It's Not About Trade

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Free trade agreements have never been primarily about trade. This is true of the FTAA deal being discussed, amidst draconian security measures, in Quebec City.

From the original Canada-U.S. free trade agreement and NAFTA to the WTO agreements and the proposed Free Trade Area of the Americas, these international treaties are about making it easier for the world's largest corporations to lower their costs. It allows them to seek out the cheapest workers, the most lax environmental laws and to use the threat of relocation to get what they want. The notion that any country, its workers or consumers benefit from such agreements is a myth.

Anyone doubting what these agreements are really about should examine NAFTA. The trade deal between Canada, the U.S. and Mexico is the template for the FTAA. Everything that is in NAFTA - and more, of course - will be in the FTAA. One of the things in NAFTA is Chapter 11, the chapter on investment. (A virtually identical chapter is planned for the FTAA, as a leaked document revealed this week.) The chapter allows corporations to sue countries directly. In effect, corporations get to implement the terms of a treaty signed by sovereign governments.

These lawsuits are determined not by our courts but by appointed tribunals of trade experts meeting in secret. Their job? To determine whether our laws have reduced the level of profit that a corporation would have made if the law weren't in place. And this includes future profits. When Canada banned the gasoline additive MMT because it had evidence that it was a neurotoxin, the product's manufacturer sought $250-million in compensation through NAFTA. Canada threw in the towel half way through the hearing, publicly apologized to Ethyl Corporation, paid them $20-million, and withdrew the ban.

Canada Post is threatened by a $234-million NAFTA suit because the giant U.S. courier UPS can't stand the competition. British Columbia's ban on bulk water exports is the subject of a $900 million suit. Canada has already lost another NAFTA case in which we were sued for complying with an environmental treaty, the Basel Convention on theTransboundary Movement of Hazardous Wastes. S.D. Myers lost business and profits when we stopped sending toxic PCB's over the border.

Promoters of free trade portray opponents as selfish  trying to deny Mexicans good paying jobs. In fact, Mexico and its workers have suffered under NAFTA. It's true exports have increased exponentially - but not as quickly as imports. Mexico is facing a balance of payments crisis as a result of "opening" its economy. Since NAFTA came into effect in 1994 the gap between U.S. and Mexican manufacturing wages has grown by some 30 per cent. A recent study by the Washington-based Economic Policy Institute examined the impact of NAFTA on workers in the three countries. It revealed that manufacturing wages in Mexico had fallen 21 per cent since NAFTA came into effect. Virtually all of the NAFTA-created jobs are in the border area maquiladoraswhere wages are deliberately suppressed to attract U.S. companies. Domestic manufacturing wages are twice what they are in the maquilas.

What about Canada? The EPI study shows that at the end of the 1990s manufacturing employment was still six per cent below its 1989 level. Canada experienced a net destruction of 276,000 jobs up to 1997. This happened despite an annual average trade surplus of $19.7-billion during the 1990s, more than double the average in the 1980s. Average per capita income fell steadily during most of the 1990s and only regained 1989 levels in 1999. Economic growth and average unemployment were worse in the free trade 1990s than in any decade since the 1930s.

If we polled Canadians about whether or not they were in favour of these specific results of expanded trade we know what the answer would be. But most pollsters simply ask are you in favour of expanded trade? The results are totally predictable. This week a CROP poll said 57 per cent of Canadians support expanded trade and 25 per cent oppose it. Even after a ten year barrage of supportive editorials and business propaganda, Canadians are wary about free trade and know who benefits: 41 per cent say businesses benefit most, 32 per cent say governments do, 11 per cent say consumers do and just 2 per cent think workers do.

Another poll this week revealed that 90 per cent of Canadians say they want public hearings and a parliamentary debate before the FTAA is signed. Many of those who feel most strongly about the issue of closed-door negotiations are in Quebec City demanding to be heard. Free trade proponents ask the rhetorical question: Whom do these demonstrators represent? The answer may just be the 90 per cent of Canadians who think its time these negotiations were opened up to public scrutiny. Such exposure would doom the FTAA to certain defeat.

A version of this article originally appeared in the Vancouver Sun newspaper.

For more rabble news coverage of the Quebec Summit and its aftermath, please click here.

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