US-Canada Free Trade Negotiations (I): Gaining Approval to Proceed (A)

Abstract:
In 1985, US Trade Representative Clayton Yeutter began preparing for trade talks with Canada, the largest US trading partner. The goal was an agreement that would virtually eliminate trade barriers between the two nations. But by the mid-1980s, traditional support for free trade had eroded in the face of a rising trade deficit and complaints about what some viewed as unfair foreign competition. Yeutter needed congressional approval for "fast track authority" to speed the Canada talks. Part A of this case provides background on areas of concern to Congress and describes events leading up to a hearing before the Senate Finance Committee, concluding with Yeutter's realization that the committee might well turn down the request. Part B shifts focus from the administration to Congress: it details the strategies and efforts of both the White House and committee members to muster support for their views. The sequel describes the outcome: after intensive lobbying by Canadian officials and the White House, the administration narrowly averted defeat and won the fast track authority it sought.

Learning Objective:
Part A raises questions of strategic management in the quest for legislative authorization and illustrates some of the differences in perspective between the executive and legislative branches. Part B looks at the competing pressures on legislators in different situations.