A DECADE AFTER the first Free Trade Agreement drastically weakened Canadian sovereignty, news reports indicate the Liberal cabinet will hold discussions on adopting the U.S. dollar and a customs union opening the border between the two countries. Some leading Liberals downplayed the reports, calling the discussions at their annual summer retreat "theoretical," but there are many signals that the government is seriously considering closer integration with the USA.

Demands for a so-called "common North American currency" have been raised repeatedly over the last year from several directions, ranging from the Bloq Quebecois and the Reform Party to the right-wing C.D. Howe Institute think tank. Perhaps more revealing in terms of the government's direction, Raymond Chretien, Canadian ambassador to the U.S., speaking in Washington on April 29th, asked whether Congress would be "prepared to consider new treaties and political arrangements that would further codify our future together?"

In reality, as Council of Canadians executive director Peter Bleyer quickly pointed out, "Adopting a common North American currency can mean only one thing - adopting the U.S. dollar. This is not what Canadians want. Canada's monetary policy would be set by the U.S. Federal Reserve. In effect, we would become the fifty-first U.S. state."

Argentina and Mexico are already engaged in serious debates about "dollarization" of their currencies.

Despite a common view that the federal Liberals have just recently become "continentalists," the historical record is quite different. Not only did they back free trade early in the 1900s, but it was the post-war Liberal government which brought in the "Abbott Plan" in 1947. Under this policy, U.S. investment in key sectors of the Canadian economy was stimulated, leading to massive U.S. ownership of natural resources and manufacturing.

At the time, Communist leader Tim Buck warned that "If the policy now being developed is persisted in we, as a nation, will pass into servitude to the United States, through economic colonialism and Canada will be inextricably enmeshed in the war plans of U.S. imperialism regardless of the people's will."

That warning rings true today, as Ottawa gives virtually total support to U.S. foreign policy, including the savage bombing of Iraq and now Yugoslavia, and growing hostility towards Cuba.

"This is a grave assault on our independence and sovereignty," said Communist Party of Canada leader Miguel Figueroa. "Just as opponents of free trade warned, we are on a slippery slope towards total integration with the United States. The World Trade Organization talks in Seattle later this year will be another step in the same direction.

"The Liberals may send out mixed signals to conceal their intentions, but nobody should be fooled. It's not too late to rally Canadians. The successful struggle against the MAI showed that if the labour movement and other organizations start emergency mobilizing and education now, we can turn the tide. But there's no time to lose!"