Things Fall Apart? NAFTA after Quebec Secession

The extremely close result of the 30 October 1995 referendum indicates that the possibility of Quebec secession is far from remote. It is therefore incumbent on those with an interest in the future of North America to consider carefully the ramifications of separation now, before another referendum becomes imminent, in the hope of achieving a cooler, less partisan debate. This note will examine the implications of Quebec secession on the continuation of the North American Free Trade Agreement (NAFTA) within the province. During the last referendum this issue was fiercely contested: the sovereigntists argued that joining the agreement would be simple, if not automatic, while the federalist forces predicted a long, difficult, and possibly futile negotiation. The importance of resolving this dispute is highlighted by a recent comment of the president of General Motors of Canada Ltd.: If there was any uncertainty at all that Quebec would be part of free trade agreements, that could create a significant issue for us with respect to future investment. It is also vital that questions regarding post-separation institutional and legal structures be clarified as much as is possible, in order that more accurate and comparable economic predictions of the cost of separation may be made, assertions as to the high price of sovereignty lose credibility when they appear to be based on partisan premises. This note will proceed by first examining Quebec\u27s position regarding free trade: its political support of the agreements; the economic benefits it has enjoyed under the agreements; and the province\u27s readiness to be part of a reconstituted NAFTA. Next, the accession clause in the agreement will be discussed, and it will be shown that there could be significant difficulties with this route. In that light a brief examination of the positions of Quebec, Mexico, Canada and the United States regarding Quebec\u27s options will be conducted. Finally, a discussion of the law of state succession will be presented with a view to determining whether such succession to the NAFTA is probable or even possible