A Trading Nation: Canadian Trade Policy from Colonialism to Globalization

Published by EH.NET (August 2004)

Michael Hart, A Trading Nation: Canadian Trade Policy from Colonialism to Globalization. Vancouver: University of British Columbia Press, 2002. xv + 556 pp. $29.95 (paperback), ISBN: 0-7748-0895-0.

Reviewed for EH.NET by Bill Marr, Department of Economics, Wilfrid Laurier University, Waterloo, Ontario, Canada.

Michael Hart of Carleton University has written an important, interesting, and readable account of Canada’s trade policy from the sixteenth century to the end of the twentieth century, with emphasis on the years since the Second World War. About 28 percent of his book is devoted to the history before the 1940s, about 40 percent covers the 1940s to the early 1970s, with 32 percent for the remainder of the twentieth century. Hart’s book is important for at least two reasons. First, it sets out in one place the history of Canada’s trade policy over a long period of time. Anyone who wants to read about the basic outline and features of that policy will find it here. Second, because Hart relates that trade policy to the general economic history of Canada, the reader appreciates, in general terms, how that policy may have affected Canada’s economic growth and economic development. This is a book about general themes and features; if interested, readers can look for specific details in other places.

Hart appears to have two goals for writing his book. First, he wants us to understand and appreciate the history of Canada’s trade policy. This descriptive goal is admirably achieved in this book. He believes that we need to understand the past in order to appreciate present trade policy; it did not appear full blown, but evolved over the decades and centuries. Second, Hart endeavors to set out the contribution that trade policy made to Canada’s economic growth and development, and to Canada’s place in the world economy. Whenever possible, he relates a particular policy to the Canadian and world economies, and tries to evaluate its effects. This is easier to do for some time periods than for others because the mix of other causal factors (besides trade policy) is much larger in some of those periods than in others. But give him credit for attempting this largely impossible task. Since Canada and British/French North America has always been an “open” economy, trade policy, which affects trade, has been an important causal factor in the region’s economic growth and development. Hart’s exposition of those policies is therefore almost an economic history of those regions; his book could almost stand alone as a textbook for a course in Canadian economic history.

The first part of Hart’s book, covering the period before the 1940s, describes and assesses the impact, among others, of mercantilism, the Corn Laws, the Navigation Acts, Reciprocity with the United States, free trade by Britain, bilateralism, and protectionism from the viewpoints of Canada’s or British North America’s trade policy, but also the trade policies of Britain and the United States. This becomes one important method of presentation that Hart develops in this first period and uses throughout his book. The trade policies that Canada follows are important, but the policies of those other two countries also need to be considered. Of course as Canada moves through the twentieth century, other countries in Europe, and countries in Asia, are considered, but Hart always returns to the importance and place of the United States and Britain. The subsequent chapters follow the evolution of multilateralism from GATT in the 1940s and the European Union of the 1950s to the Auto Pact of the 1960s. The various trade negotiations under GATT are described in their chronological order. The chapters covering the decades of the 1980s and 1990s emphasize the Free Trade Agreement and the North American Free Trade Agreement within the context of multilateralism, changes to the European trade system, and the emergence of Asia as more important to Canada’s trade policy than in the past.

It is time to mention three quibbles (a.k.a, three trivial points of criticism). The least important is the lack of a traditional bibliography. There are notes to each chapter and they document the author’s sources very well, but, since the second time a source is noted, it contains only an abbreviated reference, it would have been useful to have a traditional bibliography where the source could be located. Hart does a very good job of relating both Canadian and foreign trade policies to economic developments both here and abroad, including the flow of savings into and out of Canada. But he spends almost no space relating trade and its policies to the flow of population and labor into and out of Canada. This comment also relates to the discussion in the trade literature between moving goods and services versus moving people: trade can be a substitute for labor and population movement, and vice versa. This discussion might have been used to good account when dealing with, for example, the economic boom of the 1850s in the Canadas, the net exit of people from Canada during the last quarter of the nineteenth century, the so-called Wheat Boom from 1896 to the 1920s, and the early years of freer trade in the 1950s and 1960s. Finally, I would disagree with Hart when he writes on page 13 of his book that it is not a contribution to Canadian economic history, which he goes on to define as “the application of economic analysis to historical phenomena” (Hart 13). Taking a broader, but more useful, definition of economic history, Robert Mundell described economics as the science of choice (i.e., the study of the choices that are made). If resources, again defined broadly, are scarce and wants are unlimited, then choice is necessary and economic agents, including governments, must decide how best to use those resources to meet the wants. Choice suggests a selection from alternatives: which path to follow. So, economic history studies economic agents’ choices in particular time periods and the consequences of those choices, where those agents may be individual consumers or producers, cooperatives, not-for-profit organizations, trade unions, governments, etc. The trade policies that Canada and other countries chose are certainly the core of Hart’s book. It is economic history.

This is an interesting book that will be helpful to anyone who wants to study the general contours of Canadian and related trade policies for some time period during the last three hundred years or so. It is accessible to all and could be used as a textbook or as a supplemental book in Canadian history, economic or otherwise.

Bill Marr’s recent publications have been in the areas of population mobility, both within Canada and internationally, and he is currently examining the significance of using the individual versus the household as the unit of analysis in such mobility research.