Most media commentary has confined itself to laughing at the frilly underthings the provinces packed in the agreement. What are the main sorts of interprovincial trade barriers? Agriculture, energy, alcohol and subsidies. What did the premiers agree to exempt? Agriculture, energy, alcohol and subsidies, from a long list. No one, however, has flagged the conference's real message: Federalism works when the premiers agree. When the premiers do not agree, federalism does not work. Canada exists by the grace of the premiers.

This is implicit in all such exercises in executive federalism. Every time the premiers meet, the same corrupting idea is stealthily reinforced: There is no sovereign nation called Canada; there is no overriding national interest to which the premiers are required to submit. There are only the several populations of the provinces, whose interests are entirely in conflict, and whose sole legitimate representatives are the members of their respective provincial legislatures - or rather, not the legislatures, but the premiers.

So completely has this assumption insinuated its way into our consciousness that the federal cabinet has all but been supplanted by the First Ministers Conference as the locus of important national decisions, except that here the Prime Minister is no longer first among equals, or even equal among equals. In the present discussions, the role of the federal representative seems rather to have been somewhere between caterer and the Harvard Conflict Resolution Group.

Yet despite the unbroken string of failures this largely unconstitutional and wholly unaccountable body has produced - either failure to agree or agreement to fail - it is to the first ministers that we always return. For once you accept the League of Nations theory of federalism, there is no other way. Still, some day it might occur to someone that this process isn't going to solve our problems; it is the problem. This is especially true of internal trade. Let me explain.

Why, first of all, do provinces set up trade barriers only at the provincial boundary line? Why not protectionism within each province? Why not tariffs between cities, and within cities, between neighbourhoods? Why? Well, because. Don't be silly. But every other nation in the world would think it equally absurd to impose trade barriers anywhere within the country. Only in Canada is it even seriously discussed, let alone defended.

The economic space people think natural, in other words, coincides with the political space. Where free trade might be negotiated with other political entities, an idea that one can take or leave, it is simply a given when trading among "ourselves." That is one of the arguments for political over merely economic union. The question, then, is: Who is us? In other countries, including federations such as Australia and the United States, the economic and political space is assumed to be defined by the nation. In Canada, it is, or has become, the province.

So where other federations assign all power over internal trade to the federal government - that, indeed, was our own Fathers' intent - only in Canada is the economic union a matter to be negotiated between provinces. But so far as such negotiation occurs, it destroys that very sense of a common political space on which the economic union depends. Jacques Parizeau is right, at least in part: If an independent Quebec were ever admitted to GATT and NAFTA, it probably could trade more freely with the other provinces than it can now.

To deny the legitimacy of federal authority in this respect is nothing less than to deny the existence of the Canadian nation. That the premiers agreed, that they met at all, is evidence not that federalism works, but that, in the decadent version practiced in Canada, it does not.