Abstract:
In August 1987, Canadian negotiators concluded another round in their 15 months of talks with the US aimed at reaching free trade agreement between the two nations. Prime Minister Brian Mulroney and President Ronald Reagan had launched the trade initiative at their convivial 1985 Ottawa summit, when lowering trade and tariff barriers was cast as a path to increased prosperity for both nations. But the negotiations that followed proved difficult. Substantive differences did not prove amenable to quick resolution. The dismal forecasts were reaching Prime Minister Mulroney--who had staked a considerable amount of political prestige on the agreement and was loath to see it die. The Canadian team faced a tactical decision: how to move the negotiations forward without compromising their interests. By September, the Canadian government was preparing a strategy for resolving the talks--one way or another. Failing that, the Canadian cabinet would have to determine how and when to acknowledge the breakdown in the negotiations.
Learning Objective:
This case is designed to encourage discussion of both the Canadian and US negotiating postures and of how each nation's assessment of the other helped to define its negotiating stance. Another case, US-Canada Free Trade Negotiations I (C16-87-785.0), involves US preparations for the negotiations, with specific focus on obtaining congressional approval for the talks.
