External Pressure, National Response

The erosion of Canadian industrial strength in the early 1970s prompted Canada to rethink its postwar industrial adjustment strategy. From the early 1970s to the early 1980s, Ottawa tried trade diversification, foreign investment regulation, and an interventionist industrial policy. This path of policy development, however, produced limited positive results. In response to new opportunities and constraints in the mid-1980s, the Canadian government switched to a new policy path that sought to deregulate the domestic market and establish a continental institutional framework—with rules that would guarantee market access and facilitate the settlement of trade disputes. Since then, industrial adjustment has been shaped by liberal continentalism. This book develops a theoretical framework to account for the sequence of industrial adjustment policy actions between the early seventies and first decade of the twenty-first century, explaining why liberal continentalism has emerged as the dominant policy framework.