CHANGE IN THE WORLD ECONOMY AND NATIONAL FOREIGN ECONOMIC POLICY: A STRUCTURAL AND SECTORAL ANALYSIS OF CANADIAN TRADE POLICY, 1968-1985

This dissertation examines the relationship between structural change in the world economy and change in the content and direction of trade policy in Canada during the period between 1968 and 1985. It does so through a structural analysis of Canadian trade policy and a sectoral analysis of the Canadian steel industry.;This thesis presents the modified model of systemic influence, which suggests that the structure of the international system will have a dramatic effect on the level of vulnerability experienced by individual members of the system. The model extends the logic of the hegemonic stability thesis while at the same time suggesting two important derivations from current theorizing in international relations. First, it rejects the notion that the state invariably determines the character of the international system--at least in so far as middle range DMEs are concerned. Secondly, it suggests that domestic sources explanations need to be understood within the context of a systemic framework.;The study concludes that Canada is at a critical juncture in its trade policy and that this is largely a reflection of significant structural uncertainty at the level of the international system and serious ambiguity in its relationship with the United States. Further, it suggests that policy makers should focus their attention on the articulation of an industrial strategy which recognizes the need for a stronger and more stable North American trading environment while at the same time recognizing the need for a more orderly and effective global trading regime. Finally, the study also suggests that much more attention should be given to the relationship between domestic economic policies and trade policy.;The central argument is that the fundamental sources of foreign economic policy in advanced developed market economies such as Canada can be found within the international political economy. More specifically, it argues that structural change at the level of the world economy accounts for significant incentives and constraints for national governments. Prominent examples of this change include the breakdown of the Bretton Woods system, the increasing internationalization of production, mounting global surplus capacity, declining comparative advantage for developed market economies, the shift to post-industrial society and the continuing shifts in the international division of labour (in favour of the newly industrializing countries).