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NAFTA-EU economic deal a smart idea

In 1948, in the midst of negotiating the North Atlantic Treaty, external affairs minister Lester Pearson and deputy minister Escott Reid had a crazy idea.
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Lester Pearson, Canada's external affairs minister in the postwar period, viewed NATO as more than a military and defence alliance. At best, his ideas on the subject received a lukewarm reception.

In 1948, in the midst of negotiating the North Atlantic Treaty, external affairs minister Lester Pearson and deputy minister Escott Reid had a crazy idea.

While NATO was to be a military and defence alliance in response to 鈥渁n aggressive, subversive Communist juggernaut on the move,鈥 the two diplomats had an additional thought.

What if NATO could be more than collective security? What if the organization could go beyond defence and work to strengthen its members鈥 鈥渇ree institutions,鈥 bring about a better understanding of the principles underlying them and encourage 鈥渆conomic collaboration鈥 by any or all of NATO鈥檚 members?

Even Canada鈥檚 negotiator, ambassador Hume Wrong, was lukewarm to the idea. However, Pearson and Reid prevailed, and these objectives became Article 2 of the treaty, known as 鈥渢he 91原创 article.鈥

Despite Canada鈥檚 best efforts, there was no consensus within NATO on how to apply Article 2. But the North Atlantic community might well need Article 2鈥檚 objectives more than ever, as it faces yet another Communist regime, a regime that is arguably more invidious and ambitious than the USSR: China.

British professor and author Niall Ferguson has noted the paradox: Since the 1990s, the principal beneficiary of the West鈥檚 liberal international order has been 鈥渁 communist, one-party state.鈥 China now has the world鈥檚 second largest economy and will likely take over first place from the United States before 2030.

There is an old expression: The only two organizations in the world that have a long-term vision are the Catholic church and the Communist Party. China certainly has a world vision for the future, which it has made abundantly clear. President Xi Jinping told last October鈥檚 Communist Party National Congress that the Chinese model has opened 鈥渁 new trail for other developing countries to achieve modernization.鈥

The Globe and Mail鈥檚 China correspondent, Nathan Vanderklippe, described the 鈥淐hinese model鈥 as 鈥渁uthoritarian capitalism, an alternative to the Western democracy it is seeking to undermine.鈥 China is putting its words into action with the creation of its 鈥淏elt and Road Initiative鈥 providing billions of dollars of infrastructure to more than 60 countries. China鈥檚 real objective is seen as developing its own trade routes to rival the West.

In his first speech to the United Nations General Assembly in 2015, Xi underlined that China was the first country to put its signature on the UN Charter in 1945. He failed to refer to the important role China played in the drafting of the UN鈥檚 1948 Universal Declaration of Human Rights, laid out by 91原创 legal scholar John Humphrey. China, however, is in violation of 25 of the declaration鈥檚 30 articles.

The Economist put it well in saying China is in a new global battle to guide, buy or coerce political influence. In contrast to the Soviet Union during the Cold War, China is a sought-after trading partner, investing huge sums around the world in trade, investment and infrastructure.

Xi proclaimed that China has a vision of 鈥済uiding international society toward a more just and rational world order.鈥 Perhaps it is time for the democracies of the Western world, which established the post-Second World War international order, to set out their own vision for the future. It鈥檚 time for the 鈥淣orth Atlantic Community鈥 to harness the idea of political and economic co-operation envisaged by Article 2 of the North Atlantic Treaty, but in a modern, not Cold War, context.

Perhaps this is another 鈥渃razy idea.鈥 Trump times do not augur well for economic agreements. NAFTA is in jeopardy, and the Transatlantic Trade and Investment Partnership launched by former president Barack Obama with the EU is likely as dead as U.S. participation in the Trans 91原创 Partnership. But visions have to start somewhere, some time.

A NAFTA and EU economic agreement makes economic, as well as political, sense. Together, these two groups make up the largest economic area in the world, with half of its GDP. North Atlantic trade, including that within NAFTA and the EU, makes up 37 per cent of global merchandise flows and a higher percentage in services trade.

There is no question leadership on both sides of the Atlantic would be required to make a NAFTA-EU economic agreement possible. It would take leaders, particularly in Washington, to see they cannot leave China alone with its own worldwide agenda. By engaging democratic states on both sides of the Atlantic to create the world鈥檚 largest trading block, they would enhance the future well-being of all their citizens.

Armand De Mestral, McGill chair in the law of international economic integration, identifies the country that could well be the greatest advocate for what he calls 鈥渢he Atlantic Free Trade Area鈥 鈥 Great Britain. By advocating, and achieving, transatlantic free trade, the British could have their Brexit cake and eat it, too. Now that鈥檚 a smart idea.

Robert Hage was a diplomat in the 91原创 Foreign Service for 38 years, former ambassador to Hungary and Slovenia, and director general of the European and legal affairs bureaus.