| Summary: | The process of globalization has, since World War II, transformed relations
between states, and between states and multinational enterprises (MNEs). Canada
was one of the first countries to be transformed by this process - a trail-blazer
particularly with respect to foreign direct investment (FDI). This thesis argues that
Canada consciously took a globalist approach in its economic development via its
openness toward, and active encouragement of, FDI. Canada's approach was
facilitated by many factors, notably its cultural and historical ties to the U.K. and the
U.S., its immigrant citizenry, and its muted nationalism. This approach, while
novel at the time of its institution, has been replicated by states around the world in
the last twenty-five years as globalization of the world market has accelerated.
The Canadian case is of interest, however, because just at the time when
other countries were shifting towards the more liberal and globalist approach to FDI
that Canada had championed, Canada changed course and implemented stringent
restrictions on FDI. Then, hardly a decade later, Canada returned to a more liberal
and open approach to FDI regulation. This thesis argues that Canada turned away
from the globalizing trend because foreign penetration of the Canadian economy
had become, by far, the highest in the world. This fact, united with anti-American
sentiments and a Trudeau-inspired rise in nationalism, set the stage for a dramatic
increase in protectionist restrictions, in particular the creation of the Foreign
Investment Review Agency (FIRA) in 1974. The election victory of the
Conservatives in 1984 and the subsequent abolishment of FIRA symbolizes
Canada's return to a globalist approach to its economic well-being. This thesis will
argue that Canada's lapse into protectionism collapsed because Canada was out of
step with liberalizing global trends and the costs of this, in terms of general welfare,
were too high to be borne by a small country, particularly one whose economy had
historically relied so heavily on foreign investment. === Arts, Faculty of === Political Science, Department of === Graduate
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