplomacy, from the late 19405 to the early 19605, Canada took the lead not only in espousing a middle power ideology but in setting out standard operating procedures for the effective implementation of this mode of statecraft. The application of the functional principle, whereby secondary actors maximized their influence by concentrating their limited resources and capabilities in specific areas of strength, was a recognizable (and recognized) Canadian contribution. Another hallmark of this profile of Canadian diplomacy was its creative use of entrepreneurial and technically oriented diplomacy. Canadian diplomats received numerous accolades for their skill in utilizing coalition-building and confidence-building techniques on a wide array of issues.53 All of this activity was usually conducted with a minimum of fanfare, in the form of a low-key or quiet diplomacy. Canada's motives in taking on these responsibilities reflected the mix already commented upon. While wanting to help build up a habit of co-operation internationally, especially over disputes and crises, Canada was also interested in staking out its own position as a responsible and influential player. This search for influence in the decision-making process paid off when Canada was "listened to with great attention, not only by the big powers but also by the smaller countries."54 Australia's diplomacy featured a more inconsistent quality. In many respects Australia presents the picture of the ultra-loyalist in terms of its followership of the hegemon, if not of the international order. As in the Australian-British relationship that preceded it, there has been a "celebratory and congratulatory" aspect to the Australian-American relationship largely absent in the Canadian case.55 This pattern of conformity is offset by the adoption by Australia of a more provocative "exhortatory" element in its statecraft. In contrast to Canada's more steadfast and patient reliance on low-key, behind-the-scenes activity, Australia has periodically employed louder and often abrasive tactics designed to draw attention to the issue at hand. This inconsistency, or set of contradictory impulses, between what commentators have described as the desire by Australia alternately to "cower" and "confront" 56 - or to oscillate between postures "ranging from cocky assertiveness to almost abject submissiveness"57 - needs greater scrutiny as a crucial point of divergence in the diplomatic behaviour of the two countries; for these stylistic variations acutely influenced the

16 In Between Countries

nature of the relationship between Canada and Australia, as well as the overall approaches of the two countries to the international system. These national differences were closely identified in the immediate post-194 5 order with the contrasting personalities and mindsets of Lester Pearson and Evatt. In broad terms Pearson's approach may be described as smoothly controlled and self-consciously modest. Pearson as an experienced statesman had a clear perspective of Canada's limitations in creating a predictable and orderly international environment, in which the reach of the great powers was tempered by the constraints of association and a rules-based approach to international relations. The road to this goal was a good deal of diplomatic slogging aimed at heading off a worst-case scenario of a condominium of the greats. Evatt's approach, conversely, was idealistic and confrontational. With missionary zeal, backed by the force of his strong personality, Evatt appealed to a clearly defined set of universalistic moral principles, rights, and guarantees. While Pearson operated on the basis of diplomacy as the art of the possible, necessitating flexibility and compromise, Evatt operated on the basis that a legal framework could act as a substitute for diplomacy as an instrument in international relations. These individual differences spilled over into national differences at the 1945 San Francisco Conference on World Organization. Evatt's objective at this meeting, to "liberalise and democratise" the design of the postwar order, was laid out in a bold and eloquent fashion. In mobilizing a determined campaign for an equitable international system, Evatt portrayed himself as the champion of the medium and smaller countries. This campaign of "constructive criticism"58 was directed in particular at the imbalance in the system established via the veto powers granted to the great powers and the lack of recognition of the contribution of many of the non-greats to the war effort. In stark contrast Canada's diplomatic focus at the meetings concentrated on what was possible rather than what was right. The Canadian delegation concentrated its activities on erecting the scaffolding of a solid and lasting institutional structure, not towards the promotion of plans for a visionary model for the future. In so doing Pearson and his colleagues tried to moderate the tenor of, and manage the fallout from, Evatt's approach. After one of Evatt's many outbursts against the United States, Great Britain, and the Soviet Union, Pearson personally intervened to try to defuse tensions. As Under-Secretary of State of External Affairs Norman Robertson reported to Prime Minister W.L. Mackenzie King after this episode: "Pearson and I are seeing Evatt this evening and will endeavour to ascertain just what object he hopes to achieve by the tactics he is pursuing ... Our view is that it is better to take the Organisation that we can get and, having come to that deci-

17 Middle Power Commonalities and Differences

sion, to refrain from further efforts to pry apart the difficult unity which the Great Powers have attained."59 From Evatt's point of view this Canadian pragmatism was a sign not of good sense but of timidness. Canada's cautious approach, demonstrated most clearly by its refusal to join with Australia in the fights either to curtail the veto power or to increase the powers of the UN General Assembly, was roundly criticized as displaying a lack of courage.60 Alternatively, from the Canadian point of view, the Australian crusade on the veto was viewed as a threat to the middle powers' credibility as facilitators and problem solvers in the international arena. Both Pearson and Holmes drew uncharacteristically harsh portraits of Evatt's activities during the San Francisco conference. (Menzies, as the leader of the opposition, also criticized Evatt, ridiculing the minister of foreign affair's "passion ... for words and formulae.")61 In his portrayal of Canadian diplomacy "at the creation," Holmes depicts Evatt's "obstreperous" approach as an "irresponsible and self-defeating" course of action, which needed to be constantly watched and held in check.61 Pearson, in his own memoirs, states that Evatt needed to be "saved from the snares of his courage (or if you like, pig-headedness and vanity) by other delegations including our own,"63 While admitting some grudging admiration for Evatt's tenacity, Pearson was puzzled by his apparent lack of concern for some of the realities of world politics. From a Canadian perspective Evatt's behaviour at San Francisco showed not only aggressiveness and arrogance but also a complete misunderstanding of how international relations operated. This focus on personality is helpful in setting the stage for a more thorough examination. The personal dynamic between Evatt and Pearson casts considerable light on the complexity of the relationship between Canada and Australia at the national level. The sense of rivalry in one dimension contributed to the sense of competition in the other. The two countries, and the individual state officials within them, competed for rewards in the international system. Often these two sources of tensions overlapped, as in the case of Evatt's run for the presidency of the United Nations General Assembly. More generally the relationship between Canada and Australia was marked by a competition for recognition and influence. Evatt, for example, expressed concern in the lead-up to the San Francisco meeting about Canada's lobbying for election to the Security Council: "I do not want to stand in the way of Canada but the claim of Australia is equally strong, if not stronger."64 Any personality-driven depiction of Australian and Canadian diplomacy, however illuminating, also distorts the nature of the CanadianAustralian relationship; for this relationship was continually evolving,

18 In Between Countries

exhibiting signs of both continuity and change. The like-mindedness of the countries should not be underestimated. If their sense of rivalry made this bond more brittle, it did not shatter it completely. As Hasluck acknowledged in his retrospective assessment of Australian diplomacy, there did exist "a certain Canadian-Australian community of feeling" even during the Pearson/Evatt years, in that "thought concerning the post-war world seemed to be moving along several common lines."65 This theme of co-operation is echoed in Holmes's review of Hasluck's memoirs. While he again pours scorn on Evatt's methods, with their emphasis on stirring things up rather than quietly building consensus, he acknowledges that this divergence may simply confirm that Australia's behaviour is the flip side of Canada's own diplomatic mode of operation: "This brilliant, pugnacious, unlovable man made, without doubt, a laudable contribution to the new world order, especially at San Francisco, where someone of his graceless zeal was probably needed to rally the lesser powers and convince the great powers that their rule was not the law. Whether his raucous diplomacy was more effective than the quieter methods of the Canadians is an open question. There is an argument that they made a complementary team."66 A focus on personality creates an equally problematic impression of stasis, which belies the element of transformation in Canadian and Australian diplomacy. Although the spirit of Pearson and of Evatt have cast long shadows over Canadian and Australian statecraft, references to these individuals do not provide a completely accurate signpost to contemporary Australian and Canadian diplomatic behaviour. The entire context within which Canadian and Australian diplomacy has to operate - namely the strategic environment and the nature of national economic competition - has been fundamentally altered. Recognizing this fact, the pattern of adaptation and convergence, as well as continuity and divergence, must be taken into account in any comparative study. In the task of working towards better explanations of the overall pattern in Australia and Canadian diplomatic behaviour, over the time frame of the entire postwar period, a comprehensive examination of these countries must be attempted. Rather than relying exclusively on international relations perspectives, the mode of inquiry used in the study of comparative politics must be utilized as well. In other words, Canada's and Australia's roles in the international system, and their national policies, must be scrutinized in light of both the Australian/Canadian position in the world and the respective structures and processes in domestic politics.67 Only by looking at Canada and Australia from without and within, taking into account both their

19 Middle Power Commonalities and Differences

international and domestic attributes, may a comprehensive understanding of their behaviour be achieved. Looking from the outside in the related questions of how and where the two countries sit in the international arena must be taken into account at the outset. The behaviour of middle powers, no less than that of the greats or smaller countries, is affected by the way they are located within the international system. The most basic set of indicators that account for differentiated national responses relate to the economic circumstances and problems facing a country.68 On this basis the exploration of Canada and Australia as middle powers must start with some reference to the standard criteria for assessing the role of these countries, namely Gross National Product (GNP) and other structural attributes.69 If important, though, it would be wrong to suggest that these attributes serve as an exclusive guide for Canadian and Australian statecraft. Consistent with the notion of functionalism or niche diplomacy, there may be considerable divergence between a country's capabilities at a generalized level and its capabilities at a specialized, issue-specific level. As has been suggested an accurate assessment of national behaviour can only be achieved at the sectoral level.70 Moreover the location of a country in the international system is determined both by where and how comfortably or uncomfortably it sits.71 The notion of neighbourhood is highly salient here. The geographical position of both Canada and Australia in relation to their bilateral and regional relations must be taken fully into account, especially vis-a-vis their contrasting distance and proximity to the greats; for this relational factor remains fundamental in determining their range of strategical as well as tactical options. The internalized perception of their location, i.e., what Canada and Australia think about their neighbourhoods, adds a psychological or cognitive dimension to this discussion. These latter cast of influences are by their very nature subjective and impressionistic. Still some consideration of these factors seems vital, in that they encompass "the undercurrents, of mood, tone, or milieu, of a climate of feeling that almost imperceptibly insinuates itself into concrete ideas and actions."72 Looking from the inside out a number of variables are equally crucial for establishing the domestic context for the evaluation of Canadian and Australian diplomatic behaviour. The first of these variables is the contrast found in the political cultures of the two countries. Notwithstanding the similarity in the basic frameworks for politics established in Canada and Australia, the domestic "rules of the game" have evolved in quite dissimilar ways. Australian norms of politics have been commonly depicted as "robust and vituperative,"73 based on "a rough house ... larrikin tradition."74 The phrases used to describe

zo In Between Countries

the fundamental features of Australian political life - majority control of institutions and policy with maximum weight being given to "having the numbers" - conjure up the image of a battleground within which little quarter is asked or given. Canadian norms, by way of contrast, have tended to be characterized as consensus-seeking, accommodating, and recognizing diverse interests and minority rights.75 One has to be careful in presenting such a stark juxtaposition, given the possibility of crude stereotyping of national political conduct based on a type of vulgar Hartzian analysis. As the recent constitutional battles over the Meech Lake and Charlottetown accords have highlighted, the level of accommodation traditionally witnessed in the Canadian political culture has considerably eroded in the 19805 and 19905.?6 Certainly the type of elite accommodation that served as the bulwark of Canadian political practice, and arguably for the survival of the Canadian entity, no longer seems viable in light of contemporary conditions. Likewise the labelling of Australia as a nation of battlers formed by the hardships and exigencies of "fatal shore" considerably underestimates the degree of consensus found in Australian politics. As W.K. Hancock's well-known thesis suggests, this consensus rose on the back of widespread bipartisan support for the use of the state as an engine of economic development.77 While mindful of the problems associated with an exaggeration of these characteristics, the elemental difference in the two countries' way of doing things in the political and policy arenas does appear to be instrumental in fashioning divergent diplomatic approaches. The larrikin strain in Australian domestic politics has continued to find expression in the international arena, as witnessed by the attention this spillover effect is given within the foreign policy literature. In asking the question "how does Australia operate in the politics of international economics?" J.D.B. Miller, for example, refers to the adversarial quality in Australian diplomacy - a quality that makes Australia "a formidable foe but [that] can also render us somewhat muscle-bound in our advocacy of fixed positions."78 It seems clear that the Canadian pattern of exhibiting flexibility and a spirit of "patience and compromise"79 in its diplomatic style is also firmly rooted in its political culture. Much of the impetus behind Canada's modus operandi as a bridge builder or helpful fixer in foreign relations has been shaped by the Canadian tradition of bargaining and negotiated compromise. Whereas Australian politics has tended to accentuate divisions by operating on an either-or basis, Canadian politics has tried to blur divisions through a system of arrangements and trade-offs designed to manage (if not solve) problems. As the more sophisticated students of comparative politics remind

2i

Middle Power Commonalities and Differences

us, the analysis of political culture is a nonetheless necessary but not sufficient tool. Political culture cannot be studied in isolation from the cluster of political institutions that give them expression.80 Indeed one of the fundamental shortcomings of the study of middle power statecraft has been the overplaying of the significance of the external environment at the expense of the domestic. In the search for balance a more systematic study of domestic politics must be embarked upon, one that fits these qualities into an integrated examination. Central to this search must be the nature of state-societal relations in Canada and Australia. The Canadian and Australian states are alike to the extent that they are both grounded in complex political and economic environments.81 Yet the differences in their roles and capacity for action matter just as much in assessing the impact of internal conditions on foreign economic policies. In moving further into the black box of politics and policy making, the other feature that needs greater elaboration relates to the allocation of the state's authority and to sites of contestation. Although both Canada and Australia have federal structures, the nature of the federal or territorial dimension of politics in the two countries differs considerably. Although federalism is far from being a residual element in it, Australian politics in the main revolves around non-territorial debates based on class, ideology, and religion. In complete contrast territoriality has long assumed a commanding position in politics and policy making in Canada. Societal cleavages on a wide variety of issues have become little more than embellishment to regional divisions based on "Quebec v. the Rest of Canada," "Western alienation," and the inequities felt between Atlantic Canada and the rest of Canada. Leadership selection, the make-up of the cabinet, bureaucratic structure, the pattern of clientalism, and the electoral system, as well as the strength of non-central state actors with respect to "provincebuilding" and policy innovation, are all wrapped up in the territorial dimension of Canadian politics. As Carolyn Tuohy has cogently put it: "Of Canada's ambivalent institutions, the most significant is its particular version of federalism ... the fact that the division of federal and provincial jurisdiction is never settled means that these competing views are always in play and are addressed anew with new policy issues."82 The combination of outside-in and inside-out methods of analysis allows a more thorough examination of the paradox of cross-national variations between most similar nations. Both of these methods of examination are vital in coming to terms with the internal dynamics and external manifestations of the varied forms of middle power statecraft. More ambitiously there must be some attempt to combine the

2.2, In Between Countries

two forms of examination, for it would be misleading to suggest that the international and domestic factors are entirely insulated from each other. On the contrary the two merge and interact; the Australian and Canadian diplomatic personalities are Janus-faced. Designed to meet national needs and interests, these personalities are fashioned to a considerable extent by domestic circumstances.83 Yet these personalities also reflect the difference in where and how the two countries sit in the international environment. To borrow G. John Ikenberry's phrase,84 the "irony" from this perspective has been that the level of capability the Canadian and Australian states possessed in terms of their respective capacities at home has been at complete odds with their relative level of international strength. THE PUZZLE OF AGRICULTURE

A strong argument may be made that a systematically structured examination of Canada and Australia answers Cox's call for a more concerted "search for actors" as part of a reformulation of the middle power concept.85 What remains problematic is the search for a subject area that allows a more comprehensive test of the diplomatic behaviour of the two countries. Suitability rests on a number of factors. To begin with the specific issue-area should cast light on the degree and quality of both leadership and followership exhibited both under hegemony and during the transformation of the IPE. As Fox has noted: "Canada and Australia are regarded as having achieved middle power status precisely because they have more opportunities for manoeuvre than [those countries] of lesser consequence in world affairs."86 This diplomatic activity, however, was premised on the need for responsible behaviour on the part of the United States in the provision of leadership (negotiating and not imposing rules on others) and on the part of the followers in helping develop institutions and practices conducive to international order. On these grounds a good test case of middle power diplomacy should involve not just individual activity on the part of Canada and Australia to shape the international structure, but activity that proceeds jointly and/or in association with other nations. As Paul Keal notes it is "easier to conceive of middle powers having a special place as members of a group rather than as independent actors."87 Cox adds that a key test of the middle power thesis is the presence of a coherent political grouping of middle powers.88 From this standpoint one of the major deficiencies in the comparative studies in Canadian and Australian diplomacy is the nature of the relationship (or lack thereof) between the two countries. Many of the two-country, single-issue case-studies have constituted little more than

Z3

Middle Power Commonalities and Differences

separate exercises with minimal connection in terms of analysis. What is lacking in the Canadian and Australian responses to issues such as foreign aid, immigration, and foreign direct investment is any degree of co-ordination or overlap between them. Canada and Australia may have pursued parallel approaches, but the points of symmetry or even extended contact to try to co-ordinate those policies have been rare (for example the Colombo Plan) or non-existent. The only real exception has been on economic sanctions,89 particularly as regards South Africa. A second deficiency is the question of the centrality of the issuearea with respect both to the IPE and to the foreign economic policy of the two countries. While comparative explorations of Canadian and Australian approaches to specific issues such as foreign aid bring out many of the shades of convergence and divergence in the behaviour of the two countries, this type of issue remains episodic (and increasingly marginal) in nature. A thirdly shortcoming is that the nexus between domestic and international action on these issues has been severely neglected. While domestic politics and international relations have been viewed as "somehow entangled," little attempt has been made to "sort out the puzzling tangles."90 In particular the intrusion of domestic-level forces and structures into the international dimension of state policy needs to be teased out. On the basis of these criteria an examination of Canadian and Australian approaches to the international political economy of agriculture provides a suitable case for inquiry. More boldly than the cases tackled up to now, the study of the agricultural trade issue allows many of the central puzzles of contemporary interest to students of international political economy to be unravelled. At the international or systemic level this subject area highlights many of the key features and paradoxes of the post-1945 order. Firstly, from a leadership perspective, agricultural trade is highly representative of the pre-eminent position of the United States in the formation of the post-194 5 trade system. Because of its unmatched structural power (based on market share), the United States was able to organize this area of the IPE into a regime whereby certain norms and rules for states and markets were established and followed on a range of practices, namely comparative advantage, specialization, and the open exchange of goods and technology.91 Admittedly this regime was from the outset loose in form and limited in scope. Yet within this narrow framework the pattern of interdependence and internationalization associated with commercial and concessional agricultural transactions held considerable sway. On the other hand agricultural trade has remained in many ways the exception to the rules of the post-194 5 liberal international trading

2-4

In Between Countries

order.92 To emphasize the stability imposed on agricultural trade by the establishment and maintenance of the regime is not to deny a history of protectionism in early post-World War II U.S. agricultural policy, which in part explains the weakness of the General Agreement on Tariffs and Trade (GATT) and other international organizations in the issue-area of agriculture. After all within a few years of the GATT'S existence, it was the United States that secured a temporary waiver of the quantitative export restrictions for several of its own agricultural products. If the issue of United States protectionism remained one of degree, it still created an important gap in the international trading system, and led to questions about the quality of American leadership. To wield leadership a leader needed the confidence as well as the respect of its followers.93 This exceptional aspect of agricultural trade within the overall rules of the liberal order was accentuated with the decline of the hegemon. This is not to imply that in agriculture, any more than in many other areas of the IPE, American preponderance has been supplanted completely. Nor does it suggest that a system of advanced multipolar management of the global economy has developed. Rather the trends in the agricultural issue-area signal that the United States has moved from a position of unrivalled hegemony to a position as the first among equals, where it has been joined by other major actors (most notably by the countries within the European Community [EC]), and that this shift has severely complicated the governance of the IPE. Not only ha this evolution, in train since the 19705, undermined the ability of the United States to set the politico-philosophical agenda, but it has contributed to a growing belief in the United States that the principles that served it so well as hegemon no longer serve its national interests under the changing conditions. Although the United States remains the strongest actor in the IPE of agricultural trade, it is not strong enough to easily impose its will on the other major actors. Secondly the international political economy of agricultural trade provides a unique vehicle for examining the dynamics of Canadian and Australian middle power diplomacy. Canada and Australia both have held privileged positions in the international political economy in agricultural trade throughout the post-194 5 period. Their role in the agricultural trade system thus may be traced over a long span in which they were major stakeholders in that system. Despite the sense of diplomatic and economic competition between them, these two countries have had a common interest in maintaining and strengthening the rules of the game in the agricultural trade order. What has been transformed has been the way they have performed this function. During the heyday of the agricultural trade order in the 19505 and 19605, Canada and

2,5

Middle Power Commonalities and Differences

Australia acted in parallel fashion, with complementary but not congruent activities being the norm. With the erosion of the post-194 5 order a very different dynamic developed. Faced with a common (and intensifying) dilemma in the erosion of an orderly and predictable environment in the 19808 and 19908, the two countries moved from parallel activities to an attempt to operate in tandem. The culmination of this attempt to raise their habit of co-operation to another level was the formation of the so-called Cairns Group in 1986. Because of the very different institutional schema and set of practices associated with the establishment of this single-issue coalition, the agricultural trade issue offers valuable insights into the incentives and constraints in the evolution of middle power diplomatic behaviour. Finally the agricultural trade area serves as a useful laboratory for studying the interrelated puzzles concerning the connection between international and national political and economic structures. What Robert Putnam has termed "two-level games," or the interplay between the internal setting and international roles in the form of economic forces and domestic pressures, stands out with respect to the IPE of agricultural trade.94 Canadian and Australian agricultural trade features a powerful interaction between domestic farm politics and international economics and trade diplomacy. Canada and Australia share an enormous economic stake in the application of trade liberalization and multilateral codes of conduct to agriculture. Yet, in practice, neither country has been uncomfortable with forms of managed liberalism, which have allowed them some room for exceptions at the domestic level in agriculture. To understand this contradiction a historicalsociological examination needs to be conducted on the agricultural trade approaches of Canada and Australia. Such a survey needs to touch on a wide number of themes, including the defence of a set of distinctive rural values, the degree of influence exerted in the political process by the farm interest in the two countries, and the interplay between agricultural trade and broader domestic economic policy. The manner in which this multifaceted process takes place tells us a lot about the different priorities, pressures, and circumstances in the two countries and the way politics and policy are managed in a comparative perspective. The question of how all these factors relate to, and play themselves out in, Canadian and Australian agricultural trade diplomacy forms the central theme of this book. The work will attempt to outline and analyse the international context in which this diplomacy is located, the specific historical dynamics that have driven this diplomacy, and the two-way relationship between domestic and international factors when it comes to explanations of change. As both an ordinary and a

2,6 In Between Countries

unique case, agricultural trade provides an advantageous prism for reexamining the fundamental debates that have emerged in the IPE, the broad patterns of political and institutional change, adaptation, and resistance at the domestic level, and the relevance of the middle power concept for empirical research. Ultimately agricultural trade serves as a metaphor both for the location of Canada and Australia in the international economy and for their national characters.

2, Divergent Followership

The roles of Canada and Australia in the post-194 5 agricultural trade system have not received the degree of prominence in the IPE literature that they deserve. The focus has almost uniformly been on the core or epicentre of the agricultural trade system. The primary debates have revolved around issues concerned with the form and pattern of American leadership. A common theme throughout is that agricultural trade has become intertwined with the broader set of questions relating to the United States's will and capacity to provide structural and quality leadership within the global economy. Considerable attention has been paid to the means by which this leadership or hegemony was built up in the period from the mid-19405 through to the 19608, and to the reasons for and implications of the relative decline of the United States from the late 19605 or early 19705 through to the present. Agricultural trade is, in this context, generally examined as an exemplar of a wider movement within the IPE from stability to discontinuity. Proponents of the notions of hegemonic stability and regime theory1 tend to focus on the standard of order (and co-operation) established through the number of broadly accepted rules of the game. Although disagreeing on how and why this order came about or subsequently eroded, critics concur at least to the extent that the system allowed a "stable pattern of production and power that lasted for two and a half decades. "z The interpretative disagreement that has emerged in the agricultural issue-area of the IPE has concentrated on the motivations of the United States as leader and the impact of this leadership not only on other

28 In Between Countries

actors but on the overall structure of the IPE. From the point of view of the critics of American power, the United States is not regarded as providing leadership in the true sense of the word. The order established in the post-1945 era was one based on hegemonic power attempting to subordinate all other actors in the system to itself (and for a long period of time succeeding). The expression of this power was highly diverse in nature, ranging from the direct manifestations of American "food power" (through sanctions and the selective distribution of food aid) to the indirect influence exerted by American-based agribusiness multinationals (marketing and processing firms, as well as the providers of inputs and agricultural services) and by the diffusion of the American agricultural model and values (through the Green Revolution and the transformation of traditional dietary habits). The order could only be understood by reference to the social forces it served and benefited.3 The only difference in the evolving face of American hegemony throughout the post-194 5 era was one of degree, with changes in the American strategy towards the IPE being regarded as "contradictory only in appearance," in that the principal purpose of the strategy remained "to defend and promote a key sector of the American economy."4 As revealed most emphatically by the campaign to bring the EC back into line vis-a-vis the order in the 19805 and 19908, the tactics used by the United States may go through a transmutation, but the "basic goal of the U.S. is quite unchanged."5 From the perspective of the advocates of hegemonic stability and/or regime theory, alternatively, the leadership role of the United States has been looked at in a more positive manner. The performance of the United States as the dominant actor in the post-1945 agricultural trading system is taken to have been instrumental in providing international public good, not exploitation.6 The United States is given credit especially for taking on the responsibilities of manager of the system,7 provider of a protective umbrella over the commercial markets of other exporters, and aid giver of last resort. As the most wealthy and powerful actor, particularly in the immediate postwar years, the United States is seen as having taken the lead in underpinning a co-operative and mutually beneficial regime on the basis of norms, rules, and decision-making procedures enhancing the free and open exchange of goods, the transfer of technology, and the distribution of concessional aid. The problems with this order were not so much related to its weaknesses at the international level; rather, its erosion stemmed from the problems associated with the lack of a solid coalition of political support at the domestic level in the United States. As Peter Cowhey and Edward Long put it with reference to another sector of the economy, the main difficulty for the U.S. government was that "the pressures of

29 Divergent Followership

special-interest groups" in agriculture were "so strong that it did not behave in a manner consistent with its hegemonic interests."8 This weakness caused many of the more glaring and long-standing gaps, loopholes, and sectoral variations in the agricultural regime.9 These included the principle of exceptionalism, as illustrated through the special provisions in GATT Article XI (which legitimized quantitative restrictions on imports of agricultural products so long as production controls were placed on domestic agricultural output), Article XVI (allowing a wide range of subsidies for primary products), and the U.S. waiver, together with the absence in the GATT of any firm provisions on export subsidies and the disposal of surplus agricultural produce. The full extent of these underlying problems became fully apparent only in the late 19608 and early 19705, as the political and economic backlash against the costs of regime maintenance was building in the context of the Vietnam war and the worsening American balance-of-payments deficit. Given the shared United States-centrism of these perspectives, neither had much of significance to say about the role of secondary actors. If a distinction is made between a "coercive" or "predatory" hegemon and a "benign" leader willing to stabilize the system for the general good, both views have as their fundamental concern the behaviour of the leader, not that of the followers. When discussed at all by the critics of the system, the role of the non-hegemons in the agricultural system, such as Canada and Australia, has been relegated to that of the second-tier or secondary powers with interests common to the United States. Some of these critics attribute this behaviour simply to the power structure, in the sense that the followers joined the bandwagon because they were cowed by the might and retaliatory capacity of the United States. Other, more sophisticated analysts place greater weight on the impact of the socialization process.10 The followers went along on agricultural trade, as in other areas of the IPE, because they shared the American view of the world and equated their own interests with those of the hegemonic system. As Oran Young has asserted: "Actors are regularly socialized into accepting and performing the roles associated with institutional arrangements, and the costs to individual actors of opting out of participating in prevailing institutions are often prohibitive."11 For those favouring the more benign interpretation of the United States's leadership in the agricultural trade issue-area, the role of the followers is devalued in a more explicit fashion. From this point of view the followers are dismissed as self-seeking free riders in the agricultural trade system. The followers are said to have institutionalized, in a calculating manner, the practice of "tailgating" on the policies of

30 In Between Countries the United States.12 While the United States took on the responsibilities and burdens at the wheel of agricultural trade policy, the followers reaped the benefits of being driven along. Any positive influence that secondary actors might have had on either the leader or the overall system is not mentioned. While fully recognizing the diplomatic and economic primacy of the United States in the IPE of agricultural trade, it is the contention of this work that the supportive role of Canada and Australia as first followers in the post-1945 agricultural trade system needs to be taken more seriously if a more accurate portrayal of the dynamics of that system is to be achieved. Followership was an integral outgrowth of leadership. Fully aware as smaller trading countries of their need for stability, followers such as Canada and Australia had as their overriding goal the search for order in the international trading arena. Admittedly this approach was entirely consistent with the Canadian and Australian perceptions of their own national interest. As Robert Keohane points out junior partnership had its instrumental logic: "It is useful to remind ourselves [that under hegemony] countries other than the hegemon prospered, and that indeed many of them grew faster than the hegemon itself."13 Internationally the maintenance of a protective umbrella held by the United States over the prices of grains and other commodities provided exporting countries such as Canada and Australia with considerable shelter. As a statement by the Australian delegation to the GATT declared in the mid-1950s: "We recognize the tremendous contribution of the United States during the war and after. Its increased production in agriculture, induced by a combination of high price supports and skilful and industrious application of scientific research [was] in fact a god-send to the world in those critical years."14 Domestically the very flexibility accorded to the agricultural trade regime afforded Canada and Australia (as well as the United States) considerable room for action in terms of particularistic forms of national regulation, at odds with the spirit if not the letter of international rules. Yet it must be reiterated here that this mix of internationalism and selfinterest did not translate into passivity. "[M]iddle-sized countries" were also "able to provide infrastructure" in support and defence of the trading order, although not without costs.15 The hallmark of the followers' international behaviour was a sense of activism by which the followers made their presence felt on the agricultural trading system and on the leader in a variety of ways. If not immune to opportunism in their deviations from the international rules at home,16 Canada and Australia made substantial payments in terms of their followership. These countries did not move into the driver's seat; but neither may they be categorized simply as back-seat passengers. Sitting in the front

31 Divergent Followership they had considerable influence in mapping out the direction agricultural trade policy was to take. This sense of responsibility and burden sharing on the part of the followers emerges at a number of levels. For one thing Canada and Australia took on certain forms of functional responsibility in the agricultural trading system. The duopolistic arrangements established between the United States and Canada in the 19505 and 19605 - and later the triopoly with Australia - to control surpluses and support commercial prices in the grains sector reflect this type of practice. Under these informal arrangements, depicted by Jon McLin as a "surrogate system" of world food security,17 all three countries agreed to take on the burden of holding substantial stocks of wheat. The followership role of Canada and Australia, though, went well beyond this task-related component. By their willingness to monitor and attempt to modify the behaviour of other countries, these first followers also took on broader system maintenance tasks. When the United States did not discharge its leadership in a responsible manner, Canada and Australia took on the function of cajoling and coaxing it to do so. John McEwen cautioned in the mid-1950s that: "Countries such as mine are entitled to have a clear understanding of the high policy of the United States Administration." Without this assurance, the Australian deputy prime minister and trade minister added, "there can be no due weight of United States leadership."18 A senior Canadian trade diplomat stated in the same vein that any abdication of responsibility on the part of the United States with respect to the post-1945 trading order "confused and dismayed."19 Canada and Australia both warned that statements of good faith on the part of the United States, when they were so often compromised by American actions, sent out the wrong signal, propelling a return to the "beggar-thy-neighbour" practices of the interwar years. As the Australian foreign minister, Paul Hasluck, stated, the responsibility for the continuation of the post-194 5 order extended down the hierarchy of nations: "If liberal post-war collaboration by the United States were not brought about that result would be due not only to an American failure but partly to failure by other nations to maintain the case and occasion for collaboration."110 Canada and Australia shared a number of characteristics that formed the basis of their followership in the IPE of agricultural trade. The surpluses of food produced and exported by the two countries provided them with a selective weight and influence consistent with a major stakeholder. These capabilities were complemented in turn by a preoccupation on the part of Canada and Australia to be diplomatically involved on this issue-area. While similar in their definition of the broad features of followership in the international system, the more

32 In Between Countries

specific traits of this followership diverged fundamentally across national lines. As Peter Katzenstein points out, it is useful to distinguish between two components of strategy when discussing comparative approaches to the IPE. ZI While Canada and Australia had similar objectives with respect to the international trading system, the methods through which they attempted to pursue these objectives differed sharply. By failing to take this diversity into account, we miss the nuances in the form and accent across the broader contours of followership. SUBSTANTIVE SIMILARITIES

A fundamental objective of Canadian and Australian statecraft in the post-194 5 era has been to broaden and deepen the architecture of the international trading order. The common focus of these two countries was the development of multiple layers of institutions that would facilitate order and fair conduct in international commerce. To this end both countries had originally favoured the establishment of the International Trade Organization (ITO). Australia had a number of reservations about how the ITO was to operate, not the least of which was concern for the future of the system of imperial preferences that had been established at the 1932 Imperial Economic Conference in Ottawa. But when faced with the choice between the more ambitious plan laid out by the Havana Charter and the modified and truncated GATT, Australia preferred the former. This sentiment stemmed more from the fact that the ITO'S wider regulatory scope encompassed matters of special concern to Australia, such as the operation of international commodity arrangements, than from the institution's symbolic importance within the new international order. As McEwen indicated in no uncertain terms: "Australia would prefer a revised GATT which would enable it to recognize and operate a manageable set of fair-trading rules."11 Canada likewise was not comfortable with all aspects of the ITO, espe cially in connection with the ITO'S ability through the use of its directive powers to push for full employment. In a fashion similar to Australia, Canada worked hard to secure the ITO in the interests of multilateralism and non-discrimination. As Dana Wilgress, the head of the Canadian delegation, put it, the contracting parties should "seek to accommodate the differing situations and the legitimate aspirations and needs of the various nations of the world," but "must not... resort to expedients and indulge in compatibilities which would destroy our general objective."13 In the absence of an ITO with extensive powers of intervention, Canada and Australia concentrated their efforts on more specialized

33 Divergent Followership

multilateral institutions. Integral to this form of triopoly, both countries consistently backed efforts to stabilize grain prices through international agreements. For example Canada and Australia worked hard to establish fixed floor and ceiling prices in the 1967 International Grains Agreement (IGA), and to ensure its survival in the face of the subsequent defection of the United States and France. Despite the necessity of making some sacrifices in terms of its own sales,14 Canada held the line on floor prices for a considerable length of time. The Canadian industry, trade and commerce minister, Jean-Luc Pepin, in the process of informing the House of Commons that the IGA'S pricing arrangements would be temporarily suspended, justified this approach on the grounds that it was the only way of trying to save the agreement: "we may have lost a number of sales ... [but] it was worth the effort. "2* Australia's defence of the IGA was just as marked. Tempering its own aggressive diplomatic and commercial tendencies, Australia took the lead in attempting to work out some form of peace settlement in the wake of the fierce price-cutting campaign conducted by the major actors. Correspondingly it eased up on its own all-out sales approach, which had been marked by a drive to expand production and increase sales of its wheat crop. As one Australian journalist wrote in the late 19605: "International co-operation was only maintained by a virtual waiving of the price provisions and agreement by some exporters, such as Australia, to compete a little less aggressively so as to allow other nations to maintain their traditional share of the world market." 26 Secondly Canada and Australia were also active modifying the international economic system to take greater account of the interests and needs of the developing countries. In keeping with the informal rules of the international system, a considerable component of this activity was the amelioration of crisis conditions caused by natural disasters (as witnessed during the Indian drought from 1964 to 1966). Australia and Canada also took the lead in promoting participatory and distributive internationalism in the post-1945 era. At the 1943 Hot Springs Conference a number of prominent Australians (most notably Lord Bruce, Frank McDougall and H.C. Coombs) played a vital role in laying the foundation of the Food and Agriculture Organization (FAO). These innovators envisaged the FAO to be a prime instrument in th "bold action" needed to guarantee "freedom from want" and the stimulation of international economic adjustment.27 "Nuggett" Coombs, in drawing up his own blueprint for the collaborative management of postwar reconstruction, proposed that this "permanent international body ... would be the channel through which assistance of more concrete character" would be provided "in the form of the services of

34 In Between Countries

experts, the provision of machinery, fertilizers etc."28 Although disappointed with the fact that the FAO never received the powers necessar to achieve the transformation of international agricultural production, Australia did not retreat from its support for this specialized agency of the UN.29 As the outstanding Australian administrator/academic J.G. Crawford pointed out in the early 19505: "Australia has supported FAO fully and actively, much beyond the level of support of countries of similar size and population."30 Lending credibility to these claims, Australia subsequently called for the extension of the FAO'S Food for Peace Program so as to eliminate the disparity between agricultural surpluses and the "hundreds of millions of ill-fed people in the world."?1 Propelled by the activities of Lester Pearson as chairman of both the Interim Commission and the 1945 Quebec Conference, Canada also contributed significantly to the creation of the FAO.32 Nor did the Canadian profile on international food matters diminish in any way with the election of John Diefenbaker as prime minister. With a deep political interest in this issue-area, Diefenbaker proposed the idea of setting up a multilateral food bank for the distribution of surplus food to developing countries. As originally contemplated this plan entailed a central fund operated through the UN to which all of its members would be invited to contribute, the money collected going to pay for the transportation costs in moving the surpluses from the producing to the needy countries.33 Such an ambitious plan, with its international regulatory component, came up against considerable opposition from the United States. Given the extent of the agricultural "surplus" problem in the early 19608, the United States rejected out of hand the concept of an international food bank under UN sponsorship. What they demanded were some fundamental changes in the FAO'S method of operation to lessen their concerns about intrusions on its own sovereignty. The firm imprint of the United States was therefore stamped on the final product. Although the FAO retained the role of scrutinizin U.S. surplus disposal practices, the American government maintained tight control over the actual disposition of these supplies. As part of the UN/FAO World Food Program, the "bank" was to provide for the equitable and efficient distribution of food in times of sudden famine. Its mandate, however, did not extend to the task of stabilizing price fluctuations in international agricultural trade. The third and final aspect of Canadian and Australian statecraft featured the diplomacy of constraint. As suggested above first followership entailed a double burden of responsibility. On the one hand these followers attempted to keep potential spoilers in line. In particular Canada and Australia worked hard to try to temper the restrictive

35 Divergent Followership practices of the EC'S Common Agricultural Policy (CAP) in terms of free access. Much of this campaign was conducted in tandem with the attempts by the United States to rein in the EC. At the time of the Treat of Rome, Canada and Australia pushed for the formation of a special committee of the Organisation for European Economic Co-operation (OEEC) to examine the problem. They also participated in a number of consultative meetings (June 1959, May 1960) between the EC and representatives of the major agricultural exporting nations for the purpose of discussing the implications of the CAP.34 Canada and Australia agreed not to break ranks with the Americans on these initiatives. To the same end Canada and Australia, with the United States, were instrumental in the move by the contracting parties of the GATT to establish a panel of distinguished economists (in 1958) to report on trends in agricultural trade, with particular reference to the impact of protectionism on primary products.35 On the other hand Australia and Canada placed considerable emphasis on trying to get the United States to understand the responsibilities of its own leadership role. In doing so, they were prepared to place the international commercial transactions of the United States under surveillance and to publicize their transgressions of the rules of the game. The original target of these moves was the U.S. request, and receipt in 1955, of a waiver from GATT obligations in order to allow it to restrict the import of agricultural products under section zz of its own Agricultural Adjustment Act (covering price-supported agricultural products). Both Canada and Australia recognized the extent to which this action weakened the structure and credibility of the agricultural trade system. As T.K. Warley makes clear: "At a time when other exporters were highly agitated about agricultural trade restrictions, the architect of the trading system and the custodian of liberalism was giving primacy to national interests."36 Instrumentally the granting of the waiver to the United States widened the gap in the application of GATT rules to agriculture, already weakened by the exclusionary articles. Indeed the quotas introduced on dairy imports under section 2,2. had a profound impact in destabilizing world markets, in that they not only denied access into the U.S. market but deflected more produce into the available "open" markets (mainly Britain) and hence increased the level of competition even further.37 Symbolically the ability of the United States to put its less competitive agricultural sub-sectors beyond the reach of any international obligations indicated an unwillingness on the part of the international leader to abide by its own rules. Such a signal encouraged other actors to flout those same rules by other means. In the 19605 the main source of friction between the leader and the

36 In Between Countries followers shifted towards the methods used by the Americans to dispose of their surplus wheat and dairy products. These methods - tied sales, barter, straight gifts, and the sale of goods for soft local currency - were regarded by Australia and Canada as going far beyond the qualified acceptance of extra-market channels for food distribution allowed for in the agricultural trade order. Consistently both followers attempted to get the message through to the United States that its real long-term interest outweighed its short-term domestic concerns. C.D. Howe, the Canadian trade minister, told the U.S. secretary of agriculture directly that the American disposal techniques were "unfair and unwholesome."38 McEwen specified that: "The objective of these surplus disposals is no doubt very laudable, but nevertheless they can be highly dangerous, as they obviously result in shutting out many members of the free trading world from markets in which they could compete on commercial terms, given no United States aid programmes. By the nature of the products concerned in the United States disposal programmes, it is clear that Australia, one of the steadiest friends of the United States, stands to get hurt more than almost anybody else."39 Australia and Canada wanted a consistent display of far-sighted leadership by the United States. As in other areas of the international economic system, the United States was encouraged to lead in the agricultural trade order by positive example. Although the actions of the EC and other actors were viewed as being potentially detrimental to maintaining stability, the deviations by the United States were regarded as being much more serious. Bluntly put, the order had to be saved from the actions of its own creator. In the words of a senior Canadian diplomat, signs of an erratic course on the part of the United States left other actors "confused and dismayed."40 McEwen went further, maintaining that "it is not good enough [for the United States] to lecture on free trade. She will have to display greater and more constructive influence" in the global economy.41 DIFFERENCES IN STYLE

The divergence in the styles of followership adopted by Canada and Australia in agricultural trade relations is perhaps best captured by a matrix consisting in approaches to problem solving and relationships to the major actors.42 While parsimonious this model provides a useful means for schematizing the standard operating procedures found in the trade diplomacy of the two countries. The principal difference in problem-solving techniques is that whereas Canadian diplomacy may be described as primarily reactive in orientation, the pattern of Australian diplomacy has been more anticipatory. The contrast in how the two

37 Divergent Followership countries deal with the greats is equally marked. Canada's relations with the leader, and even with the potential spoilers, has been highly consensus-oriented, while Australia has been prone to more aggressive outbursts. In considering these patterns of diplomacy, a number of features may be highlighted. With respect to form Canada relied heavily on confidence-building measures. The rebukes issued by Canada concerning the illiberal activities of other actors were delivered in an almost uniformly low-key and temperate manner designed to connote that, although problems existed, they could be settled amicably. Rather than public censure and name-calling, Canadian policy makers underlined the importance of "skilled" negotiations conducted in a spirit of "patience and understanding" for reaching settlements.43 Essential to these efforts were the diplomacy of persuasion and reputation building. The first technique focused on the service of a wide variety of forums, formal and informal, for achieving rule compliance. This process of confidence building was particularly noteworthy in Canadian-American relations. When international rulings were sought on the question of American surplus disposal practices, for example, an appeal was most commonly made to the FAO, the GATT, or another multilateral organization in concert with other like-minded nations. An ancillary element of this approach was the attention given by Canada to winning a form of insider or core status within the process of negotiation. One measure of the success of Canada's performance at this form of politicking was the frequent selection of Canadian officials to key posts. Wilgress, most notably, served as the first chair of the contracting parties to the GATT in i94y. 44 Another indication of Canada's negotiating skill was its ability to assume a presence above its weight. Although Canada's stature as a commercial power should not be underestimated, it seems clear that the Canadian "leading" role in trade diplomacy was out of proportion to its place in the international hierarchy and owed much to the adroitness of its economic diplomats.45 If Canada had no guarantee that it would get its own way, it was at least able to minimize the damage done to its interests in international negotiations. Often overlooked in the discussion on the waiver, for example, is the fact that the United States agreed to report to the contracting parties of the GATT for an annual review as a condition of getting that exemption. In a similar manner Canada also helped extract the promise from the United States that it would consult other exporters before it embarked on any new programs designed for the furtherance of surplus disposal. Bilaterally Canadian attempts to modify U.S. behaviour were channelled through a mix of ad hoc contact and the use of "proper diplo-

38 In Between Countries matic channels."46 On the waiver issue Canada took advantage of its proximity, special relationship, and privileged access to US policy makers to discuss the matter at a special ministerial meeting.47 Three of the most senior Canadian ministers (Pearson, Howe, and Walter Harris) flew to Washington to make a direct appeal to John Foster Dulles and other American government representatives through a collective personal diplomacy. More customarily, quiet or private diplomacy conducted at the executive and bureaucratic levels dominated. Making full use of the multiple channels for contact and communication between Canada and the United States, their bilateral relations on agriculture epitomize the concept of "complex interdependence."48 The wheat surplus question provides an excellent illustration of this phenomenon in operation. To keep the dispute "within channels," consultation took place through an extensive range of informal and formal forums, including the Canadian-American Committee (a private group, which published a series of reports on the wheat surplus problem), the Canada-United States Joint Committee on Trade, the Canada-United States Interparliamentary Group, and the North American Committee of the Food and Agriculture Organisation. In addition to these other dimensions of diplomacy, Canada engaged in what may be labelled reputation-building activities; a highly selective tool. Because many of its programs on other commodities (including trade restrictions on poultry, butter, cheese, and dried milk) were not entirely consistent with the norms of free access to agricultural goods, Canada emphasized its good international citizenship in dealing with grains. Although it maintained a high market share (traditionally around 2.5 percent in this commodity area) Canadian officials declared that Canada would not engage in a tit-for-tat exercise with the United States to maintain market share. The chief commissioner of the Canadian Wheat Board, speaking to Western Canadian grain producers, warned against any temptation to go "off the deep end" responding to the disposal by the United States of surplus wheat: "Surely this is only a last resort for a country which is dedicated to international co-operation and the discussion and solution of its external problems at the international level."49 C.D. Howe echoed these sentiments about the virtue of multilateralism in a speech he made to the Canadian Parliament: "I might say that Canada is largely responsible for the fact that the price of wheat has not collapsed. We have refused to be panicked ... it would be very unwise for Canada to enter into a give-away program simply for the purpose of reducing our wheat surplus."50 Where Canada took its own initiatives with respect to trading practices, it was careful to reassure the United States and the other exporters that these practices did not constitute a fundamental depar-

39 Divergent Followership

ture from the norms of the agricultural trading system. This caution was principally evident in cases of Canadian trade deals with Communist states. For political-security reasons these countries had remained almost completely off-limits to U.S. supplies. Canada's eagerness to take advantage of these open market opportunities had to be carefully balanced with assurances to the United States that this was not being done in an unorthodox manner. When Canada negotiated a deal with Poland in 1955, therefore, the details of the deal were given to the American embassy in Ottawa to pre-empt accusations that the transaction contained special "give-away" features beyond the authorization of credit guarantees by the Canadian government.51 Canada also emphasized that this transaction was a one-off deal, in the sense that Canada was not attempting to use the Polish deal to stimulate trade with other Eastern bloc countries. The effect was to minimize the fallout between Canada and the United States on a potentially sensitive concern. As one Washington-based columnist for a Canadian newspaper reported: "Here was an issue, one would have thought, which touched the most stubborn prejudices of American politics. Yet the criticism has been scattered and reserved."51 Canada's guiding principle remained that it was better to manage problems than to try to deal with them through some form of bold solution. From its perspective these sorts of attempts were more likely to lead to greater complexity and unintended and problematic consequences than to positive, lasting results. Consistent with this attitude, tactics such as the resort to linkage diplomacy were treated with suspicion. Canada firmly declined to take retaliatory action against the United States on any of the key agricultural trade issues through the 19505 and 19605. Just as significantly Canada refused to publicly threaten retaliatory action along these lines. This strength of conviction that quiet negotiations were the best way to ensure stability in the post-194 5 order was seen initially when Congress attached a rider to the 1950 Defence Production Act to impose restrictions on selected agricultural products. This case presented an attractive opportunity to get tough with the United States. For one thing Canada had an obvious grievance, as the action by the United States was a clear violation of the GATT, coming as it did prior to the amendment of section 2,2. (making restrictions on imports of products interfering with U.S. price supports mandatory rather than discretionary) and the push by the United States for a waiver.53 For another thing Canada would not have acted alone as the Netherlands had already retaliated against the United States by imposing a quota on American wheat flour imports, with GATT approval. Further Canada had some ability to inflict considerable hurt on the United States by its

40 In Between Countries own actions. As the Montreal Gazette editorialized: "There is a very wide range of farm products which Canada imports in large quantities from the United States, and where Canada could very quickly affect a change by withdrawing tariff concessions we gave at [the GATT meetings in] Geneva and Torquay."54 Finally the Canadian government had come under intense domestic pressure from its agricultural producers to act. Even with this conjunction of incentives, though, there was a steadfastness about Canada's determination not to change their mode of statecraft. As in later cases when the possibility of a resort to retaliatory measures lay open, any deviation from the standard mode of operation was firmly resisted, seen as neither appropriate nor effective. Canadian diplomacy in relation to the emergent EC adopted the same repertoire. The main thrust of the Canadian diplomatic approach was to establish the same sort of channels for regular contact and management with the EC as had been established with the United States. Akin to the American perspective, or at least that found in the State Department and the White House,55 Canada viewed progress towards enhanced European integration as helping rather than hindering this process. The idea that the EC could be extended to a much broader Atlantic free trade area maintained considerable attraction for Canadian officials through the 19508 and 19608.56 This pattern was altered somewhat during the Diefenbaker period. More interested in the shortterm consequences of the CAP for Canadian farmers than in the poten tial longer-term benefits arising from the formation of a comprehensive economic zone, the Diefenbaker government took a tougher stance on the EC generally and the proposed entry by Britain into the EC specifically. Canada took care, however, to limit the intensity of the campaign in the early 19608. When hints were made by individual Canadian ministers of the possibility of reprisals or punitive measures if the status quo on trade arrangements and institutions was overturned, the cabinet disavowed these comments as "unwise policy and unwise politics."57 Despite all of its emotional fervour, the Diefenbaker campaign against the EC proved to have little long-term impact on the direction or style of Canadian foreign policy. By the early 19708, when Britain acceded to Europe, Canadian diplomacy had fully reverted to its conventional form. Rather than joining any last ditch bid designed to minimize the negative consequences of the British accession,58 Canada chose to concentrate on building its own positive associative links with the EC. Australian agricultural diplomacy featured a more intense and impatient style. Rather than trying to manage issues and relations, Australia's prime focus was on criticism. Viewing agricultural trade issues

41 Divergent Followership

in terms of fairness and equity, Australian statecraft tried to overcome problems by persuasion rather than coping with them through continuous negotiation. The credo according to Australian policy makers was that: "Agricultural protectionism in all its forms is a legitimate object of attack."59 This was the face of Australian diplomacy as a demandeur. In keeping with its image as the "loudest, most demanding, least diplomatic" of the Dominions,60 Australia constantly complained about the imbalances in the way multilateral trade operated in practice and impatiently worked to put the system right. In the pursuit of its goals Australia engaged in an activist form of diplomacy both multilaterally and bilaterally. Multilaterally the Australian search for swift and spectacular means of solving problems resulted in a campaign to create "a revised GATT" in the early 1950S.61 After much deliberation Prime Minister Menzies announced in August 1953 that Australia was "far from satisfied" with the operation of GATT and that it would take a leading role in securing a review of GATT in 1954-55-62 Through a big push of this nature it was hoped that the international community could better "recognize and operate a manageable set of fair-trading rules." Bilaterally Australia was prepared to "have a go" at the greats in pursuit of its aims. This confrontational approach to the United States featured a high degree of moral indignation. Australian policy makers, throughout the 19505 and 19608, condemned what they considered the abdication of responsibility and evasion of obligations by the United States respecting the waiver, surplus disposal, and import restrictions. The intensity of feelings is demonstrated forcefully in McEwen's sharpness of language: "I think it is right that we should argue vigorously and maintain pressures on the United States of America, directly and through international agencies, to see that country, which frankly has been so vigorous and active in advising the world on the advantages of free trade, should itself to a maximum extent practice a good deal of what it preached to the world."63 Menzies echoed this sense of disappointment in 1964, when the U.S. Congress repudiated a voluntary international arrangement on beef quotas by the introduction of protectionist meat import legislation. Appealing personally to President Johnson to intervene on this issue through the use of his power of veto, Menzies again addressed the United States's sense of responsibility over its exercise of international leadership: "I cannot see how the United States could exert effective leadership and expect success in her effort to contain and reduce restrictions on agricultural trade if she herself imposed restrictive action."64 The combative style of Australian diplomacy took on a different hue with the European Community. Australia remained adamant in its

42 In Between Countries belief that these countries would only take the concerns of Australia, and other medium and smaller countries, seriously when vigorous and continuous pressure was exerted. Deploying what they termed "stone under the shoe" tactics, Australian policy makers kept raising the stakes in their dispute with the Europeans. Given their importance as the architects of the CAP, much of this pressure was aimed at the French. As McEwen recalled, in his characteristically blunt fashion: "I am sure that the French in particular must have regarded me as a difficult fellow. We rarely saw eye to eye on policy questions."65 The site of these struggles ranged from the procedural (the need for continuous liaison between the GATT and the EC) and the commodity specific (access to the EC for specific products) to the overall legal/programmatic framework (the status of the Treaty of Rome under GATT). As the terms of the British entry into the EC became the dominant issue, the target of Australia's hard-hitting diplomatic approach shifted accordingly. After an extensive six-week tour of Washington, London, and the European capitals McEwen admitted that "in some matters the trade enemy is not the six-member Common Market, it is Britain."66 Taking a position as "the leader of the opposition,"67 Australia attempted to do all it could to stall or derail Britain's entry. Here it must be mentioned that this struggle was not part of some sort of emotional outburst that abated when the inevitability of Britain finding its place in Europe sunk in. Unlike the case of Canada, Australia's "grizzling and grousing" endured. McEwen, as evidenced by his two-month tour of the U.K. and the EC countries in 1970, continued the campaign right up to his retirement from politics at the beginning of 1971. Moreover this style of personal diplomacy directed at the EC was continued by Doug Anthony (McEwen's immediate successor as leader of the Country Party), as well as by Prime Minister Malcolm Fraser in the latter part of the decade. Australia's heroic approach was not without its inconsistencies. As suggested by Australia's call for a reform of GATT in 1954-55, the failure of the post-194 5 trade order to deliver what it promised introduced a sense of frustration into Australian behaviour. To a considerable extent this element reinforced the dominant face of Australian foreign economic diplomacy, namely its tough-minded and uncompromising character. Australian statecraft nonetheless had another face. On a number of occasions Australia's resentments were played out in a more fatalistic manner. This introduced an unbalanced quality to its statecraft, insofar as Australia's words failed to translate into action. This inconsistency was apparent on the waiver issue. Despite Australia's anger, which boiled over into threats not to continue the GATT tariff concessions agreed to in 1947, in the end it supported the American

43 Divergent Followership bid for waiver status. Ultimately, this appeared to be the least destructive outcome. As Crawford cabled to McEwen from Geneva: "To refuse the waiver is to wreck the GATT."68 A similar situation existed on the surplus disposal issue. As a Canadian official put it, Australia has "protested vigorously" about American dumping, "but has done little else."69 This appearance of inconsistency was reinforced by the contrary thrust in Australian thinking, which subordinated multilateralism to economic development and self-sufficiency. This line of reasoning contrasted the GATT'S inability to become an effective mechanism for the extension of fair rules for primary producers with its intrusive influence on other issues of importance to a country with infant industries. McEwen, in criticizing the imbalances caused by the GATT between industrialized countries and exporters of agricultural produce like Australia, left open the possibility that Australia might consider leaving the GATT altogether: "it would be a reasonable response to this negative attitude to fair world trade rules for primary products for Australia to consider withdrawal from GATT on the grounds that her great world trade interests were inadequately protected by GATT."70 These contradictions, it may be contended, diminished the effectiveness of Australian trade diplomacy. The fatalistic streak in Australian diplomacy reduced opportunities for joint action with other likeminded countries. Australia had criticized Canada for its cautious stance on a number of issues, especially its disinclination to support an early special session of GATT on the EC'S CAP.71 Yet in a case such as the waiver, where Canada was prepared to take a tougher approach, Australia backed away. Equally Australia's public expressions of disillusionment with the GATT sent the wrong message concerning its own commitment to the international trade system. By issuing threats to quit the GATT Australia left its diplomacy open to charges of posturing. In the view of the Australian Financial Review these threats were utterly unconvincing to the international community: "No one took seriously ... the threat of Australian withdrawal." Any clear analysis suggested that "far more would be lost than gained by withdrawing in isolation."72 These difficulties in Australian commercial diplomacy were compounded by Australia's image problems in terms of its own domestic economic policies. Australia's determination not only to resist any changes in the system of imperial preferences but also to attempt to increase the margins of those rates gave out an impression of hypocrisy. If Australia was firm in its commitment to the extension of trade liberalization to others, it was far less willing to concede the argument of the United States that the retention of this legacy of the past (dating

44 In Between Countries back to 1932.) compromised the multilateral system. Australia's vigorous pursuit of economic development under McEwen heightened this perception still further. In an explicit attempt to alter the imbalance between industry and agriculture, Australia attempted to build a trade system in the 19505 and 19608 in which the promotion of agricultural exports was complemented by an extension of the system of restrictive devices (including countervailing duties) to promote internal economic development. Rather than just promoting "Smith" abroad and "Keynes" at home, Australia may be said to have pursued "Smith" abroad and "Keynes" with a heady touch of "List" as translated by McEwen at home. This discussion leads to the last important difference between Canadian and Australian trade diplomacy, which relates to the pattern of activity and association towards the developing world. The records of the two countries in the provision of emergency relief in times of crisis and specific forms of development aid (for example, via the Colombo or, as Australia liked to term it, the Spender Plan) were similar. There are considerable differences, though, in the degree to which Canada and Australia favoured transformation in the IPE. Canada tended to take a safety-first approach on the issue of international economic reform. As shown by its willingness to support a number of selected commodity stabilization schemes, Canada favoured a degree of flexibility in the shape and application of the international system. By opposing any fundamental transformation of the international order, Canada defined the limits of its reach. The narrow nature of the Canadian approach was borne out on a variety of other issues, such as the granting of "special rights" to developing countries under the GATT. Far from being convinced of the advantages gained by the developing countries from the establishment of any "new discriminatory measures in the form of preferences," Canada remained convinced that it was precisely this group of countries that risked "undermining the GATT principle of non-discrimination."73 As one important Canadian state official elaborated: On the question of whether as a middle power we should be more helpful, there may be something to this ... I would suggest, however, that one of the reasons ... why we don't always agree with the aims of the underdeveloped countries at the United Nations, was that we were very doubtful about some of the policies that were proposed. We were very doubtful, for example, about the desirability of having preferences in trade in favour of the underdeveloped countries. We felt this was undesirable, and we urged them to press forward in getting rid of the discriminations that exist rather than go forward into a system of preferences.74

45 Divergent Followership Australia's stance contained greater room for innovation. A subtheme of Australian economic diplomacy in the 19505 and 19605 was the need for a reduction in the inequities in the trading system between the exporters of primary produce and the importers of manufactured goods. To accomplish this the Menzies/McEwen coalition dusted off the clothes it wore as the champion of the secondary powers. Taking on this role in the new crusade that Evatt began at San Francisco, McEwen stated that "[there] is nothing that we are fighting for on Australia's behalf which we are not equally fighting for on behalf of all young countries in the world."75 Only on the basis of redistributive internationalism, according to this line of argument, could the international trade system be strengthened in the interests of all of its members. Putting these declarations into action Australia presented at the 1958 Commonwealth Trade and Economic Conference a comprehensive proposal to achieve price stability through a commodity-by-commodity study of markets, directed at working out the means to anticipate fluctuations and the co-operative methods to meet them.76 In stark comparison Canada had a strictly limited interest in price stabilization. Canadian officials talked of the need to inject into the discussion an element of "practical realism."77 Nor was this a selective, oneoff attempt. At the 1963 Commonwealth Conference Australia focused its campaign to win enhanced equity in the IPE on the principle of preferential treatment for developing countries. By 1965, after further discussions at the GATT and the UN Conference on Trade and Development (UNCTAD), Australia formally applied for an exemption under the GATT to accord preferential treatment to some developing countries with respect to its own import duties for a range of products. The substantive impact of these proposals should not be exaggerated, despite the claims by McEwen and others that Australia, through these initiatives, provided "a lead to other countries which may wish to use preferences to assist the less-developed countries."78 The proposals on how to achieve price stability in the international trade of commodities remained extremely nebulous in character, and the preferences given to developing countries were not particularly generous in practice. However while cognizant of these shortcomings, we cannot dismiss altogether the impact of the proposals. Australia's offer of special status or a general waiver to a specified group of countries provided a breakthrough of sorts in the campaign by the Group of Seventy-Seven (0-77) less developed countries against the limitations of the GATT system. That is to say, the impetus provided by Australia's move helped UNCTAD and the G-JJ to build momentum for reforms on the basis of affirmative action in the international system.79 From an asso-

46 In Between Countries ciative perspective the initiatives to get more predictability in trading opportunities allowed Australia to maintain some degree of contact and positive forms of co-operation with the developing countries, despite the constraints of Australia's own problematic record on industrial protection and immigration. THE EXTERNAL DETERMINANTS OF BEHAVIOUR

In trying to determine why these variances in style between like-minded countries existed, Keohane's view that an "international-level analysis ... is a precondition for effective comparative analysis"80 seems apt. An examination of the international context in which Australian and Canadian agricultural trade diplomacy is located helps "establish a context for the comparison and evaluation of national policies."81 To understand why Canada and Australia choose to play their diplomatic cards in a dissimilar fashion, it is necessary to recognize not only the objective differences between the two countries but their subjective perceptions about the hands they have been dealt. The starting-point for this type of examination must be a more detailed appreciation of the position of Canada and Australia in the IPE. This question has received considerable discussion in the mass of literature that has grown up concerning the location of the two countries. The dominant theme is the dichotomous structure of the Canadian and Australian political economies. Based on the general criteria of GNP per capita, infrastructure networks, wage rates, and the development of welfare systems, both Canada and Australia qualify as developed countries. By other indicators, i.e., their heavy resource orientation, reliance on foreign investment, and low rates of research and investment, Canada and Australia have been accorded a more distinctive location. Immanuel Wallerstein and the adherents of the world system school have argued emphatically that Canada and Australia fit more appropriately into a category termed "semi-peripheral. "8i Although the world system typology is a critical as opposed to a problem-solving mode of analysis, this way of looking at nation states is not entirely inconsistent with the middle power perspective. As semiperipheral countries Canada and Australia are said to be in an intermediate position between the core and the periphery states in the IPE. What this typology lacks is some further specification allowing us to more accurately differentiate between Canada and Australia as well as between them and other countries in the same category. In this respect the work by Philip Resnick provides some needed illumination. Dissatisfied with the notion of "semi-periphery" countries as an all-

47 Divergent Followership embracing term, Resnick has tried to add "further gradation" to the concept. While his main concern in this revisionism has been to try to take into account the changes that have taken place in Canada since the 19705, through a redefinition of Canada as a country on "the perimeter of the core,"83 this appropriately nuanced way of looking at intermediate actors also allows a more precise grasp of the comparative standing of Canada and Australia over a longer time-frame. For all of their common features Canada and Australia have not existed as economic clones. Canada as early as the 19505 and 19605 was a country more than "mid-way" between the core and the periphery. For all of the problems attributed to foreign ownership and control, there existed within Canada a diversified industrial base, represented in part by the auto, iron and steel, aerospace, farm machinery, and textile sectors. Canada was accepted as one of the "big three" in the postwar GATT negotiations, not exclusively because of the diplomatic ability of its delegation but also because of "our status as a commercially great power."84 By comparison the form and structure of Australia's economy more accurately resembled the classic picture of the semi-periphery country. A decade after World War II ended, 80 percent of Australia's export income continued to be derived from agricultural produce. Attempts to build forward and backward linkages through import-substitution industrialization, long a feature in the Canadian case, only began with any serious application in Australia in the late 19508 and 19605. The Canadian high commissioner to Canberra, in 1958, commented about "the as yet unformed, unskilled and uninventive character of Australian industry."85 The profiles of the two countries differed considerably in terms of their agricultural production as well. Australia had built up its competitiveness in a wide range of agricultural commodities, from tropical products such as sugar, rice, and selected fruit (pineapples) to temperate products such as dairy (butter and cheese), fruit (apples), meat, wheat, and wool. Canada's range of exports was far narrower in scope, with its competitiveness concentrated in grains (wheat, barley, and oilseeds), meat and selected fruit (apples), and dairy produce (cheese). To some extent the sheer breadth of its export trade in agricultural goods put Australia in an advantageous position. In boom times especially, this structure created the image of a "lucky country" riding to prosperity on the back of this vast array of resource wealth. The variety engendered in Australia's export trade, however, did not allow it to escape the resource trap. Rather it magnified this dilemma, introducing a considerable amount of insecurity about "sudden changes in access"86 right across the spectrum of agricultural produce, with the knowledge that non-resource activities could not cushion the blow of

48 In Between Countries these shocks. Because of this level of dependence Australia had far less leeway than Canada to be "roughed up a bit" by changes in international market conditions.87 This insecurity was elevated to vulnerability by Australia's location in the IPE. Compounding Australia's structural deficiencies were the problems associated with the loneliness of its neighbourhood. Australia through the 19505 and 19605 remained an "outpost in an alien land"88 - caught between its geographical home in Asia-Pacific and its traditional social-cultural and to a large extent economic home in Britain. As the ties with this traditional home were severed by new events, symbolized by the move of Britain into Europe, and the ties with Asia-Pacific loomed larger, this sense of isolation and uncertainty became accentuated. As Geoffrey Blainey states in his magisterial work, The Tyranny of Distance: "Much of Australia's history had been shaped by the contradiction that it depended intimately and comprehensively on a country which was further away than almost any other in the world. Now the dependence had slackened, the distance had diminished. The Antipodes were drifting, though where they were drifting no one knew."89 Because of its profound fears of being disconnected, Australia fought hard against the forces of geography. The vigour with which Australia campaigned from the 19505 through to the 19705 to retain the status quo in its relationship with Britain shows the full extent of this reluctance to adjust its thinking. This is not to minimize the extent to which Australia developed new economic ties with Asia through the 19505 and 19605 to compensate for the decline in sales to Britain. Through the Australia-Japan Trade Agreements signed in July 1957 and August 1963, Australia made a breakthrough in diversifying its exports generally and agricultural goods specifically. Even with this departure from past experiences, however, the psychological-cultural and commercial barriers to coming to terms with Asia as Australia's dominant partner remained formidable. If more and more aware that it was in the region, Australia had still not come to terms with being of the region. In strictly bilateral terms the relationship that Australia developed with the post-194 5 hegemon did not substitute for the close association enjoyed with Britain. The trading relationship between the United States and Australia was neither as dominant nor as complementary as the Australian-United Kingdom relationship had been in its heyday. Economically the Australia-United States relationship was continually complicated by the lack of an open market in the United States for Australian agricultural goods and by Australia's continued support for the system of Commonwealth preferences. As mooted by the Vernon Committee of Economic Inquiry,90 Australia also lacked the availability of

49 Divergent Followership

a fallback option through some form of formal bilateral framework by which these economic tensions could be managed. Diplomatically, despite the ANZUS security treaty, the Australia-United States relationship lacked the array of formal and informal ties that marked the Canada-United States relationship. In the absence of these diversified and sophisticated forms of contact and communications, Australia's scope for action was far more limited than Canada's. In terms of its targets Australian diplomacy relied heavily on personal contact at the executive level. This sort of contact could only be made on a periodic basis because of the distance and the logistics involved. Under these conditions visits by the Australian prime minister or trade minister became associated with crisis management; Menzies, for example, travelled to meet with President John F. Kennedy specifically to discuss the question of Britain's entry into the EC. In the absence of other avenues Australian politicians also turned to long-distance "megaphone" diplomacy to make their voices heard in the United States. Consistent with the critical tenor of the Australian diplomatic style, these statements often struck a discordant note. McEwen, for example, complained in the midst of the meat import dispute that "the United States just won't plain trade with us."91 This aggressive language not surprisingly proved counter-productive. In the words of one knowledgeable Australian journalist, the resort to "a verbal barrage which had no effect on the issue ... took on the air of ineffectual pique."92Canada's predicament was very different. Instead of being lonely Canada was faced with the dilemma of closeness. As a result of both the ascendancy of the American hegemony and the ancillary British weakness,93 the Canada-U.S. commercial relationship inexorably tightened in the immediate post-1945 era. Not only had Canada's trade ties with the United States become overwhelmingly dominant, but the level of U.S. foreign investment and control of the Canadian economy had also increased appreciably. The benefits of this close relationship were selfevident. In contrast to Australia Canada had the advantage of being able to concentrate a great deal of its diplomatic effort on its major, and contiguous, economic partner in North America. This relationship not only consolidated the development of a more diversified and regularized form of diplomatic contact than was evident in the Australia-United States relationship; it provided Canada with a menu of options entirely unavailable to Australia. One choice was a move towards a formal trade treaty along the lines of the abortive 1947-48 free trade negotiations.94 Another was an extension of the type of sectoral deal already established in the Defence Production Sharing Agreement. The problems with this pre-eminent relationship stemmed from its

50 In Between Countries exclusivity. If continentalism succeeded in crowding out Canada's other connections, Canada's room for manoeuvrability in the international arena might become more limited. A narrower North American focus raised the danger of a return to the isolationist thinking of the 19205 and 19308 in a new guise - a move towards a "North American fortress." At the same time this retreat from internationalism had the potential of limiting the effectiveness of Canada's own bilateral diplomacy. Given Canada's asymmetrical position in relation to the United States, the isolation of Canada in a more confined neighbourhood reduced to an uncomfortable degree its ability to temper American behaviour on issues of immediate concern. The variance in their structural and situational contexts gave rise to very different cognitive maps on the parts of Canada and Australia concerning their places in the IPE. The dominant feature of Australia's view of the global economy has been insecurity. The Australian view of the world, for all of its abundant faith in leadership by Britain and the United States (commonly termed its "great and powerful friends") at the core sustained a deep sense of suspicion about the extent of the willingness of the greats to allow Australia and other secondary nations "a fair go" in the international trading arena. Australia's sense of loyalty was counterpoised by a fear (and expectation) of betrayal. Admittedly the sense of being let down by its protectors in the past was most prominently displayed in the strategic realm, for example the historical legacy of such emotive issues as the capture of Singapore.95 Arising from the experience of the Depression years, the memory of rejection of its claim to special status in the British and American markets was no less painful. Notwithstanding the fact that Australia put a considerable amount of its political capital into the retention of imperial preferences, it is important to remember that Australia had long felt that Britain had been infringing on the spirit, if not the letter, of those agreements. Without going into detail on this issue, the nub of this claim centred on the willingness of Britain to give privileged access to other countries. In the 19308 the main recipient of these advantages was Argentina. After the war the beneficiaries became a wider number of European countries. From the time of the "trade diversion" fiasco of the 19305, a sense of rejection also lingered in connection with the United States. Canada displayed a comparatively greater sense of confidence about its ability to deal with changes in the international trade arena. The main concerns of Canada did not emerge so much from the traumas of the past. Rather its prime focus was on the maintenance of a balance between its conflicting needs and interests in bilateral and multilateral terms. In order to mitigate the hazards of closeness, Canada played up

51 Divergent Follower ship

the notion of counterweights to continentalism, both in the form of multilateral institutions (GATT, IMF) and in the notion of an Atlantic Community (NATO, the EC, and the OEEC/OECD). At the same time Canada tried to use its "special" relationship with the United States to gain more immediate economic advantage, not only directly but indirectly. For example Canada used the GATT talks to get better access to the American market as well as to expand its trade in other markets.96 To a considerable extent, these exogenous factors point to why likeminded countries such as Canada and Australia have exhibited distinctive approaches to foreign economic policy. The structural, situational, and psychological factors in Australia's case were in many ways mutually reinforcing. Australia's weakness in terms of the IPE, its limited diplomatic options, and its historical sense of grievance all combined to help form the assertive, loud, hard-hitting, innovative, and unpredictable style of Australian trade diplomacy. Australia took initiatives in its agricultural trade diplomacy because of the stakes involved, its lack of attractive alternatives, and its fear of being ignored and even more isolated. In contrast Canada could take a quieter, deliberate, and reactive approach because in many ways it had the luxury of being able to do so. Whereas Australia wanted desperately to solve its trade problems, Canada placed its priority on the management of problems. Less preoccupied with agricultural questions, and with an available (albeit politically contentious) fallback option in the form of continentalism, Canada could afford to be more flexible and low-key in its agricultural diplomatic style, and to put the weight on process rather than results. The discrepancy between the Canadian and Australian responses to Britain's entry into the EC bears out this characterization. The decision by Britain to join the EC showcased just how much of the form and structure of Australia's economy was beset by problems "not dissimilar from those of the less developed countries."97 Nowhere was this more evident than in sectors such as the dairy industry and the canned and dried fruit industries, which had to go through a severe adjustment over the next decade (the number of dairy farmers was reduced by twothirds, from approximately 60,000 to 20,000). The rationale for the development of many of these elements in Australia's "eccentric agricultural structure"98 had been to cater to the British market. Given this continued dependence on the old rather than the new leader, many of Australia's agricultural industries and rural communities were naturally highly susceptible to the uncertainties of change. Having lost its access to its traditional "home" market, though, Australia found it difficult to readily and comfortably find a new trade partnership to offset this loss. Rather than coming to terms with geography, as indeed

52 In Between Countries

Britain had done in the process of hegemonic transition, or constituting a formal economic partnership with the United States, Australia continued to perceive itself (and to be seen by its neighbours) as a "wanderer" in the trading world."99 Australia's determined resistance to Britain's entry into Europe revealed the psychology not only of a resentful country but of a "frightened country."100 A good deal of the Australian campaign on this issue continued to be conducted on the basis of the tangible damage that the British move would have on Australian agriculture. At the same time the campaign emphasized the theme of betrayal. The trauma of rejection, or being "sold up the river," came to overshadow the trauma of material hurt, in that the abandonment of the status quo was associated more and more with past loyalty rather than with the existing commercial predicament. At one level this sense of betrayal derived from the process of negotiation carried on between Britain and the EC. Despite the original claim that the vital interests would be "acknowledged and respected,"101 as these negotiations gained momentum it became clear to Australia that the British were willing to take the plunge without gaining anything in the way of compensation or special treatment for Australia. As Anthony put it, with some overstatement given the tenacity of the Australians' own efforts, "The British let us down. We left everything to London and London did not look after us."102 At another level this treatment conjured up in Australians vivid memories of past grievances and misunderstandings in a more holistic fashion. As one commentator expressed these sentiments: "I suppose you have to go right back to the Battle of the Coral Sea if you want to find the seeds of the present situation, and then on through the fall of Singapore, the Churchill-Curtin differences over the Australian Eighth Division, and many other issues."103 Canada's response to the British entry into the EC was very different As related above, Prime Minister Diefenbaker's variation on the theme of the Australian campaign in the early 19608 was short-lived. In comparison with Australia and the other predominantly primary producing countries of the Commonwealth, Canada was "a solidly rich" country, which did not need to take "desperate measures."104 Consistent with this position Canada gradually adopted an attitude of "calm benignity"105 towards Britain's decision, putting longer-term economic as well as security considerations ahead of the short-term costs. Although in the late 19505 and early 19605 the prospect of Britain joining Europe produced some apprehension about the potential loss of markets for selected agricultural goods (including grain, cheese, and fresh fruit such as apples), these pessimistic voices were drowned out by more optimistic assessments of this scenario. For one thing hopes

53 Divergent Followership were raised that the British entry into the EC would moderate the latter's protectionist impulses. For another thing it was thought that any benefits in the form of growth that a more integrated Europe might bring about would have a positive spillover effect on the entire Atlantic economic zone. The effect might be to provide some impetus for rather than to impede the notion of some form of Atlantic Free Trade Area or Common Market. The British move into Europe also concentrated Canada's attention on its own relatively spacious room for manoeuvre. As James Eayrs bluntly put it: "A country cheek-by-jowl with the United States could not bewail the want of options."106 The Diefenbaker government, which had initially entertained the notion of diverting up to 15 percent of Canadian imports taken from the United States to imports taken from Britain, quickly reverted to form and spent a good deal of time trying to repair the damage done by its impulsive behaviour.107 The Pearson government, in more orthodox fashion, placed co-operation with the United States first on the agenda. Bilaterally a more permanent enmeshing of Canada in a continental pattern of trade took hold through a variety of limited deals, the best-known of which was the 1965 Auto Pact. Multilaterally Canada followed the United States in its attempt to accelerate the pace of liberalization through the Kennedy Round of GATT negotiations. As in the earlier trade talks the central focus of these negotiations for Canada revolved around tariff reductions implemented on a bilateral basis with the United States. Although Canada had some initial reservations about the method of calculating these tariff cuts - namely, through "linear tariff reductions" or equal percentage cuts instead of the traditional product-by-product bilateral negotiations - the decision to proceed in tandem with the United States on this basis proved beneficial. Unlike Australia, which chose not to bind its tariffs, Canada was treated throughout these negotiations as a country with "a special economic or trade structure" that accorded it the right to a "balanced" final package based on trade concessions of equivalent value.108 Given both Australia's long-standing (and on comparative grounds, justified) insistence on its own "midway" position in the IPE, and Canada's reluctance to concede special status to primary producing countries in the South, this bargaining concession to Canada was not without its touch of irony. Based on the specific if multifaceted case of agricultural trade, this emphasis on structural, situational, and psychological factors reveals much about the wider relationship between Canada and Australia in the international milieu. If a prerequisite for an extended study of the Canadian and Australian diplomacy of followership, this focus on what may be termed the actors and their setting or stage is not suffi-

54 In Between Countries cient. As Barry Buzan accurately observes, "The illusion that all states are basically the same kind of object" is fostered largely "by the habit of looking at them from an external, system level, perspective."109 To get a more complete and accurate picture it is necessary to move backstage. Although the roles of Canada and Australia are largely determined by their location in the international system, the way that these two countries perform is also conditioned by their own distinctive experiences and internal dynamics. To do full justice to the subject, a closer look at how the Canadian and Australian diplomatic approaches exhibit and reflect salient features of domestic life is in order.

3 Hard and Soft States: The Domestic Context of Agricultural Trade

The switch in focus from an outside-in to an inside-out analysis gives a very different perspective on Canadian and Australian approaches to agricultural trade. The impression derived from an externally directed inquiry is one of relative Canadian strength and Australian weakness. The contrasting realities of their location in the international system may be viewed as determining much of the character of their behaviour. Australia's ability to create an environment conducive to its security and economic well-being was limited by its high degree of reliance on the export of primary produce, its dependence on international markets, and its lack of a secure neighbourhood to fall back on. Furthermore neither Australia's partnership with the United States in ANZUS, nor its supportive followership in the international trade system, translated into a special relationship or a strong bilateral bargaining position (due to the relative insignificance of their economic relationship from an American viewpoint).1 Canada, in comparative terms, derived certain advantages because of its level of economic development and its proximity to its major market and alliance partner. While certainly not immune to being adversely affected by American trade actions, Canada had some ability at least to mitigate or circumvent their effects not only through multilateral forums but by claims of exemption or by other forms of special deals. Paradoxically it may be contended that Australia's very weakness allowed it more tactical freedom than Canada. If highly vulnerable structurally and situationally, Australia's support for the establishment of firmer and fairer international trade rules prompted a more robust

56 In Between Countries

style of agricultural trade diplomacy. To make its views felt in this issue-area, Australia was willing to take risks. Given its closeness to the United States and its more diversified economic interests, Canada's condition was markedly different. Comparatively comfortable with the way the international economic system had evolved, and more confident of its own place in that system, Canada's concerns were dominated by its search for an adequate equipoise both between its international obligations and domestic needs, and between the management of its "special relationship" with the United States and its national interest. The very complexity of these concerns helped impart the cautious, low-key disposition characteristic of Canadian diplomacy. What emerges from this examination is an appreciation of the extent to which the external constraints imposed upon Canada and Australia were countered by the domestic context. Being classified as "in the middle" of the international system did not mean that Canada and Australia were politically identical. Although as nation states in the international system Canada may be considered relatively "strong" and Australia relatively "weak," the character of their internal state structures and forces may be viewed as being respectively "soft" and "hard." As laid out in broad theoretical terms by Michael Mastanduno, David Lake, and G. John Ikenberry,2- this twofold conceptualization is valuable in a number of ways. Not only does it move attention away from an exclusively international orientation, which examines the state as a spatial territorial entity, to one which takes into account the complex of forces within national boundaries; it does so without resorting to the narrowly defined construct of domestic sources of state behaviour exemplified by the "bureaucratic politics" literature. Moreover, this framework avoids the semantic confusion caused by using the terms "strong" and "weak" to refer to both the international and domestic dimensions of the nature of the state.3 Far from being identical, these dimensions are often quite removed from each other. International power relations may be very different from the power relations within a nation, and a "strong" nation in international terms may have a "weak" state and vice versa. Looking at the domestic face of state behaviour in this dualistic fashion allows for a better structured comparison of Canada and Australia on the basis of the general level of decentralization/centralization and constraint/insularity of the state from society. Beyond this basic dichotomy this conceptualization of hard and soft states allows for a more sophisticated analysis of the "specific sources of ... power and instruments" available to a state.4 These features detail the role of state officials as agents for purposeful action and the extent of the availability (or not) of policy instruments.5

57 Hard and Soft States

A closer look at the domestic determinants of foreign economic policy in these two countries bears out this presupposition of Canadian softness and Australian hardness. Australian agricultural trade decisions in the 19505 and 19605 were marked in particular by a high degree of centralization. The era of unchallenged American leadership over international agricultural trade coincided with the unchallenged sway of a small number of individuals over this issue-area in Australian domestic politics. From 1953 to 1970 John McEwen maintained a firm grip on the management of the agricultural trade agenda. Assisted by a small, talented cohort of officials, he fashioned the strategical response to Australia's structural and situational dilemma. He dictated the direction of policy making almost entirely free from administrative interference by other members of the cabinet, the legislature, or non-central governments. In terms of state-societal relations, McEwen met societal demands through a skilful combination of innovative syndicalist-oriented institutional arrangements and coercion, which allowed him to be termed the "toughest figure in post-war [Australian] politics."6 The Canadian domestic context evolved differently. Whereas Australian policy making has been marked by a high degree of state autonomy and administrative control, Canada's policy process demonstrated a considerable amount of internal fragmentation and a scattered distribution of authority.7 Not only was the level of bureaucratic compartmentalization and fissure much more conspicuous in Canada than in Australia, but the extent of the societal penetration into agricultural trade policy was far more pronounced. The regional factor magnified these divergent characteristics still further, as economic issues in Canada quite often spilled over into questions relating to the constitution and national unity. While not completely immobilized by the impact of these internal constraints, Canada's ability to take dynamic or transformational action was impaired. Lacking a solid framework for domestic consensus, internal bargaining and political management dominated the policy landscape. Only by adding the domestic aspect of state action into the equation is a full and accurate interpretation of Canadian and Australian approaches to agricultural trade diplomacy achievable. From the perspective of the framework developed by Mastanduno and his colleagues,8 the relative strength of a country such as Canada in the IPE provides much of the impetus for an externally directed strategy. An outward-looking approach, with its strong commitment to multilateralism as a first-best option and bilateralism as a fallback option, has a number of well-entrenched attractions for Canada. The emphasis on multilateralism has traditionally allowed Canada not only to benefit

58

In Between Countries

from any generalized extensions in trade liberalization, granted in the context of the GATT, it has also assisted Canada in negotiating deals on a bilateral basis with the United States. Just as crucially, from the perspective of this framework, the soft Canadian domestic state acted to reinforce this external projection. More restricted in its ability to mobilize internally because of its decentralized nature and the extent and intensity of conflicting societal pressures, an externally directed approach has proved useful for the release and deflection of tensions. Due to its comparative weakness in the international system, Australia was more restricted than Canada in its ability to pursue its external goals. As such the distinction between Australia's internationalism and its defence of its own national interest stood out more baldly. While professing full support for a fairer international trade system, Australia's actions often deviated from this principle. As manifested by its views on imperial preference and bound tariffs, Australia was prepared to go against the rules of the international system. In this sense the hard Australian state exacerbated the erratic quality of Australia's approach to trade policy. Although placing a high priority on reform at the international level, Australia concentrated on internal questions fundamental to its own economic development. The tactics deployed bear these differences out. Canada's relative strength in the international system allowed it to focus on diplomatic process, by way of mediation and technical detail, in order to get other countries to change or modify their behaviour. Concomitantly Canada's emphasis on consensus, brokerage, and accommodation reflected key traits found in domestic Canadian politics. Conversely Australian diplomacy concentrated to a greater extent on what Mastanduno et al. term external validation. Australian state officials made concerted use of diplomatic endeavours to enhance both the national and their own personal profiles. Again this form of statecraft had an important domestic dimension. While external validation compensated in many ways for external weakness, these campaigns were also useful in the enhancement of domestic credibility and legitimacy in that they were designed and sold to the domestic public as evidence of the government's determination to fight for equity in international trade. In this way, therefore, they took on symbolic as well as instrumental value. THE TIGHT GRIP OF McEWENISM

The way McEwen fashioned his control of the Australian economic agenda points to the distinctive nature of his personal qualities. As a self-made farmer-politician, with little formal education, McEwen shared many limitations with other agrarian politicians in North

59

Hard and Soft States

America and Europe as well as Australia. Unlike the archetypal agrarian populist, McEwen exhibited little charisma or oratorical passion and flair. "Black Jack" McEwen presented the image instead of a strong-willed but dour and awkward custodian of the interests of rural Australia. Because of these traits his abilities were underestimated in the early stages of his career. A case in point was the observation made by an official in the U.S. embassy in Canberra that: "McEwen is a plodder whose horizons are as limited as the sectional interests he represents, and one who would try to make his own position stronger by placing agricultural policy above all others in the political milieu."9 McEwen offset his lack of personal dynamism with his enormous capacity for organization. His route to the apex of Australian politics was as leader of the Country Party. Overcoming both the traditional commodity and regional divisions and the volatile rough-and-tumble of Australian rural politics, McEwen succeeded in turning the Country Party into the coherent institutional voice of the rural community. To promote unity McEwen presented an all-embracing agri-centric perspective on socio-political, economic, and ideological issues: "No single thing is more national in character than to help farm industries."10 In practice every effort was made to give the impression that the primacy accorded to the concerns of the agricultural community was being converted into policy outcomes. As he put it with characteristic directness: "It is the function of my Party to see that the will of those who produce and own the products is carried into legislative and administrative effect."11 McEwen's ability to deliver on these political promises was due to the specific nature of coalition party politics in Australia. As the junior partner to the Liberal Party in the "conservative" coalition that ruled Australia from 1949 to 1972., the Country Party's role in economic affairs far exceeded its status. Although the Country Party had little or no prospect of forming a government by itself, given its restricted demographic appeal, it retained enormous leverage over Robert Menzies's Liberal Party because it consistently supplied the margin of victory over the Australian Labor Party (ALP) - the minority Country Party was "the tail that wagged the non-Labor dog" in the Menzies government. McEwen was able to extract a high organizational price for his support of the coalition, expanding his ministerial sphere of influence over the entire range of departments with responsibility for economic affairs throughout the 19505. This aggregation of power took place in a number of stages. In 1956 McEwen assumed authority over a reorganized Trade Department, which combined his own Department of Commerce and Agriculture with the Department of Trade and Customs.11

60 In Between Countries

In 1963 he assumed control of the Department of Industry and Resources as well. In this process of bureaucratic consolidation he assumed as his personal domain a broad range of policy, including international negotiations, export promotion, and import regulations. As McEwen described it in his memoirs: "Trade became the central policy department of a triumvirate that covered nearly all aspects of Australia's trade and her primary export industries."13 In exercising supremacy over this extensive apparatus McEwen combined an often ruthless approach to politics with a sophisticated appreciation of administrative behaviour. He epitomized the adversarial, macho culture of Australian politics. Never one to back away from a fight, he summed up his appreciation for political contestation in a retrospective television interview: "I'm one who has always felt that in hard-hitting politics, unless one can instill in his opponent a kind of fear ... he's not really a top-level man."14 McEwen was prepared to use all necessary means to achieve his ends, and internationally this attitude contributed to the solidifying of the confrontational style as the hallmark of Australian diplomacy. In the words of one Australian economic historian: "McEwen rarely went to international conferences merely to bargain or negotiate; he went there, he would emphasize, to fight for Australia. When it came to Australia's interests, he was always battling and brawling."15 Domestically this behaviour contributed to the siege mentality, which waned little over the years. As one long-time observer of the Country Party concluded, while McEwen lost his "almost peasant-like ... suspicion of those outside his narrow little circle ... he continued to fight viciously and with malice all enemies, real and imagined."16 McEwen's unforgiving approach to politics did not translate into an authoritarian bureaucratic view. If aloof and arrogant in manner, he had a sophisticated attitude towards organizational behaviour. Perhaps because he recognized his own intellectual limitations, he allowed a relatively free rein to the officials who served under him. These conditions allowed McEwen to build up a talented and loyal cadre of officials within his portfolios. At the top of this list was the "magnificent" John Crawford,17 a former director of the Bureau of Agricultural Economics, brought in by McEwen in 1950 to be the secretary (permanent head) of the Department of Commerce and Agriculture. Crawford was instrumental in getting off the ground those constructive initiatives most connected with the McEwen era, i.e., the extension of bilateral trade links to Japan through the 1957 trade treaty (Agreement on Commerce between Australia and Japan, 1957) as well as the push for reform of the GATT system in 1954-55. Sir Alan Westerman, who took over from Crawford as the secretary of the Department of Trade in

61 Hard and Soft States

1960, lacked his predecessor's breadth of vision. As illustrated by Australia's campaign on the British entry into the EC, the Westerman approach was more reactive in orientation. What Westerman lacked in imagination, however, he made up in political savvy and determination. "[S]hrewd, earthy, energetic and able,"18 Westerman was in large part responsible for shifting the McEwen strategy from one directed at reform in the international realm to one focused on national development at home. In moving in this direction he solidified the basis for what has become commonly known as McEwenism. With his mix of toughness and administrative sophistication, McEwen personified the hard face of the Australian state. All of the major decisions made by Australia in the 19505 and 19605 - relating to the GATT, trade negotiations, or alternatively the issue of the establishment of trade relations with the People's Republic of China - constituted forms of state-led initiatives. McEwen faced some measure of opposition, via either parliamentary interference or the influence of interest groups, to this robust approach. Yet on all of these issues McEwen and his department succeeded in getting their own way. Although Australia's continued membership in the GATT was opposed by segments within the business community, the Trade Department view, that the advantages of staying in outweighed all of its flaws, held the day. As one official summed it up, only by participation could Australia hope to rein in the EC on agricultural policy: I would be inclined to think of "the price" we pay for our membership of the G.A.T.T. as being no more than the acceptance of an international obligation to follow policies that are, in any case, likely to secure our own long-term economic interests. Indeed, one advantage I see in our G.A.T.T. membership is that it fortifies us in resisting local pressures to take actions in the field of trade policy which might suit the short-term (or even the permanent) interests of sectional groups but which would be prejudicial to the interests of the country as a whole.19

A similar position was adopted vis-a-vis the Australian-Japanese trade treaty. McEwen and the Trade Department were able to establish this institutional framework in the face of the fierce opposition of the ALP and the trade unions, the Associated Chambers of Manufactures of Australia, and the entrenched anti-Japanese sentiments of the Returned Service League.20 While acknowledging that selective local industries might require safeguards to mitigate the negative consequences of the move to open up these trade ties with Japan, McEwen subordinated these short-term problems to the long-term advantages of securing better access for Australian primary producers.

62, In Between Countries

On other issues McEwen got the results he wanted despite the objections of other elements of the governing coalition. A case in point was the controversy over Australian trade with the People's Republic of China, in which McEwen's pragmatism prevailed over the ideological dogmatism of both the right wing of the Liberal Party and the small (but politically important) Democratic Labor Party. Despite its own visceral anti-Communism - expressed most vigorously in the debates on Korea, the Petrov Affair, Sukarno and the Indonesian Communist Party, as well as its support for the United States on Vietnam - the Country Party differed from these other conservative elements by disassociating itself from the position that all commercial dealings with Communist China were detrimental to the national interest. Recognizing the potential of the Chinese market for the Australian primary producers, McEwen and his supporters maintained their view that: "economic policy was one thing, foreign policy another."21 So long as Australia's trade was not tied to the recognition of the Beijing regime, the argument went, non-strategic goods could be sold to the country labelled the enemy and a potential aggressor. At the bureaucratic level McEwen and his Trade Department tolerated little interference by other actors in the conduct of commercial diplomacy. By these hard-nosed tactics the "toughs" from the Trade Department effectively marginalized the role of the Department of Foreign Affairs in Australia's developing ties with Japan. Defining Australian-Japan affairs exclusively in economic-cum-agricultural terms, McEwen's department worked from the mid-1950s to establish this relationship as its own exclusive domain. With neither the economic expertise nor the political muscle necessary for a substantial riposte, the Department of Foreign Affairs was relegated to a minor supporting role in the preparation of the trade treaty. Indeed Sir Alan Watt, the Australian ambassador to Tokyo, only became acquainted with the text of the agreement shortly before McEwen was to arrive in Tokyo to sign the treaty. As Watt mentions with equal measures of embarrassment and bitterness in his memoirs, this displacement of his department reflected McEwen's image of "striped-pants diplomats, obsessed with protocol, unable to recognize the basic, material facts of life."zi Once in place the Department of Trade strongly opposed any relinquishing of its control. Australia's relationship with Japan therefore remained "completely in the hands of one man"13 and one department, until McEwen's retirement from office. This domination was reflected in turn by the type of resources poured into this effort. At the end of the 19605, to give just one illustration, the Department of Trade's commercial intelligence service alone had a higher budget for its work in Japan than the Australian Department of Foreign Affairs had for its

63

Hard and Soft States

diplomatic representation in that country.Z4 The relationship was cemented by the sense of obligation Japanese politicians, officials, and business concerns felt towards McEwen, for the minister of trade was "able to present himself in Japan as the man who had fought bitter opposition at home to establish a trade agreement between the two countries."15 In similar fashion the Department of Foreign Affairs was relegated to a secondary position in Australia's opposition to Britain's entry into the EC.z6 As in the Australian-Japanese relationship, this campaign featured the personal diplomacy of McEwen and a small team of officials led by Crawford and Westerman. No representatives from other departments were included in this centralized team, nor did the Australian diplomats in Europe have any substantial input into the process. Watt, having moved from Tokyo to Paris, found himself once again on the outside of the action looking in: "My hands were tied behind my back - as [were], I understand, the hands of other Australian representatives in the capital cities of the European Six. I soon drew the inference that this subject was to be regarded as the private property of the Minister of Trade, and of the Secretary of his Department. They alone were to be trusted to deal with it - through public statements, or through personal negotiations. "z? Another prominent Australian diplomat, Alan Renouf, subsequently echoed these sentiments: "While in Brussels [as charge d'affaires] I became depressed with the narrowness of Australia's approach to relations with the EEC ... The running of Australia's relations with the EEC was left to th Country Party and its fief, the Department of Trade ... [and] Country Party Ministers have never been renowned for diplomacy. Nor have members of the Department of Trade, who seem to feel the only way to produce results abroad is to be tough."18 This survey is not intended to give the impression that the supremacy of McEwen and the Trade Department remained absolute. McEwen's authority over the question of British accession into the EC was moderated by the influence of Prime Minister Menzies. Fearful that an over-aggressive diplomatic approach on this issue would render irreparable damage to the connection with the mother country, Menzies balanced the economic loss with an emphasis on the benefits of a geopolitically stronger Europe. The Treasury Department also took exception to the Trade Department's calculations of the deleterious impact of the British entry into the EC. While Menzies's intrusion departed from the norm, the Treasury Department's challenge was part of an ongoing quest for ascendancy that extended to a wide range of issues, and as such it was met by McEwen with considerable force. In the 1962 "Bury episode" a Liberal junior minister assisting the Trea-

64 In Between Countries

sury Department, who publicly questioned the appropriateness of the Australian hard-line position on Britain and the EC question, was summarily dismissed from his post. Although he denied any involvement in the affair it was commonly assumed that McEwen was instrumental in this sacking. The impression that McEwen never forgot or forgave a political rival was reinforced by the upshot of the friction between the two departments on other issues, most notably the question of currency valuation and the establishment of the Australian Industries Development Corporation (AIDC). Indeed, McEwen extracted his revenge on "Billy" McMahon, who as the Liberal treasury minister had stood up to McEwen on these issues by casting his veto against him as the successor to Menzies and Harold Holt as prime minister.19 The hard face of the Australian state had an equally imposing internal dimension. The combination of centralized decision making with a degree of societal mobilization allowed McEwen to short-circuit much of the democratic process.30 This mobilization took place in a highly structured format in agriculture, with the main producer groups being incorporated into the policy framework through a syndicalist-like set of arrangements. Integral to this design was a mix of inducements. By being given a primary role in policy implementation, selected producer groups in Australia had their activities channelled into support for McEwen's initiatives. Building on the foundations laid down by the wartime Labor government, these producer groups were given key responsibilities over the operation of agricultural marketing boards, which were designed to stabilize the prices received by rural producers. McEwen also provided privileged access for producer groups to international commercial negotiations. He openly described this technique as it applied to Britain's EC entry: "What I did as Minister in charge of the negotiations was not merely to consult... but actually take to Brussels and to London with me representatives of the organized growers or producers. If they couldn't sit at the table they were in a room outside when I or my officials could nick out and have a word with them."31 With this societal mobilization came an element of societal manipulation. Although McEwen claimed that the Country Party was the political wing of the farmers' organizations, his approach appeared less a function of a professed "principle of guidance by industry organizations"32 than it did a calculated (or cynical) attempt to pursue what he considered best for his own organizational interests and to pull his supporters along. To extend both the client base for his party and his component of the state apparatus, McEwen took up positions quite distant from the views held by many agricultural producers. This was especially true in his shift from an outward-directed approach, with the

65

Hard and Soft States

accent on trade liberalization in the 19505, to a more defensive approach to national development, through "protection all round" in the 19605. Indisputably agricultural producers won abundant compensation through bounties, subsidies, tax concessions, and grants for the extension of tariffs to Australian manufacturing industries; the question was whether they were expected to pay too high a price for this distributive system. The perception grew in the agricultural community that it was losing its standing as a sectional interest within the political process and policy agenda through this process of change in economic orientation. These frustrations were compounded by McEwen's attempt to keep the agricultural producers on a short leash through this time of transition. To counter the growing signs of disgruntlement among graziers and other export-oriented producers, which burst into the open in the late 19605, McEwen resorted to a campaign of vilification. He told the Country Party Federal Council: "There is a cell within the Graziers Association fostering a campaign against me and the Country Party."33 L O O S E C O N T R O L IN A F R A G M E N T E D

CANADA

Canada's management of agricultural trade issues in the 19505 and 19608 was much looser and more flexible than Australia's. There was a high degree of diffusion of authority and administrative responsibility in decision making. During the extended period of Liberal rule under WJ. Mackenzie King and Louis St Laurent, no single minister reigned supreme over the agricultural trade agenda in the manner that McEwen did in Australia. The closest equivalent was C.D. Howe. In the process of building up the role and capabilities of the Department of Trade and Commerce through the 19408 and 19508, Howe had taken over responsibility for the Canadian Wheat Board and chaired the Cabinet Wheat Committee.34 Yet if Howe could justifiably be considered the strong man in the Liberal governments in this sphere, he did not enjoy the near-monopoly of power over trade matters that McEwen possessed. Unlike McEwen Howe did not take on an accentuated statist perspective as he saw the need for increased intervention to create the conditions for economic prosperity and security in Canada. Howe was quite willing to use the state, both during the war and in the period of reconstruction, where private companies were unwilling or unable to perform adequately. Nevertheless Howe cannot be portrayed as the father of a "Canada Inc." approach in the way McEwen can be in the Australian case. Howe's undimmed preference was to let go of the tools that had been used by the state and to return the emphasis for economic development to the private sector. More-

66 In Between Countries

over despite his reputation for being the "minister for everything," Howe's responsibilities were neither as extended nor as deeply entrenched as McEwen's. Howe could often impose his will on his cabinet colleagues through his force of personality and weight of economic arguments. If Howe occupied the lead role, however, it was not a role that allowed him to overshadow his colleagues completely; the views of a number of other prominent ministers in the Liberal cabinets were heeded as well. On commercial issues that spilled over into questions relating to foreign policy and international organization, Lester Pearson remained a major player. D. Douglas Abbott, as finance minister, occupied a similar position on matters ranging over trade and domestic economic concerns. The power base of James G. Gardiner among western agricultural producers allowed him to exert considerable authority not only on domestic agricultural issues but on international commodity matters. This fragmented framework in the policy process continued through the Diefenbaker period. His brand of prairie populism and his incandescent leadership were at odds with the development of a coherent team approach to decision making. Many of his best-known initiatives, including the proposal for 315 percent trade diversion to Britain from the United States, were rashly launched and lacked the backup of departmental input. As Ian Drummond states, the announcement of this plan "seems to have been made without premeditation, and with no prior staffwork whatever."35 It would be wrong to surmise from this episode, however, that Diefenbaker conducted policy solely as a one-man show. Ironically the fundamental flaw in his approach to governance was its lack of leadership that was consistent with a delegation of authority. Agricultural trade bears out this point, as responsibility for this issue-area continued to be divided among a variety of ministers. Alvin Hamilton at the Department of Agriculture took the lead position in expanding Canadian grain sales. George Hees at the Department of Trade and Commerce concentrated on Canada's negotiations over Britain's entry into the EC. Donald Fleming at the Department of Finance focused on Com monwealth trade matters. With all of these ministers sharing and competing for responsibilities, Diefenbaker's own scope for action was reduced. Rather than acting exclusively in the role of policy initiator, he acted as an arbiter between competing interests. On top of this administrative fragmentation came the constraints imposed by the cleavage between regional interests in Canada. Because the policy process was judged on the basis of geographic equity as well as on efficiency, the potential for decision making to become wrapped

6j Hard and Soft States

up with questions of national unity was more pronounced in Canada than it was in Australia. Given the high stakes involved the Canadian state could not afford to present a hard face. While McEwen had the capacity to influence the Australian economy and society through a wide range of innovative instruments, the Canadian state concentrated on managing the demands emanating from different societal concerns. In comparative terms, then, the Canadian state was at the soft end of the continuum. Regional sensitivities were especially raw in the agricultural issuearea. Western farmers considered themselves to be disadvantaged by the broad pattern of economic development in Canada. From their perspective the "National Policy" sheltered the manufacturing industries of eastern (or more precisely, central) Canada behind protective barriers while forcing western farmers to sell their products at prices determined by the world market. It was this subordinate status that had precipitated the waves of agrarian protest that had periodically rippled out from the West. Some of these movements focused on reform at the provincial level; others focused directly on shaking things up in Ottawa. Whether brought to the fore in the form of political parties (the Cooperative Commonwealth Federation, Social Credit), movements (the Non-Partisan League and the National Farmers Union), a combination of the two (the United Farmers of Alberta and Ontario, and the Progressives), or ad hoc protests (the 1910, 1918, 1959, and 1965 marches on Ottawa), these manifestations of rural protest lobbied for the democratization of Canadian political institutions and the transformation of economic policy through the reduction of tariffs, the reduction of freight rates, and the better marketing of wheat and other grains.36 The needs of eastern farmers were very different. In contrast to the highly competitive prairie grain producers, the mixed farms of the east were equivocal about protection. Some eastern farmers had well-established export markets, especially in the United States, but most were more susceptible to fears about lower-priced imports reducing their market share. This pessimism concerning their competitiveness induced them to favour intervention (for example, support of butter prices) on at least a selective basis. The Liberals sought to downplay these regional sensitivities through a process of depoliticization. In what Donald Creighton critically termed the rule of the professionals,37 a balance was sought between international and domestic interests under the guidance of the cadre of "Ottawa Men" who dominated Canadian public policy in the immediate postwar era. International trade negotiations were conducted with a minimum of access from societal groups. When ministers did

68 In Between Countries

intervene directly in agricultural trade issues, they usually did so as part of a group delegation, which upheld this balanced approach. The cabinet managed the Canada-United States relationship through this type of collective responsibility. At the first meeting of the Joint United States-Canadian Committee on Trade and Economic Affairs, a key forum for discussing the issue of American disposal of surplus wheat, the Canadian delegation was composed of Howe, Pearson, Abbott, and Gardiner.38 The "flying lobby" to Washington to consult on the U.S. waiver was done on the same basis, although because this issue was of immediate concern mainly to Eastern dairy producers, Gardiner was left out of the delegation.39 Because of his prairie roots and his geographic electoral base, Diefenbaker was more receptive to the special claims of western agriculture. The Progressive Conservative government, however, limited its use of expensive policy tools. While passing the Agricultural Stabilization Act in 1958, Diefenbaker resisted pressure by the major western Canadian producer organizations for deficiency payments whereby farmers would be paid the difference between the existing market price and a "parity" price; he concentrated more on diversifying Canada's export markets. Caught between the pressures of European integration and American surplus disposal, the Soviet Union and the PRC prove obvious targets of this externally directed effort. Hamilton, and the Canadian Wheat Board, were especially enthusiastic about the potential of the Chinese market, viewing sales to the Beijing government as the means of bringing relief to prairie farming and the western business community in the midst of "glut" and the reduction of Canada's ability to sell in traditional markets. Other departments in the Canadian bureaucracy supported this diversification program. Although the Department of External Affairs had a reputation similar to the Australian Department of Foreign Affairs for a lack of program delivery in response to domestic interests, it lent its skills to this effort. As the biographer of one of Diefenbaker's key ministers put it, "Canadian diplomats and trade representatives [were instructed to] make a sales pitch" to a "list of countries to which Canada did and did not [traditionally] sell grain."40 This focus on the interests of western agriculture induced a variety of counter-pressures within the broader foreign and economic policy. The potential benefits for prairie farmers from this targeting of the Chinese market had to be weighed against its possible costs when set in the larger context. There were a number of important factors in foreign policy to be considered. Any Canadian sales of grain to the PRC that contravened the U.S. "Trading with the Enemy" legislation risked the threat of American retaliation, either directly in the area of defence

69 Hard and Soft States

sharing or indirectly through a reduction of U.S. investment in Canada.41 An indication of American willingness to adopt punitive tactics against Canada on this issue came in June 1961, when the U.S. Treasury Department halted the export of grain unloading pumps (vacuators) to Canada. This action was widely interpreted as a "shot across the bow" fired because of American displeasure with the decision by the CWB to extend credit to the PRC in its first major wheat purchas from Canada. From another perspective increased sales to the PRC raised questions about Canada's reputation as a good international citizen. The outbreak of the Sino-Indian conflict in 1961 was particularly upsetting in this regard, in that it exposed Canada to the charge that it was aiding and abetting Chinese aggression against its Commonwealth partner and fellow middle-power. From a commercial perspective Fleming and the Finance Department maintained serious reservations about the advisability of this ambitious attempt to capture a large share of the Chinese wheat market for Canada. They remained resolutely opposed to any departure from the principle of cash-only sales for international grain transactions. Any gifts in the form of long-term credit were objected to on the grounds that these practices would only provoke other agricultural trading nations to bend the rules of the game still further. Domestically, in tune with the views of the larger Canadian business community, the Finance Department contended that any move to provide benefits to prairie producers through these means would come largely at the expense of the urban populace.42- With Canada suffering a serious economic downturn in the early 19608, the issue of an extended structure of twoway trade between Canada and the PRC was particularly contentious If China did not have the requisite cash or credit to purchase Canadian wheat, Chinese textiles and other goods would have to be imported to Canada through barter-like deals to compensate for this deficiency. The inevitable effect, according to the Canadian business community, would be unfair competition leading to the erosion of Canada's manufacturing base. With the return of the Liberals to power in 1963, Canadian trade policy returned to its orthodox pattern. The accent, as previously, was on the moderation of conflicting interests. In terms of process the system reverted to its routinized form, placing the onus on skilled and experienced bureaucrats to resolve technical questions. In terms of substance the priority was balancing conflicting departmental interests. No cabinet minister was assigned to Geneva during the Kennedy Round of GATT negotiations;43 rather the task of chief negotiator was given to Norman Robertson, a former under-secretary of state for external affairs. This appointment confirmed the importance placed on

yo In Between Countries

professional experience in Canadian policy making, in that Robertson was put "again in direct contact with the subject that had been his metier since the mid-i93os."44 It also made explicit in Canadian policy making the need for experts who were "neutral" on interdepartmental differences. Indeed as tensions grew between the forces of internationalism and nationalism in Canada, the battles between the Departments of Finance, Trade and Commerce, and Agriculture and their "clients" became more pronounced in the 19705. THE WIDENING CANADIAN AGENDA

The shocks experienced in the international system in the early 19708 completely transformed the context in which Canadian agricultural trade policy was made. The commodity crisis of 1973-74 created a host of new uncertainties that made policy making increasingly complex and urgent. The balance between the interests of the farm concern, the domestic economic concern, and the foreign policy concern, to use I.M. Destler's categories - already difficult to achieve in the 19508 and 19605 - became far more difficult to reconcile in the 1970S.45 The hope that agricultural policy could be worked out in a manner that simultaneously addressed the objectives of these legitimate but competing concerns was complicated in particular by the intrusion of additional non-farm concerns into the forefront of the policy debate. As the substance and the process of policy making opened up, an opportunity was provided for both the consumer and the global welfare and development concerns to assert their claims to be given greater weight in the agricultural issue agenda. The farm concern for its part was torn between an accentuated push and pull of competing approaches from those with international and domestic orientations. This mix of multiple forces contributed to a volatile brew. One approach open to Canada was to move from a supportive followership role to one of maximizing strategy in international agricultural transactions. A shift of this nature would mean that rather than continuing to place great weight on propping up the post-1945 system, Canada would capitalize on the changes in the international environment and take a more autonomous line of action consistent with its own commercial needs and interests. The more aggressive promotion of Canadian wheat and feed grains, and oilseeds continued to have solid backing in western Canada. In the late 19605 the prairie grain producers had been under intense pressure to curtail their output. The 1969 Report of the Federal Task Force on Agriculture, and the 1970 Lower Inventories For Tomorrow (LIFT) program, were designed to prepare the way for this restructuring exercise. As Prime Minister

7i

Hard and Soft States

Pierre Trudeau stated: "It is a mistake to think we can sell all the wheat we can produce. We must address our production."46 The transformation of market conditions under the stimuli of the shocks in the early 19708 (in 1972, the price of wheat went up from two dollars per bushel to more than six dollars per bushel), promised to reverse this trend. With scarcity rather than surplus emerging as the dominant problem in international thinking, momentum built in the western Canadian farm community for a reversal of domestic thinking with the weight placed not on the contraction of production but on its expansion. Resistance to this maximizing strategy came from a variety of sources within and without the farm concern. To begin with there were the rising political demands of the new set of socially mobilized populations. The first of these forces was the consumer interest, long a quiescent element in domestic economic policy making. Accustomed to relatively low prices (the food component of the Canadian Consumer Price Index [CPI] increased at approximately 2,. 5 percent per annum between 1949 and 1972,), the political mobilization of this concern occurred as Canadian consumers were suddenly exposed in the early 19705 to double-digit inflation as the ripple effect of the international food shocks hit home. In 1973 the food component contributed 50 percent of the total increase in the CPI, and in 1974 it was responsible for 40 percent of the increase. These convulsions had an immediate organizational impact. Traditional organizations such as the Consumers' Association of Canada were overshadowed by the actions of informal coalitions of community groups, trade unions, churches, and ad hoc groups in protesting against rising prices. The prime issue for this concern was not how to maximize Canada's opportunities for international food transactions but how to minimize Canada's own economic vulnerabilities. The immediate success of the consumer concern in moving Canadian policy towards a more inward-directed approach was evident in the Trudeau government's response to the food crisis. Highly susceptible to societal pressure because of its minority government status, the government proceeded in the February 1973 budget to drop all tariffs on beef, pork, and veal products, as well as to put less restrictive rates on other meat products, fruit, and vegetables for a period of one year. Subsequently, in July of 1973, the minister of Consumer and Corporate Affairs (taking the U.S. lead) announced a program of strict export control for forty-one agricultural products, including edible oils, animal fats, and livestock protein feeds. In August of the same year, the government followed up these actions by moving to control the export of feeder cattle to the United States through the imposition of export licensing. Finally, in September, the government instituted a two-price

72. In Between Countries

system for bread and pasta products and a subsidy on milk as another buffer against the shocks. On top of winning these tangible quick-fixes, this politicization from below allowed the consumer interest to gain enhanced access to the agricultural policy-making process. Signals of the consumers' rapid ascent as a political force came initially with the creation of the Food Prices Review Board (FPRB) in May 1973, under the auspices of the Department of Consumer and Corporate Affairs, and later on with the establishment of the Anti-Inflation Board, which took over the FPRB functions. Reinforcing the impression that consumers had become central players on the policy stage, the 1974 Throne Speech promised that the government would strive for "balance" in "food," not "agricultural," policy between consumers and producers.47 Complicating the situation still further was the emergence of another significant non-farm actor in the form of the global welfare concern. The international character of the food shocks gave heightened legitimacy to those Canadian groups working to place the alleviation of world hunger and malnutrition at the front of public debate. Non-governmental organizations (NCOS) such as the Canadian Council of Churches, the Canadian Council for International Cooperation, the United Nations Association, and GATT-FLY used the crisis to mount an intensive lobbying effort publicizing the need to harness Canada's agricultural produce not only to the service of commerce but to a sense of moral obligation towards the global condition. Lacking the immediate political bite of the consumer concern, the ability of the global welfare concern to influence (and win access to) the policy-making process was very different. This concern took on the role of indirect agenda setters, not direct policy players. Their campaign was to gradually attract media and public attention to the cause and effect of global food scarcity, and not to promote the benefits of short-term relief measures.48 The global welfare concern only had an impact when food security issues rose in priority on the foreign policy agenda. The central Canadian concern here was not North-South relations but the position of the United States. As part of its well-entrenched diplomacy of constraint, Canada wished to moderate the coercive elements of the United States's "food power" emergent in the aftermath of the oil crisis and the rising demands of the LDCS for a New International Economic Order (NIEO). Nevertheless Canada had its own interest in shaping the agenda of the world food conference called for by the Gerald Ford/Henry Kissinger administration. Rather than participating in a splashy public relations exercise, the Trudeau government wanted to lay groundwork for the constructive reform of the international sys-

73

Hard and Soft States

tern, via innovative proposals for early warning systems, food banks, and the more equitable and efficient delivery of food aid. From a historical standpoint this element of Canada's response to the food shocks was consistent with the notion of middle power functionalism. An activist approach to food security also meshed with the image and ambitions of a country endowed with a considerable degree of "resources power." Such a view of Canada was put forward most prominently by James Eayrs and Harald von Riekhoff in the academic policy literature, on the basis that Canada's wealth of wheat (as well as fuel and non-fuel minerals) provided it with a greater voice, if not leverage, in international affairs. Nor was this view of Canadian capabilities confined exclusively to academics. Mainstream political discourse took up this theme as well, often linking Canadian capabilities with the need for strategical thinking on Canadian agricultural policy. As one Conservative MP urged from this point of view: "When food begins to become a political and even a military weapon, it is indeed time for Canada to disregard the luxury of co-ordinating short-term, ad hoc food policies."49 These cross-pressures extraneous to the farm concern formed only one element of the policy challenge; the other came within the farm concern itself. As the food shocks hit in the early 19708 regional and commodity differences intensified. While western grain farmers had the potential to take advantage of the changing circumstances through a maximization strategy in the international market-place, the eastern poultry and cattle producers were hard hit by the rising costs of their feed grains and other inputs. Instead of posing an opportunity, therefore, the crisis presented a harsh challenge to their very survival. This acute fragmentation among Canadian agricultural producers was played out in the struggle for domination over agricultural/food policy within the Trudeau government between Otto Lang, the minister responsible for the Canadian Wheat Board, and Eugene Whelan, the minister of agriculture. These two Liberal cabinet ministers had very different world-views. Lang, who retained control of the Wheat Board as he moved from the position of minister of manpower and immigration to justice, and then to transport, championed a rational, market-oriented approach to agricultural policy issues. His support base was located among the outward-looking, export-oriented grain producers in western Canada, concentrated in the private grain companies and producer groups such as the Palliser Wheat Growers' Association. Whelan, a cash-crop farmer and populist politician from south-western Ontario, alternatively favoured stability over expansion. In developing the system of commodity-based marketing boards, with their built-in structure of quotas and import restrictions, Whelan

74 In Between Countries

represented the interests of those who benefited more from a defensive approach as opposed to an environment of free-wheeling competition. Like McEwen in Australia Whelan was prepared to go on the offensive to get his way. In his struggle with Lang, Whelan made good use of the institutional instruments he had in his possession to undercut Lang's authority. For example he utilized his control over such agencies as the Canadian Livestock Feed Board to attempt to erode the position of the Canadian Wheat Board. He also made good use of declaratory language, frequently exhorting the need for strong and centralized policy leadership. Staking his claim for total control Whelan professed that: "anything to do with agriculture should be within the jurisdiction of the Minister of the Department of Agriculture."50 Given this background Whelan's style in attempting to suppress the rising challenge of the non-farm concerns was vigorous. With both the consumer and global welfare concerns intruding on his own domain, Whelan fought back by trying to deflect the blame for high food prices on to other actors, particularly the "middlemen" and the foreigner. One of the primary targets in this counter-attack was the "ripoff" from packers, millers and bread manufacturers; the other main target was the United States. These attacks were not in themselves enough to fend off the intrusions of the consumer and global welfare concerns, but they had the advantage of wrapping Whelan's own policies in populist/nationalist clothing. Import controls were defended, for instance, as essential and justifiable components of an orderly system of supply management that prevented the food shocks from hitting Canada harder than they did. Whelan also engaged in a number of public bouts of name-calling in order to personalize the disputes with a number of his critics. He heaped abuse on the chairperson of the Food Prices Review Board, Beryl Plumptre, and the American ambassador to Canada, Thomas Enders. Plumptre was ridiculed in her capacity as the consumers' champion and because of her own antimarketing board rhetoric. Enders was denounced as the designated point man in an American attempt to accelerate the integration of the American and Canadian commodity markets, highlighted by his public call for free trade on a sectoral basis between Canada and the United States.51 Whelan's narrow client-oriented approach allowed him to consolidate his political support among eastern farmers. Testimony to his strong political standing came with the 1974 election, as the Trudeau government was able to make major electoral gains in rural Ontario. Given the continuing difficulties for the Liberals in re-establishing a solid political base in western Canada, despite Lang's best efforts

75

Hard and Soft States

through his appeal to commercial farmers, Whelan's political stock rose. His ascendancy, however, did not guarantee him a better institutional position from which to wage his fight for control of the agricultural-food agenda. If a political asset, Whelan still did not possess enough political weight as a minister to be included in the key cabinet economic committees. Evidence of the extent to which the consumer interest had become incorporated into the decision-making process was provided both by the extension of the powers of the Anti-Inflation Board in 1976 to include the monitoring of the practices of marketing boards, and by the move by an interdepartmental working group consisting of the key deputy ministers (the DM-IO) in the summer of 1976 to circulate a series of proposals for the reform of national food policy, which called for less emphasis on marketing boards and more on market forces. In similar fashion the farm concern was shunted into a secondary position on food security issues. Unlike the American situation, where a strong secretary of agriculture (Earl Butz) showed he could hold his own against Kissinger and the State Department, Whelan was unable to secure equal status for Agriculture Canada at the 1974 Rome World Food Conference. Confronted by a variety of tests of its own expertise in adjusting to the changing international agenda, the Department of External Affairs was determined to use Rome as an example of its ability to do so. Part of this ability to adjust necessitated an opening up of the Canadian delegation to wider forms of representation. This shift in approach, however, was designed to increase rather than reduce the DEA'S influence on policy matters. While prepared to be flexible in terms of means the DEA was determined to ensure that it was recognized as the "lead" department in the management and presentation of a coherent Canadian voice on the issue of global food security, as in other areas of Canadian foreign policy. Faced with these setbacks Whelan gradually eased up on his confrontational tactics. Rather than continuing to take on every one of his challengers, he increasingly concentrated on damage limitation. An integral component of this shift in emphasis was an attempt to recast the organizational capabilities and functions of Agriculture Canada so as to better cope with the challenges from the consumer and global welfare concerns. A major reorganization of Whelan's Department, which took place in 1977 and 1978, included the establishment of a Quality Assurance and Consumer Services Directorate.52 As part of this same process of adaptation the focus of Agriculture Canada's activities took on an enhanced international dimension. Surplus products, under the jurisdiction of marketing boards (particularly eggs and dairy products), were given a much higher profile in the

7 6 In Between Countries

Canadian aid package; and Agriculture Canada displayed a greater willingness to loan skilled personnel to agencies such as the International Development Research Centre (IDRC) for projects in the South. Whelan himself began to play a prominent role in the administrative activities of a number of international bodies such as the World Food Program. One assessment of this adaptive behaviour may consider it an expedient response designed to win valuable time until the food shock diminished. Whelan, in his own statements, lent credence to this interpretation by stressing that the new political and social challenges he faced would recede as the economic crisis abated. A return to normal conditions, with food prices stabilized domestically and supplies more abundant internationally, was associated from his perspective with a return to the primacy of the farm concern. As Whelan asserted at a federal-provincial ministers' meeting in January 1978, whereas during periods of shortage consumers, organized labour, even foreign policy specialists "want in" to agricultural policy, during periods of surplus this "outside involvement" in agriculture becomes limited.53 Consistent with this expectation, the waning of the food crisis in the late 19705 did ease the pressure from the consumer and global welfare concerns on the agricultural/food agenda. As the pressure reduced, though, other sources of complaint came to the fore. That is to say as the non-farm challenges let up, a powerful backlash against Whelan's performance as agriculture minister emerged from within the Canadian farm concern itself. Underlying this phenomenon were the ongoing regional/commodity tensions concerning the appropriate strategy for agricultural trade. Western grain producers and red-meat producers felt betrayed over what they considered the missed export opportunities of the 19705. The attempts by Ottawa to sell Canadian agricultural produce in the international market-place through this decade fell far short of the high expectations within this export-oriented component of the farm concern, subordinated as the government's attempts were to a number of other powerful political claims. RE-FIGHTING OLD ISSUES

What is striking about Australia in a comparative perspective is the extent of the continuity in the making of public policy in the agricultural/food issue-area during the 19705. Despite the enormity of the shocks in the external arena, and the changing of the political guard at home (marked by the close of the Menzies and McEwen era), the nature of the debate and the method of decision making changed little. Rather than being superseded by new issues about the rights of the

77 Hard and Soft States

consumer and obligations towards the international community, the agenda continued to be dominated by old fights centred on the debate over national economic development. Amidst the intense controversy and partisanship, Australian policy making in the Gough Whitlam and Malcolm Fraser years exhibited a high level of stability. Whereas in Canada the state felt the need to react to societal pressure, in Australia the state maintained its paramountcy and its capability for autonomous action. Not only was the Australian state able effectively to resist societal pressure, it maintained its ability to mould society and the economy largely in accordance with its own vision. This is not to imply that the consumer and global welfare concerns failed to make any impression at all in Australia. As in Canada a widespread consumer revolt broke out in Australia during 1973, as the ripples of the international commodity shocks hit home. The inflation rate for 1973 was just over 13 percent, with fully half of this figure being accounted for by food.54 The anger of Australian consumers was directed primarily at the "scandalously" high local meat prices. Accustomed to beef steak ordinary Australians were not ready to accept hamburger and sausages. Through a combination of formal (the Union of Australian Women and the trade union movement) and ad hoc organizations (the Campaign against Rising Prices), this protest movement engaged in demonstrations and the organization of meat boycotts. With the blame attributed to high overseas prices and high export rates, the aim of this campaign was to shift the priority of Australian economic policy away from an export orientation towards an emphasis on anti-inflation measures at the domestic level. In a number of ways the Australian campaign had advantages over its Canadian counterpart. Firstly the trade union movement had close institutional and personal ties with the ALP government elected into office in December 1972,. These ties provided the government with considerable incentive to reduce the agri-centrism that Australian economic policy possessed during the McEwen years. Secondly the high profile of the trade union movement provided the protest with a level of political muscle and staying power far and away superior to that witnessed in Canada. 55 It is also important to note in this context that the participation by the Waterside Workers' Federation and other militant unions in this consumer-oriented campaign coincided with their ongoing industrial action against selected countries on political/ideological/human rights grounds. Wheat sales to Chile were targeted for a ban, with transportation and dockside restrictions, in reaction to the Pinochet coup. Similarly exports to Indonesia were impeded by restrictions imposed by the ACTU on the handling of Indonesian flag vessels following the East Timor invasion.56

7 8 In Between Countries

Notwithstanding these considerable strengths this protest movement had little appreciable impact on Australian policy. The pressure did force the government to make certain token gestures as sops to the consumer concern, most notably the establishment of a joint parliamentary committee on prices. This form of societal mobilization, however, did not effectively alter either the substance of policy (through the introduction of price controls or the establishment of a two-price system, with one price for meat exports and a lower price for the domestic market) or the incorporation of the consumer interest directly into the policy-making process. While it was necessary for the Whitlam government to deflect attention and buy time from the consumer interest, the core elements of Australian economic policy remained intact. Rejecting moves toward an inward-looking policy, the Whitlam government showed through its bold initiatives on tariff reform and (as will be elaborated upon in chapter 4) its innovative plans on trade promotion that it remained committed to an outward-looking approach. To do otherwise would have sent a signal that Australia was opting out of world markets. As the Australian newspaper summed up the situation: "For the time being at least our national interest lies in the expansion of international trade, not, surely in its restriction. We have, after all, been worrying ever since 1945 about not having enough of it: it seems a bit soon to start turning it back."57 Parallel with the Canadian case, divisions within the Australian farm concern intensified as well. Given the extent of the diversification in the agricultural sector one could never really talk about a monolithic community. Still it could be said with some degree of accuracy that Australian support for an open agricultural trade system in the immediate postwar period had the full backing of the farm concern. The views of the president of the Australian National Farmers' Union on the need for a further reform of international trade via a revised and strengthened GATT, for example, mirrored those of McEwen: "We have genuine grievances, not so much in what the agreement provides for, but in what it omits. At present it is too much concerned with the problems and interests of highly industrialized nations, principally the U.K. and U.S.A., and does not protect the interests of economies based on agricultural exports such as Australia and New Zealand."58 With the additional tensions derived from American "dumping" of agricultural produce and the move of Britain into the EC, however, this consensus broke down. As in Canada, cleavages surfaced between export-oriented and inward-looking producers. On one side were the low-cost wheat, meat, and wool producers who had the potential at least of remaining competitive in international markets. On the other side were the higher cost, more labour-intensive dairy, sugar, fruit, and tobacco

79 Hard and Soft States producers who had built up their industries almost exclusively to cater to the British market. While the former could adjust offensively, by paying more attention to alternative markets such as Japan and the PRC, the latter could only adjust defensively, by moving out of these lines of production or out of farming altogether. This changing environment influenced the shift in McEwen's own political and policy agenda in the latter part of his career. The process of domestic economic adjustment forced upon the Australian farming economy by global change enhanced the incentives for McEwen to move to broaden his political and bureaucratic base through the promotion of balanced development or protection all round. Despite the misgivings of the internationally competitive components of the rural sector, this formula provided McEwen with the element to cement his rural coalition. If the decline of the less competitive agricultural industries could not be stopped, and if export opportunities were hampered by the restrictions imposed on two-way trade with other countries, these problems could be masked by an extensive system of agrarian socialism, whereby the tariff assistance given to Australia's manufacturing industry was compensated for by alternative measures to primary producers. The continued flow of benefits in the way of railway subsidies, taxation concessions, special rates of interest from the Rural Bank of New South Wales, increased support prices, bounties on butter and cheese, and the superphosphate subsidy managed to keep the high-cost producers on side by easing their difficult adjustment pains, while providing the low-cost producers a quid pro quo for their economic losses. The perpetuation of this catch-all approach, however, rested on the provision of strong, capable leadership and an entrenched pay-off system. McEwen's political-cum-managerial ability, by these criteria, is sui generis - only his fusion of clout and skill allowed this all-embracing but unwieldy system to stand for as long as it did. But his hold on his constituency showed signs of weakening by the late 19608, as the export-competitive components of Australian agriculture grew restless. If increasingly fragile under McEwen, McEwenism without McEwen was ultimately unworkable. Doug Anthony, McEwen's successor to the leadership of the Country Party and the positions of deputy prime minister and trade minister, shared McEwen's tough-mindedness. What Anthony lacked was McEwen's sureness of touch on political and policy questions. These defects surfaced on a number of international and domestic questions. One thing that severely hurt Anthony's credibility as the manager of the agricultural policy agenda was his attitude on wheat sales to the PRC. Whereas McEwen had steadfastly maintained his

tttttttttttttttttttttttttttttttttttttttttt

pragmatic approach on this issue, carefully distinguishing between economics and foreign policy, Anthony expressed a more ideological disposition. By gratuitously stating that he would not recognize the PRC just to sell wheat, he politicized the Chinese question in an extremely untimely fashion. His view had the virtue of reducing the hypocrisy of the Country Party's two approaches to China - it had warned of the supposed threat from the PRC on the one hand and had lobbied for th support of agricultural sales to the Beijing regime on the other. His honesty, though, was inexpedient in the extreme, for these sentiments were expressed just as Canada and the United States were moving to recognize the PRC. In these circumstances the critical fallout from hi statement was immediate. Economically Anthony's statement was blamed for the loss of a major wheat sale to the PRC. Diplomatically he was ridiculed for hanging on to the non-recognition card well after alliance politics made it necessary to do so.59 Another thing that damaged Anthony's reputation within the agricultural community was the awkward way in which he handled the Country Party's efforts to become national in scope (the name was changed to the National Party in 1982.). McEwen had laid the foundation of this shift with considerable dexterity. In addition to a bundle of generous hand-outs, he fashioned this expansion process into a more all-embracing nationalist approach centred on an image of "Australia first." Anthony's move to extend the Country Party's appeal beyond the farm gate, once again, was conducted with far less acumen. Not only was the positive side of his appeal (political and policy rewards) more directly targeted to non-farm concerns in mining and the suburbs, but the negative side (anti-permissiveness, union bashing) was displayed in a cruder fashion. These problems were really only the symptoms of Anthony's dilemma. The root cause was the erosion of the comprehensive delivery system on which McEwenism depended for its survival. Bureaucratically the unrivalled supremacy of the Department of Trade and Industry ended with the ALP victory in December 1972. Its displacement as the lead department, with unrivalled prestige and power in the making of economic policy, was signalled by a number of administrative reforms carried out by the Whitlam government. Its centralized control was dismantled, with secondary manufacturing removed from its mandate. Its activities were also opened up to scrutiny by other agencies. To give the most obvious example, the Industries Assistance Commission, which replaced the old Tariff Board, was given more authority to carry out investigations. Accompanying this decline in McEwen's bureaucratic power base was the erosion of the distribution system that McEwen had perfected. Farmers could no longer count on being cush-

81 Hard and Soft States

ioned from, or compensated for, the adjustment process. A number of measures that the rural community relied upon as part of a quid pro quo for industrial tariffs were dispensed with altogether (such as the superphosphate bounty); others were either curtailed (tax concessions) or continued under new conditions (rationalization within the dairy industry). Under this transformed set of circumstances the pressure that had been building up in the agricultural community since the late 19605 to de-emphasize its relationship with the Country Party grew at a quicker pace. In the absence of the abundant incentives that had locked them into the patron-client structure of McEwenism, self-help became more attractive. Faced with the fact that their sectoral interest was a declining force within Australian politics, momentum built behind the argument that agricultural producers could find greater space to operate as an interest group by loosening their ties with the Country Party. Integral to these calls for rethinking was a drive for agricultural producer unity on a new basis. Although it had to overcome enormous differences in thinking concerning economic priorities, this drive paid off in political terms by allowing the amalgamation of the major commodity groups and the creation of a peak organization for the Australian agricultural community, in the form of the National Farmers' Federation (NFF).6° Just as the old ways of doing things appeared to be on the way out in Australia, however, they were given a new lease on life by Fraser and his revitalized Liberal Party. Posing as the champion of the embattled manufacturers and workers, Fraser made the issue of protection for vulnerable Australian industries a centre-piece of his electoral campaign against Whitlam and the ALP from the time he took over as leader of the opposition.61 From a narrow electoral viewpoint this approach had enormous attraction. A tough line on imports allowed the Liberal Party to cut deeply into the heart of the ALP'S traditional voting support among blue-collar workers in the auto, textile and footwear, and steel industries. It also accentuated the image of the Labor government as poor managers of the economy. These attacks benefited too from the advantage of good timing, for Whitlam's reform program, symbolized in the public mind by the decision in 1973 to reduce tariffs across the board by 2.5 percent, came into effect simultaneously with the international economic shocks of the early 19705 and a sharp economic downturn in Australia. From a broader economic or foreign policy perspective, the disadvantages of this political thrust were equally obvious. Fraser's ruthless exploitation of the ALP'S tariff cuts to win him urban votes in the forthcoming (1975) election contradicted his own professed desire to

82 In Between Countries

expand Australian agricultural exports. Industrial protectionism was highly detrimental to the Australian farm sectors' efforts to win access to overseas markets; this was borne out by Australia's struggle with the EC, a campaign that will be discussed in more detail in chapter 4. Industrial protectionism also made the development of AustralianASEAN trade links problematic. As witnessed by the retaliatory measures of the ASEAN countries to Australia's imposition of tougher restrictions on ASEAN textiles, clothing, and footwear, the unwillingness of Fraser and the Liberal government to open up two-way trade with its immediate neighbours placed a serious impediment in the way of Australian agricultural producers attempting to capitalize on their competitive advantage. As the chief executive officer of the New South Wales Graziers Association said: "Once we stop [industrial protection] we will get a lot more of our product into those areas."62 By this narrowly conceived protectionist approach, Fraser decoupled the coalition of urban and rural producers built by McEwen in the 19605 on the foundation of balanced development or protectionism all round. This move heightened sensitivities in the agricultural community. In response Fraser's tendency to favour manufacturing interests, the competitive component in the agricultural sector accelerated their mobilization on behalf of across-the-board tariff reform.63 Even if subordinated to other interests in the area of industrial protectionism, it would be wrong to suggest that all of the tenets of Australian agricentrism were completely abandoned. Despite all the changes Fraser did much during his period as prime minister to help the agricultural community in other ways. While departing from McEwen on questions of domestic economic policy, Fraser maintained McEwen's mode of operation in the international arena. Determined to show that he was doing something for the Australian farmers abroad, in the midst of the policy shift he was implementing at home, Fraser continued with renewed determination McEwen's crusade for justice. The challenge in both Australia and Canada by the 19708 was to adjust to an entirely new set of circumstances, in which the agricultural trade policy-making process was increasingly multifaceted and competitive. The responses to the diverse societal forces without and the extended farm concern within were very different in the two countries. In Canada the softness of the state allowed some flexibility to adapt domestically. While the internal challenges cannot be said to have been completely managed in the sense of being either effectively resisted or thoroughly accommodated, they were at least coped with. The Australian case was very different, for its hard nature imposed serious constraints on its ability to adapt to new forms of societal mobilization. When faced with emergent societal challenges the Australian state

83 Hard and Soft States

tended to resist these pressures in a determined manner. Despite (or because of) its international weakness, the Australian state was not about to crack open; rather it used its accumulated capacity to turn outwards in the search for solutions to its domestic economic problems.

4 Hanging Separately: Coping with Uncertainty

Multilateralism remained the first-best option of Canadian and Australian agricultural diplomacy. More interested in reform than defection, Canadian and Australian statecraft continued to be fixed on restoring order in the international trading system during the 19705 and early 19805. The efforts of these two countries were applied primarily towards coming to terms with changes in the international political economy and reflected in the emergent crisis in agricultural trade. As in the 19508 and 19608, a central ingredient of this approach was to bring back into line those actors whose interests and values explicitly challenged the shape of the postwar system. Viewing the trade practices of the invigorated EC in particular as contributing to the quickening erosion of that order, much of their activity was directed at this source of tension. Concomitantly, the weakening of the hegemonic role of the United States in this period contributed to an appreciable shift in the follower-leader dynamic. During the heyday of American hegemony Canada and Australia had focused largely on constraining the tendencies of the United States towards unilateralism. With the withdrawal of the United States from its management responsibilities in agricultural trade, the problem posed for the first followers was not so much wrong-headed or ill-chosen American actions, but inaction derived from the American lack of appetite for leadership. As one Australian academic described this dilemma in the 19705: "this period ... has been a period of transition from an old order to a new one which has not yet emerged ... United States leadership and effort as the main prop of this ... system has gone, but it has not yet been replaced, or at

85

Hanging Separately

least not replaced by any coherent system, or one of global effect."1 Rather than maintaining their traditional function of followership, therefore, Canada and Australia had to concentrate more on filling the gap in leadership. While these changes in the international system added considerable complexity to the sphere of activity occupied by Canada and Australia, they also reinforced their divergent forms of followership-cum-leadership. Although presented with a similar mix of vulnerability inherent in the economic flux, and disorder and opportunities via the enhanced room for manoeuvre for non-hegemonic actors, the responses of Canada and Australia to these new conditions became increasingly dissimilar. Australian behaviour, especially during the time of the Malcolm Fraser government, underscored the notion of Australia as the ultraloyalist with respect to American leadership. Far from abandoning the United States during the Fraser years, Australia did its utmost to nudge and cajole them towards a greater sense of commitment to the agricultural trade order. The goals sought by Australia largely conformed to the declared goals laid out by the United States during the post-1945 period. Australia placed great tactical emphasis on offering positive reinforcement to the display by the United States of a creative and consistent form of leadership. By going out ahead of the United States in terms of key proposals for agricultural trade reform, Australia's aim was not just to passively back them "to the hilt"2 but to actively bolster America's determination and courage in playing the part of the protector of the international system during a period of uncertainty and reorientation.3 To borrow Robert Keohane's phrase, Australia attempted to lead the elephant in a more positive direction.4 This display of conformity with the leader may be contrasted with the critical and combative element of Australian diplomacy towards the prime spoiler. Whereas positive reinforcement was used with the United States, negative reinforcement was deployed against the EC. Rather than attempting to play the United States and the EC off agains each other, Australia became locked into a rigid pattern whereby it impatiently upped the ante in its bid to force reform on the Europeans. Because of this inflexibility in its choice of tactics, the strength of the Australian approach (its zealous single-mindedness) could not overcome its weaknesses (its lack of international capabilities and its internal contradictions). The work of William Habeeb on asymmetrical negotiations is informative on this point: "Since a weak actor does not possess the aggregate structural power resources to alter greatly the issue power balance, it must rely on tactics whose effectiveness and credibility derive from other sources. Examples of such tactics ...

86 In Between Countries

include coalition building, based on the ability to find allies and persuade them to join your case; harassment and threats of disruption ... and threats to veto the negotiations."5 Canada, by way of contrast, continued to focus less on criticism and more on being a recognized player in the multilateral trade arena. Whereas Australia remained an outsider in the negotiations intended to resolve disputes and manage relationships, Canada pursued an insider strategy. Maintaining its low-key diplomatic approach, Canada attempted to maximize its influence by the use of skilled statecraft, which earned it considerable kudos. Being a player rather than a spectator on the sidelines, however, did not translate directly into success. With a need to balance multiple and competing domestic interests, and faced with a rearrangement of international power resources, Canada found itself unable to achieve the results it wanted in the multilateral arena. HYPER-COMMITMENT AND RIGIDITY

There is little scholarly literature on the Australian contribution to the negotiations on agricultural trade during the 19705 and early 19805. This neglect is surprising. Throughout the extended Tokyo GATT Round and its aftermath, Australia was arguably the most enthusiastic of the countries attempting to get a positive result in this issue-area. Acknowledging its lack of clout in the negotiating process, the Fraser government paid considerable attention to formulating and promoting constructive ideas in the push for reform. As Prime Minister Fraser put it in an interview with the New York Times in 1978: "Australia is well aware of the limits of what it can do by itself. But you never know how much a little extra weight might do in advancing trade liberalization, and we are ready to give that extra push."6 One of the major assets of Australia in this campaign was its sheer energy and persistence. Highly motivated because of its large stake in agricultural trade, Australia was willing to make "a maximum contribution" to the success of multilateral trade negotiations.7 This sense of mission allowed it to ride out numerous rebuffs and disappointments in its efforts to integrate agriculture more fully into the multilateral trade system, with more effectively applied GATT provisions and streamlined dispute settlement provisions. When the results of the Tokyo Round in the late 19705 proved disappointing, particularly the draft code of behaviour on export subsidies,8 Australia eagerly pursued the launch of a new drive for agricultural reform in the early 19808. Another asset was the supportive relationship that the Fraser government had with the United States during this period. From the American perspective Australia proved a useful stalking-horse. While Aus-

87 Hanging Separately

tralia wanted the United States to provide constructive leadership, the United States, up to the Reagan years, seemed quite content to let Australia go out in front in the drive for reform. Australia received repeated encouragement from the United States to contribute to the trade negotiations by way of new policy suggestions. As early as 1974 the U.S. assistant secretary for commerce expressed the sentiment that some initiative to build momentum in the agricultural trade area would be received sympathetically: "it's time for Australia to look around and come up with proposals with a global kind of viewpoint that could serve as a useful basis for discussion" and "provide the chance to put something on the table that could put us off on a new track."9 During the final stages of the Tokyo Round negotiating process this form of American pressure was again exerted. Playing to their audience's fear of being let down once again, American negotiators informed the Australians that their requests would "be left out" completely from the talks unless they embarked on another drive to rectify the situation.10 The ideas put forward by Australia also had some substantive merit. Admittedly the proposals put forward during the final negotiations of the Tokyo Round for the establishment of a new international code of export subsidies for agricultural goods and the development of a workable surveillance mechanism lacked clarity.11 But as a more coherent plan took shape in the run-up to the 1982. GATT Ministerial, these ideas took on a more "dramatic and imaginative" form.1* In several aspects these proposals by the Fraser government served as the kernel of the much better known set of proposals submitted by the Bob Hawke government during the Cairns Group phase of multilateral diplomacy in the later Uruguay Round. This sense of continuity was especially evident in the insistence on the notion of "standstill" and "windback" (or "rollback"). As the Fraser proposals indicated, Australia from the early 19805 concentrated its efforts on bringing about a "standstill on increases in protection and on the introduction of new protectionist measures"; demanding that there be "[n]o new or increased incentives and subsidies, and ... an international commitment to the abolition of existing export incentives and subsidies over a period of five years," combined with "[significant and progressive implemented reductions in all forms of protection, in accordance with a set formula to be determined through the mechanisms of the General Agreement on Tariffs and Trade."1? Still these constituent strengths of the Australian campaign for agricultural trade reform in the 19708 and early 19805 were far outweighed by the deficiencies integral to these initiatives. To begin with the Australian campaign for agricultural reform in the multilateral arena was conducted with little thought given to the process of negoti-

88 In Between Countries

ation. Australia, in the context of the Australia-United States relationship, considered good ideas by themselves to be enough. Little or no effort was made to sell these ideas beyond a selected number of American politicians and officials. As Doug Anthony made explicit at a press conference he gave in Washington in mid-1982,, even with the weakening of the hegemon the only selling that was deemed necessary was directed at the United States: "We have to look at the U.S. to take the lead in fleshing out more clearly how some of these measures might be examined."14 In London during the same tour the Australian deputy prime minister and trade minister added: "you cannot expect Britain to be the prime mover. Australia wants the United States to take the lead, and be an engine starter. It will take the United States to give the issue credibility."15 These difficulties were exacerbated by the imperial style of governance favoured by Fraser. Rather than allowing Australian agricultural trade diplomacy to be conducted largely through bureaucratic channels, this aspect of statecraft remained centralized at the apex of the political system. Fraser chose to occupy centre stage almost entirely alone. With the Australian proposals for the standstill and windback of protectionist practices termed the Fraser initiative, the reform campaign took on the spirit of a prime ministerial crusade. In the words of one journalist: "The curious aspect of all this high-powered diplomacy is that the Foreign Affairs role is negligible. It is essentially a Fraser push, backed by Mr Anthony's Trade Department."16 The element of personal diplomacy and personal sense of mission interjected by Fraser's approach to trade diplomacy was consistent with ingrained Australian behaviour. The style of Australian diplomacy, as suggested throughout this work, has been shaped by a combination of internal hardness and external weakness. Because of the legitimacy in the political culture of boldness, Australian political leaders have been given considerable leeway for diplomatic action. From an international perspective, at the same time, this reliance on mission-oriented campaigns turned necessity into a virtue. Personal diplomacy was a natural outgrowth of the constraints imposed by the mix of the dictates (or tyranny) of geography and the necessity of making Australia's voice heard. Countries such as Canada could more easily conduct a low-key diplomacy, predicated on the easy and continuous interaction between politicians and officials at key focal points, most notably in the United States and Western Europe; Australia was forced to rely more heavily on infrequent, high-level, and highly publicized forms of contact to get attention. The need to grab attention was made greater by the lack of interest in Australia shown by many prominent American and European decision makers. Henry Kissinger, for

89 Hanging Separately

instance, was quoted as saying he would not mind going to Australia if he "could drop off there on the way to somewhere more interesting - like the South Pole."17 Not surprisingly, placed in such a setting, Australian diplomacy tended to be conducted in a more intensely politicized and emotional fashion. Regardless of ideology or sense of purpose Australian political leaders have tended to act as though all that was needed to fix a problem was strong action; by authoritatively taking hold of an issue, at the political/diplomatic level, a solution would be found. This characteristic had dominated the outlook of John McEwen, the ultimate hard man in Australian politics. Fraser embraced this attitude to a similar degree, and in many ways McEwen and Fraser were quite similar in their personality traits. Both leaders were tough, aloof, and secretive. They also shared a sense of personal destiny, centred on the view that their policies would prevail at home and that they could win a better deal for Australia in a harsh trading world. In a variety of ways Fraser stood in a more advantageous position than McEwen. Although McEwen monopolized the Australian economic/trade agenda throughout the 19508 and 19605, he still remained the junior partner to Menzies in the Liberal-Country Party coalition. His grip on policy was tight but it was not all-inclusive, in that it did not extend to the entire foreign policy domain. Turf fights continued to occupy much of his time. Fraser, in contrast, was the commanding figure in Australian politics in the late 19705 and early 19805. A former permanent secretary of the Foreign Affairs Department, Alan Renouf, who served (uncomfortably) under Fraser, characterized the prime minister as the "absolute master of his government."18 Unlike McEwen's, Eraser's political and policy dominance extended right across the span of the foreign and foreign economic agenda. What Fraser lacked were McEwen's abilities to inspire loyalty in his subordinates and to delegate authority. Wanting to concentrate power in his own hands Fraser diminished the power of the influential line departments by building up the Prime Minister's Department as a central agency. Yet the impression one gets of agricultural trade diplomacy is that Fraser used these bureaucratic resources in an ineffective manner. While McEwen left no doubt about who was boss, he not only took his officials seriously but he built up a close working relationship with them. Fraser seems to have been more high-handed and cavalier. In mobilizing his officials in the agricultural trade reform campaign, he was seen as treating them "as inferiors - to be pushed around and, if need be, dressed down for incompetence."19 Fraser was also highly suspicious of potential political rivals. Mindful of the ambitions of Andrew Peacock, he moved to isolate and mar-

90 In Between Countries

ginalize the role of the Liberal minister of foreign affairs and his department in international economic negotiations (Peacock himself was excluded from the cabinet sub-committee on economic policy). This downgrading of the Department of Foreign Affairs, accompanied by an attitude of increasingly open contempt for the work of the professional diplomats, did not mean a return to the McEwenite era, when a Country/National Country Party (NCP)-controlled Department of Trade held sway over the foreign economic agenda (although Alan Carmody, who had served as an official in McEwen's Department of Trade, was appointed as permanent head of the Prime Minister's Department). As evident most vividly at the 1982 GATT Ministerial, Anthony was able on occasion to put his own personal stamp on Australian trade diplomacy; and he was also able to extend his administrative responsibilities to the Departments of Natural Resources and Overseas Trade. But Anthony's own power base, and hence his capacity to launch a challenge to Eraser's predominance, had been severely reduced through a number of organizational changes undertaken by Eraser in the 19708. The most important of these was the creation of a Special Trade Representations Department, which was delegated responsibility for economic and trade dealings with the EC (first with John Howard and then Victor Garland as special negotiators) and which reported directly to the prime minister. This imperial style of governance contributed to inefficiencies in the presentation of the Australian proposals for agricultural trade. On the one hand it exaggerated the Australian tendency to conduct negotiations in a sporadic fashion. On the other hand this style further narrowed the target of Australian diplomacy. The emphasis on high-level personal diplomacy meant that the Australian campaign was focused primarily at the executive level of government/0 Given the asymmetrical nature of the United States-Australia relationship and the intermittent pattern of contact, this way of expressing the Australian point of view was tactically problematic. While the United States expressed encouragement for the Australian efforts on agricultural trade reform, this campaign constituted a mere sideshow in the American negotiating strategy. Hyper-commitment did not translate into an explicit form of partnership. Australian attempts to deal directly with the upper echelons of the U.S. administration, rather than with the trade officials involved in the multilateral negotiations on a day-to-day basis, proved a recipe for embarrassment and disappointment. On several occasions Eraser found himself stymied in his attempts to meet with his American counterpart. For example during the process of selling his package of reforms in 1978, Eraser waited in vain in New York for six days for an invitation to visit President Jimmy Carter.

9i

Hanging Separately

The difficulties associated with Fraser's style of diplomacy were compounded by the risks inherent in an approach that so explicitly linked Australia to the United States. Australia, throughout the Fraser years, did not try to hide the fact that it perceived Australia's goals and interests to be similar to if not identical with those of the United States. Whereas in the 19505 and 19608 Australia still attempted to pursue a balanced approach, with equal consideration to each of its great and powerful friends (i.e., the United States and Britain), by the late 19708 this was no longer the case. As witnessed most graphically in the foreign economic sphere, the drive by Australia to reinforce the leadership of the United States through the exercise of a supplementary and supportive statecraft was accompanied by strong feelings of being "let down" by the British entry into the EC and the inability of Britain to have any positive impact on the evolution of the EC'S trade practices. As Australia tried to move closer to the United States, it distanced itself from its older protector and guarantor. This increasing bias contributed to the tendency in Australian agricultural trade diplomacy to treat the United States and the EC very differently. Despite the clear and repeated evidence of the United States's own defections from liberal internationalism on a wide number of issues with a profound bearing on Australia, such as access for Australian meat, Australia drew a qualitative and quantitative distinction between the American and the EC approach to agricultural trade. Whereas the EC'S CAP was regarded as structurally flawed, with its restrictive, "homogeneous"2-1 nature, the United States continued to be praised for its long-term "moral leadership"12 over the agricultural trade system. The flaws of the United States on selected issues were excused because of its traditional role as the creator and defender of the international order. Australia preferred to deal with the United States in a positive manner. Occasional hints were made by the Fraser government in the late 19708 that future defence installations in Australia would be jeopardized if American trade policy hurt Australia; but as in the MenziesMcEwen era these cautionary warnings were made more as part of the general attempt on the part of Australia to plead with the United States to act assertively and responsively in the international economic system rather than as threats of retaliation. Prime Minister Fraser's own description of his talks with the United States on trade matters, to the Australian parliament in September 1979, made special reference not only to the United States's leadership role but to Australia's record as a good ally: "On many occasions going back more than a decade I have drawn attention to the special relationship [between the United States and Australia]. It is both a treaty relationship and a relationship forged

92, In Between Countries

in a common cause in World War II, in Korea, in Vietnam and in many other instances of co-operation ... When countries are negotiating, I believe that the totality of relationships ought to be considered."23 Looking at the Europeans not as the solution but as the problem, Australia adopted a more coercive line in bilateral dealings. It used inflammatory language to define the CAP, denouncing the EC'S trad practices regularly as "acts of international vandalism." Australia complemented its tactical campaign for reform of agricultural trade at the multilateral level with frontal assaults and uncompromising negotiation on the EC'S CAP.24 Intending to bring about a modification of behaviour not by inducement but by negative sanction, the Fraser government turned up the pressure on the EC in the 19708 and early 19805 As originally conceived, with the memories of the resources shocks of the early 19705 still salient, this tougher face of Australian agricultural trade diplomacy constituted a rather crude form of resources diplomacy. Australia's uranium supplies were introduced as a potential trade lever, with Australia warning the Europeans that unless EC restrictions on agricultural products generally and beef specifically were eased, a uranium deal would be harder to negotiate. As Fraser stated on his return from his grand tour in 1978: "If the Europeans want stability of access to supplies of energy, to supplies of uranium, it is reasonable enough for us to seek to have that principle of stability applied to access to their markets. Stability is a principle that cannot just apply to one part of trade between nations."25 Unsuccessful in this bid to reshape the CAP through an offensive form of linkage politics, though Australia turned in a more desperate fashion to the application of its own buying power as a means of influencing the EC, with threats to redirect Australian purchases of a wide number of items away from the EC if greater access was not given in Europe to Australian agricultural products. Targeted in this fashion were foodstuffs and beverages, automobiles, electronics and communication equipment, transport supplies (such as the Airbus), and defence equipment (the Mirage 2000). The legitimacy of this new form of linkage was made clear by the statement of Peter Nixon, the Australian minister of primary resources: "Perhaps it is time we stopped buying Mercedes Benz, Citroens and Fiats. Perhaps it is also time we stopped buying European wines and spirits." Anthony added in a similar vein that "The EC needs to realize that Aus tralia provides a market for $3.5 billion worth of its goods."26 The effectiveness of this approach was once again compromised and undermined by the characteristic flaws of Australian trade diplomacy. As with the multilateral element the bilateral thrust of Australian statecraft was highly personalized, with the assault on the EC being described as that of a "one man army."27 The role of Australian diplo-

93 Hanging Separately

mats was devalued in that Eraser's mission-oriented crusade was conducted once more in spontaneous and centrally directed fashion, with little regard for bureaucratic backup. Indeed it must be noted here that the negative effect of the linkage tactics was fully appreciated by the Australian diplomats on the ground. The reservations of Sir James Plimsoll, the Australian ambassador to Brussels, became public knowledge when a confidential cable of his was leaked to the National Farmer newspaper. In this cable Plimsoll argued that Australia simply did not have the clout to make this coercive form of diplomacy work: "the Europeans will not react as we would like to the suggestion that we sell our uranium to the countries that buy our beef."18 Several other newspaper stories during the same period reported that Australian officials in Europe accepted that the political, economic, and technical problems facing Europe's nuclear industry were such that there was no short-term advantage to be gained and plenty of penalties to be incurred by crude attempts at resources diplomacy. After they had departed from the diplomatic corps, other professionals joined in this chorus of disapproval. Renouf and James Cumes, both of whom had served as Australian representatives in Europe, roundly condemned the attempted use of linkage diplomacy as counter-productive and dangerous.19 This top-down bullish approach in turn gave the campaign a bold but erratic flavour. As one journalistic critic harshly described it: "The Eraser tour was characterized by ... a lack of sound preparation. It deeply reinforces the impression, often given by Mr. Eraser in the past, that he is not a man who considers what waves will be caused by every stone he throws into the water. Rather, he concentrates on one line of action at a time - and then considers how to deal with the effects."30 Eraser's desire to take on the EC head-first also accentuated the rigid ity of the Australian approach. Australian diplomacy paid little attention to the internal dynamics within the EC. At the symbolic level ther was little recognition in Canberra of the close connection developed between the CAP and the idea of European integration. More instru mentally there was little effort made in the Australian assault on CAP to build up alliances with forces within the EC that were in favour of agricultural reform. Notwithstanding the growing realization within Australian farm groups, most notably the Cattle Council, that pressure conducted inside the EC served as a more effective form of pressure than crowbar diplomacy exerted from the outside,31 the Eraser government impatiently sought results right away rather than mounting a slower, albeit more sophisticated and penetrating, approach. When questioned why the government did not concentrate more on a longerterm strategy designed to build up alliances with groups within the EC

94

In Between Countries

that were critical of the CAP, Victor Garland replied: "We know there are forces within the Community working against the excesses of the Common Agricultural Policy. But we cannot rely on them to bite deeply or quickly. We must act firmly and decisively now."31 For its part, constrained by a lack of financial and logistical support from government, the effort of the Cattle Council to launch a lobbying campaign directly targeting European consumers and trade unionists ("you're being ripped off") failed to get off the ground. This short-sightedness led to considerable speculation about the degree to which opportunism motivated the Australian approach. A variety of observers saw Fraser's single-minded championing of Australian agriculture less as an attempt to win concessions from the Europeans and more as an exercise to firm up his own political image in the countryside. This is not to suggest that the sympathy Eraser expressed over the plight of the Australian rural communities in his campaign against the EC was not genuine. As a wool and beef producer, and a former Liberal opposition spokesman on rural policy in the early 19708, Fraser had a strong connection with and sense of obligation to the pastoral industry in Australia. In many ways his voice was "very much [that of] the Australian farmer in Europe"33 passionately calling for a better deal in order to save the "very wide geographic areas of Australia, which have been put into a state of depression and despair, totally misunderstood in Europe."34 But it is clear that domestic political factors played an important part in encouraging the intensity with which Fraser took on the EC. A strongly nationalist campaign against the EC had considerable political attraction for Fraser's Liberal Party. On the one hand it allowed Fraser to continue to attack the opposition on the basis that the ALP had " betray[ed] all of the farmers in this country" because they had "run away" from the problem of access for Australian goods to the EC.35 On the other hand it provided Fraser with some added leverage in his struggle for ascendancy over Anthony and the National Country Party. Although the Liberals and the NCP remained coalition partners, they had become increasingly bitter electoral rivals in the 19705. Just as the NCP attempted to broaden its own constituency to encompass mining and suburban interests, the Liberals were intent on making political capital by muscling in on the NCP'S rural strongholds. Fraser's attempt to depict himself as the saviour of rural Australia through his battles with the EC may be seen as a crucia ingredient in this strategy. As one journalist spelled it out, there was obvious political calculation in Fraser's personal diplomacy: "even if he fails Mr. Fraser can at least say he did his best to put Australia's case. His standing with the bush vote clearly has never been higher. If Mr. Anthony is not worried, about the future of the NCP, he should be."36

95

Hanging Separately

The cynicism concerning Eraser's motivations was reinforced by the timing and the scope of his campaign against the EC. Much like McEwen's efforts, Eraser's forays coincided with the electoral cycle. As the Australian farm interest was well aware, the enthusiasm with which Eraser made its case in the international arena was calculated to extract publicity and support when from a political standpoint it was needed most. As the NFF noted in the midst of its own debate about direct lobbying in Europe, the government's "fulminations against the EEC have a historical habit of reaching crescendo in election year."37 Even more significantly the credibility of Eraser fighting the good fight against illiberal farm trade practices was damaged by the discrepancy between this reformist campaign and Australia's persistence in retaining a protectionist structure for its own manufacturing industries. Notwithstanding the credit accumulated by the 1973 25 percent tariff cut, the image of Australia remained that of an unbalanced free trader. Rather than offering the EC and its other trading partners incentives in the form of bound tariffs or other concessions in return for liberalization on agricultural trade, Australia held off making further cuts until it was given full reciprocity.38 In the Eraser years, as in the McEwen era, Australia insisted that it would not move at home until corresponding action was taken by its international competitors. This difficulty in two-way trade became intricately intertwined with the question of international alliance-building. While the Australian agricultural reform strategy centred on the United States, there was an attempt as well to build support for this struggle among other countries. Eraser's personal diplomacy introduced a new element into Australian-Japanese diplomacy. In what was caustically termed a "tactic of riding the diplomatic coat-tails of Japan,"39 Australia supplemented its United States-oriented approach with greater attention to its leading trading partner. In a marked departure Eraser made it a specific practice in the late 19708 to consult with the Japanese prime minister on trade issues prior to his major overseas trips. For instance Eraser met with Premier Hajime Fukuda in Tokyo in April 1978, and with Premier Mazayoshi Ohira in 1979, prior to visiting Washington and European capitals. This consultative process, intended to build up identification and harmony of views, had some diplomatic benefits for Australia. Most notably it contributed to the Japanese proposal in 1979 at the Tokyo Summit that Australia be made a member of the exclusive club of industrialized nations.40 However in terms of more tangible progress, these signs of goodwill and co-operation did not assist in bringing the two countries into lock step on international trade matters. Japan, given its own geo-strategic and economic interests, had a very different

96 In Between Countries

outlook and negotiating strategy from Australia. Striving to maintain its own national food import policy, Japan only gave concessions on a selective basis when forced to do so by the Americans. Without the importance and power of the United States, and with a restrictive import policy on cars and other Japanese goods, Australia remained marginal to this form of selective liberalization. The ability of Australia and Japan to co-operate in the multilateral arena was greatly hampered by a number of bilateral irritants. In addition to the issue of access for Australian beef to the Japanese market, lingering on from the food shocks of the early 19708, a bitter controversy broke out in 1977 over the future of the long-term sugar contract. When this agreement was signed in 1974 the price of sugar was soaring, and Japanese refiners were pleased to be locked into a deal that gave them secure supplies at stable (if high) prices for five years. When prices fell the refiners conversely wanted to renegotiate the contract, backing up this demand by a refusal to accept several shipments of sugar. Presented with this volte-face Australian agricultural interests reacted by attempting to escalate the conflict. Spurred on by hard-line politicians in the NCP, such as the maverick premier of Queensland, Joh Bjelke-Petersen, and the NCP deputy leader Ian Sinclair, these forces pushed hard for the adoption of a form of resources diplomacy against Japan parallel to that targeted against the EC. In particular these advo cates of linkage tactics wanted to use renegotiation of the agreement allowing access to Australian ports for Japanese long-line tuna boats as a lever to gain more reliable access to Japanese markets.41 To his credit Fraser resisted the pressure emanating from his coalition partners/rivals to aggravate the conflict through linkage techniques. Still, if not trying to outdo the NCP leaders, Fraser demonstrated little evidence of statesmanlike behaviour. Instead of showing complete restraint in an attempt to depoliticize the situation, Fraser tried to highlight his leadership qualities through a public display of toughness. Informing the Australian newspaper of his intentions (so they could cover the event), the prime minister in late September 1977 summoned the Japanese ambassador to Kirribilli House in Sydney to read him the riot act over the sugar negotiations. Bypassing the Australian Embassy in Tokyo, together with other accepted and proper channels, Fraser wrote directly to Premier Fukuda to express his concern over developments on the sugar issue. As in the case with the EC, these crude and impatient actions were attacked by Fraser's critics as being "conducted with an unprecedented degree of maladroitness, rudeness and bravado ... with blind disregard for the realities of our limited leverage and without proper consideration of the future. "4i Eraser's actions did not stand in the way of a resolution of the sugar issue (a new four-year

97 Hanging Separately

agreement, maintaining approximately the old price, was agreed to in November 1977). But by causing considerable embarrassment to Japan the Australian prime minister jeopardized any hope of elevating dealings between Australia and Japan "to a new plane."43 Most significantly it did little to convince Japan that it should acknowledge a "special relationship" between the two countries.44 A second supplementary target in Australian trade diplomacy were the developing countries. Following the course laid out by the Gough Whitlam government, the Fraser government tried to diversify and consolidate Australia's relations with an array of other countries in the South. In doing so Australia could take advantage of a number of mutual interests, such as issues related to the pursuit of stable conditions of trade, better market access, and improved commodity prices. These shared concerns enabled Australia to forge a working relationship with selected developing countries on an issue-specific basis; as illustrated, for instance, by the effort that Australia, in conjunction with other commodity-producing countries, took through the GATT against the EC'S sugar subsidy export policy in the 19705. In more comprehensive fashion Australia also tried to move away from its conventional representation as a transplanted and insular country. Building once again on the Whitlam legacy, a major thrust of the Fraser government focused on developing and implementing a "progressive" policy based on the improvement of the international political economy as a whole. At the core of this attempt to build solidarity with the LDCS was the general support that Australia gave to the wide-ranging set of proposals constituting the New International Economic Order (NiEo). 45 Moving out ahead of the major Western industrialized countries, Australia gave vocal support to the idea of a common fund scheme for developing countries - as well as considerable thought to how to make the structure of the fund effective.46 This mutuality of interest nonetheless did not mean an identity of interest. Their shared concerns could not hide the fundamental socioeconomic differences and sense of psychological distance between Australia and the LDCS. While on-side with the export-producing developing countries on schemes intended to benefit all producers, Australian policy makers had serious reservations about compensation programs that were designed to benefit LDCS alone.47 Serious concerns, not surprisingly, also remained about Australia's willingness to move from an externally directed approach, where the burdens of reform would be placed on other countries, to an internally directed approach where Australia would open up its own economy to the process of change. The permanent head of the Treasury Department in Australia was reported to have said that: "unless we can show more political will

98 In Between Countries

than has been evident until now, the Australian emperor is going to appear remarkably unclothed" and that "all the emotionally satisfying posturing concerning the Third World would be undermined from a lack of substance."48 This doubt about Australia's bona fides was felt most acutely by the ASEAN countries. The damage inflicted upon Australia's reputation among these countries by the imposition of increased tariffs on their textiles, clothing, and footwear was acute. Not one to hide his feelings, the prime minister of Singapore, Lee Kuan Yew, denounced Australia's actions in especially harsh words: "That's hardly the kind of goodneighbourly policy which will generate understanding, goodwill, stability and sound relations over a long period."49 As revealed by this language, so long as Australia treated the ASEAN countries in what was considered to be an unfair fashion, it would remain an outsider to the region. The criticisms levelled at Australia by the ASEAN countries proved detrimental to it in a number of ways. Most tellingly the antagonism caused by its record of industrial protection curtailed the possibility of Australia working with the ASEAN countries on issues of interest. This absence of a co-operative relationship was particularly damaging to Australia's campaign against the EC, in that many of the ASEAN countries, including Indonesia, Malaysia, and Thailand, had their own disputes with the Europeans over access for their agricultural commodities. Yet, unable to set their own differences aside, Australia and the ASEAN countries could not unite in having their voices heard in international forums.50 Indeed, in a somewhat ironic twist the AustralianASEAN dispute allowed the EC to redirect attention away from its own trade barriers: when Australia went on the offensive against the CAP, the EC countered by attacking Australia's hypocritical attitude of preaching free trade but remaining highly protectionist itself. Even EC officials who admitted that the EC had not treated Australia fairly high lighted this double standard, telling the Australians: "You are not all that liberalistic either."51 As the chairman of the Senate Standing Committee on Foreign Affairs and Defence emphasized, the main "factor which raises doubts about our credibility is our very strong criticisms of the trading policies of the EEC ... and our advocacy of the liberalization of trade. This is seen in some countries as rather two faced because although we are bitterly attacking the EEC policies they see u as equally protectionist."52 The diplomatic impact of this reputational problem was further amplified by the fact that the member countries of the EC and ASEAN were willing to work together to register their objections to the Australian safeguard arrangements, by way of a protest lodged with the GATT Council.53

99 Hanging Separately THE INSIDER/OUTSIDER CONUNDRUM

Canada's approach to international trade throughout the 19708 and 19805 may be contrasted in a variety of ways with Australia's. With very different capabilities and a much broader set of interests and choice of tactics, Canada showed a greater flexibility in both the multilateral and bilateral arenas. Although endeavouring as in the past to adapt its approach to fit in with the United States's own goals, the weakening of the United States's hegemonic role, and a correspondingly greater room for manoeuvre on the part of the followers, Canada sharply tilted its diplomatic direction. Throughout this period Canada laid considerable stress on the diversification of its bilateral relationships. With respect to decision making and dispute resolution in the multilateral context, Canada juggled in an increasingly complex and often awkward fashion its desire to take on an enhanced burden of responsibility in managing the trade system with a forthright need to pay closer attention to a diverse range of domestic interests. If Canada retained its position as a skilful and resourceful player, its approach to international trade was conducted in an appreciably looser and unwieldy fashion. Unlike Australia's entry into a tighter form of followership with the U.S., Canada adopted a far less restrictive mode of operation. Rather than limiting itself to working side by side with the United States, Canada sought counterweights to the American role and influence. The events of the early 19705 completely changed the context in which Canadian foreign economic policy was made. In traumatic fashion the so-called Nixon shocks of 15 August 1971 had signalled a break in the traditional pattern of management of the United States-Canada relationship through the techniques of quiet diplomacy and access. Canada saw these shocks - featuring both the suspension of the convertibility of U.S. dollars into gold and the placement of a 10 percent surcharge on manufacturing goods entering the United States - as an indication of unwillingness by the United States to adhere to the major tenets of the postwar economic order. The fact that the United States did not exempt Canada from the import surcharge marked a hiatus in the much-proclaimed special relationship between the two. As John Connolly, the United States secretary of the Treasury Department, bluntly told the Canadians, these measures were designed "to shake the world. And that, brother, includes you."54 The sense of transition was reinforced when President Richard Nixon addressed a joint session of the Canadian parliament in April 1972.. He used this opportunity to make explicit the implications of the Nixon doctrine for Canada, namely that each country had to define its own interests, ensure its own security, and take responsibility for its own progress.

TOO In Between Countries

The Canadian sense of uncertainty over the direction of U.S. foreign economic policy was heightened by the transformation in the U.S. domestic political system. The ebbing of the "imperial presidency," the emergence of Congress as an increasingly important actor in foreign policy making, and the significant alterations made in the legislative seniority system in the immediate post-Vietnam and Watergate period made decision making in the United States much more difficult to comprehend and to deal with. Wider participation resulted in a more open, freewheeling, and unpredictable approach. This decentralization of foreign policy leadership was reinforced by the increased intertwining of foreign policy issues and domestic concerns. The overall result was a narrower, constituency-oriented foreign policy. As the economic pillars of the postwar order eroded, Canadian decision makers had other positive rationales for rethinking their international trade approach. James Eayrs, writing in 1975, argued that far from weakening Canada, the "Nixon shocks" on top of the commodity shocks of the early 19708 actually enhanced Canada's power capabilities. By becoming increasingly insular and unreliable the United States opened the way for the ascendancy of other countries. Canada in turn was well placed to benefit from these changed circumstances: "Canada has almost sinfully bestowed upon it the sources of power, both traditional and new ... The technology is there, and waiting. The manpower is there, and waiting ... The resources are there, or waiting too ... We need only decide how fast to develop them, how much to charge for them."55 Uncertainty and confidence combined to shape a more independent and autonomous Canadian approach. Priority was given to the strengthening of the Canadian economy by both the "judicious use of Canadian sovereignty"56 and the co-ordinated development of Canadian resources, as borne out by a number of initiatives including the strengthening of the Foreign Investment Review Agency (FIRA), the establishment of Petrocan and the Canada Development Corporation, and the introduction of the National Energy Program. As Charles Pentland convincingly argues, a dominant underlying theme in Canadian economic strategy was the push towards "the adoption, in a mild form, of the sort of neomercantilism fashionable in many states' responses to the global economic crisis of the 19705 ... represent [ing] ... a logical extension of the mild form of statism we have seen on the domestic scene."57 The main geographical thrust of the Canadian approach was a search for counterweights to reduce the vulnerability to the United States. This so-called Third Option of bilateral diversification had many facets, but centrality was given to the pursuit of a new construe-

ioi Hanging Separately tive relationship with the EC, epitomized by the signing of a Framework Agreement on Commercial and Economic Cooperation in July 1976. At one level this contractual arrangement may be considered the culmination of the drive by Canada since the 19508 to gain an associate status within the European Community. It remained an axiom in Canadian foreign policy that Canada was best off when the CanadianAmerican relationship was balanced by an attachment to the wider Atlantic community. At another level, set against Kissinger's pronouncement of "Year of Europe" in 1973 and his conceptualization of a tripolar world encompassing the United States, the EC, and Japan, th Euro-centrism of the Canadian approach reflected the Pierre Trudeau government's ambition to demonstrate that Canada had its own distinctive interests and goals in Europe. As a writer for the Manchester Guardian put it: "Canada is groping for a special relationship with the Community, perhaps less for economic reasons than as a durable reminder that she is an Atlantic power in her own right, not to be bracketed with the United States."58 If Canadian diplomacy privileged the EC it did so in manner unlike Australia's. At least as originally conceived, Canada's entry into Europe was intended to transcend the resource orientation dominating the Australian-EC relationship. Much attention was given in official discourse to the creation of a mature partnership between Canada and the EC. To Canada the economic attractions of the arrangement were greater access to European markets for finished products and the development of economic and industrial co-operation in the form of joint ventures, augmented investment, and scientific and technological exchanges. Canadian diplomacy also utilized decidedly different techniques for pursuing its needs and interests in the EC. Whereas Australia in the Eraser years concentrated on the use of threats, Canada favoured the use of rewards as a tool of statecraft in this issue-area. The corollary to this preference for inducements was that instead of impatiently attempting to achieve results or at least to demonstrate that it was doing something, as was the case with Australia, Canada was content to proceed at a more measured pace to negotiate and develop the contractual link. Although disparaging the approach in terms of its ultimate results, academic critics approved of the "skilful persistence" that Canada demonstrated in this domain of diplomacy.59 This is not to suggest that Canadian diplomacy towards the EC was completely free from impetuosity and poor judgement. Frustrated by the initial lack of interest on the part of the EC in a formal arrangement, for example, Prime Minister Trudeau turned to the arguments of European writers such as Claude Julien and suggested that the EC had only a small win-

ioz In Between Countries

dow of opportunity to secure access to Canada's "resources storehouse": "We are telling the Europeans bilaterally and as a community: you may think you are going to be able to take all our raw materials out, but you aren't... We are defining our policies and if you [the Europeans] want to get in there, you'd better embark on this process of negotiations."60 For the most part, however, Canadian diplomacy was designed in a sophisticated fashion around positive rather than negative sanctions. Most significantly the acceptance by the EC of the 197 Framework Agreement was balanced by a renewed Canadian commitment to NATO and defence spending, a commitment underscored by the Canadian decision to purchase the German Leopard tank.61 Canadian behaviour in the multilateral trade arena also sharply differed from Australia's. Because of its large stake in agricultural trade the fundamental feature of Australian trade diplomacy was the hypercommitment described above. Australia was willing to devote a disproportionately high degree of its time and resources to seeking reform in this discrete issue-area; both the strengths and weaknesses of Australian diplomacy mirrored this agri-centrism. Canadian trade diplomacy, by way of contrast, was characterized by its diffuseness. With its focus spread over a wide variety of issues, Canadian statecraft at the same time displayed a suppleness absent in the Australian case. Less fixated on the norms and values of justice in the agricultural trade order, to be obtained through an all-embracing plan for the removal of trade distortions, Canada's priority remained the establishment and maintenance of a common and transparent set of rules. While Australia's diplomacy pursued a bold strategy in a concentrated fashion, Canadian statecraft pursued a cautious strategy across a broader range of issues. From the Canadian perspective what was required to make the international trade order work more effectively was not an across-theboard overhaul but selected modifications. They paid special attention to the provision of a broader legal and institutional framework via the GATT. During the Tokyo Round Canada was highly sympathetic to the advancement of the agenda beyond cuts in tariffs to improvement in the dispute settlement procedures, and the conclusion of a number of new international codes governing the use of non-tariff barriers.6i Especially attractive for Canada, to pick up on Stephen Krasner's terminology, was the "particularistic" nature of the design of these instruments.63 A piecemeal approach offered the attraction of allowing Canada to cater to what may be called its "juxtaposition of strength and weakness"64 - pressing for more stable and secure access in its competitive sectors while simultaneously retaining a substantial element of manoeuvrability in terms of safeguards for its own import-sen-

io3 Hanging Separately

sitive producers. Where Australia used the traditional blunt but transparent tool of tariffs, Canada embraced many of the subtle methods of the new protectionism on a case-by-case basis. This bisected nature of the Canadian approach to international trade reflected the internal dynamics within both the economy generally and agriculture specifically. The Trudeau government faced vigorous crosspressures throughout the 19705 and 19808 for a bolder offensive strategy of adjustment and a more hard-nosed defensive strategy of resistance. Internationally competitive sectors, represented by the pulp and paper, aluminum and steel, and chemicals industries put continuous pressure on the government to aggressively tackle the problem of barriers against processed material; less competitive sectors, alternatively, sought and received from government heightened forms of protection. To give just a couple of illustrations, Ottawa moved to reimpose global quotas on footwear imports65 and to tighten customs inspections of imported automobiles. The impetus for Canada acting as what one Canadian state official has termed "artful chislers"66 in this selected fashion intensified with the downturn in the economy. As recession hit, the social and political costs of massive lay-offs in these key industrial sectors made the demands for defensive interventionism more compelling. The agricultural sector manifested a similar sort of tension between the forces of liberalization and protectionism. At one end of the spectrum the outward-looking, export-oriented forces within the farm concern remained sceptical about the federal government's commitment to a deal in the GATT negotiations that would benefit them. The common view among these maximizers was that their interests would, as in the past, be sacrificed, or in the colloquial language of one rural MP, "hosed."67 Premier Peter Lougheed of Alberta, in February 1978, stated for example that he was nervous that Canada "would throw away advantages benefitting Canadian agriculture" in exchange for policies that would protect the manufacturing industries in central Canada.68 At the other end of the spectrum the forces of resistance remained fearful that the GATT negotiations would go too far in the direction of liberalization. These inward-looking elements of the farm concern wanted to defend the status quo. Contrary to the maximizers' trepidation that industrial protection might restrict the possibility of enhanced openness in agricultural trade, these resisters dreaded the prospect that agriculture might bear an undue share of the adjustment costs imposed by the necessary trade-offs in an omnibus deal. Faced with these conflicting forces pushing and pulling in different directions, any high-risk approach raised the danger of alienating one or the other of these highly mobilized domestic interests. Rather than

104

In Between Countries

politicizing the trade issue, then, the Trudeau government cautiously tried to reach a balance between them. One way of doing this was to downplay the scope of the negotiations. Canada's chief negotiator during the Tokyo Round displayed a fine appreciation of the sensitivities of the farm concern about their possible subordination to the interests of the rest of the economy: "I expect that, as in the past, the exchange of concessions on agricultural products will take place within the agricultural sector."69 Another way in which the federal government tried to reassure the farm concern was by elevating their position in the actual negotiating process. It was no exaggeration to say that "producer groups have had more input... than they have ever had before" on the GATT.70 As ably demonstrated by Gilbert Winham, the farm concern, together with other producer groups in Canada, had unprecedented representation in decision making both indirectly through the enhanced role accorded to the provincial governments, and directly through their representation on advisory committees.71 The final point of distinction between Australian and Canadian multilateral diplomacy relates once again to the contrast in means. If Australia's diplomatic profile through the late 19708 and early 19805 was as an increasingly isolated champion of agricultural reform, Canada confirmed its status as the privileged insider. Although Fraser had received support from Japan for Australia's participation in the Group of Seven (G-y), this support was not enough to overcome the strong resistance from the Europeans to Australian membership. With the sponsorship of the United States and with a larger economy than Australia's, Canada's entry into the economic summit was much easier. Having been refused entry to the first meetings, mainly because of the objections of the French, Canada was invited to attend the summit held in Puerto Rico in 1976. By 1981, when it hosted the summit at Montebello, Quebec, Canada had become a full-fledged member of this exclusive club.72 As demonstrated on select occasions this membership allowed Prime Minister Trudeau to embark on high-profile diplomatic initiatives, the most widely publicized of which was his North-South initiative in 1980-81. Facilitated by the debate generated after the report of the Commission on International Development Issues (stimulated by the Brandt Report), Trudeau got the general issue of NorthSouth relations on to the agenda at the Montebello summit. After Bruno Kreisky, the Austrian chancellor, fell ill, Trudeau was invited to act as the co-chair of the Cancun North-South conference.73 Any undue concentration on this type of personal initiative distorts as much as it illuminates Canadian multilateral diplomacy. The standard operating procedure for Canadian diplomacy was the routine rather than the heroic. Forays into high-profile crusades were the

105 Hanging Separately

exception, not the rule, of Canadian statecraft. As evidenced by a wide number of cases, including its activities at the 1972, Stockholm UN Conference on the Human Environment, on the Law of the Sea, and at the Conference on International Economic Co-operation (CIEC) held in Paris in 1975 and I9?6> tne main thrust of Canadianttttttttttttttttttttttttt directed at entrepreneurial and technical activities.74 The Canadian preference for, and ability to take on, these specialist roles was enhanced by its accession to the 0-7; as noted by its closest observers, the summit mechanism placed disproportionate weight on the role of bureaucratic consultation and issue-specific forms of co-operation.75 Looking more closely at the Canadian role in the GATT negotiations in the aftermath of the Tokyo Round, the characteristic feature of Canada as a diligent diplomatic insider stands out. Canadian state officials took the lead in the ongoing effort to work out an operational framework for, pari passu, a dispute-resolution mechanism and a safeguards agreement that allowed restrictive measures on a selective but equitable basis. At the bureaucratic level Donald McPhail served as chairman of the preparatory committee attempting to lay the foundation of a document listing the major trade problems and their possible solutions.76 At the political level Allan MacEachen, the Canadian secretary of state for external affairs, took on the responsibility of chairing the crucial GATT Ministerial in November 1982. This mode of participation in the GATT negotiations exemplifies the emphasis in Canadian diplomacy on an institutional focus, coalition building, and detailed activity. McPhail, the experienced sherpa, worked industriously and skilfully in the preparatory committee. In working through the system in this fashion he embodied the tradition in Canadian statecraft that recognized that trade diplomacy was as much an arena for bureaucrats as for politicians.77 Furthermore in the tradition of Dana Wilgress, Norman Robertson, and other prominent Canadian bureaucrats in the post-1945 era, McPhail was given enough leeway by his political master to be effective. Negotiations were the lifeblood both of Canadian domestic politics and of its international diplomacy, and Canada continued to have a comparative advantage in this area. As one newspaper report of the 1982. GATT Ministerial commented ruefully, diplomacy was "one of the industries Canada has excelled at."78 As chair of the GATT Ministerial MacEachen displayed a low-key style. Far from being a flamboyant statesman in the manner of John Diefenbaker or Trudeau, MacEachen epitomized the important place in Canadian politics of the machine politician with the "inimitable homespun style reminiscent of Ottawa back room politics,"79 who had succeeded by the accumulation of political quid pro quos. In attempt-

io6 In Between Countries

ing to broker a deal at the Geneva meeting, MacEachen applied political skills honed in thirty years of House of Commons activity and during his previous stint as minister of external affairs in the early 19708. His forte, as demonstrated in the international arena by his work as cochair of the North-South CIEC in 1975 and 1976 as well as his chairing of the ad hoc cabinet committee on the multilateral trade negotiations (MTN) during the Tokyo Round, was brokerage and accommodation. While he maintained a strong idealistic streak, as witnessed by his controversial 1981 budget while finance minister, he was by temperament patient and canny. In the search for agreement MacEachen and his officials eschewed the use of protocol. Applying the techniques so salient to the Canadian experience of working out deals between the federal and provincial governments, MacEachen favoured an informal style. In trying to work out a compromise document, special attention was given to small ad hoc negotiating groups, such as the so-called Hilton Club located at the Geneva hotel of the same name, the "Chairman's group," and the "green room" group, which met at the eighteenth-century chateau that served as GATT headquarters.80 Informality, however, did not signify a lack of tenacity. On the contrary MacEachen was prepared to have the GATT Ministerial go into a long overtime period to try to unlock the disagreements rather than admit failure and face a breakdown of the talks. Originally intended to last ^Vi days, the overtime period lasted twice as long. As an outcome MacEachen continued to pursue what he termed a "sensible package," meaning the flexible set of rules favoured by Canada throughout the Tokyo Round. With a great deal of ambiguity of language, the final communique of the GATT Ministerial stated that the countries agreed to "differing levels of commitment" to trade reform. If not spectacular in the sense of immediately eradicating trade distortions, this result was at least satisfactory to Canada. Symbolically the contractual members of the GATT made a declaration of intent to do away with illegal and restrictive measures and to resist protectionist pressures. More instrumentally it was agreed that the negotiating process would be continued over the next two years, through further examination of the safeguards to protect industries hit hard by imports and a study of the specific problems attendant on agricultural trade. In contrast to the Canadian attitude Australia preferred a breakdown of negotiations to the papering over of the issues of disagreement. Instead of backing away from confrontation, therefore, the Australian state officials tried to interject a sense of crisis into the proceedings in order to achieve results.81 As an outsider without a place in the informal process of negotiation, this crisis-orientation approach

icy Hanging Separately

soon took on an air of empty bravado. Rather than working the GATT system, Australia got worked over. The complaints by Anthony, the chief Australian ministerial representative, concerning the lack of a "firm commitment" to agricultural reform during the span of the negotiations, and his disgust at the "vague, ambiguous" wording of the final communique, played well to a frustrated and fearful audience among his farm constituency back home.82 But when he made a formal statement of disassociation from the final GATT text and subsequently walked out of the meetings, his action was met by a mixture of bemusement and indifference.83 The fact that no other delegations followed Anthony's lead simply confirmed the impression of Australia's isolation in international trade relations. Tactics designed to make Australia a nuisance simply did not work. Paradoxically against this background of debacle and fiasco in the Australian camp a similar sense of disenchantment was building in response to Canada's own negotiating approach. The attractions of a low-key, consensual approach were obvious, both in allowing Canada to enhance its status at the centre of the international trade negotiations and in defusing serious sectoral and regional domestic disagreements. This diplomatic style, however, did not translate easily into tangible gains for Canada. A number of trade experts, most notably Rodney de Grey, had, since the end of the Tokyo Round, questioned the appropriateness of Canada devoting so much energy to the "rules of the game" when the international trade game itself was changing so quickly and substantively.84 Far from indicating strength it was suggested that this approach merely hid Canada's declining leverage in the new conditions brought about by changes in the international hierarchy of production, regionalism, and centres of economic power.85 This sense of disenchantment was exacerbated by the economic hard times that hit Canada in the late 19705 and early 19805. Whatever its usefulness for addressing yesterday's experience, the tendency of Canadian diplomacy to concentrate on points of procedure, dispute resolution, and multilateral disciplines appeared increasingly outmoded in contemporary circumstances. Nor was the image of Canadian diplomacy's effectiveness enhanced by the results achieved by the Framework Agreement with the EC on the bilateral front. For the state to lead via new forms of diplomacy was one thing; for economic actors to adhere to this agenda was something else entirely. Despite, or even because of, the government's enthusiasm for this project, the Canadian business community ignored or resisted the European component of the Third Option throughout the 19708 and early 19805. Rather than taking the time to lay the necessary groundwork (research, language, and personnel connections) to

io8 In Between Countries

tap into the EC market, Canadian manufacturers preferred to concentrate on the North American market.86 As the Senate Committee on "Canadian Relations with the European Community" noted in 1973,8/ the "natural propensity for the closer and more accessible American market" remained firmly entrenched. The lack of a coherent government strategy of incentives or support merely reinforced the disinclination of Canadian business to tackle the complex European market. Although the Department of External Affairs was extremely supportive of the counterweight concept in the 19708, the Departments of Finance and Industry, Trade, and Commerce remained sceptical of its benefits and so proved unwilling to nudge their clientele in that direction. It is no exaggeration to suggest that by the early 19808 Canadian manufacturers had for the most part written off the European market as either "a closed shop" or as one that was so difficult to crack that it was not worth the effort. When the EC delegation to Canada hosted a seminar in 1984 to highlight the attractions of Europe for Canadian firms, the head of the delegation was stunned by the poor attendance.88 While this lack of interest may be attributed in part to recession and to the psychology of Euro-pessimism during that time, it also reflected the process of marginalization rather than consolidation of the two-way trade between Canada and the EC. Despite the original Canadian expectation that the contractual link would act as a vehicle for economic as well as geographic diversification, the link became immutably associated with resources. Developed on resources, however, the Canada-EC relationship also floundered on resources. A number of factors contributed to this reversal. The broader constellation of changes in the IPE, highlighted by the transformation from the crisis of scarcity in the early 19708 to a crisis of abundance in the late 19705 and 19805, was certainly salient. Whereas resource dependency and vulnerability dominated the period preceding and shortly after the signing of the contractual arrangement, market competitiveness was ascendant from then on. The increasingly divergent perceptions by Canada and the EC of the nature of their relation ship on resources reinforced these tensions. The Europeans' difficulty with the relationship stemmed from Canada's imposition of a number of restrictions on the access to and supply of raw materials. These difficulties began with Canada's controls on the export of uranium in the 19708 (sensitive because they implied that Europe was considered potentially irresponsible in its use of this material),89 and grew with the introduction of the National Energy Program (NEP) and tighter controls on investment through FIRA. For the Canadians many of the problems in the relationship derived

iO9 Hanging Separately

from the European shift from the position of resource consumer to resource exporter. During the 19705, the bulk of the resource-related irritants in the Canada-EC relationship centred on questions of access into the EC; by the 19805, conversely, these irritants were internationalized. Canada faced serious competition from the EC not only in a wide number of third-country markets, ranging from grains in the Middle East to seed potatoes in North Africa, but in its own domestic market as well. The quintessential issue in the latter category was the controversy that developed over the importation of EC beef into Canada. By the 19805, therefore, Canada looked upon the EC not as a com plementary trade partner but as a major trade rival.90 The intensity of these tensions was further accentuated by their cross-cutting nature. The most problematic of the economic issues in the Canada-EC bilateral context became closely intertwined with bitter disputes in the multilateral context. As the majors tried to slug it out in order to improve their own conditions, other countries such as Canada and Australia were caught in the middle.91 The American response to the EC, during both Jimmy Carter's presidency and the early years of Ronald Reagan's first administration, centred on a concerted attempt to secure a more stable international order (especially through a revamped subsidy code in international trade). As the negotiations slowly dragged on in the aftermath of the 1982 GATT Ministerial, however, the American strategy was redefined. Faced with mounting domestic pressure to fight fire with fire, the United States signalled to other actors involved in international agricultural trade that it was willing to resort to neo-mercantilist practices to defend liberal economic values. One of the first expressions of American dissatisfaction with international dispute-settlement procedures was the largely ad hoc decision by the United States, in January 1983, to openly subsidize the sale of one million tons of surplus wheat to Egypt, which had been traditionally supplied by European producers. With the introduction of the Export Enhancement Program (EEP) this form of unilateral action took on an internationalized and institutionalized shape, targeting the markets supplied not only by the EC but by other agricultural suppliers. D I F F E R E N T PATHS L E A D I N G IN THE SAME DIRECTION

The diplomatic approaches adopted by Canada and Australia in the multilateral arena during the late 19705 and early 19805 underline the extent of the divergence and convergence between these two countries. In terms of operating procedures the means by which Canada and Aus-

no In Between Countries tralia attempted to cope with changing international conditions were quite dissimilar. Australia tried to compensate for its limited bargaining power by its hyper-commitment to reform in agricultural trade. Rather than becoming a player, nevertheless, Australia remained a victim. To a considerable extent this victimization was an inevitable result of Australia's structural and situational weakness, as its vulnerability in the IPE was shaped and conditioned by its disproportionate stake in commodities and its sense of geographic isolation. Alternatively, though, it may be suggested that Australia reinforced this sense of victimization by its own choice of tactics. The harder Australia pushed to have its voice heard and its claims for justice recognized on the international stage, the more it was viewed as a loner, without clout or skills, and disregarded. As astute Australian commentators themselves recognized, the crudeness of Australia's diplomacy merely reinforced the sense of Australia's irrelevance. In the words of one Australian journalist, writing in 1978, Australia was no longer sure whether it was being treated as a serious middle power or as a sideshow.92 A retired Australian diplomat later added: "our standing in the international community is pathetic ... Who cares whether the Australians are on side or not? We've lost almost completely whatever significance we ever had. As a medium-sized power, already in relative decline because of our foolish economic policies, we have slipped further into obscurity through our incapacity to conduct ourselves internationally with any style or substance."93 If Australian diplomacy may be said to have become counter-productive in the late 19705 and early 19805, the Australian commitment to making multilateralism and the GATT work became more firmly entrenched. Although the forces of protectionism still located in the Industries Assistance Commission (IAC), the Confederation of Australian Industry, and a number of sectoral organizations attempted to use the failure of the Tokyo Round and the 19 82. GATT Ministerial to implement heightened restrictions on imported goods, these negative actions had the opposite effect. Since the GATT, with all its warts, was the only game in town for Australia, momentum slowly built up for the type of skilful and sophisticated statecraft necessary to advance Australia's needs and interests. With the internal face of this redefinition of Australian strategy focusing on a broad and concerted effort to get its domestic house in order, the external face concentrated on ending its diplomatic loneliness. Tired of hanging separately in an era of waning hegemony, Australia increasingly wanted to hang together with other countries in a bid to restore order in the IPE of agricultural trade. Canada's pursuit of the establishment of a system of collective management in the IPE remained at the core of its statecraft. Although but-

in Hanging Separately tressing its position as a core procedural player, the substantive outcome from these diplomatic efforts had proved relatively disappointing for Canada. The hopes attached by Canada to the establishment of a comprehensive but flexible set of rules for international trade had been stymied by the downturn in the international economy and the rise of more explicit forms of economic nationalism. Canada's attempt to diversify its own bilateral economic linkages, moreover, had been dashed by its own lack of political and economic will, combined with the intractable forces of geography. It must be emphasized here that Canada, unlike Australia, retained the ability to pursue a fallback option outside of the multilateral context. With its trade highly concentrated on the United States (by 1986 78 percent of Canadian exports went there), Canada had the alternative of coming to terms with the closeness of its continental neighbour. Indeed Canada directed the process of relearning largely towards this bilateral arena. This new approach was premised on the assumption that the complexity of the Canada-United States relationship had to be met head-on rather than through a search for counterweights to the United States by way of diversifying relations with other countries. A background document to the discussion paper Canadian Trade Policy for the 19805 highlighted the centrality of the United States in Canadian foreign policy: "The task of managing the Canada-U.S. trade relationship is fundamental to Canada's well-being and to relations with our other trading partners."94 If bilateralism on a continental basis was ascendant by the early 19805, however, multilateralism retained a considerable hold on Canada's diplomatic approach. Even as the impetus developed for a formal free-trade arrangement with the United States, Canada's need to signal its commitment to constructive internationalism was reinforced rather than diminished. For the Canadian government, negotiating this type of arrangement had considerable value in showing that an institutionalized special deal with the United States would not impair Canada's capacity to look after its own interests. As John Whalley has put it, free trade with the United States increased "the pressure on Canada to elevate its middle-power diplomatic role. The need is to demonstrate that Canada's sovereignty has not been impaired by the agreement, that Canada is a separate country that takes foreign policy positions independent from the United States."95 Indicative of Canada's diplomatic approach to the IPE in general terms, this perspective catches the essence of the Canadian strategy on the agricultural trade issue-area in particular.

5 Hanging Together: The Evolution of the Cairns Group

The shift from individual to collective action through the Cairns Group marked a significant transformation in Australian and Canadian economic diplomacy. While sharing common assumptions about the rules of the game, Canada and Australia had worked only loosely with each other in bolstering the operation of the post-194 5 international agricultural trade system. The continued erosion of the system in the 19805, attendant upon the changing nature of U.S. leadership, altered considerably the pattern of followership for these two countries. Departing from the parallelism of the past, Canada and Australia worked to establish a closer form of collaboration in which they operated in tandem as agents of reform. Together with a number of other countries, Australia and Canada positioned themselves to take on new responsibilities in the way of entrepreneurial and technical leadership.1 The importance of the Cairns Group for international relations centres on the management of the international economic system under conditions of waning hegemony. Through its demonstration of joint action, as Miles Kahler suggests, the Cairns initiative offers a test case of the restoration of international governance by "the many."2 With Australia and Canada taking on prominent and distinct roles, middlepower activism as a substitute for more traditional forms of structural leadership was brought to the fore. Indeed these two countries moved to fill the leadership gap created by the major powers. The extension of their diplomatic skills, via attempts at coalition building, was a crucial ingredient in this effort. Not only did the Cairns Group bring

ii3 Hanging Together together the traditional supporters of the post-1945 system, its membership was extended to include non-traditional supporters as well. Encompassing a variety of countries from Latin America (Brazil, Argentina, Uruguay, Colombia, and Chile), Asia-Pacific (Indonesia, Malaysia, Thailand, the Philippines, New Zealand, and Fiji), and Eastern Europe (Hungary), as well as Australia and Canada, the overriding feature of the Cairns Group was its cross-cutting quality. From a comparative politics perspective, the impression one gets is quite contradictory. The Cairns Group initiative points less to a new mode of co-operation than to an exaggerated form of distinctive national behaviour. Multilateralism did not submerge the particularistic interests of the parties.3 Far from confirming a commonality of approach, through a process or policy of co-ordination,4 the Cairns experience served to heighten the differences between Canada's and Australia's preferences and objectives. As the two countries tried to work more closely together in the development of this diplomatic activity, they in fact moved further apart. In the process their accepted roles were turned upside down. Within the post-1945 international order Canada had taken on the function of role model in the creation and maintenance of issue-specific coalitions. Australia, conversely, acted the maverick with its blend of activism and acquiescence producing an erratic form of diplomatic behaviour. In the Cairns initiative this pattern reversed itself. A marked inconsistency developed between the declarations of Canadian state officials and Canadian diplomatic performance. The minister representing Canada at the original Cairns Group meeting cast the Canadian role in agricultural trade in an ambitious light, stating that "we have been taking the lead internationally in seeking a lasting solution to these problems."5 Canada's minister of international trade added: "Canada ... and our Prime Minister are taking the lead in that world initiative to make sure that agriculture remains in the forefront of all international conferences."6 A key trade negotiator likewise voiced the opinion that Canada should remain at the head of the campaign for reform on agricultural trade: "We make no apologies for setting what some may regard as overly ambitious goals. We need to set our sights high if at the end of the day we are to make more than a dent on the mess governments have created in agricultural trade."7 Canada's behaviour, however, did not live up to this high-pitched rhetoric. As the Cairns initiative progressed Canada acted as a brake rather than a motor on the actions of the group. Instead of providing a form of authentic joint leadership with Australia, Canada fell back on a tentative course of action. So hesitant did this approach eventually become that, far from being regarded as a leader within the group, the very legitimacy and

ii4 In Between Countries salience of Canada's continued membership in the coalition was called into question. The Australian behaviour in the Cairns Group exhibited a move in the opposite direction. Whereas Canadian diplomacy moved from leadership to studied ambivalence, Australian diplomacy took on an increasingly mature and sophisticated cast. Discarding the counter-productive elements of its hyper-committed approach to agricultural trade reform, Australia assumed responsibility for being the constructive and durable force behind the collective enterprise of medium and smaller "fair trading" agricultural nations. Assuming the pivotal position within the Cairns Group, Australia amplified its role during the Uruguay Round to an unprecedented extent. In contradistinction to Canada's shrinking role, from a lead performer to a rather discordant member of the chorus, Australia expanded its role as maestro by way of its improvisation through the Cairns Group. Its voice "carried an authority" and "wielded an influence" in the multilateral agricultural trade negotiations well out of proportion to what it had achieved hitherto in the GATT negotiations via alternative means.8 The leadership role taken by the Bob Hawke government in the Cairns Group displayed the same type of commitment to agricultural reform as formerly exhibited by Australia under John McEwen and Malcolm Fraser; the difference was in motivation. Faced with a number of shocks, which, as will be discussed more fully in chapter 6, jarred Australia out of its accepted form of behaviour, the scope of Australian statecraft expanded past its traditional confines. Moving beyond the narrow parameters of the past, Australia's agricultural trade statecraft became enmeshed with its problems of diplomatic and economic adjustment. Instead of relying exclusively on direct action or claims of morality in the international arena, Australia combined its activity in the Cairns Group with reorientating and readapting its position within the IPE. To understand this change it is necessary to understand the context in which Australian diplomacy operated. The 19805 proved to be a traumatic time for Australia. Far from confirming its place as a lucky country, the view took hold that Australia was a country whose luck had run out. Although the more pessimistic scenarios for Australia's decline, depicting Australians as the "poor whites" of Asia, were clearly overblown and misleading,9 the perception of crisis about Australia's ability to manage change in the international economic system dominated the political and economic agenda. As Richard Higgott has persuasively argued, Australia had become increasingly marginalized in the IPE.10 The specific conditions of the 19808 brought into sharp relief the generalized decline in international competitiveness. Australia's

ii5 Hanging Together position as a global trading nation had gradually slipped from eighth to twenty-third since the 19505, and its share of the world market dropped from z.6 percent to 1.2 percent.11 The fall in commodity prices to "the worst state since the Great Depression,"" together with rising costs, brought record balance-of-payments deficits and high foreign debt levels. Australia's traditional form of followership had also been found wanting. The Australian emphasis on cajoling and pressuring the United States to take its responsibilities on agricultural trade matters more seriously had proved futile. Rather than being rewarded for loyalty Australia came to believe that it had been penalized as a result of this approach.13 It received repeated assurances from the United States that its use of blended credits, bonus payments, and the EEP were not intended to upset Australia's traditional markets; yet the displacement effect from these measures was felt right across the spectrum of both commodities (wheat, rice, beef, and sugar) and markets (Algeria, Egypt, Yemen, Indonesia, and the Philippines). Faith alone was not enough to rectify the situation. If Australia was to modify American behaviour, it was felt it would have to add diplomatic weight and credibility to its sense of commitment. Canada's motivation in joining the Cairns Group was far more limited. Canada wanted to use the Cairns Group only as an instrument for selected reforms in agricultural trade. Collective action was attractive for Canada's major agricultural exports because these commodities had suffered extensive damage from the escalation in the United States-EC trade conflict. In contrast to Australia's strategic orientation, consequently, the Canadian support for the Cairns Group was qualified and tactical in nature. Rather than being initiated as part of a wider project, devoted to a comprehensive set of reforms at home and abroad, Canada's involvement resulted from a reflex action designed to stimulate progress towards a framework agreement in the global arena. Canada wanted to use the Cairns Group to facilitate negotiation at the international level, not as a vehicle for developing a common vision or set of national policies. Its support for the principle of ordering relations among states, to adapt John Ruggie's language, was compromised by its disinclination to co-ordinate national policies.14 In particular Canada bridled at any suggestion that the Cairns Group become involved in intra-group negotiations on instruments of reform that would be applied domestically. When prodded by Australia in this direction, Canada's involvement in the Cairns Group turned equivocal. Concerted action, with both internal and external dimensions, served to highlight Canada's diplomatic limitations instead of its suitability for leadership.

ii 6 In Between Countries PARTS OF THE W H O L E

Given its heterogeneous membership the Cairns Group was not a natural coalition of like-minded elements. With three developed countries, nine developing countries, and one former centrally planned economy the group consisted of countries with wide differences in ideology, political institutions, and positions in the hierarchy of the international system. Several of the countries brought into the group had competitive as well as co-operative relations with other members either inside or outside their own region. Brazil, Argentina, and Chile for instance had a long tradition of rivalry in South America, as did Indonesia and Malaysia in the ASEAN. Australia not only competed with Canada (and to a lesser extent with New Zealand) for status and reputation among the middle powers, but it had been engaged in a bitter struggle with Argentina and Uruguay stretching back to the 19305 for market share in a number of agricultural commodities.15 What induced a feeling of solidarity among the Cairns Group was their common vulnerability in the IPE. All of the member countries had suffered considerable damage from both the CAP and the EC'S expor restitution policy on the one side, and the United States's "fight fire with fire" response on the other.16 The group's share of international agricultural trade fell appreciably through the 19808, just as the need for revenue from exports increased for many of its members due to the debt crisis and declining access for industrial goods. Inevitably, set in this context, the agricultural trade issue became linked with the issues of social and political stability. Argentina (a country in which farming employed a quarter of the population and accounted for 30 percent of the GNP) was hurt in the maize, wheat, and meat markets; Brazil in rice, sugar, and meat; Colombia in sugar; Hungary in meat; Indonesia in rice and sugar; New Zealand in dairy products; the Philippines in sugar; Thailand in rice, sugar, and meat; and Uruguay in meat. As T.K. Warley accurately described the situation, the Cairns Group was tied together by the "commonality of sorry circumstances."17 Strengthening this attitude of "us against them," whereby the medium and smaller agricultural trading countries coalesced against a common other, was the fear of the greats cutting a deal among themselves. As Gilbert Winham has indicated the conduct of GATT negotiations on the basis of a "pyramid" structure became firmly established in the 19605, 19705, and early 19805.l8 In keeping with this structure many of the key agreements reached on agriculture could be classified as essentially bilateral deals between the United States and the EC. The risk of collusion, paradoxically, became more acute due to the very politicization of the agricultural trade issue. To escape the quagmire of

ny Hanging Together the ploughshares war a scenario was raised that the United States and the EC might be tempted to work out an arrangement to divide up mar kets at the expense of other exporters. A sense of common cause alone was not enough to get the coalition off the ground.19 What galvanized the "fair traders" into action was not only the ripeness of the moment but the willingness and capacity of Australia to provide the necessary leadership to take advantage of that moment. For Australia, this move entailed a serious process of self-criticism, re-evaluation, and relearning. Stymied in its attempts to modify the behaviour of the greats through its own arguments and calls for justice, Australia became convinced of the necessity for banding together with others to try to achieve the same end. Australia's hyper-commitment was refined and harnessed to more skilful diplomatic techniques. Rather than the undisciplined zeal associated with Australian initiatives through the 19505, 19608, and 19708, the mobilization campaign in the 19808 was conducted with a good deal of patience and care. Transforming Australia's image as an outsider in the multilateral negotiations, the Hawke government carefully moved to become the hub of a broad-based assembly of nations interested in the GATT playing an enhanced role in liberalizing agricultural trade. Alone among the members of the group, Australia took part in all of the formative meetings to establish the Cairns coalition. At the invitation of Carlos Perez del Castillo of Uruguay, Australia had attended an informal meeting of the "Southern Hemisphere Temperate Zone Agricultural Producers" with Argentina, Brazil, New Zealand, and the host country in Montevideo in April 1986, concerning the agenda for the forthcoming Uruguay Round.20 On another track Australia established a channel of contact with the Thais, which eventually resulted in a meeting in July 1986 at Pattaya to which the entire ASEAN membership was also invited. This preparatory work led to the actual meeting at Cairns in Queensland, Australia, where in August 1986 the fourteen ministerial delegations set out a declaration in time for the Punta del Este meeting that launched the GATT Round. Canada, at the specific insistence of the Hawke government, was included in the list of invitees at Cairns. In putting its diplomatic efforts on a more systematic footing Australia relied to a considerable extent on the constructive links established with the members of the group in the post-1945 era. Although overshadowed by the parochial, restrictive side of its image, Australia could still capitalize on an accumulated store of goodwill from the developing countries for championing the cause of small countries in the past. The long-standing sympathy expressed by Australia, from McEwen's time onwards, for the introduction of more equity to the

n8 In Between Countries international political economy to help the position of raw materialexporting countries, did much to reinforce this image. Even as the Fraser government raised its industrial tariffs in the late 19705, it worked to establish solid links with the South - on a functional basis through bodies such as the Southern Hemisphere Temperate Zone Agricultural Producers, the Wheat Exporting Group, the Association of Iron Ore Exporting Countries, and the International Bauxite Association, besides UNCTAD and the GATT (working in the latter organization, for example, with Brazil, first on its complaint directed against the EC'S system of cash refunds to sugar producers, and later in the criticism of the EC for not paying heed to a panel's findings); and on a regional basis through bodies such as the ASEAN Discussions and Ministerial Meetings and the ASEAN Australia Economic Cooperation Program. Consistent with these multilateral activities, Australia looked for alternatives through innovative forms of bilateral diplomacy. The lack of an ongoing and co-ordinated lobbying strategy directed at the majors was critically appraised as a serious defect in Australia's relationship with the United States. T.B. Millar, for one, urged that: "Instead of complaining ... it is our job to be more professional" and "more tough-minded" in dealing with the United States.2-1 Driven by the force of this evaluation, Australia chose a path that Canada had already embarked on, namely the devotion of greater attention to getting access to the American policy-making process, and trying to get Australia's viewpoint on specific issues across to the American public. To give just the most visible illustration of this trend, a career diplomat was appointed in March 1987 as Australia's ambassador to Congress.12 Similarly in the early 19805 Australia engaged in a constructive new form of public diplomacy towards the EC. Rejecting the "bullish" diplomacy favoured by Prime Minister Fraser (with all its "talk, bluster and international exhibitionism"),23 the Hawke government gave considerable attention to the task of assessing and publicizing the technical details of the costs of subsidies and protection in agriculture. As witnessed by its study on the CAP, the Australian government's Bureau of Agricultural Economics (later Bureau of Agricultural and Resource Economics) was impressive in its analytical capability to marshal arguments against the supposed short-term gains of protectionist policies as opposed to the long-term goal of a fairer trading system.24 This deployment of research as a diplomatic tool in turn spilled over from the bilateral context (as part of a more strategic assault on the CAP) back into the multilateral domain. An excellent example of this effect was the Australian initiative, through the OECD Ministerial Mandate stud-

ii9 Hanging Together ies, to institutionalize the concept of producer subsidy equivalent (PSE) as the index of government support for agriculture/5 Integral to Australia's change of diplomatic direction were the personality and the politics of Prime Minister Hawke. To a considerable extent Hawke was the embodiment of Australian political life. He was as willing as McEwen and Fraser to seek political advantage from the targeting of policy issues. He was also an artful practitioner, in the mode of McEwen and Fraser, of international posturing. Yet, unlike McEwen and Fraser, his robustness in the pursuit of his diplomatic goals was supplemented by an adroitness as a negotiator and broker. Immediately on taking office Hawke embarked on a fence-mending exercise designed to show that Australia was eager to co-operate with its neighbours within Asia-Pacific on issues of mutual interest. In a major speech in November 1983 to the Thai Chamber of Commerce, he called for a unified approach towards trade liberalization in the region. Extending this confidence-building approach further, the Australian delegation (led, in one of his last official acts, by Sir John Crawford) at the November 1983 Pacific Economic Conference in Bali called for a moratorium on non-tariff barriers and an immediate standstill on protection/6 Hawke's successful utilization of friendship as a tool of statecraft was also displayed in his dealings with Prime Minister Brian Mulroney in the mobilization campaign on agricultural trade reform. Sharing a taste for informality and banter, Hawke and Mulroney hit it off immediately. Aided by their participation at the Commonwealth Heads of Government meetings, the two leaders became, in Australian parlance, good mates. Hawke was even invited to be a keynote speaker at Mulroney 's national economic summit conference in early 1985. In the context of Canada's continuing search for better government procedural techniques, Prime Minister Hawke was praised by his host for his "dynamic" and "imaginative leadership" in "the field of national consultation."17 Hawke's relationship with Mulroney not only added credibility to the ALP'S domestic economic agenda, it also eased the way to bringing Canada into the Cairns initiative. Canada's entry into the group was not without its disadvantages for group unity, mainly because of the strong and persistent suspicion among the Latin Americans (in particular, Brazil) concerning Canadian participation. From the Australian point of view, nonetheless, Canadian involvement seemed vital if the group was to have an impact. Canada's membership in the G-J allowed the agricultural trade issue to become highly visible. Mulroney's own close connection with President Ronald Reagan also enhanced the ability of the Cairns Group to communicate its message

i2.o In Between Countries

to the Americans. However both of these components, it goes without saying, were necessarily dependent on a high degree of commitment to the endeavour at the prime ministerial level. In acting as the driving force behind this broad-based coalition, Australia effectively used the escalating nature of the trade situation to transform the drive for agricultural reform from a bureaucratic to a high-level political question that was difficult for the greats to ignore. Vital to this mobilization process was the ability of the Australian policy makers to turn the United States's decision to globalize the EEP ( move highlighted by the Reagan administration's decision to negotiate sales of subsidized wheat to the USSR and sugar to the PRC in 1986 into a catalyst to quicken the pace of coalition building by the "nonsubsidizing" agricultural trading nations. As in the crusades of McEwen and Fraser, Hawke's campaign featured hard-hitting language about the inequity of the international trading system; but unlike in the past Australia was no longer speaking only for itself or to itself. Its rhetoric served as a rallying call to other countries for collective action. Moving beyond the informal discussions held earlier (whether in small groups or through one-to-one telephone conversations, as between Hawke and Mulroney during the United States-Soviet subsidized wheat sales episode),28 Australia took the crucial step of formally initiating the "creation of a group ... with common interests ... for the long term,"i9 by inviting ministerial-level representatives of the fourteen selected nations to the meeting at Cairns in the last week of August 1986. Justifying this step Prime Minister Hawke argued that the agricultural trading environment had become so threatening that it was only through the development of a "co-ordinated approach to such impositions"30 that these targeted middle and small actors could prevent "our shared interests and concerns" from being "bypassed."31 The Cairns meeting accomplished a great deal, including the identification of principles vis-a-vis free trade in agriculture and the establishment of an informal working relationship among the members of the group. The declaration issued by the countries constituting the Cairns Group gave primacy to the need for agriculture to be adequately addressed in the MTN negotiations, with ministers seriously questioning "the value of a new round which failed to solve the longstanding problems in agricultural trade." To ensure that "their concerns regarding the negotiating objectives on agriculture" were "adequately met" within the GATT, the Cairns Group agreed to consider ongoing co-operative efforts at the bilateral, regional, and joint levels. These efforts would include, most significantly, "pressure to secure early changes in current domestic farm support policies of those coun-

i2i Hanging Together tries whose policies adversely affect international trade in agricultural products."32 Through this collaborative activity another influential voice was heard on the issue of agricultural trade at the Punta del Este meeting in September 1986. Although it could not be said that the Cairns Group members had begun to work in unison, the presence of a "third force" at the launch of the Uruguay Round was instrumental in establishing the centrality of agriculture on the GATT agenda. It remained unclear what precisely the implications of this mandate were, but facilitated by the emotional and practical appeal of its declaration, as well as the size of the group's collective share of world agricultural exports, the Cairns Group was able finally to secure a place for an unqualified discussion on the GATT agenda. There were no longer to be any exclusion clauses or qualifications concerning the "special" nature of agriculture. The support of the United States (which, with the Cairns Group going out ahead in terms of reform proposals, could offer its moderation at the appropriate time) and the reluctance of the EC to stand against the GATT proposals were, of course, crucial. But without the efforts of the Cairns Group it seems likely that this breakthrough would not have been possible. As the American Journal of Commerce noted: "The Mighty Cairns ... succeeded in embarrassing both the European Community and the United States into serious negotiations on farm talks."33 A similar analysis of the contribution of the Cairns Group was offered by Australia's GATT ambassador, Alan Oxley: "if you look at the history of agricultural agreements, at some point the EC and the U.S. always cut a deal. The others had little choice but to go along. The Cairns Group changes the picture somewhat. An interesting thing [arising from Punta del Este] is that there's a great deal of contentment [with] having three positions in the mix. It provides a forum for moving in the discussions."34 Set against the background of its record of underachievement, this (albeit incomplete) success for Australia had a stimulating effect on its diplomacy. From an ad hoc expression of frustration and anger at the treatment of the non-greats, the process began whereby the Cairns Group was transformed into a sustained partnership. Australia devoted a considerable amount of time and resources to this institutionbuilding exercise. It is not an overstatement to suggest that Australia took on the functions - and burdens - of being the manager of the group. To push the coalition forward particular attention was paid by Australia to consolidating the coherence among the Cairns Group's diverse membership, through the establishment of a loose co-ordinating mechanism. As the minister of trade, John Dawkins (who acted as chair and co-ordinator of the group at the Punta del Este meeting),

122. In Between Countries

informed the Australian House of Representatives in October 1986: "my Department will provide the necessary secretariat to facilitate continued co-operation and liaison both within its membership and in its dealings with the major trading economies."35 Crucial to this process was the appointment by Dawkins of Oxley as Australia's ambassador to the GATT, along with the expansion of the Australian delegation in Geneva from four to six. Oxley convened the Cairns Group meetings in Geneva at the official level. Australia also took on the role of intellectual/strategic leader of the group. In the delicate negotiating process with the United States, the EC, and other actors, Australia was instrumental in shaping the incremental, step-by-step approach of the Cairns Group. The key to this approach was Australia's employment of a good number of confidence-building techniques (techniques, as noted, traditionally associated in the multilateral context with Canada), by which the air of animosity and bilateral recrimination could be cleared and all actors convinced of the usefulness of the negotiations through a collective commitment to "standstill and rollback."36 Without such an expression of good faith by all countries, it was fully recognized that confidence and trust between the parties was difficult to achieve. From the earlier discussion of Fraser's approach to agricultural trade reform, it should be surmised that, in themselves, these proposals were not really new. Hawke's proposals for a freeze in the escalation of export subsidies and a gradual reduction in domestic supports quite clearly drew inspiration from his predecessors' campaign during the Tokyo Round.37 What was novel was the way in which Hawke marshalled the argument for and the implemention of his plan. As one ALP minister stated: "We prefer to take the detailed, methodical approach [with Australia] well-regarded, rather than being seen as angry and frustrated." 38 The Hawke government sold its plan not in the impulsive take-it-or-leave-it style favoured by Fraser but as part of a detailed, step-by-step approach to the GATT negotiations. The delicate nature of this incremental method can best be illustrated by the Australian proposal, put forward at the Bariloche meeting of the Cairns Group in February 1988, for a freeze on all farm subsidies and new import barriers to commence in 1989. The practical arguments behind such a proposal, and its timing prior to the mid-term review of the Uruguay GATT Round to be held in late 1988, were compelling. Such a downpayment on any longer-term agreement on agriculture was another step in the process to "prevent any waning of the political will for reform."39 Furthermore Australia developed a diverse and impressive repertoire of managerial techniques. Australia was largely responsible for establishing a rough division of labour within the Cairns Group, with the

iZ3 Hanging Together

member countries concentrating on what they were most interested in, best equipped to do, or found the least arduous to do in domestic political terms. Given the group's diversity, this meant that it needed to engage in strenuous bouts of internal diplomacy to maintain cohesion. Initially this internal diplomacy focused on the integration of the developing countries into the coalition. While willing to sign on, many of these countries were reluctant to identify themselves too openly with a mixed coalition of developed and developing countries. This attitude of detachment was especially problematic in the case of Brazil, whose refusal to maintain close and constant communication links with Australia in the immediate aftermath of the Punta del Este meeting made the job of co-ordinating the Cairns Group exceedingly difficult.40 As a member of the hard-line G-IO, Brazil retained different priorities and interests, on issues such as services and intellectual property in the GATT, from the advanced industrial countries. Brazil was highly sensitive also about the split between food-exporting countries and foodimporting countries. Sensitive to any threat to the 0-77 of less developed countries, Brazil exerted considerable effort to pass a proposal within the Cairns Group that the so-called Food Importers' Group would be consulted about initiatives on agricultural trade policy by the coalition.41 The overriding concern for most of the other developing countries revolved around the issue of "special and differential" treatment for their agricultural economies. Argentina, for instance, had reserved its position on the proposals for the elimination of export subsidies and for firm commitments on the question of standstill and rollback, meaning that it was not bound by these proposals. A way out of this dilemma was found only when Australia agreed in 1987 to explicitly "support the principle that the special interests of developing countries would be recognized. "4Z This concession, set against the background of the continued erosion in the cohesion of the G-IO throughout the Uruguay Round, cemented the support of the developing countries for the Cairns Group. Assured that their interests were not subordinated to those of the developed countries, Argentina and Brazil in particular demonstrated a greater willingness to take on more responsibilities within the coalition. Argentina relentlessly prodded the group along, a practice culminating in its resistance to disguising the results on agriculture at the December 1988 mid-term GATT meeting in Montreal.43 For its part Brazil worked closely with Colombia and the ASEAN countries to turn the principle of special and differential treatment for developing countries into practice through an operational program.44 The Hawke government also tried to lead by example, in going out ahead of the other countries in terms of its own concessions. The deci-

iZ4

In Between Countries

sive moment, signalling that Australia was prepared to turn away from its own history, came with Prime Minister Hawke's presentation of his seven-point plan for reform at the World Economic Forum summit on food and agribusiness at Davos. At this forum Hawke plainly indicated that because "[t]he clear economic leadership provided by the U.S. has dissipated," other actors had to fill the gap if the world was to "avoid anything resembling a return to the economic insanities of pre1939." To pass the credibility test, Hawke emphasized, governments such as Australia had to show their willingness to restructure their own economies. In other words: "We must accept the lesson that good domestic policy and good international policy are inseparable. If we cannot persuade our domestic constituencies to accept change indeed, if we allow them to isolate and insulate themselves from it and encourage them to resist and retard domestic structural adjustment we have failed not only them but the rest of the world."45 Breaking decisively with the McEwen/Fraser tradition of withholding concessions on industrial protection until agricultural reform was achieved, Hawke finished by saying that Australia was willing to put everything it possessed on the negotiating table, phasing out its own protectionist regime by internal action at the sectoral level and the negotiation of bound tariffs at the international level. Finally, Australia tried to locate the Cairns Group more comfortably between the majors. There was plenty of room to do this as the chasm between the negotiating positions of the United States and the EC remained unbridged. The United States's Proposal for Negotiations on Agriculture (1987) or "Zero 2.000" plan focused exclusively on the complete phase-out of all barriers to import access and all subsidies over a ten-year period. Until these long-term demands were met by the EC and other actors, the United States refused to address issues of short-term relief. By way of contrast the EC showed some grudging flexibility on short-term discipline for selected products but complete recalcitrance on long-term questions. The U.S. government could only build a domestic coalition in favour of a comprehensive settlement in a best-case scenario where the benefits to its competitive exporters clearly outweighed the costs to its hitherto protected sectors.46 The EC expressed a willingness to cut back on its internal support system through the CAP, but not to the extent of jeopardizing the 1992. singlemarket project. Australia's leadership role within the Cairns Group between the United States and the EC does not indicate that it took a position equidistant from the greats. Despite the harsh language directed at the EEP and other aspects of American agricultural policy, the Cairns Group tilted towards the United States in the negotiation process. This

yttttttttttttttttttttttttttttttttttttttttttt

approach, however, fitted well with the coalition's aims. The entry of the Cairns Group in favour of agricultural reform weakened the EC'S justification for its programs on the basis that they were a defence against U.S. intrusion on sovereignty, and it invalidated the widely held notion that by this defence the EC was helping the developing countrie (a view consistent with the EC'S intermittent attempts to divide the Cairns Group by side deals on selected products of special interest to the developing countries). In addition the adoption by the Cairns Group of a step-by-step approach to reform allowed it to finesse the United States into a more balanced approach. This flexibility in turn proved to be a two-way street, with movement on the part of the Cairns Group as well as the Americans. For instance as the United States gradually shifted towards shorter-term proposals (for example a five-year period for the phasing out of export subsidies), the Cairns Group was nudged towards tariffication as a second-best instrument to standstill and rollback. Overall Australia demonstrated a great deal of characteristic resilience and stamina. Fired by the prospect of an end result, Australia tended to over-negotiate in a search for movement as the negotiations ultimately progressed from agenda setting to actual bargaining. Both during the December 1988 mid-term in Montreal and in the lead-up to the December 1990 Brussels meeting, there were signs that Australia was willing to make a number of concessions to get a deal. Neal Blewett, Australia's minister for trade negotiations, indicated during the latter forum that Australia was ready to compromise with the EC on the depth of the cuts to internal subsidies and export support payments. He added that Australia would not precipitate a crisis on these issues if substantive progress was made. Rather than being interpreted as a sign of panic, however, this approach may be more accurately considered as an outcome of Australia's emerging sense of pragmatism. In an interesting twist to the experience of the 1982. GATT Ministerial, it was the Latin Americans - not Australia - who most adamantly resisted any fallback solution. At the mid-term it was Argentina, joined by Brazil, Colombia, Uruguay, and Chile, that threatened to veto the results in other areas if an acceptable agreement in agriculture was not reached. The same type of brinkmanship tactics were employed prior to the April 1989 Trade Negotiating Committee meeting in Geneva47 and at the Brussels meeting. Although not ready to completely disavow this approach48 Australia made it clear that the decision on linkage was ultimately up to individual Cairns Group countries. The role of Australia at the heart of the Cairns Group contrasts sharply with Canada's position at the edge. As the original momentum built up behind the collective action, Canada did make a number of

12.6 In Between Countries

substantial contributions. Apart from lending its name to the coalition exercise, Canada became the bridge between the Cairns Group and the G-J. When he hosted a follow-up ministerial meeting of the Cairns Group in Ottawa in May 1987, Prime Minister Mulroney was encouraged by the Australians to take on this role for Canada. Appealing effectively to Mulroney's pride in Canada's international status, Dawkins stated that Mulroney had "the unambiguous and enthusiastic support of the other Cairns countries to advance our case for agriculture trade reform" at the Venice summit.49 Canada also sought to resume its traditional role of mediator between the United States and the EC. Given the favouritism of the United States in Canadian economic policy, this role was no longer easy for Canada to play. In trying to re-create Canada's special relationship with the United States, the Mulroney Progressive Conservative government had consistently manifested its support for the United States in international agricultural relations. The head of the Canadian delegation to the August 1986 Cairns meeting, Charles Mayer, had been the most vocal in the view that Canada would be best off closely following the Americans. As he put it in an interview in January 1985: "I think it's important that we go where we can as a North American trading bloc."50 Mayer, the minister responsible for the Canadian Wheat Board, corroborated these views with a consistent defence of the U.S. retaliatory actions against the EC. After an October 1984 meeting with John Block, the U.S. agriculture secretary, Mayer informed reporters that he was "satisfied" with the U.S. program of "blended" credit because it was directed at the Europeans and not Canada.51 Later on, when questioned about the U.S. bonus program, Mayer stated that "the Americans recognize that we are not the major problem as far as export markets and subsidies are concerned."52 Under these conditions Canada was precluded from being anything other than an exaggerated version of the biased mediator in trade negotiations. As an EC trade commissioner told a Canadian reporter prior to the 1985 G-J summit in Bonn, the impression in Europe was that "Canada is on the same wavelength as the United States"; the resulting assumption was that "Canada will be on the side of the United States" on multilateral issues.53 When Mulroney set himself up as an honest broker at this summit on the issue of agricultural and food trade, President Francois Mitterrand of France predictably reiterated these common assumptions, stating that Canada in the end returned to its "own interests."54 This setback did not put an end to Mulroney's attempts at brokerage. Supremely confident of his own skill in personal negotiations and emboldened by Canada's participation in the Cairns Group, Mulroney

12,7

Hanging Together

continued to seek out diplomatic opportunities of this type; the difference was that he became gradually more selective in his approach. Instead of targeting the EC as an institution, Mulroney targeted the leaders of EC countries that he claimed wanted fast action on the subsidy problem As demonstrated in his endeavours prior to the 1988 Toronto G-J summit, this personal diplomacy was directed at Prime Minister Margaret Thatcher of Britain and Chancellor Helmut Kohl of the Federal Republic of Germany. After a visit with Thatcher, Mulroney pronounced that: "It's very important that I have her personal imprint and advice and counsel, both with regard to the agenda and the substance of that agenda."55 Concerning Kohl, Mulroney added: "while politically sensitive, [he is] genuinely desirous to move us along to a reasonable time frame toward a ... solution."56 Notwithstanding the unintended consequences later associated with this mediatory diplomacy, Canada's activity at the outset meshed well with Australian statecraft - it allowed Canada to play the nurturing "nice cop" to Australia's disciplinarian "tough cop." This double-sidedness stands out in the Canadian and Australian responses to the United States's EEP sales to the USSR in August 1986. In mounting his campaign to launch the coalition of fair traders Hawke echoed McEwen's moralism, accusing the Americans of sacrificing their own principles of integrity and liberty by escalating the "ridiculous" trade war to "ludicrous proportions."57 Mulroney's muted criticism of the United States was a study in contrast. While calling the action "unhelpful," Mulroney maintained a low profile in seeking redress. Rather than resorting to megaphone diplomacy, the prime minister emphasized personal ties and communication channels with President Reagan.58 This difference in style was also evident in the way Canada and Australia conducted their diplomacy at the G-J summits. Comfortable within this institutional setting, Canada was an active player on policy dialogue and agenda setting. By necessity, Australia was restricted to providing a new dimension to the role of outsider. As foils the two countries could play to their own strengths. Mulroney, in hosting the G-J summit in 1988, confirmed Canada's position as a consummate insider. Hawke, alternatively, tried to get an invitation to attend. When this request was denied, he did not back away but chose instead to be close to the summit without actually participating in it. As Mulroney opened the summit, Hawke delivered a speech to the Chicago Economic Club. As the Cairns Group took shape the intrinsic contradictions in Canada's membership in the coalition became prominent. Australia's commitment to international agricultural reform remained at the core of its diplomacy, and it moved in the 19805 to extend its ability to pursue

iz8 In Between Countries

this objective. In Paul Kelly's phrase, by "reinventing" itself,59 Australia's became more ambitious and more integrated in its drive to reform, in that it pressed for both international and domestical changes. As a whole set of other policies became wrapped up with this objective, this multifaceted approach proved unwieldy and even counter-productive at times; but at least this level of commitment freed Australia from many previous charges of having a double standard. Canada's position swung in the other direction, and its focus in agricultural trade diplomacy remained primarily on the reduction of conflict and tension between the United States and the EC through confidence-building measures. The scope of this activity, however, was strictly limited. Consistent with its belief that it was acting in the "international interest" or as a "good international citizen," Canada showed itself quite willing to participate in a group that aimed to promote reform on a selected basis in the global arena; but it was reluctant to be drawn into any action that entailed application of these same reform principles to domestic policy. The Canadian view of the Cairns Group was that it should act as a loose assembly of countries rather than as a tight coalition. In keeping with its 0-7 status Canada did not see itself as one among equals within the coalition. In fact Canada remained ambivalent about belonging to a formal association of middle powers, despite the perspective of many observers that the best way forward was "to quit pretending we're one of the world's major economic powers and take over leadership of the group we really belong to, the countries affected by decisions of the Big Five, by forming our own 0-15 or G-ZO, a gang of the larger middle powers with the collective clout to make itself heard."60 Canada's desire was for the promotion of a better atmosphere during the Uruguay Round. At the initial Cairns meeting Canada tried to play down the significance of the gathering. Concerned that the creation of the Cairns Group might give the misleading impression of a tightly knit fraternity to other countries, the official line was that: "It's more a development of common interests kind of meeting."61 Even the most enthusiastic advocates among Canada's state officials of multilateral reform regarded the initiative as a catalyst to push for action on the part of the majors, not as a step in the creation of a third force of medium and smaller countries. The interests that tied these disparate countries together were far outweighed by the interests that pulled them apart. As Sylvia Ostry, Canada's ambassador for multilateral trade negotiations, declared in testimony to the Senate Committee on foreign affairs: "I thought [the Cairns Group] was a useful group to negotiate the wording that allowed us to get into [the Uruguay Round], but I said to myself that once the round started all the other agenda items on

129 Hanging Together

which they were very divided - Canada and Brazil do not have the same views on many issues, to put it mildly - would cause it to break up."6i The Cairns Group was consistently viewed as a means to complement Canada's wider diplomatic effort in the MTN. As in the Tokyo Round, Canada acted as a central player in initiating the negotiations on the Uruguay Round. Canada was one of the eighteen countries in the de la Paix group that did most of the preparatory work. At the Punta del Este meeting itself Canada was a key backer of the so-called Cafe au Lait text,63 the aim of which was to see that the meeting did not collapse over agriculture or the other controversial issues such as intellectual property and services in which Canada had a stake. Given this wide range of interests, it used its position within the Cairns Group as a tool to defuse tension, not as an instrument to push a common policy. As opposed to Australia, it remained content with a mandate for negotiation based on the establishment of a comprehensive and workable set of rules rather than standing firm for a maximalist result on agriculture itself. This continuing Canadian obession with rulemaking - perhaps best captured by the statement of Canada's external affairs minister that "In their way, these GATT rules are as important to us as our own consitution"64 - subjected Canada to a smattering of internal and external criticism. One opposition MP who had attended the talks as an observer rebuked the Mulroney government for its weak participation in the Cairns Group: "We did not play as forceful and strong a role within the Cairns Group at GATT as we should have."65 Nonetheless with the eventual breakthrough at Punta del Este on agriculture and the expression of the Mulroney government's willingness to take the group's message to the G-y, these criticisms gave way to an immediate sense of relief. The Canadian delegation basked in their moment of glory with the successful outcome of the Punta del Este meeting. Thomas Hockin, a junior minister of finance, stated: "It's a clear example of Canada making a difference. The informal coalition held together, and it turns out we toughened the text."66 In a similar vein Canadian officials voiced the sentiment that the process of negotiation had been a triumph for middle power diplomacy in the exercise of international policy co-ordination.67 Canada's style remained distinct from that of the rest of the Cairns Group. While much of Australia's crusading zeal had been harnessed into more effective channels of action, its impatience for results on agricultural trade remained intense. Hawke, his cabinet, and the entire Australian bureaucracy kept up their strong push on the GATT. Canada's activism and attempts to insert itself into the agricultural trade area remained by comparison extremely cautious. If Australia (and for that matter the Latin Americans) maintained an aggressive style in this

130 In Between Countries

issue-area, Canada was still fundamentally diplomatic. Its priority remained movement in the process rather than policy per se. It is no exaggeration to say that Canada continued to be more at ease (and more effective) operating through technical channels, whether informal (such as the de la Paix group) or formal (the OECD), than through more explicitly political forums such as the Cairns Group. With its access to and know-how about the multilateral institutional machinery, Canada preferred to work the system in order to gain a consensus rather than to overplay its hand. This was particularly the case with agricultural trade, in that this subject area was regarded as a problem with no imminent solution. With this lengthy horizon Canada took the same position as it had at the 1982. GATT Ministerial, namely that it was better to paper over disagreements than to allow them to flare into the open, with the attendant risk of the collapse of negotiations. The cost of this attitude was damage to Canada's own image.68 Canadian state officials nevertheless continued to relish their reputation as constructive insiders. As Sylvia Ostry marvelled in the aftermath of the midterm review, the procedural sleight of hand was "not drafted by a Canadian, but it might well have been."69 These differences from the rest of the Cairns Group in the form and intensity of the negotiating procedure would in themselves not have been enough to make Canada the odd country out. At the outset Brazil would in all likelihood have been considered more of a rogue element than Canada. What made Canada different from the rest was its desire to severely confine the agenda of the Cairns Group. From the Canadian perspective the Cairns Group should not only restrict itself to agriculture but to the international dimension of agricultural trade. As for the notion that loose organization served Canada's interests best, the Cairns Group was not perceived initially by state officials as a new development in organization per se but as an extension of an older type of informal and commodity-specific forum, witnessed, for example, by the meeting held between grain exporting countries in Saskatoon in May 1979. At a more general level the attempt to deal with the agricultural question through the Uruguay Round was considered a vital ingredient in a comprehensive GATT deal. Only by solving this riddle, it was argued, could a general framework for a revitalized trading order be established. In the words of Ostry: "This question is a watershed of the zoth century. The subsidy system is generating enormous surpluses. Failure to agree could generate agricultural wars of a devastating nature. That is something anyone on Main Street can understand. If there is no progress on cutting subsidies it raises the question of whether progress is possible on other trade. At stake is the entire multilateral trading system."70

131 Hanging Together

Opposition to the establishment of a broader agenda with a tighter set of commitments remained the hallmark of Canada's behaviour in the Cairns Group. The idea of the group wholeheartedly embracing the principle of special and differential treatment for developing countries was especially troublesome for Canada. Rejecting the argument that such guidelines were necessary as a form of affirmative action for developing countries, Canada continued to see them as retrogressive. What was needed, according to Canada's state officials, was not special and differential treatment for some but uniform and equal treatment for all. In a similar vein Canada rejected completely the concept of direct linkage between agriculture and other issues on the negotiating agenda of the GATT, a concept that Brazil and Argentina embraced in dealing with services and intellectual property. With its broad range of interests in the GATT Round, Canada considered any short-term gains won by raising the stakes in one area of negotiation to be outweighed by the dangers of possible adverse consequences in the form of an escalation in tension. This tactical difference was reinforced by the disparity between the economic profiles of Canada on the one side and the Latin Americans on the other: as a potential beneficiary of trade liberalization in services and intellectual property, Canada faced higher linkage costs than did Brazil and Argentina. So long as the Cairns Group activities were managed in a minimalist fashion, Canada was content to contribute to the informal division of labour within the group. In the context of their historic rivalry there understandably were a number of disagreements in the coalitional diplomacy between Canada and Australia concerning the nature of the group and its voice in the international arena. Canada made it clear, for example, that although it was willing to act as a messenger for the Cairns Group at the Venice summit, it was not willing to represent the Cairns Group interests at the G-J or in any way restrict its own freedom. Suspicious of a concentration of leadership in Australian hands, Canada pressed for a process by which the chair (if not the secretariat) of the group was rotated among its members. When the group met in Ottawa in May 1987 Canada was careful to make sure that its presence in the group was underscored by an opening address by Prime Minister Mulroney, and that the agenda reflected both Canadian and Australian input. These differences stemmed from procedural questions, with status rather than policy the dominant concern. Despite all their stylistic differences, Canada could appreciate Australia's contribution to the movement towards agricultural reform in the Uruguay Round. Australia's drive for an incremental, step-by-step progress in the GATT, for example, resonated with Canada's search for a balanced outcome combining early relief with a longer-term settlement. Canadi-

132. In Between Countries

an state officials made statements, including one by Canada's finance minister in mid-1988, to the effect that "we've got to have long-term objectives but we've got to have meaningful short-term steps to move towards those long-term objectives."71 The turning-point in the Australia-Canada relationship was the decision by Australia to try to transform the Cairns Group from a loose assembly of countries co-operating on a single issue into a formalized third force in the GATT Round. By its concessions on the principle of special and differential treatment, Australia succeeded in drawing the developing countries more closely into the workings of the group. As the sense of solidarity between Australia, Brazil, Argentina, the ASEANS, and the other developing countries was enhanced, though, the ties between Canada and the rest of the membership progressively weakened. Canada did try to compensate for these differences by lending support in other ways to the agricultural exporters in the developing countries. For example Prime Minister Mulroney brought up the case of new export restrictions on animal feed with the EC, an issue on which Canadian and developing countries' interests coincided. But Canada's tough stance on the special and differential question, combined with an increasing divergence on tactical matters, forced the split between these factions in the Cairns Group to grow. Australia's determination to seek reform in the domestic and international contexts intensified Canada's feeling of isolation. Canada, initially at least, appeared willing to agree to elements of a reform package that had implications for its own domestic producers and economy. However it was not willing to contemplate embarking on these measures unilaterally, ahead of other actors, especially if (because of the special and differental principle) many other countries would be exempted from these reforms. Canada's dilemma was first exposed to public scrutiny by Prime Minister Mulroney's damaging slip-up in his pre-summit diplomatic tour prior to the 1988 Toronto G-J. By portraying Canada solely as a victim, and not a player, in his efforts to mediate between the United States and the European leaders, Mulroney seriously misrepresented and undermined Canada's position. After a meeting with Jacques Delors, the president of the EC'S Commission, Mulroney dismissed the charges of an EC official that Canadian farmers were subsidized almost as much as European ones. Playing to the audience back in Canada, Mulroney insisted: "He's mistaken. In Baie-Comeau [referring to his home town] we would say we are Junior B and they're in the national [hockey] league." The difficulty was that Mulroney's claims were not supported by the evidence from the OECD. While total European subsidies (both direct and indirect) were ten times those of Canada in absolute terms, when measured on a per-

133

Hanging Together

farmer basis the OECD figures showed that Canadian support almost matched that of the Europeans (accounting for 49 percent of a European farmer's income compared with 46 percent for a farmer in Canada). An attempt to correct the situation was quickly made by a Canadian state official, who admitted: "Everybody's sinning and the Canadians are sinning almost as much as the EC."7* This effort at damage control, far from making up for the loss of credibility suffered by Canada from this gaffe, intensified the fallout. Mulroney had been caught giving an inaccurate portrayal of the Canadian position in agricultural trade. As one journalist colourfully put it: "Whoops, good old Canada, the boy scout of international trade, has been caught in its own rhetoric again, this time over the amount we subsidize our farmers."73 This episode underscored the crucial differences between Canadian and Australian agriculture. Whereas Australia had been hurt by the United States-EC trade measures in a diffuse fashion, Canada was caught in the crossfire of the majors' actions in a highly focused manner. With its narrower export profile, Canada suffered casualties from the ploughshares war that were restricted to wheat, oilseeds, and to a lesser extent red meat. This is not to minimize Canada's stake in cooperative or multilateral approaches designed to restore order in these selected markets. In comparative terms Canada remained highly dependent on export markets for its wheat sales: 80 percent as opposed to 50 percent for the United States and 2.1 percent for the EC.74 Still this concentration imparted a flexibility to Canadian statecraft on agricultural trade that was unavailable to Australia. As Joe Clark told the Canadian Cattlemen's Association immediately before the meeting in Cairns: "No one can win a trade war - [if the] foundation of world food trade is going to be subsidy, Canada will have real trouble."75 However with a higher tax base than that of Australia, Canada could offer aid to Canadian farmers, through domestic support programs, well beyond the capacity of the Australian government. While Canada knew it could not win a protracted war through side payments, it was not willing to stand completely out of the fray and allow the United States and the EC to displace Canada in international markets. To the chagrin of the United States the Canadian Wheat Board stepped up its efforts in the 19808 to hang on to its customers via long-term agreements. As Mulroney told the 1987 Agriculture Outlook conference: "We are with you for the long haul."76 If Australia had every incentive for leading a crusade to end the lunacy of subsidies, Canada had some luxury in its choice of responses. The immediate priority for Canada was to win a ceasefire in the United States-EC trade conflict, which would allow a set of rules to be

134

In Between Countries

clarified. This approach had the diplomatic attraction of allowing Canada to work to solve the agricultural trade situation without confronting the United States head-on. In turn it allowed Canada's two major trade options to be pursued in relative harmony, in that Canada's statecraft vis-a-vis the United States in the context of multilateral institutions did not jeopardize the move towards a bilateral free trade agreement. Economically this approach offered Canada the prospect that it might be able to ease up on its unilateral support programs before they threatened other government priorities. Initially this debate centred on the need to balance the agricultural support programs with forms of international aid, most notably foreign development assistance. Later on, in the Mulroney government's second term in office (1988-93), attention turned to the efforts of the government in deficit reduction.77 The dualistic nature of Canadian agriculture, with the commodity and regional split between export- and import-oriented sectors, contributed to the nuanced Canadian approach. Without a "permissive domestic environment for multilateralism" because of this profile,78 Canada remained extremely reluctant to be drawn into any group commitments entailing internal agricultural adjustment. It was one thing for the Cairns Group to focus its attention on international trade; it was quite another to target domestic policies. From the time of the creation of the Cairns Group Canada had been taken to task by Australian commentators for its programs of support for export-oriented commodities. The newspaper of the major farm organization in Australia, the National Farmers' Federation, went so far as to condemn Canada for having "ratted on the fair-trade principles" by its practices of raising its subsidies for wheat producers."79 Nevertheless this set of issues alone did not tear the Cairns Group apart. While the Special Canadian Grains Program and other measures designed to help Canadian grain producers were not condoned by Australian state officials, neither did they elicit harsh criticism. So long as these instruments were implemented purely as temporary measures, intended to act as income support and not production support, they could be excused by the Hawke government as a detrimental but understandable consequence of the United States-EC struggle and the resulting decline in international prices. The unravelling of the Canadian-Australian partnership only took place when internal agricultural policies began to be scrutinized as a totality. As Australia turned up the pressure for domestic agricultural reform, from the time of Hawke's Davos speech on, the differences between Canada and Australia became starker in tone and content. Again these differences had an important stylistic element. The moves

135 Hanging Together

by Australia to develop and communicate a common proposal for an advance or downpayment threatened the consensual methods that Canada favoured. Suspicions were raised that Australia was extending its manipulative tactics, which the Canadian government believed had been practised at the procedural level since the initial Cairns Group meetings in an effort to lead Canada down a path it did not want to take. In particular Canada bridled at being put in a position where it had to react to policy papers into which it did not have (and equally importantly, did not want to have) any input. In keeping with its longstanding objections to formal organization, Canada saw Australia's actions as inexorably leading the Cairns Group into a tighter organization. Style became inextricable from substance. The shift in orientation from an emphasis on co-ordination in identifying problems and establishing basic principles (as in the early harvest and standstill concepts) towards a common negotiating approach was viewed as problematic in both the international and domestic contexts. Internationally any move by Australia and the rest of the Cairns Group to quicken the pace of the GATT negotiations through the downpayment notion was seen as ill-conceived and counter-productive. Rather than helping to achieve a positive outcome in the Uruguay Round, this move was seen as undermining the positive potential by tipping the balance too sharply towards short-term solutions. Canadian negotiators asked in private whether the obsession Australia had with a downpayment was in practice playing into the hands of the EC. The danger, as they saw it, was that once a downpayment was agreed to, this agreement would become the end deal. Reinforcing this scepticism was the fact that a downpayment contained risks for the Americans. Not wanting to buy into a deal until it knew what it was going to get in the long run, the United States adamantly opposed any short-term deal (because it was perceived as caving into the Europeans) through to the 1988 mid-term. The notion of a specific form of downpayment cast Canada's own inconsistency on agricultural trade policy into the diplomatic spotlight. The Mulroney government was aware from the start that pressure for international agricultural reform might make domestic reform difficult to resist. As will be discussed in more detail in chapter 7, an internal debate about the implications of this scenario was in train in Canada. Canadian state officials were certain, though, that internal reform could only be sold politically in Canada on the basis of a number of provisos. First of all Canadian state officials considered that the reform process would have to bring benefits, in terms of access to international markets, that outweighed the costs of adjustment for domestic producers. Secondly they were of the opinion that Canada could not be

136 In Between Countries

seen as going too far out ahead of other countries in the way of reform. If Canadian agriculture was to undergo serious adjustment, it would do so with adequate cover by an overall package of reform in the agricultural sector and not in a precipitous or isolated fashion. Thirdly Canadian state officials believed that any adjustment could only be brought about in a gradual or incremental fashion; no "big bang" reform was contemplated. In tune with this approach, Canada was not very forthcoming about what it would put on the table as concessions. Contrary to the stance of Australia, as witnessed by Hawke's address at Davos and to a special meeting of the GATT in October 1987, Canada's position on agricultural reform was not enmeshed into wider economic strategy. Rather agriculture was dealt with in an instrumental fashion. Caution, not a visionary impulse, fashioned Canada's mode of operation. Far less willing than Australia to go out ahead on the question of domestic adjustment, Canada continued to put the primary obligation on the United States and the EC to move first towards a settlement. This cautious tactical behaviour had some justification. It was only when Canada finally submitted its own proposals to the GATT agriculture negotiations committee after some delay, at the end of October 1987, that the first sign of an open break between the Cairns Group principals emerged. Seeking to minimize its own responsibilities in the reform process, Canada took the line that any adjustments "should be phased in progressively over time" and that the government should "retain some flexibility in the choice of policy instruments."80 The Australian attempt to tie the Cairns Group members to a comprehensive and binding set of commitments had the effect of shifting the onus from the majors back on to Canada. Intending with its bid to up the ante in the GATT negotiations, Australia laid out a detailed reform plan at the meeting of the Cairns Group in Bariloche, Argentina, in February 1988. This set of proposals called not only for a freeze on all farm subsidies and new import barriers, to commence in 1989, but for a 10 percent cut in domestic support as a downpayment on a longer-term agriculture agreement. From the Australian perspective this set of proposals was necessary as another step in the process of confidence building, demonstrating the Cairns Group's own bona fides in the lead-up to the mid-term review. From the Canadian standpoint, by way of contrast, these guidelines for negotiation were far too ambitious. By intruding into the sphere of domestic policy making in such a detailed way, the Australian proposals hit sensitive political and economic nerves, which was bound to constrain Canada's response. Canada's resistance created an open rift in the Cairns Group, which burst into the open in mid-1988. Taking advantage of the visit by the

137 Hanging Together

Canadian deputy prime minister, Don Mazankowski, to Expo 1988 in Brisbane, part of the Australian bicentennial celebrations, Australian state officials (apparently) leaked news about the seriousness of the disagreement between Australia and Canada. Mazankowski was thus greeted on his arrival by media reports speculating on whether Canada was about to leave the Cairns Group.81 Although in fact the possibility of Canada taking itself out (or being ejected) from the group had been discussed at the cabinet level, the embarrassment emanating from the public furore led not to a resolution of the dispute once and for all but to a burst of high-level crisis management diplomacy, which in effect papered it over. A meeting between Mazankowski and Prime Minister Hawke and a number of his cabinet ministers resulted in an agreement to disagree on the issue, with Australia expressing its determination to push forward with its own proposals, although not at the expense of a public break with Canada. This awkward (and ultimately unsatisfactory) compromise in practice saw Australia deleting the specifics on the downpayment in the Cairns Group "Time for Action" proposals but handing in a separate paper of its own that contained detailed recommendations about the way the cuts could and should be made.82This attempt to deal with the schism between Canada and Australia proved a failure. Despite the resort to high-level mediatory diplomacy to ease the tension between them, the underlying differences remained so deep that a workable resolution could not be attained. The disagreement about how the downpayment was to be implemented soon resurfaced over the submission of a Cairns Group proposal to a GATT agricultural committee session in Geneva. Canada, although willing to agree to a freeze on further trade-distorting initiatives and prepared to accept an overall reduction of 10 percent over the next two years, remained adamantly opposed to any commodity-specific measures - it refused to sign the Cairns Group submission on this basis. The risks and costs of accepting proposals that were not of its own making and that asked Canada to pay a good deal were simply too great. As Australia and the other members of the Cairns Group turned their attention to the questions of import access and administered prices, together with controls on production, the split with Canada became still more accentuated. At the heart of the entrenched structure of the Canadian domestic-oriented agriculture market was the system of marketing boards, supply management, and import controls. The long-established official view in Canada, made explicit from Eugene Whelan's years as agriculture minister, was that not only did this system conform to the GATT by way of Article XI, but that it was a stabilizing rather than a problematic element within the agricultural trading

138

In Between Countries

system because of the production control disciplines introduced for commodities under supply management. The Cairns Group perspective was very different. Even if the Canadian system of supply management conformed to the letter of the GATT, Australia and the other coalition members argued that this mechanism did not conform to its spirit in that it created and legitimized barriers to trade.83 From the time of the mid-term review Canada and the rest of the Cairns Group moved in opposite directions. As laid out in the Comprehensive Proposal presented at the November 1989 meeting at Chiang Mai, Thailand, the Cairns Group as a whole targeted illiberal, interventionist measures in the home market as well as in export markets.84 At the expense of increasing its isolation in the group, Canada demurred, resisting any move that entailed change in its own agricultural structure. John Crosbie, the Canadian trade minister, made it clear at the Chiang Mai meeting that "the existing GATT rules which permit import restrictions, particularly Article XI governing import controls in support of effective supply management, should be clarified and strengthened."85 Tariffication as a means of moving the MTN Round towards a ne stage of negotations in early 1990 (a shift facilitated by both the United States's greater flexibility and the creative work of Aart de Zeeuw, the Dutch chair of the agricultural committee) brought things to a head. Australia and the other members of the Cairns Group embraced tariffication; Canada expressed serious reservations about the concept. Canada saw the value of tariffication as a means of ending the EC'S system of variable import levies and as an instrument (through the trafficlight approach of red-amber-green categorization of domestic support programs) for dividing policies into three groups: those not permitted, those permitted only under GATT disciplines, and those permitted. Canada's reticence was at the suggestion that its supply management be included in the measures that would be tariffed over a ten-year period. Far from being forced to give up its exemption from the general rule prohibiting quota restrictions, Canada contended right through to the end of the negotiating process that it should be given both credit under Article XI for import quotas in support of supply management programs and the ability to operate this type of system more effectively. The divorce between Canada and Australia/Cairns Group was not quick, formal, or permanent. Rather it resembled a slow and uncomfortable separation in which the actors continue to cling to each other for comfort but irreversibly go their own ways. Despite all the tension between them over the modus operandi in the Cairns Group, the bond between Canada and Australia continued to be strong in many ways.

139 Hanging Together

While beset by irreconcilable differences over the issue of agricultural trade reform, the two countries were in no hurry to decisively break up. For a long period of time Canada seemed in denial about its deteriorating relationship with the rest of the group, and kept its place there. Yet if technically still a member, Canada could no longer be considered part of the group in the sense of contributing substantively to its policy activities. This nebulous state of affairs was perhaps best summed up by the statement of a spokesperson for the Canadian trade minister, when asked at the end of 1990 whether Canada continued to be a member of the group: "We're part of it, but we're not part of it."86 Communiques from the group continued to note Canada's opting out of the Cairns Group formula for comprehensive tariffication.87 In reply to questions about the unity of the coalition, state officials replied that Canada was a "different" member of the Cairns Group. Canada continued to take on some tasks important to the group, specifically that of delivering a message to the 1990 Houston G-j summit concerning the need for substantive progress on the GATT Round. For the most part though Canada directed its attention towards the goal of convincing other countries that its domestic agricultural policies were not trade distorting. As Crosbie made clear just prior to the mid-term meeting: "We're not going to accept any settlement in GATT that would endanger our farmers. They're not part of the problem."88 Much of this effort centred on the formulation of an alternative methodology for calculating support and the commitment to reform. Canada opposed the use of the producer subsidy equivalent (PSE), preferring instead a measure based on the trade-distorting equivalent. The proposal for an aggregate measure of support (AMS), which by definition accounted for all support from border protection and internal programs as well as export assistance, was met with reservations. Canada continued to be preoccupied with gaining flexibility in how adjustment took place. A second manifestation of Canada's distancing itself from the Cairns Group may be termed compensatory activity. As Canada fell out of step with the Cairns Group, with a tarnished image as an agricultural fair trader, it took the high road in a number of other areas relating to the GATT negotiations. Crosbie's proposal for a new International Trade Organization (ITO) looms large as an illustration of this type of positive action. Canada also was ahead of the other Cairns Group members on the attempt to improve international disciplines on countervail duties. In terms of the agriculture issue more specifically, Canada tried to counter its image as resistant on import controls by taking on renewed leadership tasks in other areas. Although Canada could not bring itself to be part of the Cairns Group's common offer in Octo-

140 In Between Countries

her 1990, because of the disagreement on border protection and internal support mechanisms, its separate offer was ahead of the Cairns Group proposal on the elimination of export subsidies in that it maintained its insistence on a cut of 100 percent cut rather than 90 percent over ten years.89 When Canada did at last acknowledge its split from the Cairns Group, it did so in terms that emphasized the need to defend national sovereignty against external intrusion. If Canada's position on agricultural reform fell short of what the Cairns Group wanted, it was argued, the offer made through the GATT had the virtue of reflecting Canada's diverse needs and interests. While willing in theory to support the positions of the Cairns Group in order to increase its own leverage, Canada worked hard to ensure that these positions did not in practice exacerbate an already difficult domestic political management process. Agriculture Minister and Deputy Prime Minister Mazankowski expressed this Canadian determination most explicitly: "What's wrong with staking out a Canadian position ... We should be applauded for that."90 The full extent of Canada's estrangement from the Cairns Group came out when Canada chose to openly campaign in defence of its system of supply management. This autonomous diplomatic activity sought succour from many of the very countries that the Cairns Group considered to be the most obstinate on the issue of agricultural reform; the focal point of this Canadian effort was a collection of countries, including Japan, Korea, and the Nordic countries, that were also interested in maintaining their national systems of agricultural protection. The association that Canada established with these countries nonetheless remained extremely tangential, since each of them had its own distinctive preoccupations. Japan and Korea, for example, provided support for Canada on the strengthening and clarification of Article XI, as a means of defending their own domestic dairy producers. Unlike Canada, however, the priority of these Asian countries was the entrenchment of the principle of food security in the GATT. This eclectic coalition of countries proved to be no substitute for the Cairns Group. Instead of providing some comfort among strangers for Canada, the search for support from non-traditional sources on Article XI magnified Canada's sense of aloneness. This isolation helped produce an air of desperation in Canadian diplomacy totally out of character with its tradition as the helpful fixer or linchpin. Frantically seeking out potential allies, Canada went so far as eventually to lobby the EC, an eleventh-hour overture that met outright public rejection. Although the Europeans had expressed some earlier interest in the Canadian proposals this sentiment was exposed as a tactical device

141 Hanging Together

designed to further split the Cairns Group. By early 1992, in the absence of any firm support from these potential allies, Canada's attempt to build an alternative coalition based on the defence of Article XI was deemed publicly to be a failure. As Canada's chief negotiator in the GATT admitted to the House of Commons Agriculture Committee, other countries were just not buying into this initiative: "We owe it to you ... to tell you the facts of life - we just can't come to you and pretend that we don't have a tough time defending this."91 REDEFINING THE RANGE OF CHOICE

In trying to work towards an explanation of why the roles of Australia and Canada in the Cairns Group found such divergent expression, the parameters of analysis must be extended to take into account the broader policy and political context of this diplomatic behaviour. In initiating the creation of the Cairns Group Australian diplomacy featured its characteristic single-mindedness of purpose. Multilateralism via the GATT, for all its flaws, remained in the Australian mind, up to the time of the mid-term review, the only avenue for progress on agricultural reform. Other outward-looking options, whether bilateral or regional in nature, remained well in the background. Indeed it was this highly focused and agri-centric approach that continued to give Australia its strengths (concentration of resources and concerted efforts at mobilization) and its weaknesses (opportunism and manipulation). As part of an ongoing process of relearning, Australia's options began to widen appreciably. While maintaining its commitment to the Cairns Group Australia diversified its approach to foreign economic policy. To a considerable extent this process may be attributed to Australia's high stakes in addressing its own economic predicament. A strong element of reputation building also remained firmly in place in Australian thinking, and the Hawke government wanted to fundamentally reshape Australia's image as an international economic citizen. The Cairns Group was a vital component in this strategy, and although subsequently weakened this commitment did not die away. Rather the multilateral initiative became intertwined with other strands of policy designed to encourage the relocation of Australia in Asia-Pacific and the transformation of Australian parochialism through regional means. Canada went in the opposite direction. In addition to its instrumental advantage as a tool for dealing with the grains crisis and as a means of breaking the agricultural logjam within the GATT, the Cairns Group appeared to have advantages in providing Canada with some added room for manoeuvre in its foreign policy. Both as a signalling exercise and as a cushion, the Cairns Group presented Canada with a poten-

ttttttttttttttttttttttttttttttttttttttttttttttttttt

tially valuable insurance policy during the move towards bilateralism. Rather than giving flexibility, however, this approach ended up confining and restricting Canada's diplomacy in terms of the Canada-United States free trade agreement. By putting pressure on the same sensitive nerves pinched by the FTA negotiations, the two-track strategy com pounded rather than mitigated the controversy over Canada's agricultural policy. In terms of domestic politics the degree to which agricultural policy became intertwined with the wider economic agenda must be more fully taken into account. Electoral politics played an important part in the internal mobilization behind the Cairns Group in Australia. As in the case of McEwen and Eraser, a desire to help Australian farmers better cope with their vulnerability in the IPE provided much of the political stimulus for the Hawke government to do something to alleviate the disorder in the agricultural trading environment. Still, if designed to rectify immediate party political problems, the Cairns Group also meshed with the economic goals of the Hawke government. Not only did the Cairns Group initiative give added momentum to the ALP government's reform drive at home, it allowed Australia to win recognition abroad for these efforts. Whereas Canada's original intention was to orchestrate an externally directed reform campaign in a fashion similar to Australia, its role in the Cairns Group had the effect of internalizing the management of agricultural trade issues. Because its activities in the Cairns Group were not integrated into an all-encompassing reform agenda, Canada's participation in an assembly of fair trading agricultural countries exposed the realities of the internal divisions and fragmentation within Canadian agriculture. In addition to this structural dimension vital situational factors also came into play. The nature of the governing coalition in Canada necessitated an accommodation of interests represented by producer groups that were polarized on policy issues. Moreover the debate within Canada on the GATT negotiations intensified and became more delicate as negotiations in this specific issue-area became wrapped up in the larger web of constitutional politics.

6 The Politics of Initiative in Australia

To achieve a more complete understanding of its activist role within the Cairns Group, Australia's changing place in the international political economy and the dynamics attendant on the management of internal reform must be examined. Australia had historically separated its international and domestic strategies for economic policy. Throughout the Robert Menzies/John McEwen and Malcolm Fraser/Doug Anthony eras, Australia had campaigned vigorously for firmer and more equitable rules in the international agricultural trade system. Yet this commitment to reform did not extend in the same fixed fashion to the domestic arena. Australia's drive for open trade in the primary sectors of the economy, in which it enjoyed a comparative advantage, remained at odds with its struggle against liberalization in its less competitive manufacturing industries. The achievement of the Bob Hawke/Paul Keating governments was to break out of this dichotomous pattern. Faced with the realities of interdependence, with the constraints imposed by the international economy on the ability of state officials to secure an efficient domestic environment, Australia in the 19805 and early 19905 tried to address its international challenges and domestic problems in simultaneous fashion.1 While trying to induce movement towards substantive global reform, Australia changed its own mentality in regard to the advance of political and economic restructuring. The 19808 jolted Australia out of its set ways of doing things, given that, as Peter Gourevitch suggests, " [crises] pry open the political scene throwing traditional relationships into flux."2 With the diminution of

144

In Between Countries

Australia's performance in the international economy, accompanied by a number of interconnected shocks - a severe recession, a trade collapse, a record balance-of-payments deficit, a massive foreign debt, and a real fall in national income - came a process of re-evaluating the Australian model of development. The logic of "protection all round" came under increasing critical scrutiny.3 The economic costs of this system's inefficiency, together with the rigid labour market, low productivity, and lack of investment, had been highlighted by a number of reports dating back to the Vernon Report in 1965. While disparaged in economic terms as a "protection racket," the model still drew a good deal of political support. The groups receiving benefits from protectionism extended over a diverse set of influential interests, ranging from manufacturers to services (including transport and communications) to selected rural industries. This model of national development had the symbolic advantage of its entrenched association, not only with the defence of particularistic industries, but with the preservation of national sovereignty and an Australian ethos or way of life. Under these conditions the impact of a new set of exogenous pressures was required to progress from bending the old order to breaking it. In facing this "critical juncture" 4 Australia's strategic choices were few in number. As a medium-sized, commodity-trading country, Australia had little choice but to place priority on international options. Withdrawal from the international economic order would invite retaliation against Australian commodity exports. Moreover Australia could not readily resort to subsidies or other forms of compensatory practices because of its limited tax base. As defined by its ability to influence other actors in the international system, Australia had very little diplomatic leverage. As one Australian state official noted, amidst the i98z GATT Ministerial: "Australia as a middle-ranking trading power has no choice but to love and rely heavily on GATT [as] the general agreement represents the only set of rules governing the conduct of international trade. Hate of this institution swelled up, only when it failed to deliver the fruits of its principles and rules."5 Australia's behaviour in the 19805 continued to be characterized by an ambitious scope and high-risk quality. The transformation in its content came about in a variety of ways. Acknowledging its lack of ability to impose its will on others, Australia moved to engage more constructively in coalitional diplomacy. Unable to dictate, Australia by necessity came to rely heavily on persuasion. At the same time it placed considerable onus on the internationalization of adjustment. At the core of its activism in the Cairns Group, and in other initiatives relating to the global and regional economy, was the belief among Australian decision makers that a sharp change in course was required. As

145 The Politics of Initiative in Australia

part of a complex two-level game,6 a strategy of offensive adjustment was pursued to reform, restructure and revitalize the domestic architecture of the Australian economy as well as to secure a more congenial environment in international trade. To compensate for its lack of structural power in the international political economy, Australian diplomacy relied heavily on external validation. As witnessed throughout the Cairns Group episode, Australia paid considerable attention to the enhancement of its own status and credibility in international negotiations. Indeed it is not an overstatement to say that Australia utilized this type of coalition-building exercise to redefine and reposition its image on the world stage. In an attempt to move away from its isolated diplomatic condition, with its high reliance on the ad hoc and go-italone forms of activity, Australia recast its profile as a good international citizen willing to work with others in building system stability and economic openness. In emphasizing validation it displayed skills and sophistication hitherto unknown to it. Detaching itself from its traditional pattern of statecraft, with its lapses into passivity and bursts of overzealousness, Australia displayed a determination to stay the course and get results in its economic diplomacy. State officials concentrated on the mobilization of societal forces behind the drive for domestic economic reform. This strategic thrust was directed primarily at progressing beyond the established landscape of Australian economic and political life. In redirecting its course in this manner, Australia's political leadership and organization demonstrated a capacity for embracing an alternative vision of its domestic goals.7 Admittedly some qualification is necessary here. The set or package of policies put into operation by Australia's authoritative decision makers lacked the complete coherence to entirely justify the claim that it represented a "grand design."8 Nor can it be argued that the state was able to get its own way in a comprehensive fashion, as the opposition continued to resist the means and the ends of this reformist campaign.9 For all these caveats it remains true that the Hawke/Keating government advanced its own purposeful agenda on both the domestic and international fronts and in doing so fundamentally altered Australian values and attitudes, with respect both to the global economy and to its own political habits. In the words of Paul Kelly: "The story of the 19805 is the attempt to remake the Australian political tradition. This decade saw the collapse of the ideas which Australia had embraced nearly a century before and which have shaped the condition of its people ... the central message shining through the convulsions was the obsolescence of the old order and the promotion of new political ideas as the basis for a new Australia."10 By its ability to shape and influence the society and the economy, the

146 In Between Countries

Australian state displayed elements of its residual hardness. Rather than being a mere reactive agent or prisoner of dominant social forces,11 the Australian state acted in the 19808 and 19905 to "mobilize and direct the resources towards [its own] end."12 As with the defence of the pillars of Australian orthodoxy in the 19505 and 19605, the move to bring those same pillars tumbling down was instituted at the leadership rather than the societal level. Unlike the initiative of the McEwenite era, though, the vigorous effort undertaken by the Hawke/Keating government to sell its policies concentrated on indirect means rather than the direct mechanisms (namely planning through state agencies and import regulations) used in the past. The attempt to reinvent Australia incorporated a mix of instruments including exhortation, corporatism, rationalization, deregulation, and bureaucratic reorganization. FITTING AGRICULTURE IN

The combination of external validation and internal mobilization allowed Australia to present a consistent face to the world. The sustained campaign for reform in the international arena became intimately related to the attempt by state officials to seek change at the domestic level, through a reduction in Australia's own level of protectionism and parochialism. The recognition won in the international community through its diplomatic activities facilitated Australia's effort to put its own house in order. Conversely the rallying of domestic societal and economic interests behind a project for internal reform allowed state officials to enhance their status in the international arena because of their increased legitimacy as authoritative voices for Australian interests. Although the benefits of this integrated approach were apparent, so too were the difficulties in linking trade to the larger economic agenda. This was markedly evident in the case of agriculture. Given its depressed condition, the agricultural sector had considerable incentive for wanting the Australian state to raise its game in the pursuit of material well-being. Australian farming had been particularly hard hit through the early to mid-1980s. The rural terms of trade, i.e., the ratio of costs to prices received, worsened considerably during this period. Not only did production costs rise, due largely to the severe drought experienced in the eastern and southern regions of the country in 1982-83, but Australian producers suffered from the dramatic collapse in the prices of a variety of world commodities. This deterioration was attributable above all else to the global situation. On the one hand demand for Australian agricultural goods dropped with recession and

147 The Politics of Initiative in Australia

the serious debt repayment problems experienced by many developing countries. On the other hand supply problems worsened with the significant diversification in international agriculture and the heightened competition between the United States and the EC to offload their surplus production. The offensive adjustment strategy in agriculture needed careful management. The Hawke/Keating government could not afford to externalize the problems of Australian farmers simply as a means of grandstanding. The agricultural community did not give the Hawke/Keating government the same leeway as it had the Menzies/McEwen and Fraser/Anthony governments. The ALP needed tangible results in the international system to maintain domestic support. Whereas the LiberalCountry coalition had the luxury of a tradition of rural support, the ALP had to operate under a cloud of deeply ingrained suspicion dating back to the Gough Whitlam years. As Hawke's minister of primary industry, John Kerin, commented: "There is always a general feeling of being forgotten [in the country] and it's more easily whipped up when there are Labor governments."13 The internal mobilization dimension of the government's project complicated matters further. In theory the agricultural community could be viewed as being among the Australian domestic interest groups most receptive to the economic reform agenda promoted by the ALP. As indicated by their agitation for change in the 19708, the farming community had been among the first of the Australian organized economic interests to become disillusioned with "protection all round." Rationalization and deregulation were attractive because they held out the possibility of lower production costs for farming through cheaper inputs (fertilizers and cultivating equipment for example). The removal of tariffs and other forms of restriction in Australia offered the possibility of an increase in two-way trade with a number of countries within the Asia-Pacific region - a region that continued to be extremely critical of Australian import restrictions. Moreover the ability of the NFF to operate as a "peak" organization allowed the farming community to respond in a politically effective fashion to these organizational shifts. If differences continued to exist between the externally and internally oriented commodity producers, in comparison with the wider business community in Australia (or for that matter, the Canadian farm interest) the farming community had a unity of group structure allowing it to adopt a strong strategic approach. The fundamental question that remained was how the agricultural community fitted into the larger economic policy promoted by the ALP. One of the main tenets of the reform agenda was "putting an end to sectional advantage," the sort of thing "nicely summed up in the

ttttttttttttttttttttttttttttttttttttttttttttttt

metaphor of the level playing field."14 In contrast to the perceived neglect of this sector by the Whitlam government, the ALP in the 19805 paid considerable attention to agriculture. In part this concern derived from the exigencies of the immediate political situation. By 1985 farm militancy had become a political force of some consequence in Australia, with the mass rallies and demonstrations by agricultural interests becoming a dominant feature of Australian political life. This mood of anger and frustration threatened not only the economic reform agenda but the consensus politics that the Hawke government did so much to promote. On top of all this, there were also immediate electoral consequences resulting from this revolt from "the bush." While the ALP had little aggregate support from the countryside, it saw the marginal country seats as being vital to its continued success at the polls. As Kerin put it bluntly in a speech in November 1985 to the New South Wales ALP: "Eighteen of our federal seats have a significant rural component. Nine of our most marginal seats are included on this list. We cannot hold government without these seats."15 In addition to political ramifications, economics came back into play from various angles. With agriculture maintaining its status as the core ingredient of the Australian economy, Prime Minister Hawke had good reason to try to do something about the rural crisis. In attempting to externalize the issue through diplomatic action he wanted to show the agricultural producers that he was acting to help them despite the fiscal constraints on doing so. Because of the overall economic situation in the country, Australia simply lacked the financial capacity to support domestic farm incomes or to match the United States or EC in sub sidizing farm exports in a trade war. From this perspective as well diplomatic skill substituted for economic leverage. Alternatively, as time went on, agricultural revival and reform were seen by the Hawke government as a key component of the sub-theme of economic diversification within the reform agenda.16 Whereas the conservative coalition governments had concentrated their efforts on selling bulk commodities, the ALP government wanted to emphasize the variegated aspects of the sector. Instead of just managing decline they included agriculture in a program of innovation. This package of policies ran up against the agricultural community's entrenched agri-centrism. What the farming community wanted was reform on its own terms; what the ALP government proffered was a comprehensive approach that subordinated the special and distinctive interests of the farming community to the objective of getting the entire national economy "right." The result was a complex mix of co-operation and conflict between state and societal interests. While willing to back a number of the individual items on the ALP'S reform agenda, the

149 The Politics of Initiative in Australia

long-standing sense of suspicion about the ALP'S motives and actions inhibited any ringing endorsement of the entire package by the agricultural community. The means by which the ALP chose to manage the politics and economics of agriculture indicated a great deal about the dynamics of adjustment in both the international and domestic realms. The ultimate outcome of the externalization strategy rested heavily on the success of the Cairns Group initiative, both in keeping the coalition together and in working towards a positive result in the international trade negotiations. As it progressed the Cairns Group became the standard by which the other Australian diplomatic initiatives were judged. The advancement of the domestic agenda, in turn, was congruent with the ability of the ALP to deal with a sectional interest with which it had an uneasy and difficult relationship. The agricultural issue was, in consequence, both exceptional and consistent with the overall pattern of adjustment. While in many ways agriculture was more sensitive and volatile than other parts of the reform agenda, various elements of its reform process spilled over and intermingled with the broader motif. The case of agriculture must therefore be located against the backdrop of this larger picture. DOMESTIC POLITICAL MANAGEMENT AND INTERNATIONAL ECONOMIC REFORM

Behind the ALP'S reform agenda was the transformation of the political context in which policy making took place in Australia. A primary stimulus to this metamorphosis was the shift in political personnel and thinking within the ALP itself. Its older generation of politicians who had dominated in the 19608 and 19708 gave way to a new cohort. With this changing of the guard came not only new interpretations of the nature of international imperatives but new ideas and a new set of policy objectives.17 The outgoing cohort, represented in the first Hawke government by veterans such as Lionel Bowen (who initially served as trade minister in the Hawke cabinet), was as tied to their own brand of traditional economic ideas and practices as the conservative coalition was to theirs. Notwithstanding the creativity they had displayed in many areas of policy making during the time of the Whitlam government, these individuals lacked both a model and the requisite ability to steer the economy in new directions. Even when they had the will to move beyond dogma - on tariffs and on trade promotion - they had neither the expertise nor the stamina to bring these notions to fruition. The new generation of Labor leaders was a very different breed. Eager to grab the nettle of reform, from which to pluck the flower of

150 In Between Countries

economic prosperity, they chose to break decisively with the status quo. Moreover unlike the Whitlam cadre, Hawke and his colleagues had the ability to implement their ideas. In large part this triumph was due to the impressive combination of means through which the reform agenda was promoted. Prime Minister Hawke devoted a great deal of energy to mobilizing support for the reform agenda, by preaching the message that consensus and national reconciliation were necessary to turn the economy around. Keating, the treasurer, together with a number of other ministers, pushed the agenda forward by tougher means. Whereas Hawke concentrated on selling to the Australian public the benefits of a shift in economic principles, Keating and the like-minded ministers dealt with the necessity of tackling Australia's problems in a radical fashion because of the underlining conditions of crisis. In tandem Hawke and Keating made an effective team. Playing down the larrikin element of his personality, Hawke assumed the role of strategic-minded political manager in the reform campaign. As Patrick Weller wrote in mid-decade, Hawke "acts as chairman, publicist, troubleshooter and at times, guardian of the central strategy of government."18 Intervening on specific issues only during critical moments, Hawke left the day-to-day handling of the economic agenda to Keating, John Dawkins, and other selected ministers. Hawke's ability to communicate directly to the public, together with his abundant skills as chair, were particularly effective in convincing the Australian business community that his government was not going to be "another Whitlam re-run."19 Averring that a successful economic policy required confidence and support from the centres of corporate and financial power as well as from the trade unions, Hawke brought this interest on side through a "charm" offensive and an image of moderation and administrative efficiency. Complementing Hawke's political flexibility and media appeal was the conceptual rigour of the so-called economic rationalists.zo Of these cabinet ministers Keating was by far the most influential. A product of the hard-nosed New South Wales right faction of the ALP, Keating was "a pile driver of a politician"21 who found in economic rationalism a means to impose order not only on the economy but on politics. As Opposition spokesman on minerals and energy in the late 19705, he built up a well-deserved reputation as a robust critic of the policy direction of the Fraser government. As treasurer in the Hawke government he took on the role of architect in advancing the cause of rationalization and deregulation of the economy. More than any other single politician in Australia, Keating had a decisive impact in shaping policy outcomes. To privilege Keating's role is not to minimize the contribution of the

151 The Politics of Initiative in Australia

other key reformist ministers in the Hawke government. Dawkins, a Western Australian member of the centre-left faction of the ALP, was another stalwart policy agent, as witnessed first by his efforts as trade minister in launching the Cairns initiative and later as a controversial minister of employment education and training. John Button, a Victorian independent, added subtlety and continuity as the long-standing industry minister. Ann Capling and Brian Galligan describe Button's vigorous contribution: Like the majority of his cabinet colleagues, Button was one of the new breed of Labor ministers, a rationalist rather than a populist and committed to overhauling the Australian economy despite the short-term costs ... Button's greatest achievement has been to shift the focus of Australian industry policy from a defensive orientation to a forward-looking approach based on fostering the development of innovative, export-oriented industries. This has been an enormous task, achieved by gradually reducing assistance to the least efficient industries in order to force their withdrawal from uncompetitive activities; by promoting industry expansion into areas where Australia has a comparative advantage such as raw material processing; and by removing impediments to competitiveness through changes to the tax system and industry infrastructural reform.12

Through the combination of their institutional capabilities and their ability to incorporate into their agenda ideas circulating in the wider community,*3 this inner core of ministers was able to dominate politics and policy in Australia through the 19805 and into the 19905. Their ideas were instrumental in moulding a new political discourse in Australia. As part of a comprehensive re-evaluation, these politicians were cognizant of the ascendancy of critical assessments made in the policy/intellectual community concerning the distortions and rigidities of the Australian economic situation. Keating, as Opposition critic, quoted favourably from Herman Kahn and Thomas Pepper's book, Will She Be Right?,14 to the effect that "resource rich countries are lazy not that the people are lazy but that the countries do not seek to find solutions [because] they can rely so easily upon resources."15 One of Keating's many talents was his ability to trenchantly expose the symptoms of Australia's economic predicament, and to force both his colleagues and the country to act on this assessment by taking the steps necessary to alter Australia's relationship to the world economy. The sense of urgency that Keating instilled in this task of discourse/action is evident in his well-known warning in 1986 that Australia faced the danger of becoming a third-rate economy, a "banana republic," unless a process of adjustment was implemented/6

152, In Between Countries

Hawke, Keating, Dawkins, and Button presided at the organizational apex of government. In G. John Ikenberry's language, this core group was able to capture the strategically important terrain, which afforded them considerable advantage both in terms of site and resources to wage their political battles.27 Together with Frank Willis at the Industrial Relations Department and Peter Walsh at the Finance Department, Hawke, Keating, Dawkins, and Button constituted the Expenditure Review Committee of Cabinet, charged with the responsibility of steering the Australian economy out of trouble. Furthermore the authority of this small group over key aspects of the policy-making apparatus consolidated over the decade. As trade minister, Dawkins served as chair of a major cabinet committee on trade competitiveness and oversaw a fundamental reorganization of his ministry, which in 1985 led to the creation of the Australian Trade Commission (AUSTRADE) and an amalgamation of trade-related agencies. Button, for his part, took over responsibility for an enlarged Department of Industry, Technology and Commerce in the 1987 restructuring exercise that saw the establishment of a number of mega-departments. As part of the same impetus towards super-ministries, Keating extended his mandate as treasurer by assuming control of the Industrial Assistance Commission, and Dawkins moved over to an expanded Education Department. The Hawke government, as might be surmised from this overview, exhibited two distinct sides in the implementation of this reform agenda. The first of these sides - largely associated with Prime Minister Hawke - opened up access to the decision-making process to societal groups on a selective basis. While considerable effort was made by the Hawke government to try to integrate functional interest groups more effectively, this process was controlled by the state, which channelled societal input through selected interest groups. Following the model found in a number of smaller European states (for example Sweden and Austria), this response to "dependence on the world economy" was predicated on the hope that a corporatist solution would reduce "unnecessary friction and stalemate" and thus facilitate "the formulation and implementation of policy."2-8 Building on his well-honed skills as a negotiator, which had been developed in his years as president of the Australian Council of Trade Unions, Hawke had campaigned in the February 1983 election on the slogan "Bringing Australia Together." The crux of this ongoing attempt to promote a new sense of national direction was the establishment of a system of consultation through the accord agreements with the trade union movement, the National Economic Summit of 1983, and the development or revitalization of a number of bodies that contained representatives from interest groups,

153 The Politics of Initiative in Australia

including the Australian Manufacturing Council, the Trade Development Council, the Trade Negotiation Group, and the Commodities Trade Advisory Group. The second side of the Hawke government's reform implementation, featuring the economic rationalist policies associated primarily with Keating and Dawkins, drew on the hard element of the Australian political culture. Paradoxically the freeing up of the Australian economy was not pursued through a hands-off approach by the state. On the contrary this project displayed many of the stylistic if not the substantive characteristics of the national development school associated with McEwen on the right and Rex Connor on the left. This blunt, centralized style was as much a part of the Dawkins revolution in higher education as it was of Keating's assault on the economic status quo through measures such as the floating of the exchange rate and the suspension of capital controls in 1983, the deregulation of the financial system, and the gradual winding back of the rate of growth of the federal government. The Hawke/Keating government consequently cannot be viewed as a monolith. One cannot make an accurate assessment of the workings of the ALP government, for example, without at least some mention of the role of the factional system within the ALP, which was divided on the bases of both ideology and region. Hawke belonged to the Victorian Labor Unity faction, Keating to the New South Wales right, and Dawkins (with the former Labor leader Bill Hayden and Neal Blewett) and later Button to the centre-left in the ALP caucus in Canberra as well as to particular factions in their own states. (Button, for example, was associated with a group called the Independents in Victoria.) From the outset there were also differences over the method and speed of reform. Eventually, over the course of the decade, the government underwent so many rearrangements that it took on a messy and even tired look. Charge over the Cairns Group moved progressively from Dawkins as trade minister to Michael Duffy as minister for multilateral trade negotiations, to Blewett as minister for trade and overseas development, to Kerin and Peter Cook as ministers of trade. Through these successive changes in ministerial responsibility, it must be added, the government suffered a number of serious turf conflicts. Tensions emerged at the outset from the 1987 merger between the Departments of Foreign Affairs and Trade - tensions that were accentuated in the latter part of the decade by the determination of Senator Gareth Evans as foreign minister to stamp his imprint on trade matters/9 Finally other overarching disputes between the major players within the government took their cumulative toll. The first of these rifts occurred between Dawkins and Hawke, punctuated by Dawkins's call for Hawke to pass the lead-

154

IR Between Countries

ership of the ALP to a successor; the second, more dramatic still, took place between Hawke and Keating. The first rift broke the pattern of ministerial solidarity that had provided the ALP government with much of its collective drive. As noted by Kelly: "The strength of the Government has been the fusion between Hawke's electoral magic and the remarkable economic team. They have complemented and reinforced each other. They have provided unity and discipline ... On what basis can it endure."30 The second conflict damaged the government's will to maintain its momentum towards reform, as this falling out led to Keating's departure to the back benches, whence he mounted a successful drive for the party leadership. Despite these internal problems the key politicians within the ALP government maintained in common a solid core belief in the economic reform agenda. The role of the state bureaucracy in providing continuity should also be taken into account. Michael Pusey has pointed to the ascendancy of a new cluster of bright and persuasive "econocrats" inside the Treasury Department and the Office of the Prime Minister as the source for much of the inspiration behind the Hawke/Keating government's domestic agenda.31 As significant, it should be added, was the impact of an equally confident and energetic group of officials dealing with Australian foreign economic policy. Mirroring the ALP politicians, the commonalities that tied this core of officials together were far more apparent than those that drove them apart. Much of the capacity of the Australian state in the international trade negotiations derived from the recognized ability of state officials to operate as a quick and effective team. Prominent among this negotiating personnel was Alan Oxley, Dawkins's personal appointment as Australian ambassador to the GATT. Because of his close ties to Dawkins and his flair for publicity, Oxley garnered for himself most of the attention paid to Australia's initiative on international agricultural trade reform, a good deal of which was justified. Not only has Oxley usually been given credit for the idea of forming a coalition of free traders in the agricultural market, he did a stellar job of forging the Cairns Group into a force to be reckoned with in the GATT negotiations.31 Nonetheless Oxley's work should not be seen in isolation from the wider constellation of Australian bureaucratic activity in this issue domain. At least two other officials deserve equal credit for the development of a coherent and technically sound Australian game plan for the MTN Round. The first of these official was Dr Andy Stoeckel, who as director of the Australian Bureau of Agricultural and Resource Economics (ABARE) was primarily responsible for the preparation and promotion of the research carried out on the agricultural policies of the major exporting countries. Stoeckel's

155 The Politics of Initiative in Australia

most publicized triumph was the Red Book on the EC'S CAP, which detailed the cost of this policy to European consumers. The second of the officials was Dr Geoff Miller. Miller joined the Bureau of Agricultural Economics (BAE) as it was then called in 1966, and after being appointed as director of the Colonial Sugar Refining Co. Ltd (CSR) in 1971, became deputy secretary in the Department of Primary Industry in 1981, director of the Economic Planning Advisory Council in 1983, and secretary of the Department of Primary Industry in 1986, before eventually being elevated to the position of associate secretary of the Department of Foreign Affairs and Trade in 1987 and secretary of the Department of Primary Industries and Energy in 1988. In 1987 Miller was given a six-month leave of absence to prepare the so-called Golden Book, which was published under the title The Political Economy of International Agricultural Policy Reform. This book, launched at the U.S. Agriculture Outlook Conference in December 1986, refined many of the principles (for instance the idea of a ceasefire in international agricultural trade) found in Australia's negotiating strategy throughout the duration of the Uruguay Round. The diplomatic qualities delivered by Oxley to the Australian negotiating team on the agricultural trade dossier were complemented by those of Peter Field. With his experience as a political operative Oxley could work a room and the media with a smoothness and confidence not hitherto visible in Australian trade diplomacy. Field's talents were those of the hard-working and intellectually vigorous Australian official, a pedigree extending back to the era of Sir John Crawford. Field had served as head of Australia's GATT delegation prior to Oxley's arrival and thus possessed the bureaucratic memory so important to the successful pursuit of trade negotiations. In his capacity as senior assistant deputy minister for multilateral trade relations and as deputy secretary in the Department of Foreign Affairs and Trade, Field initially directed this campaign from Canberra. Later he was called on increasingly to represent Australia directly in the multilateral trade negotiations. This work ranged from activities associated with the Cairns Group (for example presenting the Cairns Group paper to the GATT in November 1989) to participating in a host of informal forums (such as the Merges groups), to formal settings (such as the Trade Negotiations Committee of the GATT), as well as to travelling on overseas tours with ministers (such as Duffy's trip in early February 1990 to London and Brussels). Throughout Field was backed up by a solid group of Australian trade negotiators. Again it must be mentioned that this group of officials experienced a considerable amount of attrition. As the GATT negotiations began to drag on some left for the private sector. The first to go this route was

156 In Between Countries

Stoeckel, who in August 1986 resigned from government service to become director of the Centre for International Economics, a private think-tank located in Melbourne. In 1991 Oxley followed a similar path into consulting. There were also signs of personality clashes and exhaustion among the officials, which became exacerbated in the late 19808 and 19905 by the changes of assignment, the opportunities for other forms of international public service and diplomatic recognition (Miller, most notably, became engaged in a gruelling campaign for the position of director-general of the FAO), and the sheer fatigue from the long, drawn-out process of international negotiation. EXTERNALIZATION AND MOBILIZATION

The Australian farming community, as described above, fitted awkwardly into the ALP'S economic strategy. Because of their different objectives it was inevitable that the national agenda of the ALP would clash with the sectoral pressure behind the "rural revolt." One point of contention between the ALP and the farming community was the establishment of new corporatist structures. As in the McEwen era, the farmers were receptive to corporatism in that this concept held out the opportunity for some measure of privileged access to, and say in, economic policy. Much of the motivation behind the consolidation of the farming community under the umbrella of the NFF had been the desire to create a body with which government could deal on this basis. The problem was that the type of corporatism developed by the ALP did not operate on the farmers' own terms. Firstly the NFF criticized the government for not giving farmers' representatives the same status as the representatives of the trade unionists (through the Australian Council of Trade Unions' affiliated unions). Not until April 1986, with the publication of a Rural White Paper, was a proposal made to fully incorporate farmers into the decision-making process through the Rural and Allied Industries Council.33 Secondly the tripartite accord between the ALP government, business groups, and trade unions did not compensate for these structural deficiencies by appearing to work well in practice. The indexation principle established in the accord was completely at odds with the "capacity to pay" principle favoured by the NFF. Moreover the federation quickly became disillusioned with the idea that labour relations would be appreciably improved through this system. Much of the NFF'S agitation was directed at labour militancy, a phenomenon seen most clearly in the Mudginberri episode, in which the federation directly confronted the Australasian Meat Industry Employees Union in a bitter dispute. Given these circumstances it was not surprising that by mid-1985 a fierce

157 The Politics of Initiative in Australia

backlash had developed against the accord and other aspects of the ALP'S corporatist strategy.34 A second point of contention between the farming community and the ALP was the nature and degree of liberalization and deregulation to be pursued in the ALP'S economic reform agenda. The NFF was among the most enthusiastic of societal interest groups advocating a break with the status quo. From the early agitation against the vestiges of McEwenism in the 19705, the NFF had moved to break completely with the dogma of protectionism. Many of the leaders of the federation acted as the ideological driving forces behind the political agenda of the "new right" (the NFF'S industrial director, for example, was a central member of the H.R. Nicholls Society, a prominent neo-conservative organization) which highlighted the need for reduced public spending, widespread deregulation, and more flexibility in the economy. More pragmatically the NFF and the farming community en masse expressed considerable enthusiasm for economic liberalization because of the belief that a shift in this direction would have a positive effect on their industry, not only because of the possibility of cheaper production costs but also because of the potential for an increase in twoway trade with countries in the fast-growing Asia-Pacific region. The incubus for the NFF was the problem of reconciling this enthusiasm in the farming community for liberalization within the economy generally with their more ambivalent response towards liberalization in the agricultural sphere specifically. Despite the NFF'S rhetoric about "no hand-outs," a multitude of Australian farmers continued to benefit from a wide range of interventionist measures extending right across the board, from statutory marketing boards and bounties to two-price schemes and guaranteed minimum pricing arrangements. Buffered by these programs a solid core of farmers preferred to deal with the 19805' rural crisis by "more regulation rather than less."35 Because of this important (albeit minority) view it proved hard for the NFF to fully support economic reform. As one respected academic expert on Australian agricultural policy concluded: "When the Federation supports business deregulation, it is not talking agricultural legislation. It is talking about regulations imposed as part of general economic policies covering such things as tariffs, wages, taxes, fuel levies, transportation and industrial awards."36 A third point of contention between the farming community and the Labor government was the role of agriculture in Australian trade policy. The ALP had long criticized the agri-centric trade policy adopted by the conservative parties. The economic rationalists in the ALP cab inet, particularly, voiced the sentiment that Australia's future stability, growth, and prosperity rested on its ability to shift away from its tra-

158

In Between Countries

ditional dependence on exports in the vulnerable and volatile primary resources sector. Their alternative vision was a broader Australian economic profile, including high-tech manufactured goods and services. As Dawkins said in his major parliamentary statement on trade policy in 1985, the "imperative" for Australia was "to create conditions which will encourage improved export performance in the fastest growing areas of world trade, namely, manufactures and services."?7 This is not to imply that agriculture was irrelevant to the ALP'S total trade approach. In keeping with the party's desire to widen Australia's export horizons, attention was paid to identifying specialized markets with potential for substantial growth. Priority was given in particular to expanding the proportion of value-added, processed goods in Australia's export sales (10.3 percent of rural exports in 1984-85).38 As part of this process of redefining Australian agricultural trade opportunities, a major study was conducted on the issue of agribusiness and Australian trade. A key conclusion of the study was that future Australian exports would have to be based on a diversified product line, in which highly integrated production and marketing would be undertaken: "Merely trying to sell a product without it being part of a package involving, as appropriate, investment, technology, machinery, management, and marketing is unlikely to be successful ... A product-only approach can mean losing opportunities for associated sales."39 This focus meshed also with the importance attached by the government to research and development in such areas as biotechnology. Given the explicit withdrawal of the special status of the agricultural sector, it was difficult to convince the federation that this type of diversified trade strategy was in the best interest of its membership. The NFF leader, Ian McLachlan, called the whole approach "misplaced," asserting that with these changes "Government policies ... became wrongly slanted away from agriculture in favour always of manufacturing and services."40 These reservations were reinforced by the fact that agriculture was viewed in strictly industrial terms - that is to say, as part of an economy made up of sunset and sunrise components in the international political economy. An assessment of this type, as the executive director of the NFF argued, risked distortions: "We should be emphasizing and taking advantage of the differences between what Australia produces and what is produced by other countries. We should not be in the business of trying to model our economy on the economy of other countries."41 One means of managing the swell of anger and frustration among agricultural producers was for the Hawke government simply to give more attention and sympathetic treatment to the concerns of rural

159 The Politics of Initiative in Australia

Australia. The ALP made what could be interpreted as a number of moves in this direction in late 1985 and 1986. Tangible concessions were provided to agricultural producers, both as part of general economic strategy (the large depreciation of the Australian dollar) and of specific programs (the rebate on the fuel excise tax for on-farm work, and a reversal on tax policy with regard to the quarantine of farm losses). Psychologically as well as materially the government tried to showcase its understanding of the needs of the countryside through the establishment of the Prime Minister's Rural Task Force, leading to the publication of the Rural White Paper in April 1986, the formation of the Rural and Allied Industries Council, and the creation of the Agricultural Trade Group within the Trade Department, which was to work with the Department of Primary Industry, the statutory marketing authorities, and other advisory bodies such as the Trade Development Council and the Multilateral Trade Negotiations Advisory Group to promote agricultural trade.4Z To underscore this concern Prime Minister Hawke himself made several forays "into the bush" to speak to agricultural audiences, including one well-publicized trip in June 1986 to the heart of the rural revolt in New South Wales.43 The other means employed by the ALP government was an attempt to divert attention away from domestic conditions and on to the international scene. By shifting the parameters of debate in this manner the government bought itself time. Based on the experiences in other waves of agrarian protest, it could be suggested that the rural revolt would play itself out over a short period of time if the anger and frustration were turned outward. The government held the more ambitious hope that externalizing the reform process would facilitate the double thrust of the economic reform agenda, enabling Australian producers to reap economic benefits from global liberalization at the same time as the process of adjustment took place internally. ALP cabinet ministers had, from the outset of the crisis, tried to put the burden of responsibility for the Australian farmers' difficulties on the distortions in international agricultural trade. Kerin especially stressed this theme in his public discourse. In a 1985 interview he stated: "The real problems of agriculture are international policies as well as higher domestic cost structures. The income position of farmers can't be blamed on the Government."44 In a 1986 statement to the House of Representatives, he reiterated: "It is simply not possible ... to lay all the blame for the problem at the door of the Australian Government ... World prices are the problem."45 That this theme was central to the ALP'S overall response to the economic situation may be witnessed by Keating's concentration on the culpability of others for the continuing dilemma of "a Labor Government, the first one in a decade, the first decent one in thirty

160 In Between Countries

years, getting all the right things done in the economy - then getting kicked to death by world trading conditions."46 Notwithstanding its suspicion of the ALP it was not inconceivable that the NFF could be persuaded that the international situation was the fundamental cause of the agricultural crisis. The political approach of the federation was not without its internal contradictions. From one angle the NFF could be characterized as highly populist. Not only did it spend a great deal of its time and energy organizing mass rallies and demonstrations as protest vehicles (demanding change in government policy, attempting to break union power), but it was pushed towards such agitation by the demands emanating from its own rank and file. Adding to this populist character was the fact that, in McLachlan, the NFF had at its helm a charismatic leader who, besides enjoying a personal following within the farmers' organization, could capture media attention for the NFF. 47 From another angle entirely the NFF exhibited a solid, businesslike character. Contrary to its populist overtones its leadership had always placed great weight on establishing the organization's credibility with respect to technical expertise. The hiring of skilled experts (most notably economists such as David Trebeck, the former executive officer of the Australian Woolgrowers and Graziers Council, who had done much to prepare the way for the NFF'S departure from protection all round) allowed the federation to present wellprepared submissions on highly complex issues, including those dealing with aspects of taxation policy and the costs to the farming sector accruing from industrial protectionism. In the same way the NFF recognized the need to promote a better image in urban Australia of farmers. Towards this end a sophisticated "Our Country" multi-media awareness campaign was launched in the largest cities. Helped by the fact that several of the federation's leaders had close links to agribusiness (McLachlan, for example, was a director of Elders), a better relationship was also developed between the Australian business community and the farming interest. All of these business features of the NFF were facilitated, it must be added, by its ability to build up a large "fighting fund" ($14 million Australian). To make the externalization strategy work, the ALP had to cater to this business-oriented side of the NFF. One way to accomplish this objective was to convince the farmers (and Australians generally) how severely the economic situation was being affected by the illiberal practices of other international actors. The research activities of the BAE/ABARE played a key role here. The BAE'S "red book," released in September 1985 with considerable media fanfare, targeted the EC'S CAP for criticism on the basis of objective analysis, calculating that the CAP had cost Australian farmers $i billion a year over five years.48 A sec-

161 The Politics of Initiative in Australia

ond means was the demonstration by the Hawke government that it was willing and able to do something for Australian farmers in the diplomatic domain. Signs of the mounting governmental enthusiasm for international initiatives could be seen in Hawke's vigorous personal diplomacy on trade matters in 1985 and 1986. Furthermore there was some evidence that by playing its cards in an astute manner Australia could get results from these initiatives. In contrast to the Fraser government's poor record in winning concessions from the EC, the Hawke government delivered at least one immediate negotiating success. This breakthrough was the so-called Andriessen agreement, under which the EC agreed not to subsidize sales of beef to Australia's major Asia-Pacific markets - Japan, South Korea, Taiwan, Malaysia, Singapore, and Papua New Guinea. On the basis of this sort of action the ALP government could start to build a rapport with the NFF based on a common objective, i.e., better treatment for Australian agricultural produce in the international trade arena. Federation officials were invited to accompany the prime minister and the trade minister on all their major diplomatic missions abroad. Two NFF representatives accompanied Hawke on his trip to Brussels in February 1985, to meet EC officials. A federation official also travelled with Hawke on his ten-day visit in April 1986 to Washington and a number of European capitals. In his report to Parliament on his February 1986 mission to the United States, Dawkins was careful to give special mention of the existence of a common front within the Australian delegation: "the Vice President of the National Farmers' Federation, who joined my delegation at our invitation ... agrees with our assessment of the world situation and the need to find global solutions to the problems confronting not only Australian farmers but also farmers around the world."49 This tactical alliance with the federation also manifested itself in the approach the ALP government used to bring the agricultural fair traders together. One of the most striking features of the Cairns meeting was the way in which the NFF was involved. The NFF was integrated into the official meeting by the ALP government, in that it actively participated in both the opening and closing sessions. The NFF also held its own parallel conference, bringing together farm delegations from a number of the countries represented at the official meeting at a separate (albeit adjacent) location in Cairns. As Rick Farley elaborated: "When the Cairns Group was set up ... [Dawkins] invited us to establish a Cairns Group of farming organizations. We have consciously worked with the farming organizations from the Cairns Group to keep pressure in the policy process."50 Unquestionably a great deal of the motivation for all this activity

162. In Between Countries

was domestic-political in nature. A leading article in the Australian Financial Review, for instance, highlighted the significance of the marginal seats in ALP thinking: "the harsh truth is that the Cairns conference has been much more about posturing to domestic primary producing voters than it [has been] about any serious initiative to change world trading patterns."51 Dawkins's own desire to hold a major event in the pursuit of international trade liberalization was inspired by a number of personal political factors, primarily his need to revive his own ministerial reputation after a number of setbacks; for example he had been harshly criticized for appointing one of his ministerial staffers to the job of Australian trade commissioner in Milan.52 Even the location of the meeting in Cairns was no accident, in that the choice of site was directly tied to the electoral fortunes of the ALP in Queensland. As Oxley made clear in his recollection of the event: "Dawkins thought that holding the meeting in Cairns might also [give] the local branch of the Labor party something of a fillip," as a "regional election was imminent."53 Despite this salience of internal political factors, to concentrate exclusively on the domestic impetus behind the ALP'S approach misses the full complexity of the Cairns Group initiative. The mobilization of the Australian rural interest was vital for the ALP government's validation strategy not only in the multilateral but in the bilateral context. Through its effort to reach out to Australian farmers the ALP government gained credibility in its campaign of persuasion towards the EC. Dawkins, throughout this campaign, was careful to distinguish between the blunt instruments used unsuccessfully in the past and the sophisticated and multifaceted lobbying practices that were required to change the European policies: "in recent discussions with the National Farmers' Federation I suggested that industry groups must also carry forward the initiatives the Government has taken to publicize amongst European consumers the burdensome costs of their agricultural support policies ... Only by generating within the EC and globally the recognition of the deleterious effects of the CAP will [we] be able to achieve a change in views on subsidy practices."54 The intimate connection between domestic politics and foreign policy stands out more conspicuously still in the case of Australian-United States relations. As shown by Prime Minister Hawke's denunciations of the Ronald Reagan government's hypocritical attitude on EEP, the ALP government used the intensification of trade tensions to redirect the Australian farmers' sense of discontent from domestic governmental failures to the Americans' lack of responsibility. This was relatively easy to do. The U.S. actions generated an unprecedented wave of anti-American sentiment among the historically conservative rural con-

163 The Politics of Initiative in Australia

stituency. Wheat was dumped outside the U.S. embassy in Canberra and calls were made for a boycott of U.S. products and the imposition of a rent for the use of the joint defence facilities (including the one at Pine Gap) as compensation for the loss of markets and revenue suffered by Australian farmers. The danger faced by the ALP government in the pursuit of this externalization approach was that the linkage between agricultural and non-agricultural issues would lead to unintended consequences. The Hawke government, unlike the Whitlam government in the 19708, had carefully cultivated close ties with the United States. Hawke himself enjoyed excellent personal relations with a number of influential Americans, most notably George Shultz and Caspar Weinberger in the Reagan administration. Although Australia openly differed with the Reagan administration on a number of defence matters, including strategic mobilization (the MX missile) and strategic defence Strategic Defense Initiative (SDI or Star Wars), on core alliance issues the relationship was secure.55 The agricultural trade issue was of course an important exception to this rule. Yet one of the fundamental credos of the ALP government was that the tensions associated with this issue-area should not spill over into other economic or strategic areas. The ALP government was prepared to declare that the damage done to Australian agricultural exports by the EEP had the potential of limiting Australia's capacity to perform specific roles in the Asia-Pacific region. It was not prepared, however, to translate these feelings of dissatisfaction into direct action with respect to the joint facilities. Any movement along these lines would elevate the level of disagreement on the agricultural issue to a very different plane, giving rise to a very different American response to Australia's actions. The priority of the ALP government was to provide societal agitation a constructive outlet. Australian farmers were encouraged not only to turn their attention to the making of the specifics of trade policy at home, but to engage in direct lobbying abroad. Given the seriousness of the trade situation, a nudge was enough to get the NFF to move in this direction. As it was McLachlan admitted in 1987 that until the mid-1980s the federation "had been quite negligent in getting an independent and firm feel for our markets; in assessing opportunities from a producer perspective; and in seeking to influence the priorities in the trade policy area."56 In an attempt to catch up, the NFF had announced in October 1986 that it was trying to formulate a game plan involving not only a new campaign to export Australian produce more profitably but an extension of the work of the BAE, through the initiation of a wider study to assess the costs of illiberal trade practices (including

164

In Between Countries

those of the United States) on Australian farmers. At the same time the NFF'S initiative in lobbying in the United States complemented the government's own attempts to broaden and deepen its own efforts along these lines. With this commonality of interest the ALP government and the NFF worked together to try to persuade American exporters of the costs of U.S. agricultural subsidies to Australian sales. THE POLITICS OF OFFENSIVE ADJUSTMENT

The Australian approach to agricultural trade policy represents a complex type of two-level game, centred on a form of offensive economic adjustment.57 At the international level the Australian government was concerned primarily with strategies designed to achieve agricultural trade liberalization in the international context. At the cusp of this approach was the ongoing effort to change the existing rules of the GATT system regarding agriculture. Although Australian policy makers recognized the need for a fall-back strategy in the event of a failure of the MTN Round - a scenario that seemed more likely after the abortive mid-term review at the end of 1988 - Australia remained firmly committed to the multilateral route. If a regional option gained greater prominence as an alternative, multilateralism remained firmly in place as Australia's firstbest option. At the domestic level the campaign for agricultural trade liberalization served a number of objectives. Australia's leadership in the GATT negotiations on agriculture drew attention away from tensions between the ALP government and the rural community and to the tensions between Australia and other actors in the international arena. While suspicions about the ALP government remained, rural protest in Australia was distracted by the externalization of the agricultural trade issue. The signalling effect of Australia's Cairns Group diplomacy was also crucial for extending the sweep of the ALP'S agenda for reform. By occupying the high ground in the GATT round on agriculture, the ALP government was able to gain added leverage over those sectors of the economy that had traditionally resisted liberalization. As the driving force behind the formation and the consolidation of the Cairns Group, Australia displayed a degree of entrepreneurial and technical skill hitherto absent from its diplomacy. Its focus on agenda moving, conflict mitigating, and proposal building allowed Australia to participate for much of the course of the Uruguay Round agricultural trade negotiations as very much a central player. Besides the tangible impact Australian involvement had on the process of negotiations, this change in status played a crucial role in the external valida-

165 The Politics of Initiative in Australia

tion strategy of the ALP government. In the initial stages of the Uruguay Round the ALP government exercised the recognition it won from its diplomatic efforts to gain added legitimacy before the Australian public. One ingredient of this strategy was the depiction of the Cairns Group as a third force in the international agricultural trade negotiations. Despite all the obstacles placed in the way of the settlement of the agricultural trade issue by the major powers, Australia maintained the view that the Cairns Group had become an actor that had to be reckoned with by the United States and the EC. In the words of Evans, expressed during a news conference in Brussels in March 1989: "There are not two players in the game, there are three. The Cairns Group is very, very much a third force whose interests can't be ignored ... We haven't just folded our tents and [gone] into the night as a lot of people thought would be case with this group when it was first formed."58 A second ingredient of this approach was the portrayal of Australia, in its capacity as leader of the Cairns Group, as an accepted insider in international trade negotiations. In sharp contrast to past experience, where the Australian government had sought approval from domestic interests by playing the role of the lone white knight at international forums, the ALP government tried to enhance its reputation at home on the basis of Australia winning recognition for its work abroad. Duffy, when minister with responsibility over the MTN trade negotiations, compared the negative response heaped on Anthony's statements and behaviour in 1982, (which "doesn't really achieve a great deal")59 with the positive response given to the ALP government's actions during the Uruguay Round. Crucial to this achievement was the lofty status given to Australian state officials during the trade negotiations. Moving beyond just having a voice in the proceedings, Australian representatives took on various positions of authority that in the past had been closed to them. (Specifically Australia had been unable to get its candidate appointed as director-general of GATT in 1980 and to obtain access to the Green Room meetings during the Tokyo Round.) The role of Oxley as chair of the Geneva group of delegates from the Cairns countries, and his appointment in November 1986 as chair of the council for the GATT, provided one indication of Australia's new position in international trade affairs. Australia's inclusion, and Field's prominence, in the Friends of the Chair Group - the small negotiating group that worked to break the deadlock between the United States and the EC after the failure of the mid-term meeting - serves as another sign of the same pattern. Although Australia remained on the outside of the G-J and the Quadrilateral meetings, it must be mentioned that Australia's influence

166 In Between Countries

came to the fore in a variety of other ways. For example Australia was included with the United States, the EC, Japan, and Canada in the socalled Quint Meeting of agriculture ministers, which initially met in Orlando, Florida, from 3 to 5 January 1989. Agricultural trade reform served as a key ingredient in building momentum towards achieving the ALP'S policy objectives. Given Australia's historical record the ALP government recognized a need to show its own bona fides by accelerating its process of internal adjustment if it was to put some runs on the board. Departing from the stance adopted by the conservative coalitions, that Australia would not expose its own economy to the forces of the international market-place until substantial progress was achieved on agricultural trade liberalization, the ALP government adopted a strategy of unilateral liberalization. As Stuart Harris has maintained, this volte-face was a crucial step in the process of remaking Australia; for in terms of its "willingness to forgo reciprocity," this policy change underscored "a recognition that it was in Australia's interests to reduce protection without waiting for reciprocal benefits."60 The older habit of preaching liberalization abroad and practising illiberality at home simply was no longer viable if Australia was to get other countries to move on agricultural matters. As an editorial in the Australian summed it up: "in Australia's case, there is something schizophrenic about trying to open world markets to our agriculture while we deny the benefits of free trade to our own consumers."61 Another important manifestation of the ALP government's attempt to speak with a consistent and credible voice came in the prime minister's 2,2. October 1987 speech to the contracting parties of the GATT in Geneva. Attacking the "formaldehyde of protection," Hawke prescribed closer scrutiny of national economic policies through the GATT Trade Policy Review Mechanism. Moving beyond his offer, delivered in January 1987 at the Davos economic symposium, to bind Australian tariffs (in other words not to increase tariffs in one area unless reduced elsewhere), Hawke expressed Australia's willingness not only to radically lower its own trade barriers but to volunteer to have Australia's policies examined by the GATT review team. In this effort to lead by example Hawke reinforced the point that, unlike other Australian ministers in the past, he was not willing to wait for tough decisions to be made by others: bold initiatives of this sort would come from Australia itself.62 The main targets of the domestic reform campaign were the industrial sectors, namely steel, motor vehicles, and textiles and footwear, which received an effective rate of assistance above the average for the industrialized world. Still the agricultural sector was not completely

167 The Politics of Initiative in Australia

immune to this targeting. A variety of agricultural producers continued to receive help through governmental subventions. As a result of the serious adjustment process they had been forced to go through in the 19708 with the accession of Britain into the EC, the dairy and citrus industries received small levies of effective assistance. The tobacco and egg industries, alternatively, received support although they had never been export industries. The call for the extension of the adjustment drive to agriculture was taken up forcefully by Geoff Miller in his 1987 monograph. This Golden Book argued that if Australia was to maintain its credibility in the international trade negotiations, a reduction in domestic support would have to take place right across the board, in agriculture as well as industry. At least in their initial phases the external validation and domestic mobilization strategies worked well together. This combination contributed a good deal to the political success the ALP had in winning another majority in the 1987 election. As a government that acted as though it listened, the ALP not only increased its share of marginal seats but won twenty-one of the forty-five rural seats in the House of Representatives. The push for international and domestic reform facilitated the psychological process of transformation in Australia's self-identification within the world community; no longer having to shout from the outside, Australian policy makers operated more confidently in international forums. Economically the ALP'S commitment to the liberalization of agriculture in the international domain helped encourage domestic producers to put their collective houses in order, thus building support for the implementation of a neo-liberal agenda centred on deregulation and competitiveness. Diplomatically the drive towards structural adjustment under way within Australia could with some effect be utilized to invoke change in Australia's trade partners. Japan in particular was urged to follow the Australian example and open up its economy. As the GATT Round proceeded, however, the inability of Australia to translate its skill as a circuit breaker in the negotiating process into tangible results became salient. The upshot of this setback was a return to the oscillating pattern of Australian behaviour, in which partial breakthroughs were blown out of all proportion and setbacks were met by exaggerated emotional outbursts. An excellent illustration of this pattern, on top of those episodes already discussed in chapter 5, was the Australian response to the Dunkel working document on agricultural reform, produced in April 1989. Australia immediately took credit for orchestrating the step-by-step work that led to the political commitment to a freeze on current protectionist levels. This self-congratulatory mood was reflected in Hawke's comments in the House of Repre-

168

In Between Countries

sentatives: "On agriculture, in essence the GATT'S parties have accepted all the major elements of the Cairns Group proposal that I tabled in Geneva ... in October 1987 ... [laying the basis] for Australian farmers to look forward to improved rural returns and a massive change for the better ... [from what] they have suffered from the EEC-United States agricultural subsidy war."63 With a greater appreciation of the limitations built into this agreement, particularly its emphasis on an immediate freeze in subsidies followed by a 10 percent cut the following year as a downpayment on a long-term deal rather than as an ambit claim, a wave of pessimism superseded this positive glow. Rather than being perceived as a positive breakthrough that had been ably brokered by Australia and the Cairns Group, the Dunkel document came to be viewed as evidence of the sort of minimalist compromise worked out between the United States and the EC to avoid a clear commitment to longer-term reform. As Oxley expressed it: "If you want to be a cynic, you could say that all they've done is agree to do what they were going to do anyway."64 Because of this expanding sense of scepticism concerning the GATT negotiations, Australia kept switching and deepening its two-level game.65 The options open to Australia were recognized internationally as being quite limited. The ALP government, from the start of its mandate, did much to impart to Australia's trade policy a more regional focus. Dawkins, consistent with the ALP'S long-standing criticism of the Euro-centric tendencies of the conservative coalition, was firm about the need for a fundamental geographical reorientation: "The challenge to Australia in the next twenty-five years will be to tie itself as closely as possible to the opportunities associated with the rapid growth of Asia's new industrializing countries."66 To try to come to terms with this challenge, a number of new initiatives were launched that targeted countries in the region. Firstly a number of country-specific programs were established, including the China Action Plan, the Japan Market Strategy, and the ASEAN-Australia Economic Cooperation Program. Secondly greater attention was paid to developing specialized markets in the rapidly growing (and quality-discerning) Asia-Pacific area. A fundamental element in this process of rethinking was the more complete integration of production and marketing. As the major study on agribusiness and Australian trade indicated in 1987, to raise its market share in the Asia-Pacific region Australia would have to give much more attention to the standardization of quality, better technology, better promotion and packaging, and greater reliability of supply.67 As part of the same type of initiative, all of which tied together with the "clever country" concept, Senator Button released a booklet, "Food Processing: Getting down to Business in Asian Regions," in

169 The Politics of Initiative in Australia

November 1989, which talked about the need to lift Australia's export culture. And AUSTRADE, in early 1990, designed an export development strategy for processed-food exports. The other side of this shift towards diversification was a more negative attitude towards the traditional Australian focus on bulk commodity exports. Hawke's growing sense of frustration came out in a speech he made at the National Press Club in December 1990: "We just sold our wheat and our wool and our meat... But the world now doesn't need, at the price level, our agricultural products. We're battling to sell the damn stuff."68 In moving in the direction of diversification, Australia faced a number of serious obstacles. Notwithstanding the advantage of geographic proximity, the important complementarities between the economies of Australia and Asia-Pacific, and Australia's role in an array of governmental and non-governmental regional initiatives, the barriers to this integrative process remained formidable. In addition to the constraints imposed by the legacies of Australian industrial protection and the "White Australia" immigration policy, there were in place immense structural barriers to forging links with a wide variety of cultural, economic, and governmental systems. Leaving aside the deal Australia negotiated for a Closer Economic Relationship with New Zealand, Australia enjoyed no special status with any of its trading partners in its immediate neighbourhood. The Asia-Pacific Economic Cooperation (APEC) endeavour, set in motion by Australia in 1989, must be seen set against this background, in its proper perspective. In tune with the Cairns initiative, APEC served as a two-level signalling instrument.69 At the domestic level the APEC initiative was used to allay mounting doubt at the end of the 19808 about the ALP'S ability to manage the Australian economy in a time of increasing inflation, higher interest rates, and a record current account deficit. In analogous fashion the APEC initiative was brought into the campaign to control the damage that John Howard, the leader of the opposition Liberal Party, was thought to be doing to Labor's re-election chances by casting the issue of Asian immigration as political. APEC was a signal that Australia was "of" as well as "in" the region; it was also a signal to the Australian population of the importance of recognizing this fact. More in accordance with the central theme of this work, APEC played an important role in the search for options and manoeuvrability in Australia's international economic diplomacy. On the one hand APEC was incorporated in the ALP'S strategy as an instrument that could be used to supplement the activities of the Cairns Group in fostering reform in the Uruguay Round. In effect it was perceived as a new mechanism by which Australia could exert a form of collective pres-

170 In Between Countries

sure on the majors to deliver in the GATT. Warnings that such a contingency plan might be necessary had been delivered by ALP ministers in the period prior to the mid-term review. Duffy, for instance, told a Western Australia Labor Party rural seminar in August 1988 that: "Pressure has got to be exerted on the U.S. and the EC to wake up to themselves. They cannot continue to carry on the way they have. By March or April next year, if there isn't movement ... stronger bilateral action has to be taken."70 After the failure in Montreal and the rising pressure from the Latin American countries for an explicit form of linkage politics, the incentives for Australia to move in this direction increased appreciably. On the other hand APEC was seen by state officials as the foundation for a new form of loose Asia-Pacific group in the event of a multilateral breakdown. The greatest fear of Australia continued to be that it would be left out of a new regional economic architecture. By going on the offensive Australia hoped to curtail the possibility of the realization of this scenario. APEC was therefore originally seen by Australian policy makers as a means to an end rather than as an end in itself. It is important to note that the intended economic purpose of APEC was not to act as a precursor of trade-restricting regionalism but rather as the precursor of greater regional understanding and co-operation and trade-inducing measures entirely consistent with the GATT. In the words of Harris, the aim of the initiative was to secure "open regionalism."71 Diplomatically the idea was to make sure that Australia was a full player in any new regional grouping. APEC was a key forum for Australia not only because a very substantial part of its trade was with the region, but also because APEC represented a pan-Pacific rather than a more narrowly defined Asian institution. To generate continued support for its internal reform drive the ALP commissioned a number of studies/investigations, including the socalled Garnaut Report, Australia and the Northeast Asian Ascendancy (1989), the so-called Hughes Report on Australian exports (1989): the Pappas, Carter, Evans, and Koop reports prepared for the Australian Manufacturing Council (1989 and 1990); and the so-called son of Garnaut, Australia and North-East Asia in the 1990$ (i992.)7Z - which all reached similar conclusions about the necessity for further internal adjustment in the Australian economy. On the surface the most influential of these studies was the Garnaut Report. On top of highlighting the prospects offered by the Asian, and particularly East Asian, industrialization for Australian trade, Garnaut recommended that the entire Australian protectionist apparatus be phased out by the year 2.000 so that Australia could take full advantage of these regional opportunities. According to Garnaut the worst-case scenario was that Australia

171 The Politics of Initiative in Australia

would become weary along the long march of the reform route: "The danger is that Australians will think too soon that they have changed enough, that it is enough to weaken the pillars of protectionist minds and policies without bringing the great monuments to past mistakes crashing to the ground."73 This type of warning proved extremely accurate, as the backlash that swelled regarding the negative consequences of adjustment constrained the government's ability to stay the course. Not surprisingly a major source of resistance to the reform process came from within the trade union movement and the left-wing caucus of the ALP. Fearing the social dislocation extending from the reform agenda, these groups directed their criticism at the lack of compensation for the "losers" in the process of adjustment.74 Other interests, such as the Australian Manufacturing Council, more creatively argued for the introduction of a revised form of strategic trade policy directed towards the targeting of selective industries for government support. The growing appeal of such approaches led the Australian Industries Assistance Commission to use its 1988-89 Annual Report as a rejoinder to this new vision of interventionism.75 In addition to all this there also remained a good deal of ambivalence within the farming community about the ALP'S reform agenda. The NFF leadership continued to preach the virtues of a brand of economic rationalism. In its policy pronouncements the NFF extended the reform agenda well beyond the range promoted by the ALP, to include deregulation of the labour market and zero protection by 1995. In going this far the NFF became identified more closely with the conservative opposition an association fostered by the cross-fertilization between the two bodies. Not only did a number of influential federation officials (including McLachlan and former executive director Andrew Robb) depart to take up positions of power within the Liberal Party, but in 1990 the Liberal Party came to be led by the ideologue Dr John Hewson. At the grassroots level of the NFF, nevertheless, there was a greater sense of concern about the consequences of this policy agenda. This hesitancy to a considerable extent remained tied to specific commodity concerns. The exposed industries in agriculture continued to be wedded to the legacy of agri-socialism, joining in what the leading agricultural newspaper in Australia termed "a lemming-like rush to avoid the necessity to compete in a tough world market."76 This stance translated into resistance to the zero protectionism proposal put forward within the NFF'S council. Beyond these strong commodity reservations, moreover, a much wider cross-section of Australian agriculture dug in their collective heels over continued unilateral action to implement agricultural reform. Under conditions of depressed markets, it was

172. In Between Countries

asked, why should the rural community go along with proposals for change in their own industries when other forms of structural inefficiency had not been tackled? A good example of this viewpoint was the response to Kerin's ambitious plan for reform of the wheat marketing system.77 As John Allwright, the NFF president, warned in 1990, Australian farmers were not prepared to be the martyrs of the reform process: "The NFF will not accept further reductions in assistance for agriculture until assistance for other industries is reduced to our level. Adjustment should occur on a top down basis, with those receiving the highest levels of assistance subject to the greatest cuts. Any other approach is totally inequitable."78 A number of other factors further eroded the coherence and effectiveness of the ALP'S reform strategy. To be sure a strong argument can be made that the ability of the ALP to sell its reform package was made easier by the opposition's wholehearted embrace of economic rationalism under Hewson.79 This argument, however, overlooks the increasing disunity within the ALP itself over the scope and pace of reform, made evident by the fierce internal debate about whether or not to implement the Garnaut tariff proposal. The fact that ultimately the decision was made to shelve the plan contributed to the image of the Hawke government as one that was running out of steam. Just as crucially, from an international perspective, the inability of Australia to score some successes in the GATT negotiations wore down the ALP'S will to push its reform agenda ahead.80 Prime Minister Hawke publicly admitted in mid-i99i that he was at a loss for new tactics to buffer Australia from the United States-EC subsidy war.81 It was only with the accession of Keating to the post of prime minister in December 1991 and the ALP victory in the March 1993 election that the Labor government was able to revive something of its original sense of mission in terms of its reform agenda. Keating wasted little time in staking out his own position that a distinct Australian identity was integral to Australia's position in the international market-place. From one perspective a new era of economic success was linked directly to Australia's ability to break free from the inhibiting factors associated with its particularistic pattern of development. The key symbolic elements of this push centred on the contentious issues of the Australian flag and republicanism. More tangibly this approach meant getting the economy right. In an attempt to show that his government would not simply be a rerun of Hawke's, Keating attempted to move beyond the Hawke administration in a number of ways. He returned to a harder style of government. Not only was it more centralized, in terms of the degree of executive leadership and prime ministerial control over decision making, but it was far less flexible in sharing respon-

173

The Politics of Initiative in Australia

sibilities with the non-central units of government. For example Keating placed considerable emphasis on reining in Hawke's evolving system of federalism. At a special premiers' conference in November 1991, Keating stated that the priority in intergovernmental affairs was to enhance Australia's ability to compete abroad. Substantially he elevated micro-economic reform within the ALP'S hierarchy of policy issues. To give one illustration of this approach, Keating focused attention on transforming Australia's adversarial system of negotiations between business and labour. As he said in one speech: "Government should provide the direction and leadership necessary to ensure that Australian industrial relations operate to advance our national interest! The Government should do this - and we will."82 At the heart of Keating's strategic vision was the notion that Australia must become thoroughly enmeshed with Asia-Pacific. Only by facing its future within the region head-on, Keating argued, would Australia be accepted in its regional neighbourhood. When accused by Hewson of manipulating symbols through his discourse on republicanism, he dismissed these claims as "humbug": "To make our way in the world, and particularly this part of the world, we have to be entirely certain of who we are, what we are, and what we wish to do."83 This sense of belonging was promoted by Keating's decisions to visit countries in the Asia-Pacific region (including Indonesia, Japan, and Singapore) before travelling to the United States and Europe. Economically Keating upgraded APEC to the status of the jewel in the crown of Australian foreign policy. He moved to broaden APEC from a vehicle of communication to a substantive trade and development group designed to pursue an integrated regional market. In terms of institutional arrangements Keating stressed the need for the development of regular heads-of-state meetings. In policy terms he focused on the need for a framework agreement and the need to establish a work program to improve regional market access, the process of dispute settlement, and the harmonization of domestic legislation and rules.84 By downplaying multilateralism as the credo of Australian foreign policy in this fashion, Keating made a virtue out of necessity. The longer the GATT Round stalled the more the traditional Australian faith in universal solutions was drained away. An inadequate outcome of the MTN had the potential for dividing the Asia-Pacific trade environment into less open sub-units than Australia wanted. Furthermore even with a satisfactory GATT result, Australia would still have to get involved in a variety of detailed arrangements with countries in the region. As Keating told the "Asia 2010" conference in July 1992: "while a successful GATT outcome is important, it won't begin to exhaust the trade growth possibilities in the region."85

174

In Between Countries

If the nature of the external validation strategy changed over time, so did the domestic mobilization strategy. As the anxiety of the distressed Australian agricultural sector worsened with the stalling of the international negotiations, it became progressively more difficult for the state to manage the agricultural community. Instead of the emotions of Australian farmers being redirected through politically acceptable channels, their anger and frustration once again became volatile and difficult to control. When President George Bush visited Australia at the beginning of 1992, for example, the NFF was no longer in any mood to join forces with the Keating government in presenting a common front on the EEP. Taking to the streets the farmers greeted Bus with a massive and unruly demonstration. As one journalist put it, "the NFF let the tiger out of the cage but failed to keep it on the leash."86 The offensive strategy introduced during the 19805 and 19905 contributed to providing Australia with a greater sense of purpose in its foreign economic approach. The quixotic element in Australian behaviour, so prevalent throughout the post-1945 era, was severely reduced in consequence. No longer did Australia tilt wildly at other actors. Rather Australia's diplomatic activity was effected on a sustained and practical basis. The foreign dimension of Australian economic strategy for the first time became inextricable from domestic strategy. Australia began to get it right in terms of its diplomacy only because it was also going through an internal economic and social transformation. The new habits of acting in the international arena were accompanied by the gradual development of new thinking about Australia's own character. As Keating observed in a speech at the Evatt Foundation: "It is important that the reality of our having to go it alone is matched by our ability to go it alone."87 Australia, however, has not been entirely able to overcome the limitations of its position in the international political economy. While the Hawke and Keating governments were willing to make hard choices, this willingness did not ensure success. For all the desire by Australia in the 19805 and 19908 to come to terms with its weaknesses, the transformation process remained difficult. While Australia's direction became more clearly defined, the route remained full of checks and uncertainties.

7 The Politics of Accommodation in Canada

International trade policies have become more tightly intertwined with domestic politics in the 19805 and 19905. State officials in Australia and Canada, as elsewhere, came to the realization in these decades that the pursuit of interests in the IPE depends not only on their actions in the international arena but also on their ability to come to terms with domestic political pressures.1 The growth of interdependence and the increased incorporation of national economies into both global and regional economies presented new challenges for national economic statecraft, * in that the test of a government's economic performance became centred on its ability to foster reform and promote international competitiveness. Yet this dynamic has been played out in a very different way in Australia and Canada. In the Australian case the move towards national redefinition helped propel the Bob Hawke/Paul Keating government's strategy of offensive adjustment. In Canada, conversely, because of the extent of the differences between the forces of economic adaptation and the forces of resistance to that change, this dynamic has stimulated a more defensive response. Instead of mobilizing societal forces behind an outward-looking approach based on external validation, the Brian Mulroney government responded to the heightened tension over the agricultural trade issue with a search for balance at the societal level. The result was an inexorable process by which foreign economic strategy became subordinated to domestic political exigencies. The Canadian approach to agricultural trade through the GATT negotiations may thus be seen as the reversed image of the Australian.

176 In Between Countries

Instead of the externalization of strategy, with a focus on the international becoming a way of coming to terms with domestic problems, the Canadian approach represented the internalization of strategy with a concentration on domestic accommodation as a means of responding to challenges from the international environment. Canada's negotiating stance on agriculture, from the outset of the Uruguay Round, was more measured than Australia's. The focus was on getting a comprehensive GATT result, which would subject all agricultural producers to the same rules and disciplines and thus provide a cover for the difficult adjustment process at home.3 As the Uruguay Round dragged on, however, the possibility of introducing change from the outside without the possibility of political controversy withered away. The slow pace of negotiation on agricultural trade, far from allowing the government more time to sell the notion of economic change, made lobbying more difficult by introducing new elements of political sensitivity and trouble. The result was an exaggerated inhibition in Canadian behaviour. Because of this outside-in dynamic the Canadian approach to the agricultural trade negotiations generated considerable debate and controversy. Rather than being perceived as principled and reasonable, Canada's performance during the GATT Round was viewed by a variety of observers as ambiguous to the point of hypocrisy.4 The main stimulus for this criticism was the lack of consistency manifested in Canada's attitude to trade liberalization: while in favour of maximum liberalization for some agenda items, Canada wanted minimum change in other areas. To comprehend the dichotomous nature of Canada's position, the salience of accommodation in Canadian politics must be taken into account. Unlike the situation in Australia, a full and open discussion of the agricultural trade issue was discouraged if not avoided entirely in Canada. Canadian state officials, fearing the risk of division between different societal interests, did not present the public with clear choices. On the contrary Canadian politics favoured the art of compromise, whereby abundant efforts were made to satisfy as many interests as possible. This desire to ensure that there would be no winners and no losers was reinforced by the underlying territorial cleavages in Canadian politics. Given the potential for regional divisions to inflame political emotions, everything possible was done to defuse tensions along these lines. The stakes were considered to be just too high to do otherwise. The agricultural trade issue was greatly influenced by the relations and necessities arising out of the regional factor in Canadian politics. Indeed agriculture serves as a microcosm of the fragmentation in Canadian politics induced by regionalism. It is important to underscore the

177 The Politics of Accommodation in Canada

point that it is impossible to speak of a monolithic farm community in Canada. There are instead a number of highly diverse elements found within the agricultural sector based on region and type of production. Moreover far from there being a trend towards greater farm unity during the past decade, the pattern has been the reverse, with a proclivity towards greater internal differentiation. As William Coleman has described developments in the 19808, the associational system that agricultural producers assiduously built up over many years, in an attempt to mitigate commodity- and geography-based conflicts, came "crashing down" under the weight of new issues.5 The extent of this rift in the Canadian agricultural community was in itself enough to shape a cautious approach to trade diplomacy. However the need to walk a policy tightrope was accentuated by a number of additional factors. One was the intrusion of the highly politicized bilateral free trade deal between Canada and the United States. The FTA debate extended, and institutionalized, the regional/ commodity differences at the societal level between the forces of economic adjustment and the forces of resistance. The sharp distinctions between the domestically oriented producers in the east of Canada and the outward-looking producers in the west became more pronounced over this issue. As one journalist writing in 1987 accurately forecast, the split in the agricultural interest widened and deepened over bilateral trade liberalization: "The closer Canada and the U.S. get to a free trade deal, the wider Canada's farmers could split on the issue."6 Another profound source of tension emerged from the debates, and linkages, concerning the implications of the GATT negotiations and constitutional politics. Associated historically with western alienation and estrangement from Ottawa, the agricultural trade issue was recast in the late 19808 and early 19908 to centre on the future of Quebec. Intertwined closely with the Meech Lake controversy, the capacity of the Canadian state to behave in a consistent and effective fashion in the international arena was compromised by the primacy attached to the question of national survival. This chapter looks at the nuances of the Canadian approach to the agricultural issue within GATT through a domestic-centred analysis. While locating Canadian agriculture in a changing international political economy, its primary goal is to explore the set of internal contextual features that have been most instrumental in shaping and conditioning Canadian agricultural trade policy. Through examining the nexus between the international system and domestic political structures and processes in this fashion, the complex relationship between international challenges and domestic constraints may be captured with greater accuracy; as indicated by Robert Putnam, what may be

178 In Between Countries

"rational" in terms of foreign economic diplomacy may be "impolitic" in terms of domestic strategy.7 SETTING THE CONTEXT OF THE INTERNAL CANADIAN DEBATE

To understand the ambiguous nature of Canada's agricultural trade policy, a more detailed investigation of the Canadian state's organizational structure and the positions of individual state officials is required. To a greater extent even than with the United States - the focus of the work by G. John Ikenberry, David Lake, and Michael Mastanduno - a black box perspective on government is inadequate in the Canadian case.8 As seen by the focused analysis of agricultural trade throughout this study, politicians and bureaucrats in Canada have differed considerably in their views of Canadian preferences. Reflective of where they sit in the state apparatus, their stances diverge considerably both on their interpretations of externally generated imperatives and on their attitudes to the role of societal groups. If the Canadian state conforms to the image of a state soft on agricultural trade, this interpretation does not preclude in any way contestation between those state officials pushing for change in this issue-area and those pulling to constrain these initiatives. On the contrary the softness of the Canadian state provided a receptive setting for these policy struggles. The inner tensions of the Canadian state remained far more pronounced than Australia's. While Australia has been able to speak with one consistent voice on the issue of agricultural trade, Canada has spoken with a variety of discordant voices. This incapacity of the Canadian state to develop a consistent line of discourse and action is closely related to its inner workings. As in the past the policy-making process in Canada has been marked by intense disagreement and competition between a wide variety of state officials on substantive policy questions as well as on turf matters. For reform-oriented state officials the main question has been how fast and how comprehensively to liberalize. For the resisters, alternatively, the concern has been how to lessen the impact of the process of adjustment. Given the presence of these countervailing elements, it has been far harder to steer the Canadian ship of state on a stable course than the Australian. The forces of reform formed a loose coalition within the Brian Mulroney government. The main political representative of the outwardlooking farm concern was Charles Mayer, who in his capacity as minister of state for the Canadian Wheat Board and grains and oilseeds had represented Canada at the Cairns Ministerial in August 1986. Due

179 The Politics of Accommodation in Canada

to his status as chair of the Manitoba Progressive Conservatives and the party's shadow minister on agricultural issues when in opposition, Mayer had a degree of political clout and credibility on the agricultural trade issue that belied his relatively junior status in cabinet. His responsibility for liaison with the fair trading coalition was a prime means through which the Mulroney government demonstrated that it was doing something in the diplomatic arena about export subsidies and the other exogenously generated factors that had done so much to depress prices and inflict economic and social havoc on western agricultural producers. The strength of Mayer's political base, however, did not translate into policy success. By his performance at the initial Cairns Group meeting, he convincingly demonstrated that he was out of his depth in such a diplomatic setting. His clumsy showing could be attributed in part to his lack of political status (Mayer did not have the authority to sign on to a formal coalition, as the Australians had hoped) and to limited bureaucratic support. Nonetheless Mayer did not contribute to the effectiveness of his efforts with his blunt attacks on the EC ("for every dollar we spend on agriculture, the Europeans spend four") and his defence of the United States (suggesting that the provisions of the U.S. farm bill allowed for gradual reductions in subsidies). When the Australians surprised him with policy or procedural initiatives, Mayer came off looking ill-prepared and inflexible.9 He did not succeed in securing Canadian participation in the drafting committee (made up of Australia, Argentina, and Thailand) that drew up the text of the declaration issued at the Cairns meeting; nor did he play a mediating role within the group. A second component of the reform coalition was found in the international trade concern. Pat Carney and then John Crosbie were able to combine their own sizeable personal drive and ambition with the broad horizontal mandate occupied by their Ministry of International Trade to take on the prime responsibility of the agricultural trade dossier. Mayer's lead role, exhibited at the inaugural Cairns Group meeting as well as at the meetings of the major grain exporters at Whistler, BC, in 1986 and San Diego in February 1987, soon became overshadowed by Carney's multitude of high-profile activities in 1987: her participation at the Davos economic forum at the beginning of February; a meeting of trade ministers at Lake Taupo, New Zealand, in March; the Quadrilateral in Kashikojima, Japan, in April; and the OECD Ministerial Council meeting in May. Much of Carney's efforts at these forums may be classified as "status participation."10 She took public visibility for her ministerial activities extremely seriously. As demonstrated earlier by her work as energy minister, particularly in her

180 In Between Countries

push to abolish the National Energy Program, she eagerly embraced initiatives not only because of their policy content but because of their potential for capturing publicity. At the Quad, for example, she was quick to take the credit for the positive steps to "work our way out of this crisis ... that is what I came here to get, and that is what I got."11 This concern with status had many tangible rewards. Carney's ascendant position over Cairns Group diplomacy enhanced Canada's credibility in the eyes of the Australians. Her eleven-day visit to Australia and New Zealand in March 1987 reaped a number of rewards, both in terms of forging a closer personal relationship with John Dawkins and in terms of engagement on the detailed preparations for the Ottawa Ministerial. A more nuanced appraisal is necessary in delving into these positive developments. Behind Carney stood a skilful and dedicated team of officials, which formed the backbone of the reform approach. This team consisted of a mix of both "old trade hands" and a number of talented "ins" and "outers" who moved back and forth in terms of governmental responsibilities. In the former category were officials such as Gerry Shannon (deputy minister of international trade) and John Weekes (the Canadian ambassador to the GATT). In the latter category the individual who shone most brightly was Sylvia Ostry. A former head of the Economic Council of Canada and chief economist at the OECD, she had been brought in as deputy minister for international trade at the end of 1983. Energetic and creative, she was arguably the official most akin to the Australians in strategy and tactics. Seeing herself as a key agent of change, she remained a vocal and unwavering proponent of economic rationalism in Canadian agriculture. As she told the Standing Committee: "I would find it hard to believe that the interests of Canadian agriculture are better served by the status quo as compared to fighting for a fundamental reform of the agricultural trading system ... Such an environment is essential if the Canadian agrifood sector is to plan and invest with greater confidence."12 This team of trade officials functioned efficiently in a number of ways. The professionalism of the old trade hands protected Carney and the other Canadian ministers from more surprises at the Ottawa Cairns summit. Paying considerable attention to the logistics of this meeting, the Canadian officials ensured that Mayer and Carney presided over the opening and closing sessions, and that the agenda papers circulated well before. The intellectual drive of Ostry allowed Canada to at least entertain alternative initiatives in the area of agricultural trade reform. One idea, proposed immediately prior to the 1987 Venice G-J summit, was for the formation of an Eminent Persons Group along the lines of the Commonwealth/South Africa initiative.

181 The Politics of Accommodation in Canada

Another idea, an offshoot of the first, was for the creation of a transnational group of well-known experts on agricultural trade. The first initiative never got off the ground when confronted by stiff European opposition. The second, however, resulted in an ambitious research program, co-ordinated by the International Policy Council on Agriculture and Trade, which addressed the questions relating to a broad agenda of agricultural reform.13 A third component of this loose assembly of interests in favour of reform was the foreign policy concern. Joe Clark, as secretary of state for external affairs and an Alberta MP, wore two distinct hats on the agricultural trade issue. Wearing his foreign policy hat, he acted as the guardian of the multilateral strain in Canadian foreign policy. Inculcated in Clark's world-view, to a degree well beyond any of the other ministers in the Mulroney cabinet, was the legacy of the Canadian tradition of constructive internationalism. He was as forceful in his advocacy of rule making to ensure order and stability in the international arena as any of his Liberal predecessors. As he put it at the Punta del Este launch of the Uruguay Round, the need for a new agreement determining the rules of governance in international commerce was as vital in the 19805 as it was in the aftermath of the World War II: "In the forty years since that creative burst of confidence, we have put those achievements at risk by taking them for granted. Countries which forty years ago put the world ahead of narrow interests now apply protective trade measures outside GATT disciplines. The rules point one way, and governments go another."14 In analogous fashion he was a firm advocate of Canada building coalitions with like-minded countries on specific issues. In discussing Canada's participation in the Cairns Group, Clark was careful to emphasize the point that Canada could operate more effectively as part of a group than on its own. As he told the Canadian Grains Council in April 1987: "We can have more influence than power and are always more effective when we can help organize several countries to pursue in tandem goals that are important to us."15 In common with the world-view of Lester Pearson and his cohort of foreign policy makers from the 19508 and 19605, Clark's idealism (often portrayed as boy-scoutism) was tempered by a hard-headed calculation of both Canada's and his own interests. At a personal level he wanted to differentiate his foreign policy from that of Prime Minister Mulroney. The inspiration behind this attitude was obvious. Not only was Mulroney the man who (in an atmosphere of considerable animosity) had ousted Clark from the leadership of the party in 1983, but their political philosophies sharply diverged. Clark's tinge of "red toryism," visible in social and economic policy, remained at odds with

18 2. In Between Countries

Mulroney's business-oriented conservatism. At a policy level Clark's support for multilateralism proved a useful counterpoise to Mulroney's bias towards a concentration on Canada-United States bilateral relations. This is not to suggest that Clark opposed the need to negotiate an FTA. As in the multilateral arena, he believed that the establishment of a new institutional framework for Canadian-American trade was vital given the overwhelming importance of the continental relationship: "the Canada-U.S. trading relationship is simply too large, too complex and too interdependent to be governed by existing rules."16 Clark's support for the FTA mirrored the tilt within the Department of External Affairs bureaucracy. The key figure in this transformation in ideas and action was Derek Burney, the assistant deputy minister (U.S. Affairs), who moved on to become successively Mulroney's chief of staff and Canada's ambassador to the United States. From September 1984, Burney had directed the work of an important DBA task force on Canada-United States free trade. This positive view of free trade was reinforced by the domestic hat Clark wore. In addition to his foreign policy activities he was, by virtue of his own local political constituency, an important representative of the Albertan cattle producers. Long fearful of international trade deals that traded off their concerns against the concerns of other producer groups, the cattle producers had lost much of their faith in the GATT process in the early 19805 through their experience in the EC beef case. Having filed and won a against the dumping of manufactured beef from Ireland and other EC countries, which allowed Revenue Canada to place countervailing duties against EC beef, the Canadian Cattlemen's Association reacted angrily when a GATT panel decided in the Europeans' favour on appeal. The upshot was that the Canadian cattle producers turned their attention away from the search for multilateral agreements towards the establishment of a narrower bilateral deal. In the absence of fair and consistent rules in the multilateral context, a free trade deal with the Americans could be portrayed with some justification as a valuable opportunity to overcome trade irritants (nontariff barriers such as countervail duties and U.S. International Trade Commission investigations) and as a means of working towards the harmonization of marketing policies and practices on a bilateral basis (exemption from the U.S. Meat Import Law, and orderly export promotion). As the vice-president of the Canadian Cattlemen's Association stated: We hope that the provisions of the FTA will help us avoid disputes in the future. If disputes should occur, however, there are advantages in the Free Trade Agreement. The first is simply having a binational panel and process to appeal

183 The Politics of Accommodation in Canada to for a broad range of disputes rather than having to pursue the matter through government channels such as embassies, department or individual congressmen. A second major advantage, regarding countervail and dumping cases, is the time consumed in its appeals. The FTA would impose a time limit for appeal decisions of less than a year. This compares to the existing appeal... system which takes two or three times longer and thus adds substantially to industry losses.17

The elevation of bilateral free trade did not mean that this option was problem free. From a foreign policy perspective this choice risked giving the impression that Canada was becoming more restricted in terms of its diplomatic credibility and room for manoeuvre on the international stage. More practically there was no guarantee that the negotiations with the United States would ultimately result in success. Arthur Stein's reminder that "states choose strategies, not outcomes" was especially relevant during the FTA negotiating process.18 A trade deal of such magnitude had formidable obstacles in its way, and wellentrenched opposition to this trade option continued to exist in the U.S. Congress. Although the fast track for the deal was approved in April 1986 by the Senate Finance Committee, it was only by the narrowest margin. Nor did the solid backing of the Ronald Reagan administration of the bilateral free trade option entirely compensate for these legislative constraints. As Michael Hart suggests, "the delay sent strong alarm bells ringing in Canada about the capacity of administration officials to manage all aspects of the negotiations."19 In any case much of the impetus for the FTA at the executive level in the United States stemmed from its demonstration effect - showing the EC and Japan that the United States had other avenues open to it than the GATT - rather than from enthusiasm for free trade with Canada per se. The move by Canada to take part in a multi-member initiative in the form of the Cairns Group was useful, therefore, both symbolically as a signalling exercise, and instrumentally, as a cushion for failure. By joining with a larger group of fair trading countries Clark could indicate that the Conservative government remained observant of the liberal internationalist determinants of Canadian foreign policy. Instead of being presented as stark alternatives, bilateralism and multilateralism could be taken to constitute complementary elements of a two-track path. While choosing to enter into a closer economic relationship with the United States, it could also be said that Canada was remaining true to its traditional supportive role in the international order. As the External Affairs Department task force stated: "the choice for Canada is not between multilateral or bilateral approaches to trade but how both avenues can be pursued in a mutually reinforcing manner."2-0 At

184 In Between Countries

the same time this mix of multilateralism and bilateralism allowed Canada to hedge its bets. During the bilateral negotiations Canadian policy makers had the freedom to take some of the heat out of the most controversial issues by deferring them to the GATT. If ultimately unable to negotiate an acceptable bilateral deal with its immediate neighbour, it could continue to find comfort with friends (and some acquaintances) in a group effort to expand and diversify trade. The final component of the internal coalition in favour of agricultural trade reform was composed of the Department of Finance and the economic concern. With Michael Wilson as its minister, the Finance Department had attempted to reclaim its historical position as the controller of the fiscal framework of policy making. As one aspect of this effort the department played a prominent role in the pre-negotiation phase of the Uruguay Round to ensure that agricultural reform would be on the agenda. Wilson's visibility in this campaign was generated through his attendance at a number of meetings of international organizations, most notably the 1986 and 1987 OECD Ministerials and the 1988 Toronto Summit of the 0-7. Thomas Hockin, the minister of state for finance, attended the Punta del Este meeting and (with Clark) played a prominent role in its deliberations. The enthusiasm generated for reform on the part of the economic concern was tied in to the mounting budgetary costs of farm subsidies. Yet if keen to produce a road map and a timetable for ending producer-based subsidies, Wilson and the Finance Department were prepared to pursue this goal in an incremental fashion. It made little economic sense to substitute costs in terms of social welfare payments and damage to financial and commercial institutions in rural communities for the costs of agricultural support payments. Politically Wilson and the Finance Department did not enjoy a supreme position in economic policy-making. Removed from the prime minister's tight circle of confidants, this concern preferred not to force the pace of change. Wilson remained sanguine, believing that just as it had taken a long time to get into the agricultural mess, it would take a long time to get out of it.ZI Rather than pressing for immediate unilateral action in Canada, consequently, he maintained the line that Canada would act only when there was an opportunity for collective action for reform. As he pronounced at the Toronto Summit: "We aren't going to move alone on this. We won't expose our farmers to any hardships that other countries are not willing to."" This loose collection of forces in favour of reform faced off against the concentrated forces of resistance. While less innovative than the reformers in terms of ideas and international connections, the resisters compensated for these deficiencies through their determination to look

185 The Politics of Accommodation in Canada

after the interests of their client base. From his position as minister of agriculture John Wise was placed in the role of central champion of the status quo, and he was an easy politician to underestimate. The hallmarks of his style as agricultural spokesman in the Conservative Party were considerable flexibility and generosity. In keeping with this stance, Wise gave the impression (at least in his statements as minister) of seeking an equipoise between the forces competing within the agricultural sector. After the Cairns Group met in Ottawa in May 1987, for example, Wise indicated that the forum was important "in reinforcing the kind of changes we need."*3 Soon after, in his capacity as chair of a meeting of agricultural ministers from the American hemisphere, he issued the so-called Ottawa declaration, which gave broad support to the GATT talks and made positive reference to freer trade in farm goods.24 If willing to contemplate reform in the abstract, however, Wise dug in his heels when the time came for Canada to lay out its own position on the GATT negotiations. This defensive position was in turn shaped by the preferences of the domestic-oriented agricultural producers of eastern Canada. As a farmer from south-western Ontario, Wise was acutely conscious of the fears emanating from this societal interest in any modification in the system of quantitative import restrictions or import quotas allowed under the GATT'S Article XL These fears were reinforced by the sensitivity in Quebec, as voiced in cabinet by the secretary of state for agriculture, Pierre Blais, to any changes in the defensive architecture for local agricultural producers. Although without many of the benefits enjoyed by the reformers in terms of location or numerical superiority within the organizational structure of the state, Wise knew how to use the consensus-oriented policy-making apparatus in an effective fashion.25 Downplaying international incentives for agricultural reform, he emphasized the domestic socio-economic implications of change. Backed up by the collective voice of the Conservative parliamentary caucuses of Ontario and Quebec, Wise could play on the acute sensitivity of Prime Minister Mulroney and his political advisers about the political consequences of any sudden action that was perceived to be a threat to the livelihood of producers in those provinces. While not attempting to win a clear-cut battle over the forces of reform in the Cabinet Trade Executive Committee and other forums, he continually focused his efforts on putting off decisions. To give just one illustration of this tactic, the minister of agriculture succeeded in having the announcement of Canada's position on the GATT delayed until after the September 1987 Ontario provincial election and the conclusion of the FTA negotiations.16 Wise also made sure he put his own stamp on the communications strategy

186 In Between Countries

when the Canadian GATT position paper was eventually announced (although the negotiating documents were not released to the public). Placing the forces of reform on the defensive in their attempts to sell the GATT package,*7 he raised the stakes by publicly telling his client group that he would not let them down. To further politicize the issue he attempted to have the weight of societal influence brought to bear by pushing to have agricultural trade put on the agenda of the First Ministers Conference scheduled to convene just prior to the December 1988 Montreal GATT mid-term review. Superimposed on these differing opinions within the government was the heightened polarization among agricultural producers on the future direction and impact of policy. At one end of the spectrum the outward-looking commodity producers were the most enthusiastic supporters of multilateral trade reform. This was especially true of the groups belonging to the Canadian Agricultural Policy Alliance, including the United Grain Growers, the Western Wheat Growers' Association, the Manitoba Farm Business Association, and the Western Barley Growers Association, together with the Prairie Pools. As major exporters these groups were the hardest hit by the international trade tensions as well as the most impatient for action that would allow them to compete on a level playing-field. At the other end of the spectrum the groups representing producers in the inward-looking and regulated forms of agriculture were extremely wary of trade liberalization, fearing that their needs and interests would be sacrificed on the altar of rationality. Although the various elements of this interest shared a mutual desire to defend a way of life, these resisters differed sharply from each other in their values and goals. One strong component within the forces of resistance was located within the National Farmers' Union (NFU), the belief system of which rested on the family farm ideal, the belief in grass-roots democracy, strong support of government intervention (especially through the Canadian Wheat Board) to regulate "exploitation" by corporate monopolies, and the need for collective action by "working" farmers. A second strand of resistance was more industry specific, centred on the producers whose livelihoods were threatened by trade liberalization, found in the supply-managed commodities such as dairy and poultry. This element - the main constituency championed by Wise campaigned vigorously for protection from the unfettered forces of the market-place. While employing some of the same language as the NFU in terms of the future survival of the family farm, the bulwark of the defensive strategy adopted by these potential losers was to portray themselves as the custodians or stewards of precious and fragile parcels

187 The Politics of Accommodation in Canada

of land close to major cities. To these groups the breaking up of a farm was not the same as the closing down of a factory. A representative of the supply-managed industries, for instance, told a parliamentary committee that agriculture could not be judged "on a narrow set of economic measures" because: "consumers not only want cheap food, [but] safe food in abundant supply ... produced in an environmentally sound manner and with respect to family farms and the rural lifestyle."18 A costly educational campaign, directed at the emotions of the wider Canadian public by the Dairy Farmers of Canada (DFC), worked to drive home the message that "a self-sufficient dairy industry in Canada" was vital because "every time a dairy farm dies, a part of Canada dies."2? A third strand of resistance was territorially based. The most significant of these forces came from Quebec, based in the Union des Producteurs Agricoles (UFA). Like the NFU the UFA stressed the virtues of the family farm and of regulation, and the seriousness of the problems arising out of the intrusion of multinationals and globalization. Unlike the NFU, however, the strategy of the UFA was based not on a panCanadian appeal but on the defence of a locality, Quebec (in telling fashion the UFA'S newspaper was called La Terre de chez-nous, "our native soil"). Whereas the NFU had declared that trade liberalization would be detrimental for Canadian producers, the UFA stressed that these forces of change would be "virtually suicidal for our agriculture."30 As a UFA official put it in 1985: "all national groups tend to consider food self-sufficiency to be an attribute of national political sovereignty and an essential factor in collective stability and security."31 In keeping with this more territorial, nationalistic approach, the vast majority of the UFA'S activities were Quebec directed. With respect to federal politics its approach was to use its size of membership (42,000); its relatively abundant financial resources (a $10.6 million annual budget); its strength of leadership (both through Jacques Proulx as head of the organization and through its technical expertise, exemplified by such personnel as Yvan Loubier, director of studies and research); and its political clout (exerted through letter writing, telephone calls, and demonstrations, as well as an extensive set of personal contacts) to maintain fierce pressure on the large Quebec caucus of the Mulroney government (and more recently the Bloc Quebecois [BQ]) to defend the interests of their "home" agricultural producers. Indeed as in the case of other highly motivated, concentrated, and well-organized farm groups, the UFA'S performance in being ready and able "to press their interests in the political arena" has been most impressive.3Z Magnifying this split in the farm concern has been the absence in

i88 In Between Countries

Canada of an effective peak organization, like the Australian NFF, to act as a capable broker. The task of reconciling the internal differences of the Canadian farm community has traditionally been performed by the Canadian Federation of Agriculture (CFA). The continued ability of this umbrella organization to carry out this role, though, had been seriously undermined by the events of the 19808. The fact that many regional and commodity-specific groups had either remained outside the CFA, defected from it, or collapsed completely (the Saskatchewan Federation of Agriculture, the Manitoba Farm Bureau) reduced the organization's financial resources as well as its authority as the general farm voice in Canada. Furthermore the CFA did not compensate for its structural deficiencies through either dynamic leadership or sophisticated expertise in relations with government and business. By choosing to sit on the fence as the differences within its membership became more accentuated on the trade liberalization issue, the CFA ended up looking confused and indecisive. This image problem in turn contributed to the organization losing still further credibility as an influential actor in the policy-making process. MANAGING THE FORCES OF ADJUSTMENT AND RESISTANCE

The Mulroney government tried to manage the differences between the adjusters and resisters - or more precisely the offensive adjusters and defensive adjusters - by attempting to treat them as separate but equal entities. Instead of addressing the controversial issues head-on by developing and putting into operation a comprehensive policy, with clear trade-offs, the Conservative government tried to put off any clear choice between the export-oriented western farmers and the importsensitive eastern producers. In an attempt to both maximize competitiveness and minimize the cost of reform,33 a dualistic approach was adopted, which combined elements of an offensive international adjustment strategy and a defensive domestic adjustment strategy. The result was an awkward and fragile balance between interests. This cautious approach meshed neatly with the personal political style of Prime Minister Mulroney. Consistent with his modus operandi as a labour negotiator and political deal maker, the key question for Mulroney was not whether a policy was harmonious in terms of its various components, but it was the extent to which it had political appeal. From this standpoint, with primacy given to an ongoing political calculation, Mulroney's approach to agricultural policy may be seen as another example of the shift away from the rational management perspective practised in the Pierre Trudeau period and back

189 The Politics of Accommodation in Canada

towards the older tradition of brokerage politics.34 The prime purpose of political leadership for Mulroney was "the accommodation of interests and not the interplay of ideas."35 He had charm and cunning, but little vision. This balanced or integrated strategic approach was consistent with the Conservatives' aim of holding together the indispensable but unwieldy Quebec-western Canada alliance. Mulroney had built the Conservatives' winning coalition in the 1984 election on these pillars, and he had no desire to have them cave in on him in the 1988 election as a result of division on the agricultural trade issue. In the absence of a domestic consensus on the future direction of agricultural policy, Mulroney worked to ensure that the internal farm split along the eastwest axis was not unduly aggravated. Some change was viewed as unavoidable in the context of the GATT Round, but it remained an article of good political management that the process of change should be ushered in as delicately as possible and only as part of a wider multicountry, multi-commodity agreement. "Don't ask me to sacrifice a single Canadian farmer," he stated, "unless we see both the clarity and the continuity of the signal sent by others."36 Rather than trying to harness societal groups to the cause of agricultural trade reform, as the Bob Hawke government had moved to do in Australia, the Mulroney government continued to be fearful of the consequences of any such process in Canada. While the Australians had included a separate meeting for farm leaders at the August 1986 Cairns meeting, none was added at the May 1987 Ottawa meeting. Not wanting to expose the debate to the spotlight of public attention, hence creating an opportunity for an open airing of the differences internal to the farm community, Mulroney only agreed to meet Canadian farm leaders just prior to the Venice Summit. Although eager to maintain momentum in the international negotiations on agricultural trade, Mulroney wanted to avoid risks in the form of regional/commodity tensions at all costs. This pattern was repeated in the lead-up to the 1988 0-7 when Mulroney met with farm leaders on 8 June, just prior to the Toronto Summit, as pressure built up among the various agricultural interests for greater precision in Canada's position in the international negotiations. In putting this management approach into practice a number of devices were used. From the start of the negotiations the onus was placed squarely on other nations to move before or at the same time as Canada did. The corollary of this emphasis on collective rather than unitary action was the use of delaying tactics, a pattern that became more accentuated as the November 1988 federal election drew nearer. Sensitive issues, especially those involving concessions in the domestic-

190 In Between Countries

oriented sectors, were either put off or side-tracked to other agendas. The original (optimistic) Canadian negotiation plan reflected the desire to proceed with a slow and steady walk across the tightrope, with the tabling of Canada's negotiation proposals completed by the end of 1987, followed by a process of narrowing down the options and the development of an integrated approach worked on during 1988, an agreement on elements of the agricultural package by the end of 1988, the tabling of detailed plans accomplished during 1989, and a final agreement coming into force by 1990. One of the unintended consequences of the FTA debate was the disruption of this step-by-step approach. Free trade for agriculture had remained such a highly sensitive subject area that it was left out of any earlier proposals for a formal economic deal between Canada and the United States. The benefits of an integrated North American agriculture had been highlighted in a number of proposals for continental/bilateral free trade set out in the 19605 and 19705; yet the non-economic factors were viewed as being too controversial for the inclusion of this industry in a plan of this type. A 1963 study of the Canadian-American Committee sponsored by the National Planning Association in the United States and the Private Planning Association of Canada stated, for example, that "agriculture promises to be the principal obstacle to the all-inclusive approach" to bilateral free trade because policies in this issue-area "are politically sensitive to change." A staff report released by the same organization in 1965 added that: "Recognizing the special nature of the agricultural problems, and the above mentioned factors in particular ["forms of agricultural protection, support, and assistance (which) are numerous and complex, and derive from considerations relative to price stabilization, income improvement, social equity, and social goals, including that of security"] the plan ... permits the initial exemption of an agreed-upon list of agricultural products for which [its] provisions are clearly inapplicable."37 For similar reasons a well-publicized report from the Economic Council of Canada in the mid-1970s again adopted this cautious stance, arguing that "it would be difficult to include agriculture fully within the ambit of a free trade arrangement."38 Because of these sensitivities agriculture continued to be regarded as beyond the scope of any free trade agreement up to the late 19705 and early 19805. The 1978 report of the Canadian Senate Committee on Foreign Affairs, which (out of step with the mainstream thinking of the day) revived the idea of some form of Canada-United States free trade agreement, was careful to declare that agriculture would be "the most notable exception."39 When asked later why agriculture had been accorded this exempt status, the chairman of that committee stated

191 The Politics of Accommodation in Canada

that it was simply because "the perception of the committee [had been] that it would make the agreement so complicated to negotiate that issue that it might fail."40 For the same reason agriculture was left out of Trudeau's "sectoral" free trade initiative of the early i98os.41 It was only with the publication of, and the surrounding controversy over, the Report of the Royal Commission on the Economic Union and Development Prospects for Canada in September 1985 (commonly known as the Macdonald Commission, after the former Liberal Cabinet minister who chaired it) that this avoidance strategy was discarded - with agriculture becoming incorporated into an overall scheme for Canada-United States free trade. The report did concede that the agricultural component of the "leap of faith" might have to be less swiftly taken than in other areas of the economy. Specifically it suggested that the "potential problems may justify deferring free trade for agricultural products to which import quotas currently apply."42 If the report's language was cautious, though, Donald Macdonald's remarks to the agricultural community about the consequences of its implementation were not. Although qualifying his remarks somewhat by saying that the family farm remained the best form of production, Macdonald exhorted the agricultural population in no uncertain terms to "smarten up" in terms of their efficiency and their knowledge of markets and trade issues.43 In combination with a number of other reports - including a discussion paper, "How to Secure and Enhance Canadian Access to U.S. Markets," produced by the Department of External Affairs in January 1985, the Report of a Special Joint Committee of the Senate and House of Commons, and a May 1985 publication from the C.D. Howe Institute (written by Richard Lipsey and Murray Smith) - the Macdonald Commission report provided the intellectual environment in which to place agriculture on the agenda of the FTA negotiations. Still, the move to put agriculture on the table remained an extremely touchy issue for the Mulroney government to deal with, against the background of the split not only within the agricultural community but within the Canadian state. While agreeing in principle to include agriculture in the negotiations, the Canadian government sent out mixed messages about what this move meant in practice. The reformers in the cabinet were eager to put everything Canada possessed on the table to show its bona fides not only to the Americans but to Canada's fair trading partners within the Cairns Group. The resisters preferred a more nuanced approach on agricultural trade. While agreeing that Canada needed some form of freer trade agreement to guarantee access to the U.S. market for its (more competitive) goods, Wise attempted to reassure his clientele that the "government isn't about to give up the unique

192. In Between Countries

qualities that contribute to success and growth in the agricultural sector."" To forge a deal with the Americans a centralized Trade Negotiations Office (TNO) was given the lead role by the Department of External Affairs (a move that also signalled the removal of Clark as a major actor in this issue-area). This mechanism had a number of basic strengths. Under the forceful (if often erratic) leadership of Simon Reisman, a talented set of trade specialists was put together, and they enjoyed a high level of administrative autonomy. By wielding such authority in the conduct of the negotiations, however, Reisman and his team were placed under intense pressure to reach an agreement. This dynamic in turn contributed to a number of tensions not only on a Canada-United States basis but on an intra-Canadian basis. The latter phenomenon was particularly evident with respect to the Canadian negotiators responsible for the GATT. Inevitably there were conflicts between Reisman and Carney (to whom Reisman reported) and Ostry (who, as ambassador of multilateral trade negotiations, was technically part of the TNO team but reported to the minister of international trade) over personnel as well as jurisdiction. A number of the specialist members of the TNO team (for example Mike Gifford in agriculture) had dual responsibilities for both the bilateral and multilateral dossiers (in Gifford's case, as MTN co-ordinator for agriculture). These problems were compounded by the willingness of first Reisman and then Wilson and the Prime Minister's Office to avoid tackling the sensitive political issues, in order to reach an agreement with the Americans. The issue that stood out in this way was agricultural supply management. Faced with the choice of either facing the massed defenders of marketing boards and import quotas immediately or delaying an all-out confrontation, the Mulroney government opted for crisis avoidance. In other words it chose to deflect attention away from the FTA to the GATT by putting the burden for substantive reform on the multilateral set of negotiations.45 The FTA deal did not result in a "big bang" reform of Canadian supply management.46 As the bilateral agreement was negotiated the marketing boards were neither scrapped nor even radically altered. Chapter 7 of the FTA agreement stated explicitly that the marketing board system, along with farm income stabilization and price support programs, remained unimpaired by the accord. That being said the FTA did provide a "little bang," which prepared the way for further pressures to build up against the existing structure. As Michael Walker of the market-oriented Fraser Institute enthusiastically (and accurately) put it, free trade would "kill" marketing boards by gradually "chipping away" their entrenched position.47 The most important of these incre-

193 The Politics of Accommodation in Canada

mental changes was the provision for a gradual curtailment (over a period of ten years) of tariffs on imports of processed agricultural products. Although this modification did not directly alter the system of supply management, it undercut one of its main supports, i.e. the concept that Canadian processors had a "level playing field" for their raw materials.48 So long as tariffs were in place the incentive for change among processors operating in Canada was not great. Many of these actors, especially the medium-sized Canadian processors, actually preferred to live under the marketing board system than under free trade. For some, this cautious stance appears to be a case of opting for stability rather than change. For others the support for regulation reflected an activist/strategical rather than a passive/tactical perspective towards Canadian economic development. McCain Foods, for instance, expressed support for adopting a nationalist approach to the food industry: "Our first priority should be the development of a national food policy ... If we say that in the national food policy food security is not important to us, we will be alone because Japan does not say that, the Far East does not say that, the Nordic countries do not say that, the Europeans do not say that, and the United States does not say that. "49 With parity in input costs eroded, momentum for reform grew considerably. At the head of this campaign was the Grocery Products Manufacturers of Canada (GPMC), a powerful industry group that had long pressed for cheaper domestically produced inputs. Ultimatums were also issued both by the larger multinational corporations (Heinz, Campbell Soup) and a by number of the smaller Canadian-owned further processors of poultry, dairy, and other products, to the effect that the new set of conditions imposed on them by the FTA (higher prices for raw materials) would force them to relocate in the United States or get out of the industry altogether unless drastic modifications were made in the system of negotiating commodity prices. The chairman of Ault Foods, for one, told the House of Commons Agriculture Committee: "If our government does not ensure that our input costs are competitively priced with processed products allowed into Canada, we are going to be literally dead in the water. I mean that Ault Foods, the largest dairy processor in Canada, will close down operations in this country. Dairy margins are too thin to sustain any material cost differences."50 Exacerbating the resisters' feelings of uncertainty was their appreciation of the fact that if the FTA provided a little bang in terms of agricultural trade reform, the big bang would still ensue via the GATT negotiations. Notwithstanding all the controversy the FTA generated in

194 In Between Countries

Canada with respect to agriculture, the deal raised more questions than it answered. Many of the major issues, such as the future of Article XI (which permitted the imposition of import quotas on agricultural products where there were government-supported marketing boards), internal support systems, and the definition of subsidies, were left to the more extensive and tougher multilateral negotiations. The stakes in the outcome of the Uruguay Round, therefore, became even higher. An American trade expert put it succinctly, saying that both Canada and the United States "kept their powder dry in the North American talks awaiting the bigger battle in the GATT."51 A Canadian trade official noted, in the same vein, that many of the key agricultural trade questions were just "too big to be resolved in the bilateral context."52 The Conservative government did take some steps to attempt to prop up the system of supply management. Under the determined prodding of Wise it moved, for instance, to strengthen the system by placing yogurt and ice-cream on the import control list in late 1987. This action, though, could be interpreted more accurately as a tactical device to allow the government to win kudos in the 1988 election than as part of a wider strategical approach, i.e., as a forerunner to action on other value-added items such as chicken pies, frozen pizzas, et cetera. In any case, even this initiative was short-lived. The United States reacted quickly to the Canadian move by going on the counteroffensive through a challenge at the GATT. The eventual American victory in this so-called Haagen-Dazs case placed additional import on the overall GATT outcome. With this heightened politicization the Mulroney government resorted to damage-control tactics. To defuse tensions greater emphasis was placed on a transactional approach, whereby side payments were offered to both offensive and defensive adjusters. The action on yogurt and ice-cream, as a means to alleviate the feelings of uncertainty felt by the producers of supply-managed commodities in the dairy sector, fell into this category. So did the government's intervention, through special deals, to provide compensation to western farmers for the low prices they were receiving in the absence of a completed GATT deal. These hand-outs included the 1986 Special Canadian Grains Program and the $i billion federal grain subsidy of 1987 - the latter program coming as a response to a 5:00 A.M. phone call from Premier Grant Devine to Mulroney three weeks before the Saskatchewan provincial election in October 1986. In the short run this transactional approach paid healthy dividends to the Mulroney government. By juggling the interests of the adjusters and the resisters the Conservatives were able to retain considerable

195 The Politics of Accommodation in Canada

electoral support in the areas that they needed to retain as their strongholds. In winning another majority in the November 1988 election, the victorious party was able to sweep the rural seats in Quebec, Alberta, Saskatchewan, and Manitoba. The cost, in policy terms, was in the long run. On the one hand the compensation measures for Prairie farmers placed Ottawa in an increasingly uncomfortable position, as these ad hoc schemes became entrenched as permanent fixtures. Throwing money at the problem contradicted the government's oftexpressed desire to tackle the budget deficit. To cut back on these programs, however, was politically unattractive insofar as any move that gave the impression that the Mulroney government was losing its will to deal with the problems of falling prices and farm incomes contributed to a revival of western Canadian alienation. On the other hand the decision to place agriculture in any fashion on the FTA agenda alienated the UFA leadership from the Mulroney government.53 During the 1988 election Mulroney had to secure his party's victory by circumventing the UFA'S leadership and appealing directly to the rankand-file members of the Quebec agricultural community. The strong ties forged between regionally centred farm groups and provincial governments made the process of accommodation on agricultural policy even more difficult.54 As its relations with the Mulroney government deteriorated, the UFA fell back on the Quebec government for political support. In many ways this development was surprising. Opposition by the farming community had been instrumental in defeating the Robert Bourassa government in 1976. Furthermore the Quebec government and the UFA were situated on different sides of the free trade debate. While the Bourassa Liberal government agreed with the Mulroney government's assessment of the overall benefits of a trade deal with the United States, the UFA had joined with the major trade unions within Quebec in a united front to fight the agreement. The rapprochement, therefore, rested on expedience. In order not to lay itself open to criticism by the Parti Quebecois (PQ), the Bourassa government was careful to cushion its support for the FTA with the proviso that the pact would not allow any erosion of Article XI of GATT. As Michel Page, the Quebec agricultural minister, told the UFA annual convention, Article XI must be "inscribed in black on white" in the final text of a deal.55 For their part the western provincial premiers maintained unrelenting pressure on the federal government to deliver tangible results on trade liberalization in agriculture. The Saskatchewan provincial government, under Premier Devine, was a key partner in the Mulroney government's approach to the Cairns Group. Bob Andrew, Saskatchewan's minister for economic development and trade, had been part

196 In Between Countries

of the Canadian delegation at the Cairns, Ottawa, and Bariloche summit meetings. Devine not only gave his full backing to the coalition of fair traders, but he pressed to have the May 1987 meeting held in Saskatchewan rather than Ottawa. In response to accusations that Canada had become the "weak link" in the group, Devine called for an open expression that Canada remained solidly in the group. As the GATT negotiations dragged on Devine eventually moved towards even bolder action in an effort to maintain the momentum for reform. Facing another provincial election in the early 19905, Devine travelled to Geneva with a delegation of cabinet ministers and farm leaders in September 1990 in order to "once more impress on ... the people there that we're very serious about a solution to these international trade-distorting problems."56 Devine also explored the possibility of supporting a more aggressive trade policy towards the EC. As with the Australian experience of this style of diplomacy in the 19705, the central ingredient of this approach was some form of linkage, whereby the Europeans would be punished for their refusal to move away from their illiberal trade practices. Alberta's frustration with the pace of the GATT negotiations, in the post-Peter Lougheed period, also prompted several forms of unilateral action. A number of Alberta delegations visited Geneva to try to keep the Canadian position in line with that of the Cairns Group. At the same time, in fashion analogous to the activities of Premier Devine in Saskatchewan, the Alberta government attempted to keep the Mulroney government up to the task of all-out trade liberalization in the area of export subsidies and border protection. Under the premiership of Don Getty Alberta kept up a barrage of criticism about Ottawa's approach to the MTN, as expressed by its insistence on maintaining the existing Article XI. As underlined by a report from the Alberta Agriculture Trade Policy Secretariat, Alberta emphasized that Canada's defence of supply management by these means was "viewed as hypocritical by several of Canada's Cairns Group partners and as well by other major trading partners."57 In the face of this mounting political pressure the Mulroney government moved to refine its management techniques. Reflective of the pivotal position that agricultural policy had assumed in the Mulroney government's priorities, Donald Mazankowski took on the role of activist broker or fixer in this issue-area. As noted, Mazankowski's involvement in Cairns Group diplomacy initially came about from his bicentennial trip to Australia in mid-1988 in his capacity as deputy prime minister. Once involved, however, he became thoroughly absorbed in the process of agricultural trade policy making. By September 1988 Mazankowski had moved to take over the position of act-

197 The Politics of Accommodation in Canada

ing agriculture minister, and in January 1989 he formally took on the responsibilities of this cabinet post. Mazankowski's appointment may be deemed crucial for a number of reasons. As deputy prime minister, chair of the operations committee of cabinet (which acted as the gatekeeper to the powerful Priorities and Planning Committee), and regional minister for Alberta, Mazankowski was at the centre of the decision-making process in Ottawa.58 Unlike his predecessor as minister of agriculture, Wise, or Mayer in his position as minister of grains and oilseeds, Mazankowski did not have to react primarily to other ministers' initiatives; he had the authority to address and resolve issues on his own, and he showed an impressive adroitness in making the machinery of government work. If less publicized than Prime Minister Mulroney's manipulative skills, Mazankowski's deal-making abilities were well honed and arguably more effective in getting results.59 In taking on the role of fixer, Mazankowski gradually stamped his signature on the policy dynamic in agriculture. He attempted to depoliticize the procedural controversies surrounding this issue-area by bringing a wider set of interest groups more fully into the decisionmaking process. He also stepped up the search for a fair and equitable balance between competing regional and commodity interests. In both of these activities Mazankowski could capitalize on his extensive popularity and credibility with western farmers. In the search for a consensus on agricultural policy, he also made sure that Pierre Blais, as minister of state for agriculture (and minister of consumer and corporate affairs), developed a higher profile to curtail any impression of bias against Quebec in decision making. In his dealings with societal groups he tried to prepare the agricultural community for change without frightening them into a negative response. The momentum was cautiously but decidedly in favour of adjustment. While the sensibilities of the resisters were taken into account, most notably in the refusal to go along with the Cairns Group criteria of a strict formula for reform, Mazankowski clearly indicated his intent to have Canada liberalize its agriculture at its own pace and through its own method of reform. Institutionally Mazankowski was able to build on the existing formal process of consultation on the GATT negotiations. In terms of state-societal interaction the key elements of this administrative structure included the International Trade Advisory Committee (which included two representatives from the agricultural community) and the Agriculture, Food and Beverage Sectoral Advisory Group on International Trade (SAGIT). On the domestic agricultural policy review Mazankowski set up a number of task forces and advisory committees,

198 In Between Countries

besides extending the informal mechanisms for ad hoc discussions between government organizations representing producers and processors. Inside government, an Interdepartmental Committee on MTN Agriculture, with representation by officials from the Departments of External Affairs and International Trade, Agriculture, and Finance, from the Trade Negotiations Office, and from the Privy Council Office, had been set up at the beginning of the Uruguay Round. This activity was supplemented by periodic discussions of the issue at the ministerial level, including an informal Group of Ministers on Agricultural Trade, the Priorities and Planning Committee's Trade Sub-Committee, and the Trade Executive Committee. The First Ministers conferences, the Agriculture Ministers' meetings, the Continuing Committee on Trade Negotiations, MTN-Agriculture Trade (which held regular meetings on the Canada-United States bilateral negotiations as well as on the multilateral negotiations), and the Federal-Provincial Agriculture Trade Policy Committee all allowed continuous input from the provinces. All of these features encouraged a constructive discourse on agricultural policy. By bringing a lot of different interests under the policy tent, Mazankowski challenged the various actors to come up with ideas on how the core agriculture system could be maintained while at the same time allowing greater price and market flexibility.60 Those organizations, most notably the CFA, that proved unable to adapt quickly were penalized by a denial of policy access.61 Indeed in the process of losing its privileged position at the apex of Canadian farm politics, the CFA went through a rough patch where it tried to find its bearings in the new politics of agriculture. For a long time it was reduced to complaining from the sidelines of the policy debate about the direction of the government's policy. Only after it was publicly rebuked by Mazankowski for its lack of constructive suggestions in the way of programs did the CFA go through a process of internal upheaval and renewal. Conversely organizations, such as the Dairy Farmers of Canada, that were able to demonstrate their capacity to offer skilled analysis and workable solutions found themselves rewarded with a place on a number of working committees and with enhanced access to the minister. As part of this ongoing dynamic the DFC met repeatedly with Mazankowski to discuss Article XI as well as the imposition by the Canadian government of a twenty-month cap on industrial milk prices following the GATT meeting in Geneva in April 1989. On the question of the cap, this lobbying effort led to appreciable gains almost immediately, as in July 1989 Mazankowski announced an increase of thirty-nine cents per hectolitre increase in the price of industrial milk.

199 The Politics of Accommodation in Canada

On Article XI the DFC drew reassurances that the government was committed to fighting for its interests in the GATT negotiations: "We feel certain that through the negotiations, the rules will get modified and strengthened so we can keep our supply management system. Our government is coming out fairly strongly behind us. They are committed to supply management."62 As the policy tent became more crowded the irreconcilability of the constituent interests became plain. Mazankowski opened up the consultative process not only to the defenders of the status quo but to the components of agribusiness, especially the food processors, that were in the forefront of the domestic movement for reform of supply management marketing boards, on the grounds that the structure of the boards contributed to high input costs to the food industry. Through this move, the process of the agricultural policy review became inextricably wrapped up with the search for long-term solutions to allow processors to survive the heightened competitive pressures from the United States.63 There were tensions as well between those elements of the farm community that favoured the use of more sophisticated lobbying tactics and those that remained in allegiance to a vigorous struggle for the defence of their interests. The persistent strength of the latter tendency was reflected in the major demonstrations on Parliament Hill in November 1989, in which approximately 8,000 farmers, mainly from Ontario and Quebec, participated. The mood of anxiety among these protesters was reflected in the words of the president of the Ontario Federation of Agriculture: "We're becoming very, very worried about the government's objectives in the GATT negotiations. We feel agriculture is being traded away."64 THE AGRICULTURAL TRADECONSTITUTIONAL NEXUS

Complicating Mazankowski's ability to manage the agricultural agenda was the fact that the debate on agricultural policy could not be separated from a number of broader issues. In foreign economic terms there continued to be a close intersection between the GATT and the bilateral Canada-United States trade relationship. Having adopted tariffication, by which all import barriers including supply management would be converted into tariffs, which in turn would be reduced to zero over ten years, the United States stepped up the pressure on other aspects of the architecture of the Canadian agricultural system, culminating in a direct attack on supply management and Canada's use of Article XL Ignoring the contradictory elements in their own policy, most notably on the waiver, American officials criticized Canada's

zoo

In Between Countries

exclusionary approach not only for its own deficiencies (a common jibe was that the Canadian negotiating stance had all the consistency of Jell-o) but because this restrictive approach gave the EC and Japan an excuse for keeping their own protectionist policies in place.65 The United States's rhetoric stressed that what was needed was a single rule right across the board. If an exception was made for one country, there was no way the same claim could be stopped in other cases. Another salient factor was the increased entanglement of agricultural policy with the issues of debt and competitiveness. On one side Mulroney's unprecedented level of government spending on agricultural support programs forced the pace of a serious re-evaluation. A wide number of policy think-tanks and financial institutions directed their attention to the means by which the current ad hoc programs could be replaced with policies that were designed to make the agricultural sector more efficient, competitive, and responsive to market needs.66 This concern over the course of time merged into the broader debate about competitiveness, both in terms of agriculture specifically (witnessed for example by the report on adjustment by the Advisory Council headed by Jean de Grandpre, which proposed a two-price system for the commodities that the marketing agencies controlled, allowing Canadian companies to buy Canadian agricultural products at the same price at which U.S. firms bought their primary products) 67 and the overall Canadian economy (as witnessed by the Porter report, released on 25 October 1990, Canada at the Crossroads - The Reality of a New Competitive Environment, and the so-called prosperity initiative, Prosperity through Competitiveness, begun in February 1991). Overshadowing all of these other factors in the emergent set of debates was the political fallout from the failed Meech Lake round of constitutional politics. The prospect of a constitutional accommodation between Quebec and the rest of Canada offered the possibility of spillover agreements on a wide number of policy issues - including agricultural trade. The demise of Meech, and the attendant crisis of national unity, shattered this prospect. As Peter Russell encapsulated the mood: "Meech left the country more bitterly divided than at any time since Confederation."68 Rather than maintaining an impetus towards depoliticization on the basis of some form of regional compromise, the momentum in agricultural policy, as in a wide variety of other issues, swung back towards a more acute form of fragmentation and confrontation. The Meech accord, of course, should not be viewed in isolation. As noted above the grievances of the UFA had been building up against the Mulroney government and the federal system of politics since the 1988 general election. Aggravated by an intense fear and suspicion of the

2.OI

The Politics of Accommodation in Canada

direction of policy in Ottawa, this rift widened despite repeated efforts to convince the organization of the federal government's bona fides. Among Ottawa's overtures, the leader of the UFA, Proulx, was given a place on the SAGIT; and Mulroney and Mazankowski made continual efforts to defend the government's record in meetings with the UFA Executive Council and senior officials. Rejecting these appeals the UFA moved to wrap agriculture more tightly in a nationalist Quebec cloak. It stepped up its efforts to have jurisdiction over agricultural policy given over completely to the Quebec government, fiercely criticizing the Mulroney government on a number of points: its approach to free trade; its allocation of expenditure to the agricultural industry (including both the older grievances over the Western Grain Transportation Act and the new issue of the levels of support for western grain producers as opposed to eastern dairy producers); and its response to the ice-cream and yogurt GATT panel, in which the UFA claimed that Ottawa had sold out the interests of Quebec. As a UFA official commented at the organization's annual convention in December 1989: "If the federal government is not taking into account the Quebec farmers' position, the Quebec government should patriate as much power as it can in this field. We no longer believe the assurances of the federal government."69 What was new in the aftermath of the Meech Lake failure, was that agriculture took on a greater symbolic importance in Quebec. So long as the Meech Lake Accord seemed a viable means of coming to terms with the "Quebec problem," the Mulroney government remained confident about addressing the agricultural trade issue in a committed fashion. It was no coincidence that the culmination of the negotiations on the Meech deal, in April 1987, went hand-in-glove with the most ambitious period of Canadian activity in the GATT negotiations, leading up to the Ottawa Cairns Ministerial in May 1987. During the subsequent three years of constitutional bickering, the Mulroney government's approach to the GATT became more imbued with the issue of national unity. The announcement of Canada's proposal for a strengthened and clarified Article XI, for instance, was timed to buttress the Conservatives' image in Quebec as Meech came under a determined and ultimately successful onslaught in the rest of Canada. For a brief moment Ottawa even received applause from the UFA for its position on the GATT.70 With agriculture becoming a lightning-rod for the outpouring of Quebec nationalism in the aftermath of the failure of the accord, this unity was irrevocably broken. The various components of the Quebec political establishment showed themselves to be unified in their declared intentions to do a better job of defending Quebec's agricultural interest than the federal

zoz

In Between Countries

government was doing. The Quebec Liberal Party, through the mechanism of the Allaire constitutional committee, attempted to work towards finding alternatives to the constitutional status quo. Immediately after the death of Meech, a delegation led by the agriculture minister, Michel Page, visited Geneva to demonstrate the concern of the Quebec government over the tariffication proposals before the GATT. Premier Robert Bourassa went so far as to write a public letter to Mulroney denouncing the de Zeeuw report on agricultural reform within the GATT. The sovereigntists in Quebec, encompassing both the provincial Parti Quebecois and the Bloc Quebecois, the new political party containing Quebec nationalists in the House of Commons, went still further, arguing that Quebec's agriculture could only receive adequate protection in an independent Quebec. The importance of the agricultural trade-constitutional nexus was underscored by the fact that the first question that Lucien Bouchard asked in the House of Commons after his break with Mulroney and the Conservative Party to lead the BQ addressed the future of Quebec agriculture. As with the PQ, the BQ targeted the damage done to Quebec agricultural producers "as a result of the positions which the federal government will take in the current round of GATT negotiations in Geneva."71 Through this campaign to position themselves as the champions of Quebec interests generally and Quebec agriculture specifically, the nationalist forces hoped to reinforce the central theme that there was no longer any hope for workable compromises between Quebec and the other regions of Canada. By rejecting Meech the rest of Canada was in effect seen as rejecting Quebec.72 Any further deals would simply confirm the subordination of Quebec's concerns to those of the rest of Canada. The disagreements over agriculture, in the mind of Bouchard, simply confirmed the impossibility of hiding fundamental differences by the use of nuance and ambiguity: "Voila un autre cas patent de double langage, futile recours pour reconcilier la double realite d'un pays impossible. C'est le syndrome ... qui consiste a dire une chose, en promettant par ailleurs de faire le contraire."73 The UFA, for its own part, showed an increased determination to go its own way from the wider Canadian farm concern. Over the time of the Meech controversy the Quebec farmers' organization severed several of its ties with farm organizations in the rest of Canada. Ostensibly the UFA withdrew from the DFC because of financial problems. True or not, this disengagement signalled the widening gap between the two organizations on a number of key issues. Whereas the DFC showed a considerable amount of pragmatism in dealing with the Mulroney government (for example on the question of import controls on ice-cream and yogurt), the UFA persisted in its tough, uncompromising stance.

2.O3

The Politics of Accommodation in Canada

Although the UFA remained formally under the umbrella of the Canadian Federation of Agriculture, by the end of 1990, "il n'y a pratiquement aucune communication entre les dirigeants de I'UPA et de la FCA."74

By way of reinforcing this impression of separation, the UFA'S tactical and strategical agenda diverged considerably from that of the farm organizations in the rest of Canada. Internationally the UFA engaged in a very different sort of coalition-building activity, designed to create a coalition of resisters on an international rather than a pan-Canadian basis. In building up its international alliance the UFA joined with EC, Japanese, and other import-vulnerable farmers in a show of agrarian solidarity at the December 1990 GATT meetings. To downplay the panCanadian connection, by way of contrast, the Quebec organization chose not to join with the Ontario Federation of Agriculture in a collective lobbying effort "to save marketing boards" in late 1991.75 Domestically the UFA'S enthusiasm for Quebec sovereignty became more pronounced in the aftermath of the Meech failure. In a brief to the Belanger-Campeau commission on the future of Quebec, the instrument set up by the Bourassa government to serve as an "estates general" to consult the Quebec people on the full range of future constitutional options, the UFA reported that 99.2 percent of the organization's farm union delegates and yz percent of its general membership supported independence.76 In response to this marked shift in the politics of agriculture in Quebec, a backlash developed in western Canada. The UFA'S activities in the international arena, designed to stymie the conclusion of a GATT deal, removed any remaining vestiges of unity between the export-oriented and domestically oriented agricultural producers. As Harvey McEwen, the president of the Western Canadian Wheat Growers Association, stated in the aftermath of the UFA'S decision to break ranks with Canadian farmers by marching with the enemy in Brussels: "When someone goes out and supports the very same people who are putting you out of business, I have a very hard time considering someone like that an ally."77 Beyond these specific complaints the spectre of Quebec sovereignty raised a number of divisive issues about the operation of programs shared between two distinct states. The western Canadian farm concern also had serious reservations about how far the federal government should go in the GATT negotiations to accommodate Quebec. In personnel terms the prairie farmers watched with considerable apprehension as Blais's profile rose in the Mulroney government as the defender of Quebec's agricultural interests. In a calculated move to deflect the criticism of the nationalist forces in Quebec, Blais visited Geneva in July 1990 to proclaim the fed-

2.O4

In Between Countries

eral government's determination to "get Article XI ... working ... to clarify it, to reinforce it and to use it more effectively."78 In taking this public stance Blais not only signalled Canada's growing detachment from the Cairns Group, but also its willingness to seek out new allies of a very different type. After a meeting with the French agriculture minister, Blais exposed the extent of this tilt in Canadian thinking by suggesting the possibility of co-operation between Ottawa and Paris: "Mr. Nallet is very understanding of the Canadian needs ... [and because of his] important position with the European Community ... can perhaps aid the Canadian position when it is discussed, because of that understanding."79 More immediately, western agricultural producers questioned whether it was their interests that were to be sacrificed in the making of a GATT deal. At one level concern developed about the nature of the Canadian decision-making process. To be sure francophones - including Germain Denis, head of the MTN team at the assistant deputy minister (ADM) level, and Jean-Jacques Noreau, deputy minister of Agriculture Canada - assumed greater importance in the bureaucratic constellation as the MTN negotiations went on. Denis was used, very convincingly it might be added, as a major spokesperson for the federal perspective in Quebec. After a number of public attacks by Proulx and Loubier, an economist and directeur-adjoint a la section recherches et politiques in the UFA, that "Ottawa ne defend pas Pagriculture du Quebec au GATT,"80 an article by Denis was published in most of the French- language newspapers in rebuttal.81 At another level concerns were raised about the type of concessions to be made in the GATT negotiations. With Quebec raising the ante on Article XI and the system of supply management, grain farmers feared (with some justification) that their support programs might be targeted for cuts. Particularly susceptible from this standpoint were the payments made under the Western Grains Stabilization Act and the other income safety-net programs that fell under the non-green category as stipulated by Aart de Zeeuw. THE UNRAVELLING OF THE PROCESS

So long as the overall GATT negotiating process was immobilized, much of this tension over agricultural reform had a hypothetical flavour to it. While the United States and the EC refused to come together, Canada could continue to tread water in its own policy deliberations in the knowledge that serious domestic reform would be extremely unlikely without international trade reform. What brought the controversy to a head in late 1991 and early 1992 was the feasibility of the Dunkel report (with its emphasis on the conversion of quotas into tariffs sub-

205 The Politics of Accommodation in Canada

ject to future reductions),8z which enabled a compromise to be established that would break the deadlock in the farm conflict. By providing the way towards a negotiated settlement in the MTN, the Dunkel proposals made the policy dilemma at the domestic Canadian level more acute. The status quo was a lose-lose option for Canada. As indicated by the GATT panel decision on yogurt and ice-cream, Article XI as it stood could not ensure continuity in the supply marketing system. Things were not going to stay exactly the same, even if Canada was able to preserve this particular form of defence for its dairy, egg, and poultry industries. Nor was the status quo a viable proposition from the perspective of the export-oriented agricultural industries. A GATT deal without major advances on export subsidies and market access would not be a satisfactory outcome for the grain and red meat industries. At the same time Canada had little or no hope of forging a winning coalition in its bid to strengthen and clarify Article XI. Given the opposition of the United States and the Cairns Group to this action, Canada could not hope to influence the outcome in this fashion. All it could hope to do was to buy time. Once the EC moved to support tariffication under the Blair House accord, this loose coalition of resisters quickly unravelled. As the EC (including France) tried to work out the precise details of its separate deal with the United States, any illusion that it was sympathetic to the Canadian case on Article XI was dashed. Arguing that there was no longer any room for exclusion, the EC refused to negotiate on other questions such as market access until Canada accepted tariffication as part of the final package. The only means of escape for Canada was to take the same route some of the other resisters had already taken, namely to work out some sort of deal prior to the final deadline of the GATT Round, whereby it received some sort of concession in terms of the implementation of the reform process. Or it could, as one Canadian state official put it, make a nuanced judgment on how, when it came to the final minutes of the negotiation, to jump.83 Switzerland was the first to defect, having made it known by March 1992 that it was willing to go along with tariffication so long as provision was made for an extended transition period. Japan, characteristically, waited until the last moment to move, but also agreed to go along with the tarrification process on rice in exchange for special transitional arrangements. Under this political fix Japan received a six-year delay on tariffication in return for a minimum access commitment of 4 percent to 8 percent. Canadian state officials had long contemplated action along these lines. Recognizing that Canada had become isolated from its natural allies on the agricultural issue, and holding out little hope for a victo-

^o6

In Between Countries

ry through other means, the notion of a tactical retreat had been floated as early as the beginning of 1992. Detailed stories in the trade papers reported that Canada was contemplating the idea of replacing import quotas with a high level of tariffs (as high as 292. percent on imported butter).84 Underlining the necessity for some sort of fall-back approach, Canada's chief GATT negotiator told a radio audience that it was the government's responsibility "to look at all the options." Rather than ignoring this solution, he added, Ottawa owed it "to the private sector to make [a] good analysis of the impact [of tariffication] and how the supply management could work with that."85 Denis added, in testimony before the House of Commons Standing Agriculture Committee, that: "The one thing we obviously have to guard against is getting to the end of the day with no options and not having done the homework. That's the conundrum negotiators have."86 What remained lacking was the political will to move. The advocates in the cabinet of economic adjustment (most notably Wilson, who by mid-1991 had moved over to the international trade portfolio in addition to his appointment as minister for industry, science, and technology) were persistent in their calls for reform. But after Mazankowski moved over to the Finance Department, with Bill McKnight taking over Agriculture Canada, there was not one minister who had the clout and/or acumen to fashion a breakthrough of this magnitude. Against the backdrop of the fast-approaching federal election in 1993 and a possible Quebec referendum on sovereignty, the Mulroney government remained the prisoner of politics, dissuaded by its sensitivity to the attendant political fall-out from taking any steps to unilaterally impose a deal. Behind this impasse lay the government's inability to obtain the consent of afflicted domestic groups to make accommodations to international life.87 The supply-managed producers refused to take on any responsibility in helping the government find its way out of the dilemma. If the government was going to move they wanted no part in the process. The societal response to any notion of a retreat on Article XI was a campaign of non-co-operation, whereby the representatives of the supply management sector refused to work with the government via the SAGIT and other bodies. The farmers supplemented these efforts by more traditional modes of protest, namely, mass demonstrations and lobbying at home and abroad. Confronted by this set of political constraints, Canada's retreat from the Cairns Group assumed a logic of its own. Faced with the need to continue its search for balance at home, the Mulroney government opted to play to its different domestic audiences right to the end rather than focus on the details of an international agreement. The priority of the government was still to convince the polarized farm concern that

2.O7 The Politics of Accommodation in Canada

their interests were being taken care of, not to win the good fight to restore order in the international trading system. As a leading Canadian newspaper sarcastically described the situation, "the problem with federal politics [in Canada] is that we too often elevate regional rivalries to an art form, while making a muddle of our foreign agenda."88 Only when it no longer had the ability to delay did Canada finally back down. Hemmed in without a tenable line of retreat, all Canada could do was scramble around in an attempt to salvage as much as it could, by way of trade-offs on costs and benefits, from a deal imposed on it by others.

8 Commitment and Convenience

An examination of Canadian and Australian approaches to agricultural trade remains of considerable interest for students of international political economy. In common with the widely accepted notion of the "in between" place of these two countries in the global arena, the starting-point for this examination has been a middle power framework. Despite its lack of analytical conciseness this conceptual tool has considerable value in shedding light on how a selective (and self-selecting) group of secondary powers has attempted to contribute to the maintenance and restoration of the international trading order. By its identification of countries other than those at the leadership level as sources of international activity, this perspective offers some redress from the top-down, apex-centric perspective characteristic of the IPE mainstream literature. It also provides a framework that allows a dynamic reading of the behaviour of non-hegemons or non-leaders. The search for stability and orderliness in so much middle power diplomacy is informed by an evolving process of what may be termed first, or archetypal, followership. The nature of this followership rests squarely on the relationship between the middle power and the leader. A consistent theme throughout has been the establishment of a set of rules, which are intended to be binding upon the big as well as the small. In Robert Cox's words, this search constitutes the realpolitik of the middle power.1 To achieve this goal the role of follower has undergone an ongoing evolution in terms of form. As the performance of the United States as manager of the international trade system has mutated, so have the functions taken on by the middle powers. This evolu-

2.O9

Commitment and Convenience

tion has contributed in turn to an extension in their relative freedom of expression. As Richard Higgott suggests, middle powers must be seen as "agents, as well as subjects, of history, albeit with different capacities and interests to the hegemonic state" in the global order. That is to say these actors not only "have their own interests and histories" but "have a role to play in shaping wider discourse and process."2 This movement over time is evident in the agricultural trade issuearea. Under conditions of more pronounced American dominance in the 19505 and 19608, the followership exhibited by Canada and Australia remained restricted within the parameters imposed by the United States over the system. Largely reactive in nature this behaviour was influenced more by structure than by agency. Yet even in this period the Canadian and Australian followership dynamic cannot be interpreted as simply a passive construct of American power. As in other spheres the Canadian and Australian approaches developed more out of a sense of loyalty and a desire to adhere to the rules of the game established for the post-194 5 agricultural trade order than from a need simply to be fellow travellers with the United States. Making use of the degree of autonomy they enjoyed within the order, Canada and Australia worked hard both to extend the norms and values of that order and to engender more consistency in the United States's management approach. As the pattern and quality of American leadership over the IPE was transformed in the 19705, 19808, and 19908, Canadian and Australian followership in the agricultural trade arena was put to a different set of tests. The diminution in the American will and/or capacity to manage this issue-area in a benign or creative fashion, combined with the ascendancy of countries with far less allegiance to the post-194 5 order, increased Canada's and Australia's feelings of vulnerability and uncertainty. Being in the middle took on a new and deleterious meaning. In the 19505 and 19605 being a middle power was associated with "go between" diplomacy intent on constraining specific forms of action on the part of the United States and the EC. With the escalation of trade tensions in the 19808 and 19908, being in the middle also came to mean being caught in the economic crossfire between the policies of the greats. Against this background the pursuit of stability in international agricultural trade was given a new sense of urgency. Indeed the defence of order indicated a sensible conservatism based on the fear of mounting dangers. As John Crosbie, from his vantage point as trade minister, warned, Canada risked being "smashed" if a new set of rules was not established: "Canada is a middle power and the [tariff negotiations] are of tremendous importance to Canada ... We need the rule of law in trade affairs and we have a lot at stake in this round."3

zio In Between Countries

The experience of the Cairns Group shows both the opportunities and the limitations of middle powers in redefining their followership and recalibrating a new course of action in their diplomacy. The changing conditions experienced in the overall international system allowed some possibilities for greater freedom of action in individual issueareas. The transformation of the security agenda in particular contributed to broadening the room for discretionary activity in foreign policy on a selective basis. No longer restricted by the disciplines of the Cold War to the role of loyalist or at times the conscience of the system, the traditional followers could endeavour to fill the gaps in the U.S. management over the international economy. As demonstrated in the activities of the Cairns Group, this diplomacy focused on specialized, mission-oriented work in the way of entrepreneurial and technical leadership. More generally speaking these coalition- and confidence-building activities were an attempt to compensate for the legitimacy deficit created in the multilateral arena by the shift towards hegemonic defection. The influence of the Cairns Group was felt in a number of ways during the Uruguay Round. The Cairns Group must be credited with getting agriculture on the negotiating table and keeping it there. By its intervention as a third force in this issue-area at the Punta del Este meeting, the coalition helped launch the Round. Moreover by continuing to engage both the United States and the EC throughout the course of the negotiations, it made sure a deal would emerge when at long last the time was ripe. Because of the Australian and Canadian tradition of followership to the United States, the coalition could not be considered an "unbiased" mediator in these talks.4 Yet by acting as both a critic of and a moderating influence on the U.S., the Cairns Group ensured that the end result would be decided through a negotiated settlement. The Cairns Group was also instrumental in widening and deepening the multilateral context of the agricultural trade issue in the Uruguay Round. In terms of its own composition, the fundamental success of the Cairns Group was to constructively integrate its developing country members into the negotiations. With its heterogeneous membership, this coalition epitomized the enhanced ability of issue-specific initiatives to transcend the cleavages and boundaries in the international system built up over the post-1945 era. In terms of outcome this assembly of secondary nations not only forced the greats to deal with the issue of agriculture directly but to do so in a manner that distributed the benefits of the settlement beyond the United States and the EC. Thirdly the Cairns Group had a profound effect on the discourse of the agricultural trade negotiations. Through its agenda-setting and policy-promotion activities,5 the group was able to influence both the

2.11 Commitment and Convenience

declaratory language and the operational proposals built into the GATT deal. Underpinning this achievement was the high degree of attention the Cairns Group gave to information gathering and the development of technical and specialized expertise on the detail and formula of the agricultural negotiations.6 It is easy to dismiss this sort of work as marginal to the core negotiating activity; but in this, as in other areas of endeavour, margins count in a profitable manner. These achievements do not mean that the Cairns Group can be considered a complete triumph. From a systemic perspective the impact of this third force on the final outcome of the negotiations was not equivalent to the collective market share of its members. Its skill and muscle were enough to make the Cairns Group a force to be taken seriously in terms of procedure,7 especially in the run-up to the mid-term forum. In terms of actual results, however, a power-based interpretation proved a more accurate predictor of events. In the denouement of the Uruguay Round, i.e., from November 1992 when the United States and the EC struck a bilateral deal in the form of the Blair House Accord to the final GATT Draft Final Act on agriculture, the Cairns Group was restricted to the edges of the process. The group had the staying power and resources to maintain its monitoring activities, most notably via Senator Peter Cook's tour of European capitals in October 1993 in the company of the Thai deputy prime minister and the Argentine minister of trade. However it did not have either the bargaining leverage or the ability to shape the negotiated outcome through extended forms of inducements or rewards of its own.8 Although remaining a prolific source of ideas and an important stakeholder in the process, the Cairns Group was effectively presented with the final package on a take-it-orleave-it basis. From a cross-national perspective the Cairns Group experience reveals the difficulties in maintaining a coherent approach even in a single-issue coalition. An examination of the coalition allows close scrutiny of the "interaction effect"9 between the two countries long taken to be the exemplar middle powers within the international system. The parallel nature of the diplomatic activities of Canada and Australia during the longer span of the post-194 5 agricultural trade order meant that an analysis of their behaviour was restricted to identifying their similarities and differences along a stylized matrix, indicating degrees of intensity and relations to other actors. Their joint activity in the Cairns Group, on the other hand, allowed an extension of this mode of analysis to encompass both the impact of changes in the international system on diplomatic behaviour and the influence of the two countries' internal characteristics as individual national contexts of policy making.

2.12

In Between Countries

Central to an understanding of Canadian and Australian approaches to the agricultural trade issue-area is an appreciation of how the diplomatic behaviour of the two countries meshes and diverges. The first followership of the two countries has historically been marked by a shared faith in the benefits of multilateralism and a generalized disposition towards a rules-based approach to this domain of international relations. The differences that existed between them were largely stylistic: whereas Canadian diplomacy had been low-key and routine, the Australian variety featured a forceful and heroic quality. As the pattern of followership has been altered in the 19805 and 19905, the trajectories of these stylistic differences converged. In one of the underlying ironies of the Cairns Group, many of the entrepreneurial and technical methods utilized by Australia in helping to build a coalition were similar to those characteristically exhibited by Canada in a variety of functional activities. Sensitized to the futility of out-in-front initiatives, with paramountcy attached to points of principle and righteous indignation, Australia exhibited an augmented willingness in the Cairns Group to entertain procedural compromises and trade-offs to gain broader long-term benefits on the agricultural trade issue. No longer of the opinion that it could succeed by attempting to trample over the practitioners of illiberal trade practices, Australia showed a new willingness to "tap dance" to get results.10 Instead of allowing Canada and Australia to more easily act in concert, this evolution had, in the setting of the Cairns Group, the opposite effect. Bluntly put the harmonization of their modes of operation, together with the equalization of their diplomatic skill levels, had the effect of rekindling Canada and Australia's long-standing rivalry for status in the international arena. Having gained control of the Cairns Group, Australia deployed its new-found management and bureaucratic expertise to consolidate its leadership position over the coalition. Because of Australia's refusal to, among other things, have the chair of the group rotated among its members, Canada felt manipulated by Australia's domination over the coalition. Diplomatic familiarity, as the two countries rubbed up against each other on the agricultural trade issue, had the effect of stimulating new irritations as they rubbed each other the wrong way. Still the central impediment to Canada and Australia acting in concert was not their differences in style but differences in commitment to substantive reform of the agricultural trade system. A tempering of Australia's diplomatic intensity, far from signifying any reduction in its desire for reform through GATT, signalled Australia's conversion from a critical to a results orientation. As in the past the stakes for Australia in getting a good outcome from the GATT on agriculture were very

hhhh

high. What was different about Australia's performance in the Uruguay Round was that its foreign and domestic economic strategies were now in sync with each other. The Cairns Group initiative, unlike the diplomatic efforts of John McEwen and Malcolm Fraser, was used in a complementary fashion in the service of Australia's internal goals. The episode provides a classic illustration of the "conditions under which ... enterprizing [statesmen] ... employ strategies that are double edged, exploiting domestic politics and international politics simultaneously."11 The Canadian approach to agricultural trade was much more convoluted. Canada's ambiguous behaviour towards the Cairns Group cannot be seen simply as the mirror image of Australia's commitment. Admittedly such an interpretation is tempting given the tenor in the recent critical literature on the conduct of Canadian foreign policy.12 It must be said, though, that these critiques were offset, at least in the earlier years of the Brian Mulroney era, by an alternative and more positive view of Canada's middle power activism.13 The impression one gets is that Canada's behaviour on agricultural trade in the Uruguay Round did not feature an inexorable retreat from constructive internationalism. On the contrary Canada's diplomacy displayed a double thrust. The first thrust featured a moderate degree of commitment to the Cairns Group coalition. The second thrust signalled a marked shift from this commitment to a convenient stance, highlighted by the growing gap between Canada's aspirations in foreign economic strategy and its operational policy in terms of domestic agriculture. From an international perspective Canada had a mix of incentives to become engaged in co-operative international collective action for the purpose of reforming agricultural trade. A large proportion of the Canadian agricultural sector was, to invoke Helen Milner's description, "deeply tied to the international economy."14 The grain, oilseeds, and (to a lesser extent) red meat industries faced exposure to the vicissitudes in the IPE similar to that experienced by the Australian producers. The Mulroney government had solid diplomatic motivations to become involved in the coalition. Its multilateral focus allowed Canadian behaviour in this issue-area to be differentiated from the bilateralism of the FTA negotiations; while eager to win a special deal with the Americans because of the high level of integration of Canada's economy with the United States, the Mulroney government knew the pitfalls of substantiating the impression of Canada being left alone with the United States on the North American continent. The maintenance of its reputation for team playing remained crucial in making this distinction. What pulled Canada back from its commitment to the Cairns Group was not so much that it lost faith in internationalism per se, but that

214 In Between Countries

the political costs of this commitment were too onerous to bear. Whereas Australia's strategy in dealing with its domestic rural crisis expanded to become part of a deliberate response to the logic of the international economy, Canada's contracted to become a response to domestic politics in a narrower sense.15 Canadian agricultural trade diplomacy fits precisely with Michael Aho's dictum that: "Trade negotiations are as much domestic negotiations as they are negotiations among countries."16 As such the pattern of Canadian behaviour cannot be traced only against the shadow of the international constraints imposed by its position in the IPE. The nuances contained in the Canadian approach to agricultural trade were an expression of Canada's inability to act with a singularity of purpose due to divisions among societal forces and the softness of the Canadian state. So long as the Cairns Group was outward looking, Canadian commitment remained in place. In terms of form, the division of labour within the coalition allowed Canada (and Prime Minister Mulroney) to take full advantage of its membership within the G-y. The emphasis on Canada delivering the Cairns Group message to the greats through this mechanism played into Canada's broader foreign relations goals. Consistent with the behaviour of past Canadian administrations, the Mulroney government was careful to distinguish between its willingness to join in coalition building and its desire and capacity to project Canada's distinct national needs and interests through autonomous diplomatic activity. Although Canada still had an instinctive desire to participate in classic middle power diplomacy, its willingness to act as a member of this sort of team was conditioned by the institutionalized position it was accorded as an insider in the exclusive setting of the summit forum. If it was uncomfortable with many of the collective aims of the Cairns coalition, Canada was not without the privileges of membership in the exclusive club of the 0-7. In terms of scale Canada continued to favour a minimalist approach on reform. While Australia pressed for a comprehensive package of measures, Canada targeted selective areas, such as export subsidies and market access, which spread the burden of adjustment on to other actors. Canada's convenient variant of middle power diplomacy came to the fore with the Cairns Group pressure to extend the focus of reforms in the GATT negotiations to domestic agricultural policies. The claims by Canada to international leadership waned as domestic politics became elevated as the source and target of policies. Rather than persisting as a prime mover for "necessary" reform in an offensive mode, Canada became a cautious advocate for domestic adjustment when possible. The Mulroney government was prepared to move in some areas of agricultural reform, albeit in a slow and piecemeal fash-

2i5

Commitment and Convenience

ion; but it was not prepared to give unconditional support, through a collective approach in the international arena, to initiatives that necessitated action at home.17 This convenient approach hinged on a host of interconnected domestic political factors. The preference for ambiguity in the Canadian strategy fitted in with the personal style of Prime Minister Mulroney. The significance of leadership in mediating cross-national differences becomes prominent on the issue of agricultural trade. On the basis of this line of inquiry, Mulroney's process-oriented temperament differs markedly from the policy-driven concerns of Bob Hawke and Paul Keating. Mulroney was also more sensitive than his Australian counterparts to the issue of allocating rewards and costs to domestic interests. Although highly skilled in the art of balancing domestic interests Mulroney was unable to choose between outcomes, which ended up raising the political profile of the agricultural trade issue. Having missed the opportunity to move out ahead, by either incorporating domestic agricultural reform into a comprehensive strategy or working out a compensation package to ease the process of adjustment, Canadian leadership showed an increasing awkwardness as the agricultural trade issue dragged on through the GATT negotiations. The personality of the Canadian prime minister and the tactical choice of crisis avoidance and manipulation through side-benefits are salient in explaining the Canadian defensive approach. But, drawing on the work of Stephan Haggard and Robert Kaufman, "it is also clear that decision makers operate in a matrix of international, social, and institutional constraints."18 The Canadian state remained dominated by its softness. More variegated in its organizational structures than Australia, Canada was not able to act decisively on prescriptions for agricultural trade. Far from displaying any administrative unity in the choices to be made and implemented, the decision-making process in Canada was marked by intense disagreement and competition within and between departments. Although itself hampered by internal divisions over the priority to be placed on the FTA and the GATT negotiations and the pace of reform, the Department of External Affairs and International Trade, with the Finance Department, tried to act as the "change team" behind structural adjustment.19 The clientele-oriented elements of the bureaucracy, located most firmly in Agriculture Canada, conversely became strong forces of resistance to any dramatic challenge to the status quo.20 The internal softness displayed on the agricultural trade issue was reinforced by the wider political and institutional milieu. Politically agriculture continued to matter in Canada, but in a bifurcated fashion. While the export-dependent elements of Canadian agriculture were a

2,16 In Between Countries

strong constituency in favour of reform (although there was some debate, among societal groups, about the relative benefits of the FTA and the GATT negotiations), the domestic-oriented producers strongly opposed this course of action. As attested to by the historical analysis of Canadian agricultural policy, agriculture has long been an arena of intense conflict between these dual forces. A system fitting (and taking advantage of) John Ruggie's concept of embedded liberalism,11 however, allowed these tensions to be managed for the bulk of this period. While promoting trade in the sectors in which Canada enjoyed some comparative advantage, this compromise system enabled the Canadian state to cushion the impact of international trade in the sectors where Canada suffered from competitive weakness. If often messy (and the subject of increasing debate and controversy from the 19605 on), this implicit bargain allowed a distinction and a separation between Canada's interests in the international trading system and its need for domestic welfare. Continuing legitimacy was provided for this system, moreover, by the high level of tolerance to picking and choosing selected forms of agricultural intervention. Most significantly, Canada's system of supply management had made use of the space in the system provided by Article XI. The dilemma that the Mulroney government faced was that the rising stakes (and risks) in the Uruguay Round trade negotiations moved to pry this system open; for the accelerated moves in the IPE were designed to do in the 19808 and 19908 what the post-1945 architecture had been unable to achieve, namely, a move towards "progressive liberalization internationally" without the allowance and even facilitation of "governmental intervention in the domestic economy."22 State behaviour and policy outcomes in Canada ultimately favoured a defensive approach due less to an imbalance between the power resources of the export-oriented and import-sensitive industries and societal groups than to contextual factors relating to regional and constitutional dynamics. For all the discontinuity experienced in the IPE the Mulroney government tried to deal with the changing agenda in agricultural trade through an extension - often in an exaggerated form - of the "federal style" of Canadian foreign policy-making, which dated back to the 19505 and 19608. When confronted with serious regionally based differences during that earlier period, the federal government adopted an approach of coping with rather than resolving differences; although societal groups were not mobilized en masse, neither were they ignored. In the context of the 19805 and 19905 this mode of operation was no longer feasible. The political and economic stakes had simply become too high as the separation between the domestic and the international broke down in agricultural policy. The challenges

217 Commitment and Convenience

of international competitiveness made the struggle over the form and scope of adjustment an increasingly fundamental and bitter one, with a clearer delineation between winners and losers. As Richard Simeon explains, the differentiated effects of these forces on the Canadian economy "exacerbate regional disparities while at the same time constraining the ability of governments in Canada to address them."23 On top of all these other factors there were the special circumstances of Canada's constitutional imbroglio. Here the soft condition of the Canadian state threatened to stretch to the point of dissolving. Not wanting to risk further volatility in Quebec-Rest of Canada relations, the Mulroney government took extreme care to ensure that it was not seen as dictating either terms to regional interests on the international trade agenda or rearrangement of the relative balance of power between the contending forces. A tell-tale sign of how Canada's economic and diplomatic strategy were subordinated to political tactics on agricultural trade was the routing of all the important decisions in this issue-area in the later stages of the GATT negotiations through the central agencies of the Prime Minister's Office and the Privy Council Office. The decisive impact of the constitutional issue in this manner inevitably stymied the government's ability to perform effectively in the concluding phase of the Uruguay Round. Without an analogous set of domestic constraints centred on national unity, Australia could never understand Canada's predicament. By shifting so far towards a convenient stance, the Mulroney government reduced the capacity of Canada to influence the outcome of the wider trade agenda, not only directly in terms of the GATT negotiations but indirectly with respect to the impact of the FTA. This work does not support the conclusion that the move by the Mulroney government towards an institutionalized form of bilateralism with the United States in itself diminished Canada's room for manoeuvre on the international economic agenda. If anything, the sensitivity generated by the agricultural issue within the FTA context had the opposite effect, acting as a stimulus for more autonomous activity in multilateral trade diplomacy.2-4 What complicated the situation was the poor tactics of the Mulroney government in trying to limit the requirement for domestic reform in both the FTA and the GATT. A tactical approach of this type only worked as long as the GATT negotiations were used to minimize the impact of the FTA. The longer Canada waited to move on the GATT, however, the less likely this result became. As the GATT negotiations began to wind down, Canadian state officials had set considerable store in their ability to work out a fall-back solution with the United States to take the sting out of a GATT result based on tariffication. The most common scenario held out was the

T

one in which Canada would receive some credit for its broader role in the international trading system (including the original proposal for the World Trade Organization) in order to achieve an understanding with the Americans. This understanding would be based on some sort of package whereby tariff equivalents would be maintained on imports originating in the United States on supply-managed products (with some compensation in turn for the U.S. products hitherto protected under Section 2.2. of the U.S. Agricultural Adjustment Act). However the longer and more strenuously Canada (or more precisely the Canadian negotiators under instructions from their political masters) argued for exemption from tariffication in the GATT negotiations, the less this seemed possible. Indeed Canada paid a considerable cost for its delay. As its isolation became acute in the last stages of the negotiations, Canada lost most of its credit for promoting reform on issues such as export subsidies and access to third-country markets, along with its willingness to tariffy all Non-Tariff Barriers (NTBS) except under Article XI. Notwithstanding its solid record of support for the United States (and its concessions in other forms), Canada was increasingly depicted as a country whose recalcitrant stance on agriculture had the potential of killing the Uruguay Round. These attacks not only damaged Canada's credibility and effectiveness in the multilateral arena, but they made Canada prone to attacks in the bilateral arena. Canada's evasiveness provided the United States with an excuse to accelerate its campaign of aggressive unilateralism against Canada's agricultural practices.15 Going on the offensive against Canada as an "unfair trader," the United States stepped up its pressure against the Canadian Wheat Board's pricing practices and transportation subsidies. At the core of the Canada-United States tensions, nevertheless, remains the question of market penetration by supply-managed products. Rejecting the Canadian assumption that the FTA and the GATT were entirely separate, with the supply-managed sectors exempt from the FTA regardless of the issue of tariffication within the GATT, the United States argued that the two sets of negotiations were intertwined. In doing so they attempted to trap the Canadian supply management system between two types of pressure for forced liberalization. On the one hand the U.S. turned up the pressure for tariffication through the GATT negotiations; on the other hand, they pushed for the phasing out of the tariffs through the FTA and NAFTA. Canada continues to have certain advantages in handling these types of bilateral pressures, not the least of which is its concentration of attention on these issue-specific matters.*6 Still Canada's shift to convenience on the agricultural trade issue in the later Mulroney years left a variety of detrimental legacies. Largely by default Canada's oppor-

219

Commitment and Convenience

tunistic and expedient performance on this issue has eroded its reputation as a committed multilateralist and economic liberalizer. Activities aimed at system stabilization had been overwhelmed by status seeking and the desire to escape responsibility. In economic terms Canada's inbetween nature took on a very different hue. An imposed multilateral deal without special national terms or conditions, combined with the appearance of Canada being more entrapped within a bilateral trade structure, did not meet Canadian expectations in the agricultural trade issue-area. Not only did the conclusion of the GATT dash the hopes for an agreement balancing the interests of the outward- and inward-looking domestic agricultural producers, but an air of uncertainty hung over the policy agenda. Interpretations differed about whether the GATT result necessarily took precedence over the FTA, i.e., whether Canada-United States trade relations would continue to be governed by the GATT. A number of pivotal issues about the future of Canadian agriculture rest on the outcome of this set of questions. One of these was whether Canada's imposition of tariffs on U.S. imports without American agreement was legally consistent with the FTA and/or NAFTA; another was whether the United States was prepared to launch a case under the dispute settlement mechanism of the FTA to find out. For Australia only the delivery of a maximalist agreement in the GATT agricultural trade negotiations constituted a successful outcome. By this elevated criterion the Cairns Group activities in the Uruguay Round proved a disappointment. Australia and its coalition partners demonstrated their diplomatic skills and staying power in this single issue-area. They had also influenced the procedure of the negotiations in a variety of ways. Yet this activity did not translate into the big result in which Australia had set such great store. The deal (or more precisely, the set of deals) worked out by the United States and the EC was a far cry from what Australia had worked for. The Blair House Accord of November 1992 signified a marked departure from the earlier Australian demands, calling for reducing export subsidy expenditure by 3 6 percent over six years, the export subsidy values by 21 percent, and the level of internal agricultural support by 20 percent. The successful campaign by France to further dilute the Blair House Accord made matters worse. As Keating informed President Bill Clinton at their meeting in September 1993, for Australia the Blair House Accord was the final bottom line: "a minimum set of standards, a set of minima agreed beyond which, we believe, we should not go."27 From the Australian perspective, therefore, the changes in the accord in the period up to December 1993 represented a compromise on the compromise in the establishment of fair rules for trade on agriculture. If a disappointment in terms of the immediate economic results, the

-LIO In Between Countries

Cairns Group experience should not be judged a failure in terms of other criteria. By enhancing Australia's profile and image the experience contributed enormously to the international validation strategy pursued by the Hawke and Keating governments. It also meshed closely with the dynamic of "social learning,"18 which so much influenced the reform agenda in Australia during the 19805 and 19905. Instead of seeing change largely in negative terms - as a process to be fought against - developments in the IPE were regarded by the Australian government as positive stimulants towards a necessary transforming process. From this perspective the Cairns Group can be viewed as a liberating experience, which allowed Australia to free itself from many of the shibboleths of the past and to recalibrate its overall foreign economic strategy. At the top of the list of these accepted wisdoms was Australia's role as follower to the United States in the international system. As suggested throughout this work Australia's role as first follower was central to Australian behaviour in agricultural trade diplomacy during the post-1945 era. What Australia, along with Canada, wanted was a form of responsible and benign leadership from the United States, which took into account the interests of the junior partners in the international trade system. What it got was increasing inconsistency and poor management in the construct of this leadership function. By the 19805 and 19908, when direction was deemed most crucial to bring about reform in the IPE, Australia's frustrations over U.S. leadership practices reached such a level that it was prepared to take on some of the responsibility of leadership itself. One scenario for Australia, faced with the difficulty of the Uruguay Round, was to revert to older forms of behaviour and seek security through a closer form of followership. Much of the bipartisanship that had emerged in foreign economic policy making in Australia in the 19805 broke down on this issue. The Liberal/National Party leaders, seeking a quick way out of the GATT morass, pinned their hopes in the early 19908 on working out some form of closer followership with the United States, preferably through a new institutional arrangement allowing Australia to join NAFTA. Prime Minister Keating, for his part, entertained the notions not only of breaking away from the vestiges of the constitutional connection with Britain but of shifting Australia's economic followership from the United States to Japan. During his official visit to Japan in September 1992, Keating dramatically raised the possibility that if Australia was forced to make a choice between Japan and the United States over economic issues, it would choose Japan. Pronouncing that he would not enter into any trade pact that discriminated against Japan, Keating identified Australia's core inter-

2.2.1

Commitment and Convenience

ests as maintaining the most favourable environment for trade with Japan and region/9 An indication of the extent of Australia's diplomatic maturity in the 19905 is that this search for leadership did not distract attention from a flexible and multifaceted foreign economic strategy. Despite his claim that American economic policies such as the EEP were driving Australia into Japan's orbit, Keating did not do anything that might limit Australia's choices in the international arena. In the multilateral context he went out of his way to praise American leadership during the GATT negotiations in his first meeting with President Clinton, stating that "the Americans have been the largest, most burly sentry at the gate of free trade for the last seven years through the GATT round."30 In the regional context, in contradiction of his earlier criticism of the conservative opposition proposals along these lines, Keating mooted the possibility of Australia taking on a close association with the NAFTA countries. Although this stance was in part motivated by political expediency (namely, an unwillingness to embarrass his host as President Clinton was pressing to get NAFTA past Congress), it was also based on a desire to avoid introducing clear-cut gradations and choices in foreign economic policy. From this perspective, far from being mutually exclusive, NAFTA formed a natural fit with APEC as an overlay to a GATT agreement.31 While Australia's future lies primarily in an engagement with AsiaPacific, driven by a complex form of multilateral diplomacy centred on APEC, Keating made it clear that Australia did not want to be locked into any particular subregion. Australia's preference remained a nondiscriminatory form of transpacific regionalism that allowed it to hedge its bets. While Australia is likely to continue to try to advance an Australia-Japan special relationship, as well as to nudge Japan to provide leadership in the multilateral arena, an Asia-Pacific economy split into a Western hemisphere grouping and a western Pacific grouping based on Japan would present Australia with a problem rather than a solution.32- Australia continues to prefer a loose regional system on a panpacific basis, not a tighter form of Asian institutionalism. As Gareth Evans has emphasized about this sense of geographical inbetweenness, Australia's identity was with Asia-Pacific, not Asia: "there are always going to be some limitations, on the extent to which Australia is, or can be, part of Asia. Geographically - or geomorphologically - we are not so much in Asia, but alongside it. What we are unequivocally part of is the Asia-Pacific - embracing East Asia, Oceania, North America (and in some accounts at least, the Pacific coast of Latin America as well)."33 With this maturity has come a more instrumental assessment of the

2.2.Z

In Between Countries

world and Australia's position in it. No longer perceiving universalistic action in the way of trade reform as the deus ex machina, Australia has taken on greater responsibility for shaping its own economic destiny. The Keating government argued that only by taking on different political symbols and developing a diversified export culture could Australia fully come to terms with its long-standing feelings of insecurity. The implications of this transition for Australian agriculture are especially profound. While the protracted period of negotiation through the Uruguay Round has equated Australia's national interest with agricultural trade, the agri-centrism of the McEwenite tradition no longer holds. Just as the leadership and multilateralist fixations will continue to wane, agriculture's privileged position in Australian foreign economic strategy will also erode. While reaping benefits from the market-driven orientation of Australia's main game, the special claims of Australian agriculture will be increasingly subordinated to the multiple concerns of getting the economy right. Diplomatically this transition is reflected not only in the refusal of Australia to disrupt or block the GATT deal (notwithstanding considerable pressure by the Latin American countries to do so because of the inadequacy of the agricultural package) but also in its concentration on the mainframe issues that will affect Australia into the distant future.34 Economically it is showcased by the shift in Australian concerns from a preoccupation with securing a level playing-field in terms of competition to a broader-based agenda based on comprehensive structural change, innovation, value-adding, productivity improvements, and the extension of the economic base.35 This is not to say that Australia's process of transformation is complete. Australia's historical sense of solitude has been eased somewhat by the determination of the ALP governments from 1983 to 1996 to enmesh Australia within the wider Asia-Pacific region. The push towards solidifying Australia's relations with Asia-Pacific, nonetheless, remains a delicate exercise as the transition takes place between the ALP and the Liberal/National Coalition government. Internally the redefinition of the national identity has to be taken a number of stages further both in its economic and psychological dimensions. It is one thing for the Australian government, following the logic of the Garnaut Report and the Department of Foreign Affairs and Trade (DFAT) paper, to recognize that their future is in the AsiaPacific region; after all 60 percent of Australian merchandise exports go to Asia, with Japan the largest and ASEAN the second largest purchaser. It is quite another matter to get the support of the Australian public to match the level of potential trade flows. As Harry Gelber points out the danger is that the Australian diplomatic activity on Asia-

2.2.3

Commitment and Convenience

Pacific will race too far out ahead of both "public and political enthusiasm."36 The problem with selling the message at home, that Australia belongs in Asia-Pacific, will be exacerbated further if tangible economic benefits do not come up to expectations.37 Externally the key remains a constant upgrading of the validation strategy. The bottom line is that Australia needs the other countries in the region more than those countries need Australia. Therefore it has to be careful about letting its long-standing anxiety about being left outside regional arrangements become counter-productive to its sense of belonging in its neighbourhood. The most vivid illustration of this problem was Keating's response to Prime Minister Mahathir of Malaysia and the challenge of the East Asian Economic Caucus, during the summit conference of APEC leaders held in Seattle in November 1993. Keating's outburst about Mahathir's recalcitrance undermined an otherwise successful performance (designed to solidify American engagement in the regional community-building process and to defuse the human rights issue) by drawing criticism away from Malaysia for its non-participation and on to Australia for its insensitive diplomatic style. The result was to strengthen the hand of those forces that advocated an exclusively Asian conceptualization of regional development. Australia's domestic hardness continues to provide a form of compensation for the weakness of its structural position in the IPE. The combination of a political system that encourages a display of strong leadership on political issues (Keating tried to justify his behaviour towards Malaysia by reference to the rough-and-tumble of Australian political life)38 and a cohesive administrative structure, allowed the Australian state to mobilize societal interests. The sense of standing up for Australia against an external "other" (or more precisely, a set of others) facilitated an inclusive approach, in which interest groups and opinion leaders rallied behind a defined game plan that also targeted rigidities and distortions at the domestic level. The success of this strategy in the agricultural sector, internally as well as externally, was most marked in the start-up phase. By drawing the National Farmers' Federation, along with other societal actors, into the wider policy debate, the ALP was able to advance its agenda on structural adjustment a considerable way. In the consolidation stage,39 however, this process proved more fragile. Although not reversed the reform agenda was not fully sustained. To a considerable extent this slippage was a result of the ALP'S strategy simply running out of steam, against a background of internal organizational and ideological tensions.40 A contributing factor, nonetheless, was the inability of the Australian state to offer the farm interest substantive side payments in advance of an international result on agricultural reform. Until this

224

In Between Countries

sort of pay-off was produced, not only in the multilateral but the regional context, the obstacles in the way of the ALP building sustainable networks with the interest group organization were imposing. It therefore seems incontrovertible that the middle power perspective tells us a lot about the similarities in the diplomatic roles of Canada and Australia - namely their support for the international order, multilateralism, diplomatic initiatives, conflict reduction, and constraint on the greats. Yet as this case-study on agricultural trade reveals, notwithstanding all these similarities in their generalized mode of diplomatic behaviour and their convergence on diplomatic style, the two countries have diverged considerably in their specific policy preferences. When put to the test their common interests, connections, and practices in facilitating "orderly change in the world system"41 were not enough to allow them to work in harmony. The Cairns Group experience, instead of promoting unity, highlighted differences, and Canada and Australia went their separate ways. The contrast in the positions of the two countries in the international system has some relevance in explaining this divergence of followership. Whereas Australian diplomacy has been conditioned by Australia's loneliness, Canada has struggled with its propinquity to the United States. Still, to fully understand the considerable variation between the Canadian and Australian approaches to agricultural trade, a corrective must be made to the one-dimensional way of examining these middle powers. Middle power commitment remains on tap in both Canada and Australia, regardless of their shifting positions within the IPE. Although the projection of middle power activity is often triggered and/or constrained by exogenous factors, the question of whether this activity will be expressed in a committed form, or take on a convenient shape, depends not so much on international incentives as on the internal context of policy making. The flavour and quality of the Canadian and Australian middle power product, if not its effusion and impact, reflects the special blend of domestic factors found on an issue-specific basis.

Notes

CHAPTER ONE

1 Robert O. Keohane and Joseph S. Nye Jr, Power and Interdependence: World Politics in Transition (Boston: Little, Brown 1977). 2 For a recent review, see Andrew E Cooper, Richard A. Higgott, and Kim Richard Nossal, Relocating Middle Powers: Australia and Canada in an Evolving World Order (Vancouver: University of British Columbia Press 1993)3 Annette Baker Fox, "The Range of Choice for Middle Powers: Australia and Canada Compared," Australian Journal of Politics and History 26, no. 2 (1980): 193. 4 J.P. Schlegel, sj, "Patterns of Diplomacy: Canada and Australia in the Third World," Australian journal of Politics and History 30, no. i (1984): ii. 5 Paul Keal, ed., Ethics and Foreign Policy (Canberra: Allen and Unwin 1992), 10. 6 See Paul Painchaud, "Middlepowermanship as an Ideology," in J. King Gordon, ed., Canada's Role as a Middle Power (Toronto: Canadian Institute of International Affairs 1966). See also John W. Holmes, The Better Part of Valour: Essays on Canadian Diplomacy (Toronto: McClelland and Stewart 1970). 7 Robert O. Keohane, "'Lilliputians' Dilemmas: Small States in International Politics," International Organization 23, no. 2 (1969): 296. 8 Quoted in Bruce Thordarson, Trudeau and Foreign Policy: A Study in Decision-Making (Toronto: Oxford University Press 1972.), 69.

226 Notes to pages 4-8 9 Parliament of Canada, House of Commons, Debates, 9 February 1984, 12,12.. 10 North-South Institute, "The Wider World: Challenges for the Second Mulroney Mandate," Review '88 Outlook '89 (Ottawa: 1989) z. For a thorough analysis of the broader themes of change and continuity in Canadian foreign policy, see Kim Richard Nossal, The Politics of Canadian Foreign Policy (Scarborough: Prentice Hall 1989), 52. 11 H.V. Evatt, The United Nations, The Oliver Wendell Holmes Lectures 1947 (Cambridge, MA: Harvard University Press 1948). 12. Coral Bell, Dependent Ally: A Study In Australian Foreign Policy (Canberra: Allen & Unwin in association with the Department of International Relations, ANU 1994), 40. 13 Ibid. 14 See for example McEwen's speech, Parliament of the Commonwealth of Australia, House of Representatives, Debates, 2 June 1955, 1409. For a critical assessment of this concept, see H.W. Arndt, "Australia: Developed, Developing or Midway?" in H.W. Arndt, A Small Rich Industrial Country: Studies in Australian Development, Aid and Trade (Melbourne: F.W. Cheshire, 1968). 15 Representatives, Debates, 23 August 1973, 2.00. 16 E.G. Whitlam, "Australia: base or bridge?" (Evatt Memorial Lecture, Sydney University Fabian Society, Sydney, 1966). 17 Representatives, Debates, 24 March 1981. 18 Quoted in Leslie Murphy, "Support for Fraser View on Middle-Rank Voice," Canberra Times, 9 September 1980. 19 Gareth J. Evans and Bruce Grant, Australia's Foreign Relations: In the World of the 19905 (Carleton, Vic.: Melbourne University Press 1991). 2.0 Press Conference with Bill Hayden MP, at Parliament House, 15 March 1984, Backgrounder, no. 42.3, 2,1 March 1984. 21 John W. Holmes, "The United Nations in Perspective," Behind The Headlines 44, no. i (Toronto: Canadian Institute of International Affairs 1986): 1-24. 2.2. See for example Bernard Wood, The Middle Powers and the General Interest (Ottawa: North-South Institute 1988). 23 Evans and Grant, Australia's Foreign Relations, 32.2.. 24 Notes for a toast by Prime Minister Brian Mulroney, at a dinner in honour of the Prime Minister of Sweden, Mr Ingvar Carlsson, External Affairs and International Trade Canada, 25 June 1991. 25 Stephen Lewis, interviewed by Jim Wurst, "United Nations after the Gulf War: A Promise Betrayed," World Policy Journal 8, no. 3 (1991): 547. 26 See for example Blair Fraser, "Canada: Mediator or Busybody?" in Gordon, Canada's Role as a Middle Power; David Barnett, "Is It Time for Australia to Shut up?" Bulletin, 18 December 1990, 30.

227 Notes to pages 8-n 27 See Robert Cox, "Middlepowermanship, Japan, and the Future World Order," International Journal 44, no. 3 (1989): 826. See also, "Multilateralism and World Order," Review of International Studies 18, no. 2 (1992): 161-80; and "The United Nations Organizations and Hegemonic Decline," draft manuscript, 1987. 28 See also Philip G. Cerny, The Changing Architecture of Politics: Structure, Agency, and the Future of the State (London: Sage 1990). 29 Robert W. Cox, "Globalization, Multilateralism, and Democracy," the John W. Holmes Lecture, ACUNS Reports and Papers 1991-2, i. 30 See David R. Mares, "Middle Powers under Regional Hegemony: To Challenge or Acquiesce in Hegemonic Enforcement," International Studies Quarterly, 32, no. 4 (1988): 453-71. 31 Cox, "Middlepowermanship," 824. 32 Peter Alexis Gourevitch, "States in the International System: Changing Relationships and the Role of Middle Powers," in Richard Higgott and James L. Richardson, eds., International Relations: Global and Australian Perspectives on an Evolving Discipline (Canberra: Department of International Relations, Research School of Pacific Studies, ANU 1991), 228. 3 3 See for example Bruce Grant, The Crisis of Loyalty: A Study of Australian Foreign Policy (Sydney: Angus and Robertson 1972), chap. 2; T.B. Millar, Australia in Peace and War (Canberra: ANU Press 1978), chap, n; James Eayrs, In Defence of Canada, Vol. 4, Growing Up Allied (Toronto: University of Toronto Press 1974). 34 See for example Joseph A. Camilleri, Australian-American Relations: The Web of Dependence (Melbourne: Macmillan 1980); John W. Warnock, Partner to Behemoth, The Military Policy of a Satellite Canada (Toronto: New Press 1970). 3 5 See for example Douglas A. Ross, In the Interests of Peace: Canada and Vietnam, 1954-1973 (Toronto: University of Toronto Press 1984). 36 Martin Indyk, "The Central Balance in Relation to Closer Events: Its Effects on Australia's Middle Power Aspirations," in Coral Bell, ed., Academic Studies and International Politics (Canberra: Department of International Relations, ANU 1982). 37 Michael K. Hawes, Principal Power, Middle Power, or Satellite? Competing Perspectives in the Study of Canadian Foreign Policy (Toronto: York Research Programme in Strategic Studies 1984). 3 8 The best-known examples of this literature are Greg Cough, Ted Wheelwright, and Ted Wilshire, eds., Australia and World Capitalism (Ringwood, Vic.: Penguin 1980); Greg Cough and Ted Wheelwright, Australia: A Client State (Ringwood, Vic.: Penguin 1982); and Glen Williams, Not for Export: Towards a Political Economy of Canada's Arrested Industrialization (Toronto: McClelland and Stewart 1983).

228

Notes to pages 11-15

39 Duncan Cameron, "Canada in the World Economic Order," in Paul Painchaud, ed., From Mackenzie King to Pierre Trudeau: Forty Years of Canadian Diplomacy, 1945-1985, (Quebec: Les Presses de 1'Universite Laval 1989), 147. 40 Cox, "Middlepowermanship," 824. 41 Lester B. Pearson, Mike, the Memoirs of the Right Honourable Lester B. Pearson, Vol. 2: 1948-1957, ed. John A. Munro and Alex I. Inglis (Toronto: University of Toronto Press 1973), 3342 Evatt, The United Nations, 36. 43 See for example A.EW. Plumptre, Changes in the International Environment: Canada's Approach to the Next Round of GATT Negotiations (Toronto: Canadian Export Association, 1973), 3. 44 John W. Holmes, Canada: A Middle-Aged Power (Toronto: McClelland and Stewart 1976), 6. 45 "Current Notes," January 1967, 12, quoted in WJ. Hudson, Australian Diplomacy (Melbourne: Macmillan 1970), 75. 46 A. Claire Cutler and Mark W. Zacher, "Introduction," in A. Claire Cutler and Mark W. Zacher, eds., Canadian Foreign Policy and International Economic Regimes (Vancouver: UBC Press 1992), 15. 47 Peter J. Katzenstein, Small States in World Markets: Industrial Policy in Europe (Ithaca: Cornell University Press 1985), 44. 48 See Francis Castles, ed., Australia Compared: People, Policies and Politics (North Sydney: Allen & Unwin 1991). 49 Malcolm Alexander and Brian Galligan, "Australian and Canadian Comparative Political Studies," and Robert J. Jackson, "Australian and Canadian Comparative Political Research," in Malcolm Alexander and Brian Galligan, eds., Comparative Political Studies: Australia and Canada (Melbourne: Pitman 1992). Tom Symons goes so far as to say that "There are few countries in the world which have as much in common as Australia and Canada"; in R.L. Mathews, ed., Public Policies in Two Federal Countries: Canada and Australia (Canberra: Centre for Research on Federal Financial Relations, ANU 1982), 10. 50 Alexander Brady, Democracy in the Dominions: A Comparative Study in Institutions (Toronto: University of Toronto Press 1947). 51 Bruce Grant, The Australian Dilemma: A New Kind of Western Society (Sydney: Macdonald Futura Australia 1983), 66. 52 See for example Barbara Ward's "The First International Nation," in William Kilbourn, ed., Canada; A Guide to the Peaceable Kingdom (Toronto: Macmillan 1970), 45-8. 53 Robert W. Cox and Harold K. Jacobson, eds., The Anatomy of Influence (New Haven: Yale University Press 1973), 410. Canadian journalistic accounts also showcased this theme. See for example Peter Trueman, "Influence of a Middle Power," Montreal Star, 19 January 1960.

2,2,9 Notes to pages 15-19 54 Raminsky Papers, File PWCP, to T.A. Stone, 7 August 1944, quoted in J.L. Granatstein, The Ottawa Men: The Civil Service Mandarins 19351957 (Don Mills, Ont.: Oxford University Press 1982), 306 n. 70. 55 John Eddy, "What Are the Origins of Australia's National Identity?" in Castles, ed,. Australia Compared. 56 J.W.C. Cumes, A Bunch of Amateurs: The Tragedy of Government and Administration in Australia 2nd edition (Melbourne: Sun 1988), 12.1. 57 W.J. Hudson, Australia and the League of Nations (Sydney: Sydney University Press in association with the AHA 1980). See also Bruce Grant, What Kind of Country? Australia and the Twenty-first Century (Ringwood, Vic.: Penguin 1984), 89-90. 58 Evatt, The United Nations, 4. See also Norman Harper, A Great and Powerful Friend: A Study of Australian American Relations Between 1900 and 1975 (St Lucia: Queensland University Press 1987), chap. 10; Neville Meany, "Australia, The Great Powers and the Coming of the Cold War," Australian Journal of Politics and History 38, no. 3 (i99z): 3 l6 ~3359 John Holmes Papers, Canadian Institute of International Affairs, Robertson to King, 10 June 1945. 60 See Paul Hasluck, Diplomatic Witness: Australian Foreign Affairs 1941-1947 (Melbourne: Melbourne University Press 1980), 195. 61 "Forde-Evatt Proposal at UNICO attacked," Sydney Morning Herald, 17 May 1945. 62 John W. Holmes, The Shaping of Peace Canada and the Search for World Order (Toronto: University of Toronto Press 1979-1982.), i, 247-59. 63 Pearson, Memoirs, 277. 64 National Archives of Australia, World Organisation: Documents for San Francisco conference, misc Papers, Secret Telegrams, A2937, no. 307, Dr. Evatt to Eggleson, Officer, Maloney, Cablegram, 17 June 1945. 65 Hasluck, Diplomatic Witness, So. 66 John W. Holmes, review of Paul Hasluck, Diplomatic Witness in International Journal 37, no. 3 (1982): 493. The more idealistic Canadian diplomat Charles Ritchie went so far as to add that Evatt, in his "insufferably megalomaniacal and irresponsible way did what many in the Canadian delegation would have liked to do"; Charles Ritchie, Diplomatic Passport (Toronto: Macmillan 1981) 5-13. Arnold Heeney, another influential state official, added in his memoirs that: "Few can be more successfully abrasive than a determined Australian, and Evatt was a past master in giving offence"; Arnold Heeney, The Things That Are Caeser's: Memoirs of a Canadian Public Servant (Toronto: University of Toronto Press 1972), 87. 67 See Holmes, "The United Nations in Perspective," 20. 68 John Zysman, Governments, Markets, and Growth: Financial Systems

230

69 70

71

72 73 74 75

76 77 78

79

80 81 82 83

Notes to pages 19-2,2

and the Politics of Industrial Change (Ithaca: Cornell University Press 1983) 289. Carsten Holbraad, Middle Powers in International Politics (London: Macmillan 1984). See for example Charles Lipson, "The Transformation of Trade: The Source and Effects of Regime Change," in Stephen Krasner, ed., International Regimes (Ithaca: Cornell University Press 1983). G. John Ikenberry, "The Irony of State Strength: Comparative Responses to the Oil Shocks in the 19705," International Organization 40, no. i (1986): 119. See also Maureen Appel Molot, "Where Do We, Should We, or Can We Sit? A Review of Canadian Foreign Policy Literature," International Journal of Canadian Studies i, no. 2 (1990): 77-96. Robert Dallek, The American Style of Foreign Policy: Cultural Politics and Foreign Affairs (New York: Knopf 1983), xiii. Paul Kelly, The End of Certainty: The Story of the 19805 (St Leonards, NSW: Allen & Unwin 1991), 65. Maximilian Walsh, Poor Little Rich Country (Ringwood, Vic.: Penguin 1979), 89. Carolyn J. Tuohy, Policy and Politics in Canada: Institutionalized Ambivalence (Philadelphia: Temple University Press 1992). See also Robert Boardman, Global Regimes and Nation-States: Environmental Issues in Australian Politics (Ottawa: Carleton University Press 1990), 202. Alan C. Cairns, Disruptions: Constitutional Struggles from the Charter to Meech Lake (Toronto: McClelland and Stewart 1991). W.K. Hancock, Australia (London: Ernest Benn 1930); Brian Head, ed., The Politics of Development of Australia (Sydney: Allen & Unwin 1986). J.D.B. Miller, "The Interaction of Economics and Politics in Government Policies," in J.D.B. Miller, Australia's Economic Relations (Sydney: Angus & Robertson in association with the AHA 1975). See also Richard N. Rosecrance, "The Radical Tradition in Australia: An Interpretation," Review of Politics 22, no. i (1960): 115-32. Thomas Hockin, "Federalist Style in Internationalist Politics," in Stephen Clarkson ed., An Independent Foreign Policy for Canada? (Toronto: McClelland and Stewart 1968), 119-30. See also Denis Stairs, "The Political Culture of Canadian Foreign Policy," Canadian Journal of Political Science 15, no. 4 (1982): 667-90. See for example Michael Loriaux, "Comparative Political Economy as Comparative Politics," Comparative Politics 21, no. 3 (1989): 355-77. See G. John Ikenberry, "The State and Strategies of International Adjustment," World Politics 39, no. i (1986): 53-71. Tuohy, Policy and Politics in Canada, 51-2. Benjamin Cohen, "The Political Economy of International Trade," International Organization 44, no. 2 (1990): 268-9.

231 Notes to pages 22-9 84 85 86 87 88 89 90 91

92

93

94

Ikenberry, "The Irony of State Strength." Cox, United Nations, 1987, n. Fox, "The Range of Choice," 193. Keal, Ethics and Foreign Policy, n. Cox, draft manuscript, 1987, n. Kim Richard Nossal, Rain Dancing: Sanctions in Canadian and Australian Foreign Policy (Toronto: University of Toronto Press 1994). Robert D. Putnam, "Diplomacy and Domestic Politics: The Logic of Two-Level Games," International Organization 42, no. 3 (1988): 423. Raymond Hopkins and Donald J. Puchala, eds., The Global Political Economy of Food (Madison: University of Wisconsin Press 1978), (special issue of International Organization 32, no. 3 [1978]), 581-880. Mark W. Zacher, "Trade Gaps, Analytical Gaps: Regime Analysis and International Commodity Trade Regulation," International Organization 41, no. 2 (1987): 175-6. See Susan Strange, "The Future of the American Empire," Journal Of International Affairs 42, no. i (1988): 1-17; Robert Gilpin, The Political Economy of International Relations (Princeton: Princeton University Press 1987), 345. Putnam, "Diplomacy and Domestic Politics." C H A P T E R TWO

1 Raymond Hopkins and Donald J. Puchala, eds., The Global Political Economy of Food, (Madison: University of Wisconsin Press 1978), (special issue of International Organization 32, no. 3 [1978]). 2 Harriet Friedmann, "The Political Economy of Food: A Global Crisis," New Left Review 197 (1993): 31. 3 See for example Stephen Gill and David Law, The Global Political Economy: Perspectives, Problems, and Policies (New York: Harvester 1988), 134. 4 Yann Fitt, Alexandre Faire, and Jean-Pierre Vigier, The World Economic Crisis: U.S. Imperialism at Bay (London: Zed Press 1980), 23. 5 Ibid., 27. 6 Charles Kindleberger, The World in Depression, 1929-39 (Berkeley: University of California 1974), 307. 7 Hopkins and Puchala, The Global Political Economy of Food. 8 Peter F. Cowhey and Edward Long, "Testing Theories of Regime Change: Hegemonic Decline or Surplus Capacity?" International Organization 37, no. 2 (1983): 16. 9 Mark W. Zacher, "Trade Gaps, Analytical Gaps: Regime Analysis and International Commodity Trade Regulation," International Organization 41, no. 2 (1987). See also Charles Lipson, "The Transformation of

232- Notes to pages 29-32

10 11

12

13

14

15

16

17

18 19 20 21

22 23

Trade: The Source and Effects of Regime Change," in Stephen Krasner, ed., International Regimes (Ithaca: Cornell University Press 1983), 421. G. John Ikenberry and Charles A. Kupchan, "Socialization and Hegemonic Power," International Organization 44, no. 3 (1990): 283-315. Oran R. Young, International Cooperation: Building Regimes for Natural Resources and the Environment (Ithaca: Cornell University Press 1989), 197. See for example Don Paarlberg, "On Sleeping with an Elephant" (J.S. McLean Memorial Lecture, University of Guelph, 13 October 1977); James Rusk, "U.S. Seen at Wheel in Agriculture while Others Tailgate Its Policies," Globe and Mail, 15 October 1977. Robert O. Keohane, After Hegemony: Cooperation and Discord in the World Political Economy (Princeton: Princeton University Press 1984), 45National Library of Australia, Crawford Papers, box 16, GATT: 1954 m Agricultural Surpluses and Subsidies, Statement of Australian Delegation, "Disposal of Surplus," W.9/5O, 30 November 1954. David Lake, Power, Protection and Foreign Trade: International Sources of U.S. Commercial Strategy, iSS-y-iyiy (Ithaca: Cornell University Press 1988), 45. A. Claire Cutler and Mark W. Zacher, Canadian Foreign Policy and International Economic Regimes (Vancouver: UBC Press 1992); and R.H. Snape, "Australia's Relations with Gatt," Economic Record, March (1984), 16-27. Jon McLin, "Surrogate International Organization and the Case of World Food Security, 1949-1969," International Organization 33, no. i (1979): 35-55. See also Theodore H. Cohn, The International Politics of Agricultural Trade: The Canadian- American Relations in a Global Agricultural Context (Vancouver: UBC Press 1990), 73. Michael L. Hoffman, "Economic Policy of U.S. Attacked," New York Times, 23 October 1956. Dana Wilgress, quoted in "U.S. Role in GATT Termed Crucial," New York Times, 6 December 1955. Paul Hasluck, Diplomatic Witness: Australian Foreign Affairs 1941-1947 (Melbourne: Melbourne University Press 1980), 80. See Peter Katzenstein, "Conclusion: Domestic Structures and Strategies," in Peter Katzenstein, ed., Between Power and Plenty: Foreign Economic Policies of Advanced Industrial States (Madison: University of Wisconsin Press 1978), (special issue, International Organization 31, no. 4 [1977]), 881-90. "Geneva Told of Australia's Objections to GATT," Sydney Morning Herald, 10 November 1954. Address of Hon. L.D. Wilgress at final plenary meeting of the ITO

2.33 Notes to pages 33-5

24 25 2.6 27 z8 Z9 30 31 3z

33 34

35

36

preparatory committee, zz August 1947, quoted in Bruce W. Muirhead, The Development of Postwar Canadian Trade Policy: The Failure of the Anglo-European Option (Montreal and Kingston: McGill- Queen's University Press 1992.), 50. See also Frank Stone, Canada, the GATT and the World Trading System (Ottawa: Institute for Research on Public Policy 1984). See House of Commons Standing Committee on Agriculture, Minutes of Proceedings and Evidence, 16 June 1975, 49:41Parliament of Canada, House of Commons, Debates, zi July 1969, 11398. Tom Connors, The Australian Wheat Industry: Its Economics and Politics (Armidale, NSW: Gill 1972.), izi. See "Feeding The Post-War World," Times (London), iz March 1943, 3. H.C. Coombs, "International Aspects of Reconstruction" (address to the Economic Society of Australia, January 1944). See Cecil Edwards, Bruce of Melbourne: Man of Two Worlds (London: Heinemann 1965), 416^3. J.G. Crawford, "Australian Agricultural Policy" (Joseph Fisher Lecture, University of Adelaide, i95z). Parliament of the Commonwealth of Australia, House of Representatives, Debates, 17 August 1961, z6z~3. Lester B. Pearson, Mike, the Memoirs of the Right Honourable Lester B. Pearson, Vol. z: 1948-1957, ed. John A. Munro and Alex I. Inglis (Toronto: University of Toronto Press 1973), Z45~5O; John English, The Life of Lester Pearson Vol. i, Shadow of Heaven, 1897-1948 (Toronto: Lester & Orpen Dennys 1989). The representative of the Canadian Federation of Agriculture said of Canada's performance: "There is no question but that Canada's standing is right near, if not right next to, that of the big powers in international affairs"; Public Archives of Canada, RG 17-3477; Copy of Diary Notes of H. Hannan, on his journey to the FAO no. z in Copenhagen, n September 1946. Bill Becker, "Diefenbaker Asks U.S. Co-operation," New York Times, 9 June 1958. National Library of Australia, Crawford Papers, series 5, European Economic Community, box 14, Briefing Notes for Informal Consultations on the Common Agricultural Policy of the E.E.C. May-June 1960, vol. i, Canberra, May 1960. National Archives of Australia, Brief for Montreal Conference, Economic and Trade Problems in Regard to Agriculture and Other Primary Production, "Agricultural Protectionism: The Role of the GATT." T.K. Warley, "Western Trade in Agricultural Products," in Andrew Shonfield, ed., International Economic Relations of the Western World 1959-1971, Vol. i Politics and Trade (London: Oxford University Press

234

37 38 39 40 41

42

43

44

45

46 47

48 49

50 51 52 53

Notes to pages 35-9

for the Royal Institute of International Affairs 1976), 347. See also Theodore H. Cohn, "Canada and the Ongoing Impasse over Agricultural Protectionism," in Cutler and Zacher, Canadian Foreign Policy and International Economic Regimes,63-5. Trevor R. Reese, Australia, New Zealand, and the United States: A Survey of International Relations 1941-1968 (London: OUP/RIIA 1969). "Benson Listens to Canada in Key Decisions on Wheat," Financial Post, 21 January 1956. Quoted in Reese, Australia, New Zealand, and the United States, 235. "U.S. Role in GATT Termed Crucial," Financial Post, 6 December 1955. Quoted in "Trade Stand of U.S. Held Hypocritical," New York Times, n April 1958, speech at annual conference of Country Party, Cowes, Victoria. See Jeremy Richardson, Gunnel Gustafsson and Grant Jordan, "The Concept of Policy Style," in Jeremy Richardson, ed., Policy Styles in Western Europe (London: Allen & Unwin 1982). C.D. Howe, former minister, 66th Annual Convention of the Farm Equipment Institute, November 1959, in National Archives of the United States, State Department Papers, RG 59 box 4470, United States Vice Consul to Consul, Weekly Farm Report, 13 December 1955, 842. A.F.W. Plumptre, Three Decades of Decision, Canada and the World Monetary System, 1944-75 (Toronto: McClelland and Stewart 1977), i3During the meetings on the ITO, Canada was referred to by the other contracting parties as one of the "Big 3"; Muirhead, The Development of Postwar Canadian Trade Policy, 50. See Cohn, The International Politics of Agricultural Trade, 58-63. "Can U.S. Be Persuaded to Change Farm Policy?" Financial Post, 8 January 1955; Ed Hadley, "Cabinet Level Talks Start," Daily Star (Montreal), 6 January 1955. Robert O. Keohane and Joseph S. Nye Jr, Power and Interdependence: World Politics in Transition (Boston: Little, Brown 1977), 165. Speech by George Mclvor, chief commissioner, Canadian Wheat Board, to Farmers's Union of Alberta, as reported in National Archives of the United States, State Department Papers, RG 59 box 4470, United States Vice Consul to Consul, Weekly Farm Report, 13 December 1955, 842. House of Commons, Debates, 16 May 1955. National Archives of the United States, Records of the Department of State, R659, NND 877416 box 4470, Telegram, 6 July 1955, 842. M.F., "No Stones from a Glass House," Winnipeg Free Press, 15 July 1955"U.S. Curb on Cheese Scored at Geneva," New York Times, 18 September 1951.

235

Notes to pages 40-3

54 "Canadians Protest American Import Restrictions on Cheese and Other Dairy Products," as reported in National Archives of the United States, Department of State, record Gp 59, box 1959, Agricultural Attache to Ambassador, 18 September 1951, 442.55 Miriam Camps, Britain and the EEC, 1955-1963 (Princeton: Princeton University Press 1964); Nora Beloff, The General Says No: Britain's Exclusion from Europe (Harmondsworth: Penguin 1963). 56 See Dana Wilgress, The Impact of European Integration on Canada (Montreal: Canadian Trade Committee, Private Planning Association of Canada 1962). 57 J.L. Granatstein, Canada 1957-1967: The 'Years of Uncertainty and Innovation (Toronto: McClelland and Stewart 1986), 49. 58 Jane Armstrong, "Canada Invited to Get Nasty about the U.K. Joining Europe," Toronto Star, 6 July 1971. 59 J.G. Crawford, "Some Issues in Australian Trade" (address to the Australian Institute of Agricultural Science, November 1958). 60 T.B. Millar, Australia in Peace and War (Canberra: ANU Press 1978), 338. 61 "Geneva Told of Australia's Objections to GATT," Sydney Morning Herald, 10 November 1954. 62 See Wilfred Prest, "Economic Policies," in Gordon Greenwood and Norman Harper, eds., Australia in World Affairs: 1950-55 (Melbourne: Angus and Robertson 1957). 63 Representatives, Debates, 17 May 1959, 193964 "Australia Warns U.S. Beef Curb," New York Times, 17 August 1964. See also "Principles at Stake in Meat," Australian Financial Review, 18 August 1964, 2; "Threat of Showdown over Meat," Australian Financial Review, 18 August 1964, i, 5. 65 John McEwen, "His Story" (ANU 1982), 62. 66 "French Accord Aids Australia's Market Battle," Australian Financial Review, 29 March 1962. 67 Reese, Australia, New Zealand, and the United States, 244. 68 National Library of Australia, Crawford to McEwen, cable no. GATT 126, 21 February 1955, Crawford Papers, series 6, GATT, box 16. 69 National Archives of Canada, J.W.L. MacDermot, Canadian high commissioner to Australia, re: Montreal Conference, to under-secretary of state for External Affairs, 10 April 1958, RG 20 (Records of the Department of Trade and Commerce) 1941 20-118-13 pt 2. 70 "Disappointment in Geneva," Australian Financial Review, 6 January T 95571 National Library of Australia, Crawford to Australian Delegations, "Common Market," 14 March 1957, Crawford Papers, series 5, EEC, box 14. 72 "Meeting in London," Australian Financial Review, 27 January 1955.

236

Notes to pages 44-8

73 The Canadian minister of trade and commerce, quoted in Grant L. Reuber, Canada's Interest in the Trade Problems of Less-Developed Countries (Montreal: Private Planning Association of Canada 1964), 6. 74 Mitchell Sharp, minister of trade and commerce, quoted in Gordon Hawkins, ed., Middle Power in the Market Place: A Discussion of Canadian Trade Policies (Toronto: Canadian Institute of International Affairs/University of Toronto Press 1965). 75 Representatives, Debates, 3 May 1962. 76 "Aims Achieved at Montreal," The Age, 2.9 September 1958. 77 National Archives of Canada, RG 20 1942-20-118-130-8, memo to the cabinet, Montreal, September 1958, "Brief for the Canadian Delegation to the Commonwealth Trade and Economic Conference." 78 McEwen, Representatives, Debates, 19 May 1955. 79 "New Deal for Primary Goods Sought," Sydney Morning Herald, 4 March 1963. 80 Robert O. Keohane, "The World Political Economy and the Crisis of Embedded Liberalism," in John H. Goldthorpe, ed., Order and Conflict in Contemporary Capitalism: Studies in the Political Economy of Western European Nations (Oxford: Clarendon Press 1984), 16. 81 Ibid., 15. 82 See for example Immanuel Wallerstein, The Capitalist World-Economy (New York: Cambridge University Press 1979). 83 Philip Resnick, "From Semi-Periphery to Perimeter of the Core: Canada in the Capitalist World Economy," in Philip Resnick, The Masks of Proteus: Canadian Reflections on The State (Montreal and Kingston: McGill-Queen's University Press 1990), 180. 84 Wilgress to Pearson, 30 September 1947, quoted in Muirhead, The Development of Postwar Canadian Trade Policy, 199. 85 National Archives of Canada, RG 20, 1941-20-118-1303; T.W.C. MacDermot, Canadian high commissioner for Australia, 10 April 1958. 86 Baker Fox, "The Range of Choice for Middle Powers: Australia and Canada Compared," Australian Journal of Politics and History 26, no. 2 (1980): 82. 87 "The Biggest Task Ahead is.to Reconcile Diverse Trade Aims," Australian Financial Review, 18 September 1958. Sir John Crawford noted these basic differences in a memo to the secretary of the Prime Minister's Department: "Australian circumstances are rather unique with the possible exception of Argentina. The United States has always the alternative of subsidies. While Canada sits smugly on her hard wheat"; National Library of Australia, Crawford Papers, series 5, EEC, box 14, Crawford to Sir Allen Brown, 25 June 1957. 88 Bruce Grant, Crisis of Loyalty: A Study of Australian Foreign Policy (Sydney: Angus and Robertson 1972), 3.

237 Notes to pages 48-53 89 Geoffrey Blainey, The Tyranny of Distance: How Distance Shaped Australia's History (Melbourne: Sun Book 1966), 339. 90 Committee of Economic Enquiry: Chairman: J. Vernon, Report, vol. i (Canberra: Australian Government Publishing Service 1965). 91 Quoted in "Trade Minister's Stand Wins Him Farmers' Support," New York Times, 5 April 1963. 92 Alan Wood, "Our Missing Link with the U.S.," Australian Financial Review, 21 January 1969. 93 For a provocative expression of this theme see J.L. Granatstein, How Britain's Weakness Forced Canada into the Arms of the United States (Toronto: University of Toronto 1989). 94 See Robert Cuff and J.L. Granatstein, "The Rise and Fall of CanadianAmerican Free Trade, 1947-8," Canadian Historical Review 58, no. 4 (1977): 459-82; Michael Hart, "Almost but Not Quite: The 1947-8 Bilateral Canada-U.S. Relations," American Journal of Canadian Studies 19, no. i (1989): 25-58. 95 The theme of "abandonment" is explored in David Day, The Great Betrayal: Britain, Australia and the Onset of the Pacific War 1939-42 (Oxford: Oxford University Press 1988). For a rebuttal see Carl Bridge, "Special Relationships: Australia, Britain and the United States since 1941" (The Trevor Reese Memorial Lecture 1991, Sir Robert Menzies Centre for Australian Studies, Institute of Commonwealth Studies, University of London, 1991). 96 Tom Keating, Canada and World Order: The Multilateralist Tradition in Canadian Foreign Policy (Toronto: McClelland and Stewart 1993), 134-4397 Rt. Hon. John McEwen, MP, "Australia's Overseas Economic Relationships" (Roy Milne Memorial Lecture, 5 July 1965), 6. 98 Ian M. Drummond, Imperial Economic Policy, 1917-1939: Studies in Expansion and Protection (London: Allen & Unwin 1974). 99 Sir Alan Watt, quoted in Carsten Holbraad, Middle Powers in International Politics (London: Macmillan 1984), 72. 100 Renouf, Frightened Country. 101 "Trade Thrown into 'Melting Pot,'" Australian Financial Review, 22 June 1961. 102 "Anthony Says Britain Let Us Down," The Australian, 25 June 1971. 103 Peter Smark, "Is it the end of a beautiful friendship?" The Australian, 26 July 1971, 9. 104 "The Biggest Task Ahead is to Reconcile Diverse Trade Aims," Australian Financial Review, 18 September 1958. 105 James Eayrs, "'Calm Benignity' to UK'S Euromart Bid," Toronto Star, 14 July 1971. 106 Ibid.

Z38 Notes to pages 53-60 107 See for example "Diefenbaker Asks U.S. Cooperation," New York Times, 9 June 1958. 108 See Keating, Canada and World Order, 141. 109 Barry Buzan, People, States and Fear: The National Security Problem in International Relations (Brighton: Wheatsheaf 1983), 68. CHAPTER THREE

i Harry Gelber made this point in blunt fashion in his 1968 study of the Australian-American relationship: "Australia often lacks the weight to bargain successfully for American acceptance of her interests as she sees them"; Harry G. Gelber, The Australian-American Alliance: Costs and Benefits (Baltimore: Penguin 1968), 58. 2, Michael Mastanduno, David A. Lake, and G. John Ikenberry, "Toward a Realist Theory of State Activity," International Studies Quarterly 33, no. 4 (1989): 457-743 Stephen D. Krasner, "United States Commercial and Monetary Policy: Unravelling the Paradox of External Strength and Internal Weakness," in Peter J. Katzenstein, ed., Between Power and Plenty: Foreign Economic Policies of Advanced Industrial States (Madison: University of Wisconsin Press 1978). 4 Mastanduno, Lake, and Ikenberry, "Toward a Realist Theory," 467. 5 See John Zysman, Governments, Markets, and Growth: Financial Systems and the Politics of Industrial Change (Ithaca: Cornell University Press); and G. John Ikenberry, David A. Lake, and Michael Mastanduno, "Introduction: Approaches to Explaining American Foreign Economic Policymaking," International Organization 42, no. i (1988): 1-14. 6 Paul Kelly, The End of Certainty: The Story of the 19805 (St Leonards, NSW: Allen & Unwin 1991), 6. 7 See Michael M. Atkinson and William D. Coleman, The State, Business and Industrial Change in Canada (Toronto: University of Toronto Press 1989), 56. 8 Mastanduno, Lake, and Ikenberry, "Toward a Realist Theory." 9 National Archives of the United States, Department of State, RG 59 box 3563 743.13/1-851, Richard W. Byrd, Memo, 3 March 1952.. 10 Peter Long, "The 19705 Challenge to the Country Party," Canberra Times, 2.2. December 1969. 11 Quoted in Keith O. Campbell, "Australian Farm Organizations and Agricultural Policy," in Colin A. Hughes, ed., Readings in Australian Government (St Lucia: Queensland University Press 1968), 433. 12 See R.P. Deane, The Establishment of the Department of Trade: A Case Study in Administrative Reorganization (Canberra: AND Press 1963). 13 John McEwen, "His Story," (ANU 1982.).

239 Notes to pages 60-4 14 Gavin Souter, "McEwen: The Last of his Kind," Sydney Morning Herald, 7 November 1970. 15 Leon Glezer, Tariff Politics: Australian Policy-Making 1960-1980 (Melbourne: Melbourne University Press 1982.), 202. 16 Alan Reid, "The Next P.M.?" The Bulletin, 19 April 1961, 16. 17 McEwen, "His Story," 41. In his first press conference after becoming minister of the amalgamated Department of Trade, McEwen answered the question about who would be in charge of the new ministry by saying: "You can all guess Crawford"; National Library of Australia, McEwen Papers, box 118, interview with press, new Department of Trade 1956. See also L.T. Evans and J.D.B. Miller, eds., Policy and Practice: Essays in Honour of Sir JohnCrawford(Sydney: ANU Press 1987). 18 Alan Reid, "The Next P.M.?" 15. 19 National Archives of Australia, British Commonwealth Trade and Economic Conference, A 1838/283, 708/3/2, pt 2, M.W. O'Donnell, first assistant secretary, Department of Trade, to Crawford, 23 April 1958. 20 Alan Rix, Coming to Terms: The Politics of Australia's Trade with Japan, 1945-1957 (Sydney: Allen & Unwin 1986), 216. 21 J.D.B. Miller, Australia's Economic Relations (Sydney: Angus and Robertson in association with the Australian Institute of International Affairs 1975), 12. For a detailed examination of this contradictory approach, see Edmund S.K. Fung and Colin Mackerras, From Fear to Friendship: Australia's Policies Towards the People's Republic of China, 1966-1982 (London: University of Queensland Press 1985), chap. 3. 22 Sir Alan Watt, Australian Diplomat: Memoirs of Sir Alan Watt (Sydney: Angus and Robertson in association with the Australian Institute of International Affairs 1972), 264. 23 Trevor Matthews and G.S. Reid, "The Australian Bureaucracy and the Making of Australian Foreign Policy," in Peter Drysdale and Hironobu Kitaoji, eds., Japan and Australia: Two Societies and Their Interaction (Canberra: ANU Press 1981), chap. 2. 24 Peter Robinson, "Australia Holds Biggest Customer at Arm's Length," Australian Financial Review, 9 April 1968. 25 Ibid. 26 Harry G. Gelber, Australia, Britain and the EEC: 1961 to 1963 (Melbourne: Oxford University Press 1966), 116. 27 Watt, Australian Diplomat, 293. 28 Alan Renouf, The Champagne Trail: Experiences of a Diplomat (Melbourne: Sun Books 1980), 69. 29 Alan Reid, The Power Struggle (Sydney: Shakespeare Head Press 1969). 30 Hugh V. Emy and Owen E. Hughes, Australian Politics: Realities in Conflict (Melbourne: Macmillan 1980), 42. 31 Campbell, "Australian Farm Organizations," 432.

240 Notes to pages 64-72 32 Jonathan Gaul, "The Country Party's Credibility Problem," Canberra Times, i July 1969. 33 "McEwen Challenged by Graziers," The Age, 10 December 1968. See also Jonathan Gaul, "McEwen Tries the Old Tactics Again," Canberra Times, 10 December 1968. 34 Robert Bothwell and William Kilbourn, C.D. Howe: A Biography (Toronto: McClelland and Stewart 1979), 230. 35 Ian M. Drummond, "Canadian-British Trade Relations and the Economic Background to Britain's Application to the EEC," in Josef Becker and Rainer-Olaf Schultze, eds., Areas of Conflict within the North Atlantic Triangle: Canada's Foreign Policy since the Second World War (Bochum Germany: Dr N. Brocmeyer 1989), 263. See also J.L. Granatstein, Canada 1957-1967: The Years of Uncertainty and Innovation (Toronto: McLelland and Stewart 1986), 45. 36 For general background see Seymour Martin Lipset, Agrarian Socialism: The Cooperative Commonwealth Federation (Berkeley: University of California Press 1950); and C.B. Macpherson, Democracy in Alberta (Toronto: University of Toronto Press 1962). 37 Donald Creighton, Canada's First Century, 1867-1967 (Toronto: Macmillan 1970), chap. 13. 38 "Canada Assured on Crop Disposal," New York Times, 21 March 195439 "Can U.S. Be Persuaded to Change Farm Policy?" Financial Post, 8 January 1955. 40 Patrick Kyba, Alvin: A biography of the Honourable Alvin Hamilton, P.C. (Regina: Canadian Plains Research Centre 1989), 163. 41 Ibid., 169. 42 Donald M. Fleming, So Very Near: The Political Memoirs of the Honourable Donald M. Fleming: Vol. 2 (Toronto: McClelland and Stewart 1985), 217. 43 "Canada Doubtful of Tariff Parley," New York Times, 23 November 1964. 44 J.L. Granatstein, A Man of Influence: Norman A. Robertson and Canadian Statecraft 1929-68 (Toronto: Deneau 1981), 363. 45 I.M. Destler, Making Foreign Economic Policy (Washington: The Brookings Institution 1980), 20. See also Don Paarlberg, "A New Agenda for Agriculture," in Don F. Hadwiger and William P. Browne, eds., The New Politics of Food (Lexington, MA: D.C. Heath 1978). 46 Quoted in M. Goldblatt, "Grow Less Wheat, P.M. Tells Western Farmers," Globe and Mail, 15 July 1969. 47 Jennifer Lewington, "Ottawa Walks Food Prices Tight Rope," Financial Post, 28 April 1973. 48 See Kim Killeen, "Interest Groups in the Canadian Foreign Policy Formu-

241 Notes to pages 73-85

49 50

51

52

53 54

55 56 57 58 59 60 61 62. 63

lation Process: The World Food Conference" (master's thesis, Dalhousie University, 19 8 2). Parliament of Canada, House of Commons, Debates, 14 October 1976, 72. House of Commons Standing Committee on Agriculture, Minutes of Proceedings and Evidence, 27 March 1974, 5:13. In his memoirs, Whelan claims that the Liberal Party "let me down" by refusing to combine Agriculture and the Canadian Wheat Board; Eugene Whelan, Whelan: The Man in the Green Stetson (Toronto: Irwin 1986), 213. Harald von Riekhoff, John H. Sigler, and Brian Tomlin, Canada-U.S. Relations: Policy Environments, Issues and Prospects (Montreal: C.D. Howe Institute 1979), 80; W.A. Wilson, "Canada-U.S. Trade," Vancouver Sun, 2.8 December 1977. Richard W. Phidd, "Administrative Change and Policy Development: A Case Study of Agriculture Canada" (paper presented at a conference on organizational policy and development, University of Louisville, Kentucky, ii May 1983). Eugene Whelan, "Notes for the Federal-Provincial Conference on Food Strategy," Winnipeg, 16 January 1978. Barry Hughes, "The Economy," in Allan Patience and Brian Head, eds., From Whitlam to Fraser: Reform and Reaction in Australian Politics (Melbourne: Oxford University Press 1979), n. "Union Ban on Meat Export," Australian, 16 June 1978. Parliament of the Commonwealth of Australia, House of Representatives, Debates, 15 September 1977, 12.04. "A Price We Must Pay for Meat Export," Australian, 18 April 1973. C.M. Williams, Farmers in Support, Australian Financial Review, 2.7 January 1955. Fung and Mackerras, From Fear to Friendship, 106-9. A good summary of these questions is provided in Tom Connors, "A Thinking Farm Lobby," Australian Financial Review, 4 January 1982. Kym Anderson and Ross Garnaut, Australian Protectionism: Extent, Causes and Effects (Sydney: Allen & Unwin 1987), 93-6. "Tariff Protection Major Problem to Rural Sector," Canberra Times, 24 September 1977. Tom Connors, "Eraser's Policies Annoy Farmers," Far Eastern Economic Review, 3 February 1978; Jacqueline Rees, "Farmers Unite against Tariffs," Australian Business Review, 13 August 1981. CHAPTER FOUR

i H.G. Gelber, "World Food Supply: The International Political Implications," in Stuart Harris, ed., International Politics and World Food (Can-

242

2 3 4 5

6 7 8 9

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Notes to pages 85-92

berra: Centre For Resource and Environmental Studies, ANU 1976), 26-7. Alan Renouf, Malcolm Fraser and Australian Foreign Policy (Sydney: Australian Professional Publications 1986), 42. Ibid., 81. Robert O. Keohane, "Big Influence of Small Allies," Foreign Policy i, no. 2 (1971): 161. William M. Habeeb, Power and Tactics in International Negotiations: How Weak Nations Bargain (Baltimore: Johns Hopkins University Press 1988), 133. Bredan Jones, "Australia Chief Dubious of Geneva Talk Gains," New York Times, 3 June 1978. Doug Anthony, Parliament of the Commonwealth of Australia, House of Representatives, Debates, 9 May 1978, 2028. John Edwards, "Honour and Defeat in Geneva," National Times, 13 January 1979. Lawrence A. Fox, quoted in Brian Toohey, "A US View of Australia's Role in World Trade Negotiations," Australian Financial Review, 12 February 1974. Quote from Alan Wolff, "US Deputy Trade Representative, Aust-US Fight for Beef, Wheat Trade," Advertiser (Adelaide), 8 February 1978. Brian Toohey, "Eraser's US Thrust," Australian Financial Review, 6 June 1978. David Bird, "Australia's Fraser Calls for Lowering of Protectionist Trade Barriers," New York Times, 21 May 1982. Ibid. Glenda Korporaal, "Aust, US Tackling GATT on Farm Subsidies," Australian Financial Review, 15 June 1982. Margaret Jones, "Tariff Fight is over to the US: Anthony," The Age, 9 June 1982. Peter Bowers, "Fraser: A Hard Run in Europe," Sydney Morning Herald, 17 June 1978. Creighton Burns, "Fraser Trips the Slight Fantastic," The Age, 3 June 1978. Alan Renouf, Frightened Country (Melbourne: Macmillan 1979), 485. J.W.C. Cumes, A Bunch of Amateurs (Melbourne: Sun 1988), 99. Renouf, Malcolm Fraser,no. "Eraser's Case against Aust's Protectionist Image," Australian Financial Review, 8 June 1978. Fraser, Representatives, Debates, 10 May 1978, 2120. Ibid., 25 September 1979, 1456. Alan Burnett, Australia and the European Communities in the 19805 (Canberra: ANU Press 1983).

243

Notes to pages 92-7

2.5 Bryan Frith, "Fraser on the Defensive," Far East Economic Review (PEER), 59. 26 Quoted in "Aust EEC Access Demand," Australian Financial Review, 23 April 1980. 27 Renouf, Malcolm Fraser, 81. 28 "Uranium Lever Will Not Raise Beef Sales," Australian Financial Review, 14 April 1978. 29 "Fraser versus Europe," extract from Cumes, A Bunch of Amateurs, in Australian Financial Review, 24 and 25 May 1979. 30 Peter Robinson, "Underbriefed Overkill on Noisy Grand Tour," National Times, 24 June 1978, 7. 31 Rod Metcalfe, "Cattle Council wants EEC Watchdog Lobby for Farmers," Australian Financial Review, 15 May 1981; Nicholas Roth well and Errol Simper, "Farmers Plan Assault on Europe," Australian, 17 August 1981, i. 32 Representatives, Debates, 16 March 1978, 833. 33 Bowers, "Fraser: A Hard Run." 34 "Fraser Mends Australia's U.S. Fences," Australian Financial Review, 15 June 1978. 35 Fraser, Representatives, Debates, 16 November 1978, 2919. 36 Bowers, "Fraser: A Hard Run." 37 Julian Cribb, "The EEC: Our Billion Dollar Trade Bluster," National Farmer, 24 July 1980. 38 Alan Renouf, The Champagne Trail: Experiences of a Diplomat (Melbourne: Sun Books 1980), 69. 39 Michelle Grattan, "Eraser's Tokyo Mission," The Age, 5 April 1978. See also "Canberra's New Spokesman - Japan's Premier Fukuda," PEER, 9 June 1978. 40 Renouf, Malcolm Fraser, 159-60. 41 Brian Toohey, "Resources Diplomacy Lives On - But without the Name," Australian Financial Review, 21 January 1977; Bryan Frith, "Australia Gets Tough on Sugar," PEER, 17 June 1977, 76. 42 Paul Keating, Representatives, Debates, 5 April 1978, 1005; Lionel Bowen, Representatives, Debates, 8 May 1979, 1912. See also Paul Kelly, "Why the PM opened Fire," National Times, 3-8 October 1977, 5. 43 Renouf, Frightened Country, 481. 44 See for example "Arrogance Won't Sell," Melbourne Herald, 25 October 197745 Australia and The Third World: Report of the Committee on Australia's Relations with the Third World (the Harries Report) (Canberra: AGPS 1979). See Also Brian Toohey, "Eraser's Role Reversal," Australian Financial Review, 17 June 1977. 46 Stuart Harris, "Australia's Interests in Third World Development: The Perspective of a Resource Exporter," in Robert Cassen et al., eds., Rich

244 Notes to pages 97-101

47

48 49

50 51 52

53 54

55

56

57 58 59

Country Interests and Third World Development (London: Groom Helm 1982). See for example Stuart Harris, "Australia and the New International Economic Order,"CRES Working Paper R/WPZI (1977), reprinted in Australian Outlook, April 1978, 24-40. John Stone, quoted by Bill Hayden, Representatives, Debates, 20 August 1981, 575. Quoted in Michael Richardson, "Lee Kuan Yew's Harsh Words for Australian Trade Policies," Australian Financial Review, 17 May 1977. See also Joanna Lawe-Davies, The Politics of Protectionism: Australian-ASEAN Economic Relations, 1975-1980 (Brisbane: Centre for the Study of Australian-Asian Studies 1981). Michael Richardson, "Fraser Faces Asian Test," The Age, 16 June 1978. Quoted in Susan Woods, "Anthony threatens to retaliate over EEC," Australian Financial Review, 16 July 1980. Parliament of the Commonwealth of Australia, Report of the Standing Committee on Foreign Affairs and Defence, Australian ASEAN Relations (Sen. J.P. Sim, chair), (Canberra: AGPS 1980), testimony on 25 May 1979, 786. Malcolm Subhan, "The Five Count on the Nine," PEER, 24 November 1978, 47. Quoted in Kim Richard Nossal, The Politics of Canadian Foreign Policy (Scarborough: Prentice Hall 1989), 72. See also Raymond Heard, "Who Said Anything about a Special Relationship," Montreal Star, 6 October 1971. James Eayrs, "Canada's Emergence as a Foremost Power," International Perspectives, May/June 1975, 15-2.4- See also Harald von Riekhoff, "The Natural Resource Element in Global Power Relationships," International Perspectives, September/October 1974. C.C. Pentland, "Domestic and External Dimensions of Economic Policy: Canada's Third Option," in Wolfram F. Hanrieder, ed., Economic Issues and the Atlantic Community (New York: Praeger in Cooperation with the Committee on Atlantic Studies 1982), 141. Pentland, "Domestic and External Dimensions," 150. Hella Pick, "Hired Hands across the Ocean," Manchester Guardian Weekly, 5 November 1973, 9. Robert Bothwell, "The Canadian Connection: Canada and Europe," in Norman Hillmer and Garth Stevenson, eds., Foremost Nation (Toronto: McClelland and Stewart 1977), 35. For a more thorough account, see J.L. Granatstein and Robert Bothwell, Pirouette: Pierre Trudeau and Canadian Foreign Policy (Toronto: University of Toronto Press 1990).

245

Notes to pages 102-5

60 Leo Ryan, "Resources Are Trudeau's Lever for Trade Agreement with EEC," Globe and Mail, 26 October 1974. 61 See Michael Tucker, Canadian Foreign Policy: Contemporary Issues and Themes (Toronto: McGraw-Hill Ryerson 1980), chap. 4. 62 See Frank Stone, Canada, the GATT and the International Trade System (Montreal: Institute for Research on Public Policy 1989). 63 Stephen Krasner, "The Tokyo Round: Particularistic Interests and Prospects for Stability in the Global Trading System," International Studies Quarterly 23, no. 4 (1979): 491-531. 64 Charles Lipson, "The Transformation of Trade: The Sources and Effects of Regime Change," International Organization 36, no. 2 (1982): 4I7-45565 See for example Margaret A. Biggs, The Challenge, Adjust or Protect? (Ottawa: North-South Institute 1980). 66 Michael Hart, Mercantilist Bargaining and the Crisis in the Multilateral Trade System: Finding a Balance between Domestic and Foreign Trade Policy (Ottawa: Centre for Trade Policy and Law, The Norman Paterson School of International Affairs, Carleton University 1989), 21. 67 Gary Gurbin, Standing Committee on Agriculture, Minutes of Proceedings and Evidence, 3 June 1982, 78:35. 68 Quoted in Wally Dennison, "Whelan Says Farmers Can Only Gain in Bid to Calm Fears Over GATT," Winnipeg Free Press, 4 May 1978. 69 Quoted in James Rusk, "Canada Will have to Play Its Hand with Great Skill to Come out ahead at the World Trade Negotiations," Globe and Mail, 29 March 1978. 70 Standing Committee on Agriculture, Minutes of Proceedings and Evidence, 29 November 1977, 1:35. 71 Gilbert Winham, International Trade and the Tokyo Round of Negotiations (Princeton: Princeton University Press 1989). 72 See Robert D. Putnam and Nicholas Bayne, Hanging Together: Cooperation and Conflict in the Seven-Power Summits (Cambridge, MA: Harvard University Press 1987). 73 For different interpretations of this initiative, see Cranford Pratt, ed., Internationalism under Strain (Toronto: University of Toronto Press 1989), 26-36; Granatstein and Bothwell, Pirouette, 299-307; Kim Richard Nossal, "Personal Diplomacy and National Behaviour: Trudeau's North-South Initiatives," Dalhousie Review 62, no. i (1982): 278-91. 74 Andrew F. Cooper, Richard A. Higgott and Kim Richard Nossal, Relocating Middle Powers: Australia and Canada in an Evolving World Order (Vancouver: University of British Columbia Press 1993). 75 Putnam and Bayne, Hanging Together. 76 Sara Southey, "Canada Has Major Role in GATT Talks," Globe and Mail,

246 Notes to pages 105-11

77 78 79 80 81

82 83 84

85 86

87 88 89 90 91 92 93 94

95

z August 1982; David Stewart-Patterson, "Trade Officials Prepare for Critical Session," Globe and Mail, 13 September 1982. Gilbert Winham, "Bureaucratic Politics and Canadian Trade Negotiations," International Journal 34, no. i (1978-79): 87. Stephen Handelman, "Canadians Shine at Diplomacy," Toronto Star, 2.7 November 1982. Stephen Handelman, "MacEachen Plays Crucial Role to Save Trade Pact," Toronto Star, 28 November 1982. Clyde H. Farnsworth, "A Reporter's Notebook: Behind the Scenes at the GATT Trade Talks in Geneva," New York Times, 5 December 1982. Habeeb, Power and Tactics, 144. See also Oran R. Young, The Politics of Force: Bargaining in International Crises (Princeton: Princeton University Press 1968), 175-6. Vincent W. Stove, "Australians Lose Faith in GATT," Journal of Commerce, 2 December 1982. Stuart Simson, "The GATT Fiasco," Business Review Weekly (Australian), 4-10 December 1982. See Ronald Anderson, "Freer World Trade Trend Unlikely to Be Resumed," Globe and Mail, 28 September 1978; "Lack of Canadian Clout Reflects Trade Realities," Globe and Mail, 31 August 1979. See also Rodney de Grey, Trade Policy in the ipSos: An Agenda for Canadian-U.S. Relations (Montreal: C.D. Howe Institute 1981). Hart, Mercantilist Bargaining. The need to institutionalize this trading relationship was also recognized within the business community. See for example "Trade Link with U.S. 'Inevitable,'" Montreal Star, 18 August 1962. Report of the Senate Standing Committee on Foreign Affairs (Ottawa: Queen's Printer, July 1973). "Representative Urges More Trade with EEC," Globe and Mail, 19 January 1984. See for example "The Missing Link," Financial Times (Toronto), 10 April 1977. Jeffrey Simpson, "The Battle over Beef," Globe and Mail, 26 April 1985. Michael Valpy, "World Trade at the Crossroads," Globe and Mail, 23 November 1982. Peter Costigan, "Has Fraser Convinced Them Yet?" Sunday Mail (Brisbane), 18 June 1978. Cumes, A Bunch of Amateurs, 120. Department of External Affairs, Canadian Trade Policy for the 19805; A Discussion Paper (Ottawa: Ministry of Supply and Services 1983), 96. John Whalley, "Implications for the Uruguay Round," in Jeffrey J. Schott and Murray G. Smith, eds., The Canada-United States Free Trade Agree-

2.47 Notes to pages 112-15 ment: The Global Impact (Washington, DC: Institute for International Economics 1988), 176. CHAPTER FIVE

i Oran O. Young, "Political Leadership and Regime Reform: On the Development of Institutions in International Society," International Organization 45, no. 3 (1991): 2,81-308. See also Richard A. Higgott and Andrew F. Cooper, "Middle Power Leadership and Coalition Building: Australia, the Cairns Group, and the Uruguay Round of Trade Negotiations," International Organization, 44, no. 4 (1980): 489-632. 2. Miles Kahler, "Multilateralism with Small and Large Numbers," International Organization 46, no. 3 (1992): 699. 3 John Gerard Ruggie, "Multilateralism: The Anatomy of an Institution," International Organization 46, no. 3 (1992): 567. 4 Helen Milner, "International Theories of Co-operation among Nations," World Politics 44, no. 3 (1992): 467; Robert O. Keohane, After Hegemony: Cooperation and Discord in the World Political Economy (Princeton: princeton University Press 1984), 51-2. 5 Charles Mayer, Parliament of Canada, House of Commons, Debates, 28 April 1987, 5357. 6 Pat Carney, testimony to the House of Commons Standing Committee on External Affairs and International Trade, Minutes of Proceedings and Evidence, 9 April 1987, 23:7. 7 Michael Gifford, agricultural trade counsellor at the Trade Negotiations Office, quoted in Frances Williams, "GATT Weeds through World Farm Trade Ideas," Financial Post, 2 November 1987. 8 William Dullforce, "How Australia Operates in GATT," Financial Times (London), 7 December 1988. 9 Jocelynne A. Scutt, ed., Poor Nation of the Pacific? Australia's Future? (Sydney: Allen & Unwin 1985). 10 Richard Higgott, "Australia: Economic Crisis and the Politics of Regional Economic Adjustment," in Richard Robison, Kevin Hewison, and Richard Higgott, eds., South East Asia in the 19805 (Sydney: Allen & Unwin 1987), 177-217; and "Australia and the New Division of Labor in the Asia Pacific Region," in James Caporaso, ed., A Changing International Division of Labor (Boulder, CO: Lynne Rienner 1987), 147-85. 11 Figures given by John Dawkins, Parliament of the Commonwealth of Australia, House of Representatives, Debates, 22 April 1985, 1653. See also Lawrence B. Krause, "Australia's Comparative Advantage in International Trade," in Richard E. Caves and Lawrence B. Krause, eds., The Australian Economy: A View from the North (Sydney: Allen & Unwin for the Brookings Institution 1984), 281.

Z48 Notes to pages 115-18 12 Geoff Miller, The Political Economy of International Agricultural Policy (Canberra: AGPS 1987), i. 13 Sir Colin Teese, the senior official in the Australian delegation at the 1982 GATT Ministerial, had suggested as late as July 1985 that: "Our best hope is that a few illustrations of [the American tactic of fighting fire with fire] in action will bring the community to the negotiating table"; quoted in Deborah Snow, "Australia in the Crossfire of a US-Europe Trade Row," Australian Financial Review, 16 July 1985. 14 Ruggie, "Multilateralism," 567. 15 See Ian M. Drummond, Imperial Economic Policy, 1917-1939: Studies in Expansion and Protection (London: Allen & Unwin 1974); and Andrew F. Cooper, British Agricultural Policy, 1912-36; A Study in Conservative Politics (Manchester: University of Manchester Press/St Martins Press 1989). 16 For background see Robert L. Paarlberg, Fixing Farm Trade: Options for the United States (Cambridge, MA: Ballinger for the Council on Foreign Relations 1988); and Nicholas Butler, "The Ploughshares War between Europe and America," Foreign Affairs 62, no. i (1983): 105-22. 17 Quoted in Frances Phillips, "Farm Aid Becomes Hot Summit Topic," Financial Post, 30 May 1988. 18 Gilbert R. Winham, "The Pre-Negotiation Phase of the Uruguay Round," International Journal 44, no. 2 (1989): 290. 19 On this point see Fen Osier Hampson, "Climate Change: Building Coalitions of the Like-Minded," International Journal 45, no. i (1990): 36-74. 20 Peter W. Gallagher, "Setting the Agenda for Trade Negotiations: Australia and the Cairns Group," Australian Outlook: The Australian Journal of Political Science 42, no. i (1988): 5. 21 T.B. Millar "Australia and the United States," (paper presented at a conference on Australia's External Relations: The Interaction of Economic, Political, and Strategic Factors, the ANU Research School of Pacific Studies, Department of International Relations, Canberra, 1-4 September 1982). 22 Richard Higgott, "The Ascendancy of the Economic Dimension in Australian-American Relations," in John Ravenhill, ed., No Longer an American Lake? Alliance Problems in the South Pacific (Berkeley: Institute of International Studies, University of California at Berkeley 1989), 158. See also Anne Summers, "Australia Plays Smart to Lobby Officials on Protectionism Debate," Australian Financial Review, 27 March 1987. 23 Alan Renouf, The Frightened Country (Melbourne: Macmillan, 1979), 49724 See also ABARE, Japanese Agricultural Policies: A Time of Change (Can-

249 Notes to pages 119-13

25 2.6

27 28 29 30 31 32 33 34

35 36 37 38 39

40

41

42

berra: AGPS 1988); and Ivan Roberts et a\., U.S. Grain Policies and the World Market (Canberra: ABARE 1989). OECD, National Policies and Agricultural Trade (Paris: OECD 1987). J.A.C. Mackie, "Australian Foreign Policy as Regionalism: The Transition from Fraser to Hawke," Dyason House Papers 10, no. i (1983); John Durie, "Hawke Campaigning for Pacific Region Trade Talk," Australian Financial Review, 8 December 1983. Laurie Oakes, "A Domestic Victory in Hawke's Ottawa Triumph," The Bulletin, 2 April 1985, 34, 37. Roy Eccleston, "PM calls for Allies in Wheat War," Australian, 26 July 1986. Amanda Buckley, "Aust Hopes to Help Found Group to Counter Protectionist Traders," Australian Financial Review, 25 August 1986. Ibid. Barry Critchley, "Fair Traders Taking Aim at Agricultural Subsidies," Financial Post (Toronto), 23 August 1986. Cairns Group, Declaration of the Ministerial Meeting of Fair Traders in Agriculture, Cairns, Australia, 26 August 1986. Journal of Commerce 27 May 1987, loA. Alan Oxley, quoted in Ellen Wallace, "'Barn Wars': GATT Feels Time is Ripe for Action on Subsidies," Christian Science Monitor, 7 November 1986. Representatives, Debates, 10 October 1986. Cairns Group, Declaration. David Kelly, "Can We Make the World Farm Traders Toe the Line?" Australian Farmer, 18 February 1987. John Kerin, quoted in Richard Yallop, "EC Trade, Proposals Not Enough: Kerin," The Age, 14 October 1987. Opening statement by the minister for trade negotiations, Mr Michael Duffy, at the third Cairns Group Ministerial meeting in Bariloche, Argentina, 24 February 1988. The consensus out of this meeting was that "the Hero's role at Bariloche must go to the Australians"; Tim Coone, "i4-Nation Group Devises Trade Reform Ideas," Financial Post (Toronto), 2 March 1988, reprinted from Financial Times (London). Sarah Sargent, "Big Issues May Need 'Other' Solutions as Trade Reform Continues to Flounder," Australian Financial Review, 14 January 1988. For a fuller discussion see Andrew F. Cooper, "Exporters versus Importers: LDCS, Agricultural Trade and the Uruguay Round," Intereconomics 25 (1990): 13-17. Sarah Sargent "Australia Will Recognize Exceptions to Free Trade for Developing Countries," Australian Financial Review, 22 May 1987. This recognition was built into the Cairns Group, Time for Action: A Proposal

2,50 Notes to pages 12.3-8

43

44 45 46

47 48 49 50 51 52 53 54

55 56 57 58 59 60 61

for a Framework Approach for Agriculture, no. MTN.GNG/NG5/W/69, GATT, 13 July 1988, 5. Diana Tussle, "Holding the Balance: The Cairns Group," in Diana Tussie and David Glover, eds., The Developing Countries in World Trade: Policies and Bargaining Strategies (Boulder, co: Lynne Rienner 1993), !95Ibid. Speech by the PM, R.J.L. Hawke, EMF Symposium, Davos, 29 January 1987. Robert Paarlberg, "Why Agriculture Blocked the Uruguay Round: Evolving Strategies in a Two-Level Game," in William P. Avery, ed., World Agriculture and the GATT (Boulder, co: Lynne Rienner 1993), 39-54"Cairns Group Threatens Geneva Walkout," Agra Europe, 23 March 1989. Greg Hywood, "Cairns Group May Barter for Better Deal on Agriculture," Australian Financial Review, 2. July 1990. Quoted in Russell Blinch, "Agricultural Exporters Press for Reform of Subsidy System," Toronto Star, 25 May 1987. "Closer Farm Ties with U.S. Planned," Winnipeg Free Press, 5 January 1985. David Stewart-Patterson, "Sweetness and Light Prevail in Canada-U.S. Wheat Talks," Globe and Mail, 19 October 1984. House of Commons Standing Committee on Agriculture, Minutes of Proceedings and Evidence, 2,2, May 1985, 19:10. Willy de Clercq, quoted in Jeffrey Simpson, "A Steady Corrosion," Globe and Mail, 27 April 1985. Andrew F. Cooper, "Agricultural Relations between Western Nations: Canadian Approaches," in Irene Sage Knell and John R. English, eds., Canadian Agriculture in a Global Context: Opportunities and Obligations (Waterloo: University of Waterloo Press 1986), 85. Quoted in Edward Greenspon, "Mulroney Looks to Thatcher for Leadership," Globe and Mail, 24 May 1988. Edward Greenspon, "Kohl Gives PM Warm Welcome, Little Hope on Key Summit Issue," Globe and Mail, 25 May 1988. Paul Samuel, "Hawke Flays US Hypocrites over Cheap Wheat for Russia," Australian, i August 1986. "Reagan Deaf to PM'S Protest in Approving Soviet Wheat Sale," Toronto Star, 23 August 1986. Paul Kelly, "Reinventing Australia," National Interest, Winter 1992/93, 57-66. Don McGillivray, "Canada's Pretence Exceeds its Stature," Ottawa Citizen, 7 May 1986. Philip Douglas, deputy director of agricultural and commodity policy in

2-51 Notes to pages 118-36

62

63 64 65 66 67 68 69 70 71

72 73

74

75 76

77 78 79 80

DBA, quoted in Clyde Graham, "Farm and Trade Officials to Meet in Australia," Halifax Chronicle Herald, 23 August 1986. Sylvia Ostry, testimony to the Senate Standing Committee on Foreign Affairs, Minutes of Proceedings, 13 June 1989, 5:19. She then added somewhat ruefully, "it did not." Paul Knox, "Clark Will Press Need for Saving GATT Talks," Globe and Mail, 15 September 1986. Paul Knox, "Clark Urges GATT Members to Start Talks," Globe and Mail, 16 September 1986. Steven Langdon, Parliament of Canada, House of Commons, Debates, 20 October 1986, 539, 540. Quoted in Paul Knox, "Big Obstacle Overcome on GATT Guidelines," Globe and Mail, 20 September 1986. Quoted in Geoff White, "Middle Powers Proved Catalysts at Trade Meeting," Calgary Herald, 26 September 1986. See Carolyn O'Brien, "Problems in Australian Foreign Policy," Australian Journal of History of Politics 33, no. z (1987): 13. Testimony to the Senate Standing Committee on Foreign Affairs, Minutes of Proceedings, 13 June 1989, 5:9. Quoted in Brigid Phillips, "Farm Dispute Still Alive," Calgary Herald, 20 May 1988. Quoted in Christopher Waddell, "Summit Progress Not Expected on Subsidies," Globe and Mail, 16 June 1988. Michael Wilson, at a pre-summit briefing with Clark, echoed the sentiments held by the Australians. "Mulroney Errs in EC Subsidy Assessment," Halifax Chronicle Herald, 2.6 May 1988. John Ferguson, "Farm Subsidies Catch up with PM," Calgary Herald, z6 May 1988. See also John Spears, "Canada Both a Peace-Keeper and a Player in Subsidy War," Toronto Star, 27 May 1988. Colin Carter, Alex McCalla, and Andy Schmitz, Canada and International Grain Markets: Trends, Policies, and Prospects (Ottawa: Economic Council of Canada 1989). Speech to Canadian Cattlemen's Association, Whistler, BC, 8 August 1986, 2. Peter Benesh, "Canadian Subsidies Break Free from Trade Subsidy," The Age, 18 December 1987. John Wise, the Canadian agriculture minister, added that "we'll be there when the smoke clears." For journalistic commentary see Peter Cook, "Canada's Clever Approach Turns Two Issues into One," Globe and Mail, 10 July 1987. Ruggie, "Multilateralism," 568. "Cairns Trade Deal Bickering," National Farmer, 18 September 1986. Canada, Proposal by Canada Regarding the Multilateral Trade Negotiations in Agriculture, no. MTN.GNG/NG5/w/i9, GATT, 20 October 1987, i.

2,52.

Notes to pages 137-44

81 See for example Sarah Sargent, "Cairns Group May Lose Canada," Australian Financial Review, 7 July 1988. 82 Australia, Illustrative Elements of Commitments to Reduce Support as Part of First Steps to Long-Term Reform, no. MTN.GNG/NG5/W/7O/REV. i, GATT, 13 July 1988. 83 John Durie, "Canada a Fair Trade Friend? Fair Weather, More Like It," Australian Financial Review, 18 June 1990. 84 The Cairns Group, A Comprehensive Proposal for the Reform of Agriculture, Chiang Mai, Thailand, 21-3 November 1989. 85 News Release no. 2.92,, minister for International Trade, "Canada Endorses Cairns Group Agreement on a GATT Negotiating Position," 23 November 1989. 86 Madelaine Drohan, "Canada at Odds with Trade Group," Globe and Mail, 24 October 1990. 87 Helen Trinka, "Canada Rains on Team Parade," Australian, 2,0 October 1989. 88 "Crosbie Urges Liberalized Farm Trade," Toronto Star, 23 July 1988. 89 Robert Garran, "Canada Fails to Back Cairns Group Offer on GATT," The Age, 17 October 1990. 90 Quoted in Drohan, "Canada at Odds." 91 Germain Denis, testimony to the House of Commons Standing Committee on Agriculture, Minutes of Proceedings and Evidence, 11 February 1992, 24:10. CHAPTER

SIX

1 Michael Mastanduno, David A. Lake, and G. John Ikenberry, "Toward a Realist Theory of State Action," International Studies Quarterly 33, no. 4 (1989): 458-9. 2 Peter Alexis Gourevitch, "Breaking with Orthodoxy: The Politics of Economic Policy Responses to the Depression of the 19305," International Organization 38, no. i (1984): 99. Mancur Olson also suggests that an exogenous shock breaks the lock of established interest groups over the policy-making process; Mancur Olson, Australia in the Perspective of the Rise and Decline of Nations (Sydney: Centre for Economic Policy Research 1984). 3 See for example Fred Gruen, "How Bad Is Australia's Economic Performance and Why?" Economic Record 62, no. 177 (1986). For an interpretation of this crisis from a left perspective, see Bob Catley, "Australia in the World Crisis," in Graeme Duncan, ed., Critical Essays in Australian Politics (Melbourne: Edward Arnold 1978). 4 G. John Ikenberry, "Conclusion: An Institutional Approach to American Foreign Policy," International Organization 42, no. i (1988): 233.

2.53 Notes to pages 144-50 5 Quoted in Stuart Simson, "GATT Talks Offer Little Hope of Piercing Trade Wall," Business Review (Australia), zo November i98z. 6 On the application of this concept see Andrew F. Cooper, "Australia: Domestic Political Management and International Trade Reform," in Grace Skogstad and Andrew F. Cooper, eds., Agricultural Trade: Domestic Pressures and International Tensions (Halifax: Institute for Research on Public Policy 1990), 111-33; and Richard A. Higgott, "The Politics of Australia's International Economic Relations: Adjustment and Two-Level Games," Australian Journal of Political Science 2.6, no. i (1991): i-z8. 7 Stephan Haggard, Pathways from the Periphery: The Politics of Growth in the Newly Industrializing Countries (Ithaca: Cornell University Press 1990), 4. 8 Ibid., Z3. 9 Nancy Viviani, "Foreign Economic Policy," in Christine Jennett and Randal G. Stewart, eds., Hawke and Public Policy: Consensus and Restructuring (Melbourne: Macmillan 1990). 10 Paul Kelly, The End of Certainty: The Story of the 19805 (St Leonards, NSW: Allen & Unwin 1991), i. 11 Peter Evans, Dietrich Ruescheymer, and Theda Skopal, Bringing the State Back (Cambridge: Cambridge University Press 1985), 9. iz John Zysman, Governments, Markets and Growth: Financial Systems and the Politics of Industrial Change (Ithaca: Cornell University Press 1983), z86. 13 Quoted in Nigel Austin, "Kerin's Deep Split with Farmers," Bulletin, iz November 1985. 14 Greg Whitwell, "Economic Ideas and Economic Policy: the Rise of Economic Rationalism in Australia," in Graeme D. Snooks and Jonathan J. Pincus, eds., Economic Policy in Australia since the Great Depression (Sydney: Sydney University Press 1993), (Special issue of Australian Economic History Review 33, no. z [1993]), 10. 15 Quoted in Julian Cribb, "Bush Whacked by Labor," Australian, i-z August 1987. 16 On the ALP'S wider agenda see Ann Capling and Brian Galligan, Beyond the Protective State (Melbourne: Melbourne University Press i99z). 17 Ikenberry, "Conclusion," zzo. 18 Patrick Weller, "The Hawke Cabinet: Collective or Responsible?" Australian Quarterly, Summer 1985, 343. 19 Peter Robinson, "Consensus Politics Confronts its Destiny," Australian Financial Review, 13 December 1991. zo Michael Stutchbury, "The Rise of the New Econocrats," Australian Financial Review, Z4 July 1987; Michael Pusey, Economic Rationalism in Canberra: A Nation-Building State Changes Its Mind (Sydney: Cambridge University Press 1991).

2.54 Notes to pages 150-9 21 Paul Kelly, "Reinventing Australia," National Interest, Winter 1992/93, 66. 22 Capling and Galligan, Beyond the Protective State, 127. 23 On this point more generally see Haggard, Pathways from the Periphery, 46-7. 24 Herman Kahn and Thomas Pepper, Will She Be Right? The Future of Australia (St Lucia: University of Queensland Press 1980). 25 Parliament of the Commonwealth of Australia, House of Representatives, Debates, n September 1980, 1265. 26 Quoted in Francis Castles, Australian Public Policy and Economic Vulnerability (Sydney: Allen & Unwin 1988), 36. 27 Ikenberry, "Conclusion," 220. 28 Peter J. Katzenstein, Small States in World Markets: Industrial Policy in Europe (Ithaca: Cornell University Press 1985), 12. 29 Louise Dodson, "Devolution in Trade," Australian Financial Review, 8 October 1987. 30 Paul Kelly, "Why Dawkins and Hawke Have Split," Australian, 12 October 1988. 31 Pusey, Economic Rationalism. 32 William Dullforce, "How Australia Operates in GATT," Financial Times (London) 7 December 1988. 33 A Government Policy Statement, Economic and Rural Policy (Canberra: AGPS 1986). 34 Most dramatically the NFF scheduled a massive rally in Canberra to coincide with the opening day of a tax summit convened by the Hawke government. See David Barnett, "A Show of Rural Strength Frightens Hawke," The Bulletin, 16 July 1985, 50-2. 35 Keith Campbell, "Prospects for Deregulation of Australian Agriculture," Australian Quarterly, Spring 1985, 253. 36 Ibid. 37 Representatives, Debates, 13 May 1985, 2148. 3 8 Agricultural Trade Group, Department of Trade, Agribusiness: Structural Developments in Agriculture and the Implications for Australian Trade (Canberra: AGPS 1987). 39 Agricultural Trade Group, Agribusiness, 89. 40 Ian McLachlan, "Successful Strategies for Australian Trade," (address to a seminar at the Centre for International Economics, Sydney, 23 October 1987), 16. 41 Rick Farley, "Agriculture as Sunrise Industry," letter to Australian Financial Review, 24 June 1988. 42 David Shires, "Spotlight on Agricultural Trade in Dawkins' Revamp," Australian Financial Review, 8 January 1986. 43 Hawke was careful to reiterate the basic theme in these addresses, that it

255 Notes to pages 159-65

44 45 46 47 48

49

50

51 52

53 54

55

56 57

58

was the international environment that was the root cause of the domestic rural crisis. See Representatives, Debates, 20 February 1986, 959. Quoted in Adrian Lynch, "Australia's Grapes of Wrath for Politicians and Farm Families," Rydges, October 1985, 19. Representatives, Debates, 15 April 1986, 2281. Quoted in Barbara Crossette, "Despite Decisive Steps, Australia is Stumbling," Times (London), July 1986. For a profile see Peter Menadue, "An Establishment Man Goes to Bat for Angry Farmers," Australian, 5 July 1986. Bureau of Agricultural Economics, Agricultural Policies in the European Community: Their Origins, Nature and Effects on Production and Trade (Canberra: AGPS 1985). Representatives, Debates, 17 February 1986, 635. Dawkins added a few days later in the House of Representatives that he was "appreciative of [the NFF'S] support and assistance," 20 February 1986, 956. Commonwealth of Australia Senate, Senate Standing Committee on Foreign Affairs, Defence and Trade, Implications of United States Policies for Australia, 25 September 1992,, 99. "Strange Goings-on at Cairns," Australian Financial Review, 28 August 1986. Andrew Casey, "Dawkins: On the Ropes, but Not Down," Sun-Herald, 20 April 1986; "GATT Lifts Dawkins' Stocks," National Times, 28 September 1986. Alan Oxley, The Challenge of Free Trade (New York: Harvester Wheatsheaf 1990), 118. Representatives, Debates, 20 February 1986, 956. The minister for foreign affairs, Bill Hayden, made this point even more explicitly. Speaking on a television public affairs program, he urged the NFF to use the fighting fund to lobby the U.S. government. For a comprehensive review of this relationship see Richard W. Baker, "U.S. Perceptions of Second-Order Allies or It's Not Easy Being Middle" (paper prepared for a conference, Shared Perspectives: Australia and Canada & Pacific Defense and Security, Victoria, BC, 21-3 January 1994. McLachlan address, i. G. John Ikenberry, "The State and Strategies of International Adjustment," World Politics 39, no. i (1986): 57-9. See also Andrew F. Cooper and Richard A. Higgott, "Australian and Canadian Approaches to the Cairns Group: Two-Level Games and the Political Economy of Adjustment," in William P. Avery, ed., World Agriculture and the GATT (Boulder, CO: Lynne Rienner, 1993), 121-42. Transcript of news conference held in Brussels, Australian Department of Foreign Affairs and Trade, 22 March 1989.

2.56 Notes to pages 165-71 59 Press conference by Michael Duffy, minister for trade negotiations, 15 September 1987. 60 Stuart Harris, "Economic Change in the International System: Implications for Australia's Prospects," Department of International Relations ANU, Working Paper 1989/5, December 1989, 14. 61 "No Saints in World Trade - Not Even Us," Australian, 2. May 1989. 62 Speech by the prime minister to the contracting parties of the GATT, Geneva, Switzerland, press release, 22 October 1987. 63 Representatives, Debates, 10 April 1989, 1231-2. There were also a number of laudatory commentaries in the national press concerning Australia's diplomatic role; "Cairns Group Davids Muscle GATT Goliaths," Australian, n April 1989. 64 Quoted in Tim Colebatch, "Too Early for the Winners to Cheer," Australian, ii April 1989. 65 Higgott, "The Politics of Australia's International Economic Relations," 23. 66 Representatives, Debates, 13 May 1985, 2.149. 67 Agricultural Trade Group, Agribusiness. 68 Suzanne Houweling, "Hawke Remark Criticised by Farm Exporters," Australian Rural Times, 14 December 1989. 69 Richard A. Higgott, Andrew F. Cooper, and Jenelle Bonnor, "Asia-Pacific Economic Cooperation: An Evolving Case-Study in Leadership and Cooperation Building," International Journal 45, no. 4 (1990): 823-66. 70 "Pacific Rim Trade Bloc if Talks Fail, Warns Duffy," Australian, 8 August 1988. 71 Stuart Harris, "Regional Economic Cooperation, Trading Blocs and Australian Interests," Australian Outlook: The Australian Journal of International Affairs 43, no. 2 (1989): 16-2.4. 72 Ross Garnaut, Australia and the Northeast Asian Ascendancy (Canberra: AGPS 1989); Helen Hughes, Australian Export Performance, Obstacles and Issues of Assistance: Report for the Committee for Review of Export Market Development Assistance (Canberra: AGPS 1989); Pappas, Evans, and Koop, The Global Challenge, Australian Manufacturing in the 19905; What Part Will Manufacturing Play in Australia's Future? (Melbourne: Australian Manufacturing Council, Interim Report, 1989); East Asia Analytical Unit, DFAT, Australia and North-East Asia in the 19905; Accelerating Change (Canberra: AGPS 1992). 73 Quoted in Alan Wood, "Why Labor Must Speed Reform," Australian, 23 March 1993. 74 A number of published works backed up this critical assessment of the ALP government's performance. See for example Graham Maddox, The Hawke Government and Labor Tradition (Ringwood, Vic.: Penguin 1989).

257

Notes to pages 171-6

75 See Richard Higgott, "International Constraints on Labor's Economic Policy," in Brian Galligan and Gwyn Singleton, eds., How Labor Governs: The Hawke Government and Business (Melbourne: Longmans 1991). 76 "Protectionism Rears Its Head," Australian Rural Times, 24-30 May 1990. 77 See for example David Kelly, "Kerin Is Set on a Less Regulated, More Open Wheat Industry Format," National Farmer, 6 May 1988. 78 Suzanne Houweling and Tim Powell, "NFF Rules out More Aid Cuts," Australian Rural Times, 26 April-2 May 1990, 2. 79 Whitwell, "Economic Ideas and Economy Policy," 25. 80 Glen Milner, "Hawke Shelves Garnaut Tariff Plan," Weekend Australian, 3-4 February 1990. 81 David Lague, "Hawke Admits He Has No Tactics in Trade War," Australian Financial Review, 2 August 1991. 82 Prime Minister Paul Keating MP, "New Visions for Australia" (E.V. Evatt Lecture, Sydney, 28 April 1993). 83 Representatives, Debates, 28 April 1992, 1847. 84 For background see Andrew Elek, "APEC - Motives, Objectives and Prospects," Australian Journal of International Affairs 46, no. 2 (1992): 174-81. 85 Paul Keating, speech to the Asia 2010 conference of the Australian Chamber of Manufacturers in Melbourne, quoted in Dennis Shanahan, "Regional Trade Vital Regardless of GATT, says PM," Australian, 21 July 1992. 86 Gregory Hywood, "Farm Protests Win No Sympathy in US," Australian, 6 January 1992. 87 Keating, "New Visions for Australia." CHAPTER SEVEN

1 Michael Mastanduno, David A. lake, and G. John Ikenberry, "Toward a Realist Theory of State Action," International Studies Quarterly 33, no. 4 (1989): 458. 2 See David Baldwin, Economic Statecraft (Princeton: Princeton University Press 1985). 3 See Hyman Solomon, "Cuts to Farm Trade Barriers Face Battle before GATT Meeting," Financial Post, 6 October 1990. 4 See for example Jeffrey Simpson, "A Two-Headed Agricultural Policy," Globe and Mail, 17 November 1989; Hyman Solomon, "Canada's Contortions on Supply Management," Financial Post, 15 March 1990; and Barry Wilson, "Canada Takes on Two Roles at the Same Time," Western Producer, 14 December 1990.

258 Notes to pages 177-83 5 William D. Coleman, Business and Politics: A Study of Collective Action (Montreal and Kingston: McGill-Queen's University Press 1988), 101. 6 John Spears, "Trade Debate Divides Farm Groups," Toronto Star, 18 April 1987; Barry Wilson, "Farmer Interests Divided on Freer Trade Proposals," Western Producer, 15 December 1988. 7 Robert D. Putnam, "Diplomacy and Domestic Politics The Logic of TwoLevel Games," International Organization 48, no. 3 (1988): 434. 8 G. John Ikenberry, "Conclusion," International Organization 42, no. i (1988): 220. 9 Timothy Palmer-Benson, "Fair Traders Showdown Puts Food on GATT List," Food in Canada, October 1986. 10 Donald J. Savoie, The Politics of Public Spending in Canada (Toronto: University of Toronto Press 1990), 190. 11 "Farms Given Top Bill," Winnipeg Free Press, 26 April 1987. 12 Testimony to the House of Commons Standing Committee on Agriculture, Minutes of Proceedings and Evidence, 12 March 1987, 12:9. After she moved over to a position at the University of Toronto, Ostry warned that a GATT agreement could not avoid dealing with domestic policies: "The basic agreement that will have to be worked out before the end of the round will be the precise definition of the total subsidy, and the question of Article XI will have to be worked out in some detail"; testimony to the Senate Standing Committee on Foreign Affairs, Minutes of Proceedings, 13 June 1989, 5:20. 13 Reforming World Trade: A Policy Statement by Twenty-nine Professionals from Seventeen Countries (Washington: Institute for International Economics 1988). 14 Quoted in "Trade Rules Needed to Halt World Decline, Clark Says," Winnipeg Free Press, 16 September 1986. 15 Joe Clark, speech to Canadian Grains Council, "Farm and Foreign Policy Are Tied Tightly Together," Winnipeg, 7 April 1987. 16 Quoted in John Da vies, "Canadian Farmers Called War Victims," Journal of Commerce, 24 March 1987, 3. 17 Jim Graham, testimony to the Senate Standing Committee on Foreign Affairs, Minutes of Proceedings, 9 August 1988, 31:34. 18 Arthur A. Stein, Why Nations Cooperate: Circumstances and Choice in International Relations (Ithaca: Cornell University Press 1990), 16. 19 Michael Hart, Irreconcilable Differences: Negotiating the Free Trade Agreement, Occasional Paper No. 133, Centre for Trade Policy and Law, the Norman Paterson School of International Affairs, Carleton University (Ottawa 1990), 12. See also I.M. Destler, American Trade Politics: System Under Stress (Washington: Institute for International Economics 1986). 20 Department of External Affairs, How to Secure and Enhance Canadian

259

21 22 23 24 25

26

27

28

29 30

31

Notes to pages 184-7

Access to Export Markets (Ottawa 1985), 3. For Pearson's own search for balance between multilateralism and bilateralism see Lester B. Pearson, Mike, the Memoirs of the Right Honourable Lester B. Pearson, Vol. 2: 1948-1957, ed. John A. Munro and Alex I. Inglis (Toronto: University of Toronto Press 1973), 32.. Quoted in Jim Sheppard, "Canada, Agricultural Rivals Sign Trade Pact," Toronto Star, 14 May 1987. Quoted in John Douglas, "Hopes for Subsidy 'Miracle' Doused," Winnipeg Free Press, 16 June 1988. Quoted in Alex Binkley, "Farm Meet Still Called Vital Step to Reform," Winnipeg Free Press, zz May 1987. "Agriculture Minister Seeks End to Subsidized Trade Wars," Winnipeg Free Press, 3 September 1987. On this point see Henry R. Nau, "Domestic Trade Politics and the Uruguay Round: An Overview," in Henry R. Nau, ed., Domestic Trade Politics and the Uruguay Round (New York: Columbia University Press 1989). See the opposition parties' complaints about the delay in tabling the Canadian negotiating proposal on agriculture in October 1987; Parliament of Canada, House of Commons, Debates, 27 October 1987, 10189-10191. Carney, in her statement to the House of Commons on 20 October, only "promised not to abandon the farmers in the short term"; House of Commons, Debates, 20 October 1987, 10188. See also Ostry's speech on Canadian agriculture and the Uruguay Round, "Notes for an Address to the Canadian Farm Writers Federation Annual Meeting," Ottawa, n December 1987. Alex Craig, chairman, Sub-Committee on Trade of the Supply Managed Commodity Committee, CFA, testimony to the House of Commons Standing Committee on Agriculture, Minutes of Proceedings and Evidence, 15 June 1989, 14:13. "Dairy Farmers Campaign Tug at Heartstrings," Toronto Star, 22 October 1990. Testimony of Yvan Loubier, director of studies and research for the UFA, to the Senate Standing Committee on Foreign Affairs, Minutes of Proceedings, 10 August 1988, 32:91. Jean-Yves Couillard, second vice-president, UFA, testimony to the Special Joint Committee of the Senate and the House of Commons on Canada's International Relations, Proceedings and Evidence, zz July 1985,

7:2.532 See for example Frank D. Weiss, "Domestic Dimensions of the Uruguay Round: The Case of West Germany in the European Communities," in Nau, Domestic Trade Politics, 79-81.

z6o Notes to pages 188-92 33 G. John Ikenberry, "The State and Strategies of International Adjustment," World Politics 39, no. i (1986): 57. 34 Peter Aucoin, "Organizational Change in the Machinery of Canadian Government: From Rational Management to Brokerage Politics," Canadian Journal of Political Science 19, no. i (1986): 3-27. 3 5 Savoie, The Politics of Public Spending in Canada, 90. 36 Quoted in "Summit May Move on Debt, Subsidies," Financial Post, 20 June 1988. 37 Sperry Lee, A Canada-U.S. Free Trade Agreement (Washington: Canadian-American Committee 1963); A Possible Plan for a Canada-U.S. Free Trade Area: A Staff Report (Washington/Montreal 1965), 30. 3 8 Economic Council of Canada, Looking Outward: A New Trade Strategy for Canada (Ottawa: Ministry of Supply and Services 1976), 51. See also Theodore H. Cohn, The International Politics of Agricultural Trade: The Canadian-American Relations in a Global Agricultural Context (Vancouver: UBC Press 1990) , chap. 7. 39 Canada, Senate Standing Committee on Foreign Affairs, Canada-United States Relations, vol. 2, Canada's Trade Relations with the United States (Ottawa: Queen's Printer 1978), 2. 40 Senator George van Roggen, testimony to the Senate Standing Committee on Foreign Affairs, Minutes of Proceedings, 20 March 1990, 21:13. 41 External Affairs, A Review of Canadian Trade Policy. 42 Report of the Royal Commission on the Economic Union and Development Prospects for Canada (Ottawa: Queen's Printer 1985), 2:422-35. 43 Quoted in John Spears, "Macdonald, Farmers Clash over Serfs in Free Trade," Toronto Star, 26 November 1985. 44 Quoted in "Wise Vows Farm Program Non-Negotiable," Winnipeg Free Press, 2.6 March 1986. See also notes for an address by the Hon. John Wise, Minister of Agriculture, to leaders of the chicken, turkey and egg industries, 3 December 1987. Wise's own suspicions about the concept of free trade with the United States had been made known in a number of public statements. In a speech in 1985, for example, Wise had pointed to the inconsistencies in the American stance on trade liberalization: "We hear a lot of talk about free trade and so on. That is fine. But it appears that certain people are not always as free in their trading as they would like to lead people to believe they are"; House of Commons Standing Committee on Agriculture, Minutes of Proceedings and Evidence, 4 February 1985, 5:16. 45 See Bruce Doern and Brian Tomlin, Faith and Fear (Toronto: Stoddart 1991). 46 On this concept see Peter F. Co whey, "The International Telecommunications Regime: The Political Roots of Regimes for High Technology," International Organization 44, no. 2 (1990): 169-200.

261 Notes to pages 19:1-7 47 Quoted in Fred Langan, "Marketing Boards Are Under Seige," Calgary Herald, 3 November 1989. See also Grace Skogstad, "Policy under Seige: Supply Management in Agricultural Marketing," Canadian Public Administration 36, no. i (1993): 1-2.3. 48 George Fleischmann, president and CEO, CPMC, and John Pigott, vicepresident, Morison Lamothe, testimony to the Senate Standing Committee of Foreign Affairs, Minutes of Proceedings, 9 August 1988, 31:46, 31:52. 49 Archie McCain, president, Canadian Food Processors, testimony to the Senate Standing Committee on Foreign Affairs, Minutes of Proceedings, 20 March 1990, 21:24, 21:45. 50 Graham Freeman, chairman, Ault Foods, testimony to the House of Commons Standing Committee, Minutes of Proceedings and Evidence, 20 March 1990, 26:11. In February 1990 the Ontario Ministry of Agriculture and Food released a report of the Food Industry Advisory Committee that suggested that supply management made it more difficult for food processors to compete under the FTA. See Alan M. Rugman and Andrew Anderson, "The Canada-U.S. Free Trade Agreement and Canada's Agri-Food Industries" (paper presented at the joint conference of the Advisory Committee on Education, Economics and Extension and the Northeastern Agricultural and Resource Economics Association, Truro, Nova Scotia, 19 June 1990). 51 Jeffrey J. Schott, United States-Canada Free Trade: An Evaluation of the Agreement (Washington: Institute for International Economics 1988), 24. 5 2 Terry G. Norman, deputy coordinator, Agriculture, Trade Negotiations Office, testimony to the Senate Standing Committee on Foreign Affairs, Minutes of Proceedings, 9 August 1988, 31:26. 53 Suzanne Dansereau, "L'uPA entend accentuer son opposition au libreechange," Le Devoir, 2 December 1987; Richard Cleroux, "PM Faces Fight with Quebec Farmers over Free Trade Deal," Globe and Mail, 30 August 1988. 54 See Grace Skogstad, "The State, Organized Interests and Canadian Agricultural Trade Policy: The Impact of Institutions," Canadian Journal of Political Science 25, no. 2 (1992): 319-47. 55 Robert McKenzie, "Quebec Wavers on Free Trade for Farmers," Toronto Star, 4 December 1987. 56 "Saskatchewan to Fight Subsidies," Globe and Mail, 21 September 1990. 57 Alberta Agriculture Trade Policy Secretariat, "Alberta's Views on Effective and Equitable GATT Rules for Agriculture: A Discussion Paper," 25 September 1989, 8. 58 Colin Campbell and John Halligan, "Executive Leadership: Comparing

2,62. Notes to pages 197-202

59

60

61 62

63

64 65

66 68

68

69

70 71

Hawke and Mulroney," in Malcolm Alexander and Brian Galligan, eds., Comparative Political Studies: Australia and Canada (Melbourne: Pitman 1992), 80-1. Bill Redekop, "Mazankowski Gets Farmers' Nod," Winnipeg Free Press, 30 December 1988; Barry Wilson, "Mazankowski Clout Makes Big Difference," Western Producer, 10 August 1989. Agriculture Canada, Growing Together: A Vision for Canada's Agrifood Industry (Ottawa: Supply and Services Canada, Publication 5269^, 1989). Barry Wilson, "Farm Lobby Feels Chill in Government Relations," Western Producer, 31 August 1989. The president of the DFC, John Killoran, quoted in "Breather Comes on Supply Management," Western Producer, 14 December 1989. See also Dairy Farmers of Canada, "Necessary GATT Principles for Supply Management: Article XI" (Ottawa 1989). Several plants concerned with further processing had either closed or threatened to close. See also Rugman and Anderson, "The Canada-U.S. Free Trade Agreement and Canada's Agri-Food Industries." "8,000 Farmers in Rally to Protest Tariff Easing," Vancouver Sun, 22 November 1989. Peter Morton, "Jell-o Jibe Angers Canadians," Financial Post, 6 December 1990. See also Edward Greenspon, "Canada Teased for Its Farm Trade," Globe and Mail, 14 April 1990. See for example James C. Gilson, World Agricultural Changes: Implications for Canada (Toronto: C.D. Howe Institute 1989). See also Dairy Farmers of Canada, Response to Adjusting to Win: The Report of the AdvisoryCouncilonAdjustment(De Grandpre Report) (Ottawa 1989). Peter H. Russell, Constitutional Odyssey: Can Canadians be a Sovereign People? (Toronto: Custom Publishing Service, University of Toronto Bookstores 1992), 128. Jean-Yves Duthel, quoted in Barry Wilson, "Market Boards That Stabilize Rural Incomes Are under Fire," Montreal Gazette, 8 January 1990. The regional dimension in these complaints is highlighted by the forceful rhetoric of Jacques Proulx, the UFA'S president, that Ottawa was "bartering away the subsidies to Quebec dairy farmers, in order to secure export markets for prairie grain growers at the GATT bargaining table"; quoted in Benoit Aubin, "Quebec Farmers Plan to Besiege Tory MPS," Globe and Mail, ii May 1989. On Proulx, see Danielle Thibault, "M. Agriculture", L'Actualite, decembre 1988, 78-86. La Terre de chez nous, 22 mars 1990. House of Commons, Debates, 24 September 1990, 13212.

263

Notes to pages 2,02-7

72 Russell, Constitutional Odyssey, 142. 73 Lucien Bouchard, "Un cas patent de double langage," Le Devoir, 24 juillet 1990. 74 Claude Turcotte, "Le President de I'UPA croit a un compromis au GATT," Le Devoir, 6 decembre 1990. 75 Alan Freeman and Drew Pagan, "Quebec Silence Loud at GATT," Globe and Mail, 29 November 1992. Organizations such as the Dairy Farmers of Canada, the Canadian Chicken Marketing Agency, and the Canadian Egg Marketing Agency had conducted their own transnational lobbying efforts in Europe throughout the late 19805 and early 19905, often in conjunction with the International Federation of Agricultural Producers. Most notably, as discussed in chapter 5, the DFC extended its domestic lobbying effort to try to save Article XI of the GATT into the international arena. 76 L'Union des producteurs agricoles, "Elements d'analyse sur les relations actuelles entre le Quebec et le Canada," Commission sur 1'avenir constitutionnel du Quebec, 2 novembre 1990. 77 "Western Farmers Lash out at Quebec's GATT Stance," Globe and Mail, ii December 1990. 78 "Blais Will Fight for Marketing Boards in Geneva Talks on GATT Doc," Montreal Gazette, 21 July 1990. 79 Quoted in Peter Morton, "Farmers Fear Freeze on Canada's Supply Marketing Programs," Financial Post, 21 July 1990. 80 Le Devoir, 15 decembre 1989. 81 See Germain Denis, "L'agriculture quebecoise est-elle defendue au GATT?" Le Devoir, 14 decembre 1989. 82 "Draft Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations," MTN. TNC/W/FA, GATT, 20 December 1991. 83 Germain Denis, assistant deputy minister, Department of External Affairs and International Trade, Multilateral Trade Negotiations, testimony to the House of Commons Standing Committee on Agriculture, Minutes of Proceedings and Evidence, 11 February 1992, 24:7. 84 Jeffrey Simpson, "Fighting to the Finish, and Now the Finish Has Come," Globe and Mail, 28 May 1992; and Barry Wilson, "Canada Fights Lonely Gatt Battle against Odds," Western Producer, 23 July 1992. 85 Germain Denis, Radio Noon, CBC/CBO, 4 February 1992. 86 Minutes of Proceedings and Evidence, n February 1992, 24:9. 87 Gilbert Winham, International Trade and The Tokyo Round Negotiations, 373-4. 88 "Dairy lobby sours chances for trade," Toronto Star, 27 November 1993.

264 Notes to pages 208-13 CHAPTER EIGHT

1 Robert Cox, "Globalization, Multilateralism and Democracy," the John W. Holmes Lecture, ACUNS Reports and Papers 15*91-2, i. 2 Richard Higgott, "Toward a Nonhegemonic IPE: An Antipodean Perspective," in Craig N. Murphy and Roger Tooze, eds., The New International Political Economy, IPE Year Book, vol. 6 (Boulder, CO: Lynne Rienner 1991), 108. 3 Quoted in Darryl Gibson, "Crosbie Fears GATT Failure Will 'Badly Smash' Canada," Winnipeg Free Press, 14 November 1989. 4 Saadia Touval, The Peace Brokers: Mediators in the Arab-Israeli Conflict, 1948-1979 (Princeton: Princeton University Press 1982). 5 Colleen Hamilton and John Whalley, Coalitions in the Uruguay Round: The Extent, Pros and Cons of Developing Country Participation, (Cambridge, MA: 1989), 42. 6 William M. Habeeb, Power and Tactics in International Negotiations: How Weak Nations Bargain (Baltimore: Johns Hopkins University Press 1988), 145. 7 "Survey of Australia," Economist, 4 April 1992, 18. 8 On this point generally see Fen Osier Hampson, "A New Role for Middle Powers in Regional Conflict Resolution?" in Brian Job, ed., The Insecurity Dilemma: National Security of Third World States (Boulder, CO: Lynne Rienner, 1992), 199. 9 Richard Rose, "Comparing Forms of Comparative Analysis," Political Studies 39, no. 3 (1991): 458. 10 See Peter J. Katzenstein, Small States in World Markets: Industrial Policy in Europe (Ithaca: Cornell University Press 1985), 24. See also Andrew F. Cooper, "Like-Minded Nations and Contrasting Diplomatic Styles: Australian and Canadian Approaches to Agricultural Trade, Canadian Journal of Political Science 25, no. 2 (1992): 349-79. 11 Andrew Moravcsik, "Introduction: Integrating International and Domestic Theories of International Bargaining," in Peter B. Evans, Harold K. Jacobson, and Robert D. Putnam, Double-Edged Diplomacy: International Bargaining and Domestic Politics (Berkeley: University of California Press 1993), 33. 12 See for example Cranford Pratt, "Canada: An Eroding and Limited Internationalism," in Cranford Pratt, ed., Internationalism Under Strain: The North-South Policies of Canada, the Netherlands, Norway, and Sweden (Toronto: University of Toronto Press 1989); and Arthur Andrew, The Rise and Fall of a Middle Power (Toronto: James Lorimer 1993). 13 North-South Institute, The Wider World: Challenges for the Second Mulroney Mandate (Ottawa: 1989).

2.65 Notes to pages 213-19 14 Helen V. Milner, Resisting Protectionism: Global Industries and the Politics of International Trade (Princeton: Princeton University Press 1988). 15 Katzenstein, Small States in World Markets, 134. 16 C. Michael Aho, "Foreword," in Robert L. Paarlberg, Fixing Farm Trade: Options for the United States (Cambridge, MA: Ballinger for the Council on Foreign Relations 1988), viii. See also Henry R. Nau, ed., Domestic Trade Politics and the Uruguay Round (New York: Columbia University Press 1989). 17 For an excellent discussion of the committed and convenient concepts see Robert L. Paarlberg, "Ecodiplomacy: U.S. Environmental Policy Goes Abroad," in Kenneth A. Oye, Robert J. Lieber, and Donald Rothchild, Eagle in a New World: American Grand Strategy in the Post-Cold War Era (New York: Harper Collins 1992.), 207-32. 18 Stephan Haggard and Robert R. Kaufman, The Paths of Economic Adjustment: International Constraints, Distributive Conflicts, and The State (Princeton: Princeton University Press 1992). 19 John Waterbury, chap. 4 in Haggard and Kaufman, The Paths of Economic Adjustment. 20 Haggard and Kaufman, The Paths of Economic Adjustment, 18. 21 John Gerard Ruggie, "International Regimes, Transactions, and Change: Embedded Liberalism in the Post-War Economic Order," in Stephen D. Krasner, ed., International Regimes (Ithaca: Cornell University Press 1983), I95-2-3222 John Gerard Ruggie, "Unravelling Trade: Institutional Change and the Pacific Economy," in Richard Higgott, Richard Leaver, and John Ravenhill, eds., Pacific Economic Relations in the 1990$: Cooperation or Conflict? (St Leonard's, NSW: Allen & Unwin 1993), 36-7. 23 Richard Simeon, "Concluding Remarks," in Douglas M. Brown and Murray G. Smith, eds., Canadian Federalism: Meeting Global Economic Challenges? (Kingston, ON: Institute of Intergovernmental Relations, Queen's University 1991), 286. 24 For older arguments along these lines see Peyton Lyon, "Second Thoughts about the Second Option," International Journal 30, no. 4 (1975): 647. 25 For a general analysis of this phenomenon see Jagdish Bhagwati and Hugh T. Patrick, eds., Aggressive Unilateralism: America's 301 Trade Policy and the World Trading System (Ann Arbor: University of Michigan Press 1990). 26 See Robert O. Keohane and Joseph S. Nye Jr, Power and Interdependence:World Politics in Transition (Boston: Little, Brown iyjj), 167-72. 27 Laura Tingle, "Clinton Backs Keating on APEC," Australian, 16 September 1993.

i66 Notes to pages 220-3 28 Peter Hall, "Policy Paradigms, Social Learning, and the State: The Case of Economic Policymakers in Britain," Comparative Politics 25, no. 3 (1993): 275-96. 29 See for example Glen Milne, "Keating Calls for the Changing of the Guard," Australian, 26-7 September 1992; and Greg Sheridan, "Trading Places," Australian, 26-7 September 1992. 30 Laura Tingle, "Clinton Backs Keating on APEC." For a fuller analysis in support of this position see R.H. Snape, Jan Adams, and David Morgan, Regional Trade Agreements, parts i and 2 (Melbourne: Department of Economics, Monash University, June 1992). 31 Quoted in Geoffrey Barker, "Keating: The New Apostle of the Pacific," The Age, 18 September 1993. 32 See Stuart F. Harris, "Regional Economic Cooperation, Trading Blocs and Australia's Interests," Australian Outlook: The Australian Journal Of International Affairs 43, no. 2 (1989): 16-25; and Peter Drysdale and Ross Garnaut, "A Pacific Free Trade Area," in Jeffrey Schott, ed., Free Trade Areas and US Trade Policy (Washington: Institute of International Economics 1989). 33 Gareth Evans, "The Challenge of Asia for Australian Foreign Policy," World Review 32, no. 4 (1993): 56. 34 Tom Burton, "Keating Risks Anger from Farmers," Australian Financial Review, 13 September 1993. 3 5 See for example Australian Graduate School of Management, Going International: Export Myths and Strategic Realities, Report to the Australian Manufacturing Council (Melbourne: 1992); Paul Keating, "The Quiet Revolution in the Australian Economy, Australia Trade and Asia, A Fair Day's Trade Conference," Sydney, The Sydney Institute, 8 February 1993; and Hugh V. Emy, Remaking Australia: The State, the Market and Australia's Future (St Leonard's, NSW: Allen & Unwin 1993), chap. 4. 36 Harry G. Gelber, "Advance Australia - Where?" Australian Journal of International Affairs

46, no. 2 (1992): 12.

37 An early pessimistic assessment of Australian regionalism came from Helen Hughes, "Too Little, Too Late: Australia's Future in the Pacific Economy," Australian Economic Papers, December 1988. See also Richard Higgott, "Pacific Economic Cooperation and Australia: Some Questions about the Role of Knowledge and Learning," Australian Journal of International Affairs 46, no. 2 (1992): 182-97. 38 Quoted in Michael Stutchbury, "Keating's Temper Gives Him Foot in Mouth," Australian Financial Review, 26 November 1993. 39 Haggard and Kaufman, The Paths of Economic Adjustment, 6-7. 40 Whitwell, "Economic Ideas and Economic Policy: The Rise of Economic Rationalism in Australia," in Graeme D. Snooks and Jonathan J. Pincus,

2,67 Notes to page 2.2.4 eds., Economic Policy in Australia since the Great Depression (Sydney: Sydney University Press 1993), (special issue of Australian Economic History Review 33, no. 2, [1993])41 Cox, "Middlepowermanship, Japan, and the Future World Order," International Journal 44, no. 3 (1989): 827.

This page intentionally left blank

Index

Abbott, D. Douglas, 66, 68 agent-structure debate, 9, 209 aggregate measure of support (AMS), 139 Agriculture Canada, formerly Department of Agriculture: and clients, 70, 215; and Hamilton, 66; and Mazankowski, 198, 206; and Whelan, 74-6, 241 n. 50; and Wise, 185 Aho, Michael, 214 Allaire Committee, 202 Allwright, John, 172 Andrew, Bob, 195 Anthony, Doug: agricultural reform, 143, 147; and Britain, 52; and GATT Ministerial, 107, 165; stamp on trade diplomacy, 90; struggle with Fraser, 94; successor to McEwen, 42; and the U.S., 88; and wheat sales to the PRC, 79, 80 Anti-Inflation Board, Canada, 72, 75

Argentina: and Britain, 50; in Cairns Group, 113, 116, 117, 123, 132, 179, 211; and linkage, 125, 131 Asia-Pacific, 48, 113, 170, 173, 221. See also Australia and Asia-Pacific Asia-Pacific Economic Cooperation (APEC): Australian initiative, 169, 170; and NAFTA, 221; summit, 223; upgrading, 173 Associated Chambers of Manufactures of Australia, 61 Association of South East Asian Nations (ASEAN), 98, 116-18, 123, 132 Atlantic Canada, 21 Atlantic free trade area, 40, 53, 101 Australia: agri-centrism, 59, 77, 102, 141, 148, 157, 222; as"banana republic," 151; as bridge, 6; as busybody, 8; corporatism in, 146, 152, 156, 157; crisis,

114, 115, 143, 144; diplomatic style 15, 40-2, 51, 56, 88, 109, 118, 174, 212; domestic mobilization, 64, 82, 146, 147, 150, 162, 167, 174, 223; "econocrats," 154; economic rationalism, 150, 151, 153, 157; external validation, 58, 146, 162, 164, 165, 167, 174, 223; federalism in, 13, 21; good international citizenship, 7, 8, 12, 141, 145; hard state, 56-8, 61, 64, 66, 82, 88, 146, 172, 223; heroic approach, 42, 104, 212; identity, 167, 221, 222; image, 3, 5, 14; larrikin strain, 19, 20, 150; loneliness, 48, 49, 52, 223; as lucky country, 47, 114; maingame, 222, 223; national interest, 12, 13, 58, 60, 146, 173, 175, 222; offensive adjustment strategy, 145, 147, 149, 164, 170, 171,

270

Index

174, 175; political culture, 19-21, 88, 153; process of rethinking 114, 117, 128, 141, 145, 151, 174, 220; state-societal relations, 21, 57, 64; unilateral liberalization, 124, 166; weakness in international system, 18, 47, 48, 51, 55, 85, 145, 174, 223 and Asia-Pacific: beef sales, 161; geographical home, 48, 119, 169; relocation in, 141, 222, 223; two-way trade, 147, 157, 168, 169; split within, 2 2 1 ; strategic role, 163 and ASEAN, 82, 98, 168, 222 and Britain: change in relationship with, 48, 51, 88, 220; fear of betrayal by, 50, 220; as protector, 10; special friendship with, 5, 15, 50,91 and Canada: complexity of relationship, 17; contrasting diplomatic personalities, 22; divorce, 138; family, 14; first followers, 9, 29-31, 34, 53, 55, 84, 208-10, 212, 220; in between countries, 3-5, 46-8, 51, 53, 56, 208, 209, 221; interaction effect, 211; juxtaposition, 20; as middle powers, 3-9, 11-15, 18, 21-5, 211, 214, 224; as nice cop and tough cop, 127; niches of comparative advantage, 11, 12, 18; pairing with, 3, 13-18, 22, 46, 47, 53; privileged positions in agricultural trade system, Z4; rivalry, 14, 17, 18,

212; schemata for relationship, 36, 211; studies of, Z3; in tandem, Z5, 112; technical and entrepreneurial leadership, 15, 105, 112, 211, 212; unravelling of partnership, 134 - and developing countries: and Cairns group, 117, 118, 123; McEwen initiatives, 45; similarities, 51; Whitlam legacy, 97 - and the EC/EU, ASEAN-EC relationship: 82, 98; British entry, 42, 48-51, 61, 63, 64, 78, 79, 91, 167; combative approach to, 41, 4Z, 101, 118; on the CAP, 92, 94; domestic politics, 94, 95; and G-7, 104; lobbying, 118, 160-2; and personal diplomacy, 88, 90, 93 - and Japan, as alternative market, 48, 79, 168, 222; Australia-Japan Trade Agreements, 48, 60, 61, 62, 63; bilateral irritants, 96; and G-7, 104; McEwen and the Department of Trade, 60, 6z; and personal diplomacy, 95, 96; special relationship, 97, 220, 221 - and the People's Republic of China (PRC), 62, 79, 80, 168 - and the United States: burden sharing with, 31; frustration with, 35, 37,41,43, 50, 78, 84, 120, 162, 220; lobbying, 118; "megaphone" diplomacy, 49, 51; Power and Interdependence, 3; protector, 10, 55; special friendship, 5, 50; ultra-loyalist, 85-8, 90,91, 99, 115 Australian, 96, 166

Australian Council of Trade Unions (ACTU), 77, 152-, 156 Australia-New ZealandUnited States (ANZUS), security treaty, 10, 49, 55 Australian Financial Review, 43, 162 Australian Industries Development Corporation (AIDC), 64 Australian Labor Party (ALP): corporatism, 152, 157; and the countryside, 148, 149, 156, 157, 159; diplomatic approach, 122; domestic support, 142, 147, 162, 167; economic agenda, 119, 156; economic rationalism, 150, 153, 157; and the EC, 94; and external validation, 164, 165; factions, 150, 151; Hawke's leadership of, 154; and internal reform, 157, 166, 170— 2; and the NFF, 158, 160; in opposition, 59, 61; priorities, 163,173; regional diversification, 168, 222; and rural revolt, 156, 160, 164; structural adjustment, 149, 223; tensions within, 153, 154, 172; wartime governments, 64; Whitlam government, 77, 81, 148 Australian Manufacturing Council, 153, 171 Australian Trade Commission (AUSTRADE), 152, 169 Australia-People's Republic of China, 61 Austria, 152 Belanger-Campeau Commission, zo3 Bell, Coral, 5

271

Index

Biafra, 8 Bjelke-Petersen, Joh, 96 Blainey, Geoffrey, 48 Blair House accord, 205, 211, 219 Blais, Pierre, 185, 197, 203, 204 Blewett, Neal, 125, 153 Block, John, 126 Bloc Quebecois (BQ), 187 Bouchard, Lucien, 202 Bourassa, Robert, 195, 202 Bowen, Lionel, 149 Brady, Alexander, 14 Brazil: in Cairns Group, 113, 116-19, 132; and Canada, 129, 130; linkage, 125, 131; special treatment for developing countries, 123 Bruce, Lord, 33 Bureau of Agricultural Economics, later Australian Bureau of Agricultural and Resource Economics (ABARE), 118, 154—5, 160, 163 Burney, Derek, 182 "Bury episode," 63 Bush, George, 174 Button, John, 151, 152, 153, 168 Butz, Earl, 75 Buzan, Barry, 54 Cairns Group: Australia as driving force, 114, 117, 119, 121, 122, 124, 125, 131, 135, 165, 212; and Australian bureaucracy, 122, 154, 155; Bariloche meeting, 122, 136, 196; Cairns meeting, 126, 161, 162, 178, 179, 196; Canada as odd country out, 114, 128-130, 132, 134, 135, 138-40, 196, 204-6, 213; Chiang Mai meeting, 138; collective action through,

112; and developing countries, 116, 123, 125, 131, 132; diversity of membership, 113, 116, 123, 140, 210; and domestic reform, 164, 168, 169, 205, 214; and external validation, 145; formation, 25, 151; galvanization, 117, 120; Hawke's role, 119, 124; and the majors, 125; ministerial responsibility, 121, 153; motivations behind, 114, 115, 129, 181, 183; and NFF, 161; Ottawa meeting, 126, 131, 180, 185, 189, 196, 201; outcome from, 149, 210, 211, 219, 220, 224; schism, 136-9, 141; as "third force," 121, 128, 132, 165, 211 Canada: ambiguity in agricultural policy, 114, 135, 176, 178; as busybody, 8; constitutional politics, 129, 177, 200, 202, 216, 217; domestic adjustment, 135, 136, 192-4, 199, 204-6, 213-17; federalism in, 13, 21, 173, 198, 200-2, 206, 216; as good international citizen, 7, 8, 12, 38, 128; image, 3, 5, 14; national interest, 12, 13, 56, 126, 130, 140, 175, 214, 216; political culture, 19, 20; politicization of agricultural policy, 176, 177, 193, 216; as principal power, 73, 100; quiet diplomacy, 15, 18, 37, 38, 39, 51, 56, 58, 86, 88, 99, 102, 107, 212; regionalism in, 21, 66, 176, 177, 200, 207, 216, 217; soft state, 56-8, 67, 83, 100,

-

-

-

178, 214, 215, 217; sovereignty, 100, 111, 140; state-societal relations, 21, 25, 56-8, 67, 77, 178, 216; territorial dimension, 21, 56 and Britain: British decline, 49; British EC entry, 40, 51-3, 66; as protector, 10 and developing countries, 44, 53, 72 and the People's Republic of China (PRC), 69, 80 and the EC/EU: and agricultural subsidies, 132, 179; and Atlantic community, 40, 51; during Diefenbaker period, 40, 66; duties against, 182; Framework Agreement on Commercial and Economic Cooperation, or contractual link, 102, 107, 108; linkage of issues, 196; low-key approach towards, 88; marginalization from, 108; mediator, 126; overture towards, 140; personal diplomacy, 127; and resources, 101, 109; special relationship, 101 and the United States: Auto Pact, 13, 53; burden sharing, 31; concentration of trade, 111; continental economic relationship, 4, 5, 11, 49, 50, 51, 111, 182, 183, 190, 213, 224; counterweights, 51, 66, 99-101, 111 Defence Production Sharing Agreement, 13, 49; diplomacy of constraint, 71, 84, 209; friction with, 35, 39, 218; and G-7, 104; management of, 56, 68, 99, 111,

272. Index 118; mediator, 132; under Mulroney, 4, 126, 127, 134, 182; multiple ties with, 49, 88; new institutional framework, 182.; and "Nixon shocks," 99, 100; Power and Interdependence, 3; as protector, 10; punitive tactics, 69; special relationship, 55, 56, 99, 126, 213; use of diplomatic channels, 37, 38, 40. See also free trade Canada Development Corporation, 100 Canadian Agricultural Policy Alliance, 186 Canadian Cattlemen's Association, 133, 182 Canadian Consumer Price Index (CPI), 71 Canadian Federation of Agriculture (CFA), 188, 198, 203, 233 n. 32 Canadian Grains Council, 181 Canadian Livestock Feed Board, 74 Canadian Trade Policy for the 1980s, 111 Canadian Wheat Board, 38, 65, 68, 69, 73-4, 126, 133, 178, 186, 218, 241 n. 50 Cancun North-South initiative, 104 Capling, Ann, 151 Carmody, Alan, 90 Carney, Pat, 179, 180, 192, 259 n. 27 Carter, Jimmy, 90, 109 Charlottetown constitutional accord, 20 Chile, 77, 113, 116, 125 Churchill, Winston, 51 Clark, Joe, 133, 181-2, 184,192 Clinton, Bill, 219, 221 coalition-building: Australian skill, 144; in

Cairns group, 112, 1203, 214; Canadian skill in, 15; at domestic level, 28, 178, 179, 184; eclectic, 140, 141; in GATT negotiations, 105 Coleman, William, 177 Colombia, 113, 116, 123, 125 Colombo Plan, 23, 44 Common Agricultural Policy (CAP), 35, 40-3,924, 98, 116, 118, 124, 160, 162 Commonwealth: Eminent Persons Group, 180; Heads of Governments meetings, 119; preferences, 48; Trade and Economic Conference, 1958,45 Conference on International Economic Cooperation (CIEC), 105, 106 confidence-building techniques, 15, 122, 136, 210 Connolly, John, 99 Connor, Rex, 153 consumer concern: in Australia, 77, 78; in Canada, 70-6, 187; European, 94, 155, 162, 187 Consumers' Association of Canada, 71 Cook, Peter, 153, 211 Coombs, H.C., 33 Country Party, Australian, after 1975 the National Country Party, after 1982 the National Party: Anthony as leader, 79, 80; in coalition with Liberals, 89, 220, 222; in competition with Liberals, 94, 96; control of trade agenda, 59, 60, 61, 62, 90; McEwen as leader, 42, 59, 60; political wing of the farmers, 64;

process of transition, 65, 81; trade with Japan, 63; trade with PRC, 62, 79, 80. See also McEwen, John Co whey, Peter, 28 Cox, Robert, 8, 12, 22, 208 Crawford, Sir John, 34, 43, 60, 63, 119, 236 n. 87, 239 n. 17 Creighton, Donald, 67 Crosbie, John, 138, 139, 179, 209 Cuban missile crisis, 10 Cumes, James, 93 Curtin, John, 14, 51 Dairy Farmers of Canada (DFC), 187, 198-9, 202, 263 Davos World Economic Forum, 124, 134, 136, 166, 179 Dawkins, John: and Pat Carney, 180; as chair of Cairns, 121, 122, 126; and economic reform, 150-4; export diversification, 158, 168; and NFF, 161; political problems, 162 Defence Production Act (1950), 39 de Grandpre, Jean, 200 de Grey, Rodney, 107 de la Paix group, 130 del Castillo, Carlos Perez, 117 Delors, Jacques, 132 Denis, Germain, 204, 206 Democracy in the Dominions, 14 Democratic Labor Party, of Australia, 61 Department of Consumer and Corporate Affairs (Canada), 71, 72 Department of Finance (Canada), 66, 69-70, 108, 184, 198, 206, 215

Z73

Index

Department of Foreign Affairs (Australia), 623, 68, 88-90, 153, 155, 222

Department of Foreign Affairs and International Trade (DFAIT), formerly Department of External Affairs (DEA) and External Affairs and International Trade Canada (EAITC): and counterweight concept, 108; and the FTA, 182., 183, 191, 192; and grain sales, 68; interdepartmental committee on MTN agriculture, 198; as "lead department," 75; and structural adjustment, 215 Department of Industry, Trade and Commerce (Canada), 65, 66, 70, 108 Department of Primary Industry (Australia), 92, 155,159 Department of Trade (Australia): Agricultural Trade Group within, 159; and Anthony 88; and Dawkins, 122 dependency, or economic nationalist, perspective, 11 Destler, I.M., 70 developing countries (LDCS): commodity stabilization scheme, 44, 45; Common Fund, 97; special treatment, 44, 45, 53, 97, 123, 131, 132. See also Australia and developing countries and Canada and developing countries Devine, Grant, 194-6 de Zeeuw, Aart, 138, 202, 204 Diefenbaker, John G.: agricultural support, 68;

autonomous action, 10; Britain and Europe, 40, 52; food bank, 34; grain sales, 68, 105; personality, 105; trade diversion, 53, 66 Drummond, Ian, 66 Duffy, Michael, 153, 165 Dulles, John Foster, 3 8 Dunkel working document, 167, 168, 204, 205 East Asian Economic Caucus, 223 Eastern Canada agricultural producers: resistance to change, 67, 177, 185, 188, 201; and U.S. waiver, 68; and Whelan, 73,74 East Timor, 8, 77 Eayrs, James, 53, 73, 100 Economic Council of Canada, 180, 190 economic sanctions, 3, 23, 28 Enders, Thomas, 74 European Union (EU), earlier the European Community (EC) and the European Economic Community (EEC): as agricultural exporter, 109; agricultural subsidies, 132, 133, 148, 179; ascendant force, 84; and ASEAN, 98; of Atlantic Community, 51; compromise solution, 168, 211, 219; and developing countries, 125; Diefenbaker and, 40, 68; early attempts to rein in CAP, 28, 35; and France, 204, 205; and the FTA, 183; internal dynamics, 93; marginalization of Canada, 108; McEwen and, 42; in multilateral negotiations, 121, 124, 135,

136, 166, 204; as spoiler, 85; trade conflict with U.S., 115, 133, 134, 170, 172, 219; in tripolar world, 101. See also Australia and the EC/EU and Canada and the EC/EU Evans, Gareth, 6, 7, 153, 165,221 Evatt, Dr H.V.: international governance, 12; middle power perspective, 5; personal diplomacy, 6; personality, 16; and San Francisco, 17, 18, 229 n. 66; shadow over Australian foreign policy, 18 Evatt Foundation, 174 Export Enhancement Program (EEP), 109, 115, I2O, 127,

l62,

164,

221

174,

163,

export subsidies: agreement on, 219; Canada and, 126, 140, 205, 214, 218; EC'S export restitution, 116; GATT provisions, 29, 86, 87; linkage, 123; subsidy war, 168; U.S.'s "fight fire with fire," 116 Farley, Rick, 161 farm concern in Australia: and the EC 93, 94; and economic reform, 147-9, J56, 157, 159, I71-3, 189; on GATT reform, 78; on protection, 79, 82; ties with Country Party, 81 in Canada: and the FTA, 191; split within, 103, 104, 147, 177, 194;and widening agenda, 70, 73, 76 Field, Peter, 155, 165 Finland, 7 Fleming, Donald, 66, 69

Z74

Index

followership-leadership: altered forms, 209, 210, 212; dynamic, 9, 10, 22, 24, 29, 30, 55, 84, zo8, 220; filling the gap, 85, 112; friction between, 30, 31, 36, 84; tighter form, 99, 115 Food and Agriculture Organization (FAO), 334, 37, 156 Food Importers' Group, 123 Food Prices Review Board (FPRB), 71 food shocks, 70-3, 76, 77, 9Z, 96, 100 Ford, Gerald, 72 foreign aid, 3, 22 foreign direct investment, 3, 11, 23, 47-9, 69 Foreign Investment Review Agency (FIRA), 100, 108 Fox, Annette Baker, 3, 22 France, 33, 4, 104, 204, zo5, 219 Fraser Institute, 192 Fraser, Malcolm: agricultural reform, 86, 87, 114, 120, 122, 124, 142, 143, 213; autonomy, 77, 147; and developing countries, 97; and the EC, 94, 95, 161; and farming community, 94, 95, 147; imperial style, 88, 89, 90; and Japan, 96,104; on middle powers, 6; personal diplomacy, 42, 91, 93, 118, 119; and protection, 81, 82; threats, 101; and the U.S., 85 free trade, Canada-U.S.: and agriculture, 177, 182, 185, 190, I92-4, 217, 260 n. 44; fallback option, 49, 57, 111; "leap of faith," 191; and MTN, 134,142,182, 184, 199, 213, 215,

216, 218, 219; negotiations, 183, 191, 192, 198; obstacles to, 183; and Quebec, 195; sectoral, 74. See also Canada and the United States Fukuda, Hajime, 95, 96 functionalist principle, 11, 15, 18, 31, 73 Galligan, Brian, 151 Gardiner, James G., 66, 68 Garland, Victor, 90, 94 Garnaut Report, 170, I72, 222 Gelber, Harry, 222, 238 n. 1 General Agreement on Tariffs and Trade (GATT): and agriculture, 35; and Atlantic Community, 51; and Australia, 30, 3Z, 41, 42, 61, 78, 97, 98, 212; and Canada, 37; and Canada-U.S. relations, 58; and developing countries, 44, 97; and the EC, 4z; Kennedy Round, 53, 69; violation of, 39; weakness, Z4, 43

als, 87, 114, 122, 124, 136, 154, 155, 166, 168, 169; Canadian role, 128, 129, 131, 136-9, 142, 175, 185, 18 6, 196; consultation in, 197, 198, 199, 215, 216; role of developing countries, 123, 131; frustration with, 172, 173, 189, 194; launch, 117, 181, 184; role of the majors, 124, 165, ZO4; Montreal midterm, 125, 211; outcome, 135, 139, 205, 210, 219-21; and Quebec, 202, 203, 217; and reform, 139, 218 geo-security issues, 10, 95 Getty, Don, 196 Gifford, Mike, 192 global welfare concern, 70, 72, 74, 76-7

Gourevitch, Peter, 10, 143 Grant, Bruce, 14 Great Britain, 5, 10, 15, 16, 35, 48-53, 66,91, 220. See also Australia and Britain and Canada and Britain Grocery Products ManuGATT - Article XI: in conformifacturers of Canada (GPMC), 193 ty with, 137, 138, 216; failure to defend, 141; Group of Seven most industrialized nations reform of, 185, 194-6, (G-7), or Economic 198, 199, 205, 206, Summit: and Australia, 218, 258 n. 12,; special 95, 165; Canadian provisions, Z9; strengthmembership, 5, 105, ening of, 140, 201 119, 126, 128, 129, - 1982 Ministerial, 87, 90, 131, 214; Houston 105-7, 109, 130, 144 Summit, 139; Toronto - Punta del Este meeting, Summit, I27, 184, 189; 117, 121, 123, 129, and Trudeau 104; 181, 184, 210 Venice Summit, 180 - Tokyo Round, 86, 87, Group of Seventy-Seven 102-7, 109, 122, 129, less developed countries 165 (G-77), 45, 123 - Uruguay Round: agriGroup of Ten (G-IO), cultural reform, 120, 123 121, 130, 164, 212, Gulf War, 7 213; Australian propos-

275

Index

Habeeb, William, 85 Haggard, Stephan, 215 Hamilton, Alvin, 66, 68 Hancock, W.K., 20 Harris, Stuart, 166, 170 Harris, Walter, 3 8 Hart, Michael, 183 Hartzian thesis, 20 Hasluck, Paul, 12, 18, 31 Havana Charter, 32 Hawke, Bob: apex of government, 152; and Australia's image, 141, 143, 220; catalyst on Cairns, 114, 117, 120, 127; character, 119; choices, 174; and corporatism, 152; and the EC, 118, 161; externalization of problems, 147, 148, 149; and factional system, 153; and federalism, 173; frustration, 169, 172; and GATT, 87, 122, 129, 167, 189; and Mazankowski, 137; and Mulroney, 119, 215; personal diplomacy, 161; reform agenda, 145, 148, 150, 152, 153, 175; and rift within ALP, 154, 172; and rural Australia, 158, 159; ties with U.S., 163; trade concessions, 123, 124, 134. See also Australian Labor Party Hayden, Bill, 6, 153, 255 n. 54 Hees, George, 66 Hewson, Dr John, 171-3 Higgott, Richard, 114, 209 Hockin, Thomas, 129, 184 Holland, or the Netherlands, 7, 13, 39, 138 Holmes, John, 7, 12 , 17 Holt, Harold, 64 Howard, John, 90, 169 Howe, C.D., 36, 38, 65-6, 68

Hughes Report, 170 Hungary, 113, 116 Ikenberry, G. John, 22, 56, 152, 178 immigration, 3, 23, 46, 117, 169 imperial preferences, system of, 13, 32, 43, 50, 58 India, 33, 69 Indonesia: and Cairns Group, 113, 115; Communist Party, 62; East Timor invasion, 77; and the EC, 98; and Keating, 173; and Malaysia, 116; and Sukarno, 62; West Irian episode, 10 Industries Assistance Commission (IAC), 80, 109, 152, 171 International Council on Agriculture and Trade, 181 International Development Research Centre (IDRC), 76 International Grains Agreement (IGA), 33 International Monetary Fund (IMF), 51 international political economy (IPE): of agriculture, 23-5, 27, 29, 31, 208; approaches to, 3; Australian location in, 48, 51, 110, 114, 142, 143, 174; and Cairns Group, 116; Canadian location in, 57, 111; debates in, 26; equity in, 45, 118; and issue-areas, 23; and leadership, 28; and middle powers, 9, 46, 50, 224; transformation in, 44, 84, 97, 108, 220

International Trade Organization (ITO), 32, 139

Japan: agrarian solidarity, 203; and agriculture, 140, 161, 166, 193, 200, 205; and FTA, 183; and G-7, 104; and Keating, 220, 221;and structural adjustment, 167; and tripolar world, 101. See also Australia and Japan journal of Commerce, 121 Julien, Claude, 101 Kahler, Miles, 112 Kahn, Herman, 151 Katzenstein, Peter, 13, 32 Kaufman, Robert, 215 Keal, Paul, 22 Keating, Paul: and APEC, 222; apex of government, 152; and "banana republic," 151; and Bush, 174; choices, 174; and Clinton, 219, 221; commitment to reform, 143, 145, 147, 174; as economic rationalist, 153; shift in followership, 220; and insecurity, 223; and international conditions, 159; and Mahathir, 223; and Mulroney, 215; and NAFTA, 221; national redefinition, 145, 174, 175, 220, 222, 223; as prime minister, 172; rift with Hawke, 154; strategic vision, 173; tough approach, 150, 223. See also Australian Labor Party Kelly, Paul, 128, 145, 154 Kennedy, John E, 49 Keohane, Robert, 3-4, 30, 46, 85 Kerin, John, 147-8, 153, 159, 172King, William Lyon Mackenzie, 14, 16, 65 Kissinger, Henry, 72, 75, 88, 101

276 Index Kohl, Helmut, 127 Korea, 61, 92, 140, 161 Kreisky, Bruno, 104

Lower Inventories For Tomorrow (LIFT) (1970), 70

and political management, 140, 196-9, 201 Meech Lake accord, 20,

Lake, David, 56, 178 Lang, Otto, 73-4 Latin America countries, 113, 119, 125, 129,

McCain Foods, 193 McDougall, Frank, 3 3 MacEachen, Allan, 105,

Menzies, Robert: and British entry, 49, 63; and coalition government, 59, 89; criticism of Evatt, 17; and GATT review, 41; and international reform, 45, 143; and middle power perspective, 5; special friendships, 5; transition from era, 64, 76, 147 middle powers: activism, 112; Australian selfimage as, 5, 6; autonomy, 10; collective effort, 114, 120, 128, 129; conceptual framework, 7, 8, 9, 22, 26, 46, 208, 223; consensus in Canada, 4; and developing countries, 44; and functionalism, 73; India, 69; and like-mindedness, 13, 18; new meaning, 209, 210; normative bias, 7, 8; operating procedures, 15; quintessential, 3, 211; rules-orientation, 12, 144; and single issues, 25; supportive role, 30; varied forms of statecraft, 21 Millar, T.B., 118 Miller, Dr Geoff, 155-6, 167 Miller, J.D.B., 20 Milner, Helen, 213 Mitterrand, Francois, 126 Montreal Gazette, 42 Mulroney, Brian: businessoriented conservatism, 183; and Cairns Group, 129,131, 179; and Clark, 181, 182; convenience, 218; and the EC, 131-3; forces of reform within government, 178; and FTA, 182, 191, 195;

177,

106

McEwen, Harvey, 203 McEwen, John: and agriLaw of the Sea, 105 leadership: and Cairns cultural producers, 44, coalition-building, 11264, 65, 74, 77, 82, 95, 142, 147, 156, 222; and 4, 117, 124, 164, 214; Britain, 42; and coalicoercive and benign, 29; tion government, 59, conformity with, 85, 91, 89; control over eco115; debates about, 27, z8, 208, 222; moral, 91; nomic agenda, 57, 58, 66, 80, 89, 146, 153; pre-eminence of U.S., and developing coun23, 24; responsible, 9, tries, 45; and interna10, 22, 87, 220; impact tional reform, 32, 78, of secondary powers, 82, 114, 117, 119, 120, 30, 31, 35, 36; U.S., 143, 213; middle power withdrawal from, 24, perspective, 5; and 84 "megaphone diplomaLee, Kuan Yew, 98 cy," 49, 119; and U.S. Lewis, Stephen, 7 leadership, 31, 36, 41, Liberal Party (Australia): 127; and Trade Departcoalition government, ment, 59-63, 80, 90, 59, 89; under Hewson, 239 n. 17; transition 171; under Howard, from era, 76, 79, 82, 169; and the PRC, 62; 157; and U.S., waiver, revitalized under Fraser, 43; withholding conces81; rivalry with NCP, 94; sions, 124, 143 successors to Menzies, McKnight, Bill, 206 64; transition to, 222; McLachlan, Ian, 158, 160, and the U.S., 220 163, 171 Liberal Party (Canada), McLin, Jon, 31 65-6, 69,181 McMahon, "Billy," 64 linkage diplomacy: by McPhail, Donald, 105 Cairns, 125, 131; CanaMahathir, Bin dian suspicion of, 39, Mohammed, 223 101; counterproductive, Malaysia, 98, 113, 116, 93; and Devine, 196; 161, 173 economic security, 91, Manchester Guardian, 101 92, 102, 163; and resources diplomacy, 93, Mastanduno, Michael, 56-8, 178 96, 101, 102 Lipsey, Richard, 191 Mayer, Charles, 126, 178, 179, 180, 197 Long, Edward, 28 Mazankowski, Donald: Loubier, Yvan, 187, 204 Lougheed, Peter, 103, visit to Australia, 137; move to Finance, 206; 196 131, 170, 222

200,

2O1, 2O2

277

Index

and G-7, 126, 127, 214; and Hawke, 119, 120; and Meech Lake, 200; middle power activism, 213; middle power perspective, 4, 7; political style, 185, 188, 189, 215, 216; and Quebec farmers, 185, 187, 195, 200-2; search for balance, 175, 188, 196, 206, 217; status, 12,6; transactional approach, 194, 197; and the U.S., 4, 182 multilateralism: Australian commitment, 41, 86, 102, 141; and bilateralism, 50, 55, 92, 109, 111, 118, 133, 134, 184, 194; and Cairns Group, 8y, 113, 120, 128; Canadian slant, 126; and Clark, 181, 182, 183; codes of conduct, 25; convenient stance, 134, 217-19; and economic development, 43, 44, 99; and farm exporters, 186; first-best option, 57, 84; food bank, 34; and hegemon, 12; insider and outsider, 104, 117, 130; and Kennedy Round, 53; and likeminded countries 13, 37; and middle powers, 4, 7, 8; outmoded, 86, 107; and regionalism, 164, 173, 221, 222; specialized institutions, 33, 37; Tokyo Round, 106; virtue of, 38, 212. See also General Agreement on Tariffs and Trade

National Energy Program (NEP), 100, 108, 180 National Farmers' Federation (NFF), Australia: and Canada, 134; diffi-

culty of managing, 174; and EC lobbying, 93, 95; and economic reform, 147, 156-8, 160, 172, 223, 255 n. 49; and externalization, 161, 162-4; and Liberal Party, 171; peak organization, 81, 147, 188 National Farmers' Union (NFU), Canada, 186, 187 National Party. See Country Party neighbourhood: acceptance by, 173; confined, 50; cooperation with, 119; immediate, 82, 169; lack of secure, 48, 55, 169; notion of, 19 New International Economic Order (NIEO), 72, 97 New York Times, 86 New Zealand, 7, 78, 113, 116, 117, 169, 179, 180 Nixon, Peter, 92 Nixon, Richard, 99 "Nixon shocks," 99 non-governmental organizations (NCOS), 72 Nordic countries, 13, 140, 193 Noreau, Jean-Jacques, 204 North American Free Trade Agreement (NAFTA), 218-21 North Atlantic Treaty Organization (NATO), 5, 10, 51, 102 Norway, 7 Nye, Joseph Jr., 3 Ohira, Mazayoshi, 95 Ontario Federation of Agriculture, 199, 203 Organisation for Economic Co-operation and Development (OECD), formerly the Organisation for European Economic Co-operation

(OEEC), 51, 118, 130, 132-3, 179-80, 184 Ostry, Sylvia, 128, 130, 180, 192, 258 n. 12 "Ottawa Men," The, 67 Oxley, Alan, 121, 122, 154-6, 165, 168 Page, Michel, 195, 202 Parti Quebecois (PQ), 195, 202 Pax Americana, 10 Peacock, Andrew, 89-90 Pearson, Lester B.: autonomy, 10; and economic policy, 66; and FAO, 34; internationalism, 4, 181; and San Francisco, 1618; shadow over Canadian foreign policy, 18; and the U.S., 10, 38, 53, 68; and world order, 12 Pentland, Charles, 100 People's Republic of China (PRC), 62, 68, 69, 79, 80, 120, 168. See also Australia and the People's Republic of China (PRC) and Canada and the People's Republic of China (PRC) Pepin, Jean-Luc, 3 3 Pepper, Thomas, 151 Petrocan, 100 Philippines, 113, 116 Plimsoll, Sir James, 93 Plumptre, Beryl, 74 Poland, 39 Porter Report, Canada at the Crossroads, 200 Prime Minister's Office (Canada), 192, 217 producer subsidy equivalent (PSE), 119, 139 protectionism: and agricultural producers, 67, 78, 81, 147, 160, 171; American waiver in agriculture, 24, 29, 35, 37, 39,41, 43; and ASEAN, 98; Australian national development,

278

Index

44, 60, 95, 149; bound tariffs, 58; and developing countries, 45, 46, 118, 119; and the EC, 53, 92, 98, zoo; and Japan, 96, zoo; new forms of, 87, 102, 103, 218; "protection all round," 65, 79, 8z, 144, 147; unilateral liberalization, 124, 143, 144, 146, 166 Proulx, Jacques, 187, 201, 104, 262 n. 69 Pusey, Michael, 154 Putnam, Robert, 25, 177 Quadrilateral meetings, 165,179,180 Quebec: agricultural politics, 185, 187, 189, 195, 197, 199, 201-4; future of, 177, 201-3, 206; and the Rest of Canada, 21, 200, 2O2-4, 217

Queensland, 96, 117, 137, 162 Reagan, Ronald, 87, 109, 119, 120, 162, 163, 183 regimes, 27, 28, 29, 30 Reisman, Simon, 192 Renouf, Alan, 63, 89, 93 Report of the Federal Task Force on Agriculture (1969), 70 Resnick, Philip, 47 Returned Service League, of Australia, 61 Robb, Andrew, 171 Robertson, Norman, 16, 69 , 70, 105 Royal Commission on the Economic Union and Development Prospects for Canada, (Macdonald Commission), 191 Ruggie, John Gerald, 115, 216 Russell, Peter, 200 San Francisco Conference

on World Organization, 16-18, 45, 229 n 66 satellite perspective, 11 Sectoral Advisory Group on International Trade (SAGIT), 197, 201, 206 Shannon, Gerry, 180 Shultz, George, 163 Simeon, Richard, 217 Sinclair, Ian, 96 Singapore, 50, 51, 98, 161, 173 Smith, Murray, 191 South Africa, 23, 180 South East Asian region, 6 Southern Hemisphere Temperate Zone Agricultural Producers, 117, 118 South Pacific region, 6 Soviet Union, 16, 68, 120 "standstill" and "windback," 87, 122, 123, 125 Stein, Arthur, 183 St Laurent, Louis, 65 Stoeckel, Dr Andy, 154, 156 Street, Tony, 6 Suez crisis, 10 supply management, in Canada: resistance to change, 186, 187; source of tension in Cairns Group, 137, 138; and Uruguay negotiations, 194, 199, 206; and the U.S., 192, 193, 218. See also Whelan, Eugene Sweden, 7, 152 Switzerland, 205

Treasury Department (Australia), 63, 64, 97, 150, 154 Trebeck, David, 160 Trudeau, Pierre: economic cross-pressures, 103, 104; and Europe, 101; flamboyance, 105; middle power perspective, 4; North-South initiative, 104; peace initiative, 4; rational management, 188; reformist impulses, 11, 72; response to food crisis, 71, 73; review of foreign policy, 4; sectoral free trade, 191; Third Option, 100, 107; wheat sales, 71 Tuohy, Carolyn, 21 "two-level games," 25, 145, 164, 168, 169 Tyranny of Distance, The, 48

United Nations: Economic and Social Council, 5; food bank, 7; General Assembly, 5, 17; veto in the Security Council, 5, 16, 17 United Nations Conference on the Human Development, Stockholm, 105 United Nations Conference on Trade and Development, 45 Union des producteurs agricoles (UPA), 187, 195, 200-3, 262 n. 69 United States: and agricultural regime, 23, 24, 27, tariffication, 138, 139, 199, 28; black box perspec202, 204-6, 217, 218 tive, 178; and Clark, 182; deviations, 33, 36; Thailand, 98, 113, 116, and the EC, 35, 109, 117, 119, 179, 211 116, 117; and Evatt, 16; Thatcher, Margaret, 127 export controls, 71; farm bill, 179; and food Trade Negotiations Office (TNO), 192 bank, 34; and food

htttttttttttttttt power, 28, 72; as hegemon, 9, 27-9, 49, 84, 88, 209; and Keating, 221; recognition of PRC, 80; surplus disposal, 36, 38, 39,41,43, 68,78; unilateralism, 84, 99, 109, 218; in Uruguay Round, 121, 124-6; and World Food Conference, 75 Uruguay, 113, 116, 117, 125 Vernon Committee of Economic Inquiry (1965), 48, 144 Vietnam conflict, 29, 62, 92; bombing of North Vietnam, 10 von Riekhoff, Harald, 73 Walker, Michael, 192 Wallerstein, Immanuel, 46 Walsh, Peter, 152 Warley, T.K., 35, 116

Waterside Workers' Federation (Australia), 77 Watt, Sir Alan, 62, 63 Weekes, John, 180 Weinberger, Caspar, 163 Weller, Patrick, 150 Westerman, Sir Alan, 60, 61, 63 Western Canada, agricultural producers of: as adjusters, 188; and Cairns Group, 179; in Conservative coalition, 189, 195; and Diefenbaker, 68; discontent, 21, 67, 177, 195, 203;

and FTA, 177; power base for Gardiner, 66; trade promotion, 70, 71, 73, 74, 76 Whalley, John, 111 Whelan, Eugene: struggle for control, 73, 74, 75, 76; and marketing boards, 73, 75, 137

Whitlam, Gough: and agricultural producers, 147, 148; economic management, 80, 81, 149, 150; and food shocks, 77, 78; middle power perspective, 6; reformist tendencies, n, 97; and the U.S., 163 Wilgress, Dana, 32, 37, 105 Willis, Frank, 152 Wilson, Michael, 184, 192, 206 Winham, Gilbert, 104, 116 Wise, John, 185, 186, 191, 194, 197, 260 n. 44 World Food Conference (Rome), 1974, 75 World Food Program, 76 World Trade Organization (WTO), 218 World War II, 4, 14, 92 Young, Oran, 29