I actually think there's a lot to be learned if we study the history of our existing free trade agreements, including those that were not with the United States, because there is an asymmetry involved when you're negotiating free trade with a smaller country versus with the United States.
The interesting experience is that with Mexico, Israel, Chile, and Costa Rica, four countries much smaller than Canada, the bilateral agreements resulted in a relatively small stimulus to Canadian exports to those regions but a huge inflow of imports from those regions. I referred earlier to the Chilean experience as the extreme case.
In terms of the 1989 free trade agreement, there are a lot of predictions that haven't come true, including many on the proponent side, that it would lead to a convergence in productivity levels between Canada and the U.S. and a big inflow of foreign direct investment to Canada to take advantage of it. Those two predictions have been unequivocally proven false.
The Koreans have taken a very different approach to industrial development strategy than we have. Instead of saying we're going to throw the market open and let business do what it likes, they have a very conscious, directed state strategy involving a range of tools, including financial market tools, activist foreign trade policy, macroeconomic measures, and labour market policies, all focused on building and creating competitive advantage in high-value industries, rather than, as we seem to be doing these days, looking at what we happen to have in the ground beneath our feet, digging it out, and selling it to the world market. It's a very activist strategy, and it has worked big time in Korea, as it did in Japan before and as it is doing in China today.
The implications of that approach for us are that those formidable competitors are not allowing the rule of markets to dictate outcomes. They have a very active state-directed strategy, and we can't assume that simple free trade is going to allow us to succeed in a mutual way with those trading partners.