What’s with the NAFTA panic attacks some Canadians are having? They can’t really believe the Americans would pull out of their big trade deal with us and Mexico. Maybe it’s strategy on their part, like that trickster Brer Rabbit. Brer Fox traps Brer Rabbit and is carrying him to the cook pot. “Do anything to me,” pleads the rabbit, “but don’t throw me into the briar patch.” So the fox does. But don’t throw us out of the NAFTA patch. Right. If only.
Can anyone honestly think little Mexico and puny Canada fooled the mighty, rich, ruthless U.S. into doing something it didn’t understand? It was their idea to start with! Then they got Brian Mulroney’s government and the CEOs of U.S. branch companies here to push it through. What did they gain?
How about 63 per cent of our oil, 56 per cent of our natural gas, and our powerlessness to cut back on those amounts even if every Canadian is freezing to death? What were we supposed to get? “Guaranteed access” to the U.S. market based on a “dispute settlement mechanism.” Only there never was a dispute settlement mechanism. Just an Alice-in-Wonderland clause where each country gets to decide if it’s applying its own laws properly when there’s a complaint. Et voilÃ , softwood lumber.
Then why are there threats and gripes in the U.S.? Because it hasn’t been good for everyone. An Ohio union leader told journalist JoAnn Wypijewski, “Who said there was going to be a giant sucking sound? They made a fool of him, but he was absolutely right.” He means Ross Perot, in 1992, predicting the jobs effect of NAFTA if it went through. He said U.S. industrial jobs would move to places with lower wages and desperate people — like Mexico. But hey, Ohio, don’t blame us. The sucking sound starts up here, passes through the U.S. to Mexico, then to even grimmer spots beyond.
Whole plants in Southern Ontario shipped themselves to the southern U.S. Take Nortel, once Canada’s poster child for the superior employment that trade deals such as NAFTA would bring. It chugged public funding, then under the trade deals began shedding jobs — from more than 85,000, mostly Canadian, to about 30,000. Its Canadian work force is down to 6,800. This week, it said it would cut more North American jobs while adding them in China, India, Mexico and other “lower-cost regions.” Flush.
So was NAFTA a bad deal? Yes. Was it a good deal? Yes. What’s going on? It’s all about who it’s good for and who it’s bad for. For this, you need to think a bit in terms of social class, which got harder when John Edwards dropped out of the Democratic race. He talked about those things.
Take Canada. According to economist Bruce Campbell, under NAFTA, the Big Three auto makers shrank their work force here by more than 50 per cent and increased revenues by 70 per cent. Employment declined in manufacturing and rose in the lower-paid service sector. Wages haven’t grown at all since the original free-trade deal in 1988. That’s a first.
Productivity has continued to rise, but, in the past, wages always rose “in tandem.” Top CEOs in 2005 made 237 times more than the average wage, doubling the gap before NAFTA. Wages as a portion of the economic pie declined while profits rose. The top 0.1 per cent of earners doubled their income to $1,641,000; the bottom 95 per cent saw their share of the pie decline.
As for public goods, such as health care and education, we were told these would thrive under trade deals; but our governments have slashed social programs by 26 per cent. Oh, please don’t toss us outta the NAFTA patch.
It’s not just here. In the U.S., six out of 10 Republican voters say free trade did harm. Mexicans disapprove of NAFTA 2 to 1, the reverse of 10 years ago, before real experience set in. But we only hear about it from our leaders when an election is on: ChrÃ©tien-Martin in 1993, the Democrats now. When it’s over — nothing. Try your class analysis on that phenomenon.