NAFTA's Broken Promises (fwd)

[Sid Shniad <shniad@xxxxxx>]

> http://www.thestar.com/thestar/back_issues/ED19980115/
> money/980115BUS02_FI-CRANE15.html
>
> 	As senior federal negotiators made clear, one of the
>        key, though not widely broadcast goals of the free trade
>        agreement was to prevent future elected Canadian
>        governments from pursuing certain pro-Canada policies.
>
>
> TORONTO STAR  January 15, 1998   By David Crane
>
>                    Free trade's many broken promises
>
>                    THERE WAS was not a peep out of Ottawa on
>                    Jan. 1, despite the fact that the date
>                    marked a significant event in Canadian
>                    history - the final elimination of tariffs
>                    on goods between Canada and the United
>                    States under the Canada-U.S. free trade
>                    agreement.
>
>                    It was on Jan. 1, 1989 that the free trade
>                    deal came into effect.
>
>                    Based on the great claims that government
>                    and business proponents of the trade deal
>                    had made, you would have thought that the
>                    Business Council on National Issues, the
>                    Canadian Chamber of Commerce, the Alliance
>                    of Canadian Manufacturers and Exporters,
>                    the C.D. Howe Institute, not to mention
>                    negotiators Simon Reisman and Gordon
>                    Ritchie, would have planned a gala event
>                    to celebrate on Jan. 1.
>
>                    But nothing of the sort happened.
>
>                    In the United States, Commerce Secretary
>                    William Daley issued a statement,
>                    declaring that ``a milestone in the trade
>                    policy history of the United States and
>                    Canada was reached on Jan. 1, 1998.''
>
>                    But from the Canadian point of view, maybe
>                    there's not a lot to celebrate.
>
>                    To be sure, Canadian exports to the United
>                    States have soared. But it's likely that
>                    would have happened anyway due to the
>                    strength of the U.S. economy.
>
>                    Much of the increase in trade volumes to
>                    the United States have occurred in sectors
>                    such as automobiles and resources, where
>                    tariffs were already zero.
>
>                    But what the Mulroney government, the
>                    business community, economists and think
>                    tanks promised for the most part never
>                    materialized.
>
>                    Then prime minister Brian Mulroney
>                    proclaimed that the trade deal would mean
>                    ``jobs, jobs, jobs.'' Reisman predicted
>                    that the free trade deal would pave the
>                    way for bigger pay increases for Canadian
>                    workers.
>
>                    Groups like the business council and the
>                    Alliance of Canadian Manufacturers and
>                    Exporters said the deal would mean richer
>                    social programs. The C.D. Howe Institute
>                    said it would mean the end of bitter
>                    disputes such as the softwood lumber
>                    dispute.
>
>                    The Economic Council of Canada said it
>                    would mean a huge surge in Canadian
>                    productivity. The government boasted it
>                    had won an exemption for Canadian cultural
>                    policies.
>
>                    A decade later, Canadians are still
>                    waiting for ``jobs, jobs, jobs'' and for
>                    those big pay increases. And Canadian
>                    families are still waiting for richer
>                    social programs and rising living
>                    standards based on the promised upsurge in
>                    productivity.
>
>                    And as for the promised end to
>                    cross-border trade disputes and the
>                    exemption of cultural industries from
>                    trade measures, the record speaks for
>                    itself.
>
>                    Major industries, such as steel, softwood
>                    lumber and wheat, have been forced under
>                    U.S. threats to agree to managed trade
>                    provisions that limited their shipments to
>                    the United States. While Mulroney had
>                    promised he would not sign a trade deal
>                    unless Canada was exempted from U.S. trade
>                    harassment, in the end he caved in.
>
>                    And Canada's cultural industries have
>                    continued to face the full assault of the
>                    giant U.S. media conglomerates and the
>                    White House and Congress.
>
>                    The only goal of the free trade agreement
>                    that has turned out as predicted is that
>                    Canadian governments have fewer powers to
>                    stand up for Canadian interests. As senior
>                    federal negotiators made clear, one of the
>                    key, though not widely broadcast goals of
>                    the free trade agreement was to prevent
>                    future elected Canadian governments from
>                    pursuing certain pro-Canada policies.
>
>                    Thus Canada gave up many of its powers to
>                    prevent Americans from buying up promising
>                    Canadian companies. Canada also conceded
>                    greater access for the United States to
>                    Canadian resources. And U.S. corporations
>                    gained greater leverage in fighting
>                    federal and provincial policies that might
>                    affect them.
>
>                    Meanwhile, as CIBC-Wood Gundy economists
>                    Jeff Rubin and John Lester have shown,
>                    ``instead of narrowing, the labour
>                    productivity gap in manufacturing has
>                    continued to widen to an unprecedented 20
>                    per cent. Free trade hasn't accelerated
>                    the slide in relative productivity but it
>                    hasn't halted it either.''
>
>                    Nor has the free trade agreement made
>                    Canada a magnet for foreign investors to
>                    serve the North American market.
>
>                    Instead, the continuation of trade
>                    harassment from Washington has made the
>                    United States a safer location for
>                    European and Japanese multinationals.
>
>                    It's hard to see what Canada really gained
>                    from the free trade deal. All we can say
>                    with certainty is that 10 years later it
>                    has not delivered the benefits its
>                    proponents promised us.
>
>                                -------------------
>
>          David Crane is The Star's economics editor.
>
>  copyright © 1996-1998, The Toronto Star
>  .......................................
>
>
>  Bob Olsen	Toronto		bobolsen@xxxxxxxxx   (:-)
>
>