Thursday, June 13, 2013

Why Is Harper So Fervent About Free Trade?



Much has been written about the Harper government's obsession with concluding a variety of trade deals; probably one of the most worrisome in terms of its implications for Canadian sovereignty, jobs, environmental protection and culture is the Comprehensive Economic and Trade Agreement (CETA) that Canada is pursuing with the European Union, about which I have written previously.

As reported in the news today, Harper has just addressed both British Houses of Parliament advocating for it:

“It remains our hope that we will soon achieve a comprehensive economic and trade agreement with the European Union, Canada’s second-largest trading partner after the United States,” Harper said.

“For Canada, and for Great Britain as a member of the EU, this will be a historic step — a monumental one, in fact: A joint Canada-EU study has shown that a commercial agreement of this type would increase two-way trade by twenty per cent.


But like so much else about the cabal that currently rules us, I believe there is an underlying truth about Harper's fervour that his rhetoric seeks to obscure. The fact is that such deals, while they will open up new markets for business and thus help to fatten corporate coffers, will also make it easier for those very same corporations to continue to ignore their responsibility to create good-paying jobs in Canada.

Consider an obvious truth. In the old days, there was an understanding, a 'social contract' if you will, that good profits and good jobs went hand-in-hand. Pay your workers a good wage and they will buy your products. That premise, many would argue, has steadily eroded with freer trade, with job losses outpacing job creation, and a growing gap in inequality within Canada.

It is no secret that the middle class is dwindling, the same middle class that used to buy the bulk of goods and services produced domestically. Now, however, with outsourcing and the steady erosion of domestic manufacturing, that domestic market has shrunk. But it doesn't have to be that way.

In today's Star, Jonathan Power has a piece about the rapid growth of prosperity in the developing world. One of the most important observations he makes is the following:

The most important engine of growth of the developing South is their own domestic markets. The middle class is growing at a pace like never before. Within a dozen years the South will account for three-fifths of the 1 billion households earning more than $20,000 a year. Between 1990 and today, the South’s share of the world’s middle-class population expanded from 28 per cent to 58 per cent. Even in the poorer parts of India or Africa, mobile phones, motorbikes and contraceptives are fairly common. Phone sales are up to a cumulative 600 million in Africa — and climbing fast.

So, of course, these emerging markets are much coveted by the corporate agenda, further relieving them of their former 'burden' of job creation in order to expand their profits. And while the corporate press will continue to promote the propaganda of freer trade prosperity, we would all be wise to bear in mind that the prosperity it talks about is not to be found domestically, as they would have us believe, but rather, offshore.





4 comments:

  1. As Stiglitz outlines in "The Price of Inequality" this gutting of the middle class is the direct result of legislation transferring wealth out of the blue and white collar working classes and into the accounts of the wealthiest, the rentier class. Warren Buffet has spoken of a powerful class war, one that the richest launched and are winning.

    Harper is a keen supporter of the FIRE (finance/insurance/real estate) economy where wealth is largely conjured and pools to the credit of the wealthiest. It is why Harper will not recognize the reality of a Carbon Bubble and the perils that holds for Canada, generally, and for Alberta especially.

    Free trade was sold on a false promise. Ours was supposed to morph into a "knowledge economy" in which we would no longer dirty our hands only the supposed knowledge jobs never materialized as the highly-paid, nation-building manufacturing and trades positions were offshored. The educational Marshall Plan that would have been needed was never funded and we have, instead, a Potemkin Village labelled "Action Plan Canada" topped up with a guest worker programme. And those knowledge jobs? A lot of them have been outsourced too. There's a reason why India opens 19-technical universities every year and it's falling behind China.

    We were sold down the river by the ideologically twisted minds of the Gang of Three - Reagan, Thatcher and Mulroney. It's mind-boggling that so many on the Right still venerate those charlatans.

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  2. And sadly, Mound, there really seems to be no alternative vision being offered by either the Liberals or the NDP. Sure, Justin Trudeau can talk all he wants about the middle class, but until he articulates substantive policies that would foster its promotion, I regard his words as nothing more than platitudes. The same goes for Mulcair.

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  3. It's no secret that I share your lack of confidence in both opposition leaders, Lorne. Neither of them acknowledges we can't have a strong Canada and a strong, cohesive society without rebuilding the middle class. Neither of them acknowledges that we can't rebuild the middle class without a huge dollop of legislative activism/interventionism. It was the political apparatus that created the conditions that undermined the middle class.

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  4. Unfortunately, Mound, thanks to the relentless propaganda of our times and Canadians' historical ignorance/amnesia. the idea of government intervention is regarded as anathema. We can only hope for a restoration of balance in economic matters, but that won't happen until people become more informed and engaged.

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