Free Trade Is Never Free

While it is beginning to look like International Trade Minister Chrystia Freeland's departure from CETA negotiations was more of a ploy than the end of talks, the hiatus at least gives Canadians the opportunity to once more reflect on its dangers, the same dangers that afflict other so-called free trade deals.

The fact is, free trade is never free. The surrender of sovereignty rights, about which I have written previously, is probably the most insidious aspect of such deals, given that corporations are granted the right to sue if national or subnational governments pass legislation that affects a corporation's right to make money. That includes legislation to protect the environment or mitigate climate change.

An analysis of the Trans Pacific Partnership yields this chilling truth:

"The Investor State Dispute Settlement (ISDS) mechanism included in the TPP investment chapter grants foreign investors access to a secret tribunal if they believe actions taken by a government will affect their future profits. This provision is a ticking time-bomb for climate policy, because many government policies needed to address global warming are subject to suits brought before international investment tribunals. ...Other TPP chapters like the one covering trade in goods can be the basis for state-to-state suits challenging climate policies."

Here in Ontario, citizens were recently reminded of the consequences of corporate displeasure via the NAFTA investor dispute settlement provisions. Opting for some sober second thoughts, the province decided to put a moratorium on offshore wind turbine development, a pause that did not sit well with Windstream Energy LLC, the American company that had signed a $5.2 billion deal with Ontario. A fine of $25 million has been imposed after Windstream invoked its investor rights that were granted under NAFTA, but the fine is a mere precursor to future action.

At the end of September, a panel convened by the Netherlands-based Permanent Court of Arbitration awarded $25.2-million in damages and almost $3-million in legal costs to Windstream, saying the province broke rules under the North American free-trade agreement when it put a moratorium on offshore wind developments in February, 2011, effectively scuttling the Windstream project.

The deal is still considered to be in force, and Windstream has every intention of making sure it comes to fruition:

“We have a contract here, and contracts don’t go away,” [Windstream director David] Mars said, even though the moratorium on offshore wind is still in effect.

In other words, taxpayers will have to brace themselves for further, much deeper compensation to the company in the future, unless Ontario gives in to the extortion NAFTA has made possible.

And despite free-trade cheerleader Freeland's ceaseless chatter about making the investor dispute settlement process more transparent, the unalterable fact is that the right of corporations to sue governments remains solidly intact.

I'll leave the final word to Noam Chomsky who, in this brief video, reminds us of some inconvenient truths we would do well to never, ever forget:

Joseph Stiglitz On The TPP

A very brief video, but a very important message about the dangers of the Investor-State Dispute Settlement mechanism that is a central part of the Trans Pacific Partnership, and something enthusiastically embraced, it would seem, by our 'new' government:

Elizabeth Warren On The Trans Pacific Partnership

Recently, U.S. Senator Elizabeth Warren, a woman I much admire, released a five-minute video that takes aim at the Trans Pacific Partnership, specifically denouncing the Investor State Dispute Settlement provisions that give corporate entities the right to impinge upon a country's sovereignty through lawsuits if legislation affects their ability to make a profit.

Even though it is aimed at an American audience, Canada is mentioned in the warning; all of us would be very wise to take what she says very seriously, given the enthusiasm our 'new' government has for globalized trade.



I look forward to the day when our 'leaders' explain to us why these investor rights are good for all of us.

For more information about why this deal is bad and dangerous, click here.

Will The Trudeau Government Ignore The Warnings?

As pointed out by The Mound, Joseph Stigliz has issued a dire warning to Canada about the dangers of the TPP (Trans Pacific Partnership); essentially, it will enrich the few at the expense of the many. As well, he has warned about two other grave dangers the pact poses for our country:

The controversial but not-yet-ratified trade agreement could tie the hands of the Trudeau Liberals on two key parts of its agenda — fighting climate change and repairing relations with aboriginal people, the Nobel-winning professor warned Friday.

During the recent World Economic Forum in Davros, he spoke to his old friend and now International Trade Minister Chrystia Freeland about his concerns, perhaps best summing up its impact on the daily lives of a great many working people this way:

... the deal benefits big business at the expense of working people, driving down the bargaining power of workers, including their wages.

Despite Freeland's openly-professed enthusiasm for another trade agreement, CETA, which carriess with it similar perils, one can only hope that she listens to her old friend with open ears and has influence with our new prime minister. So far, the signs are ambiguous:

Freeland’s spokesman Alex Lawrence said the government is keeping an open mind about the deal and is following through on its promise to consult widely with Canadians.

“Many Canadians still have not made up their minds and many more still have questions,” Lawrence said.

The House of Commons trade committee is studying the TPP — a process that Freeland has said could take up to nine months.
Lawrence said the committee would travel across the country as part of its outreach to Canadians.

After that, Freeland has promised that only a vote in Parliament would ratify the deal, which was negotiated under the former Conservative government.

When an economist of Stiglitz's stature speaks, none of us can afford to turn a deaf ear.

For a more detailed discussion of this issue, here is a Q&A with Stiglitz.

The High Cost Of Free Trade

Despite the rhetoric by our political and corporate overlords about the wondrous benefits of free trade, multitudes of people on both sides of the border are becoming increasingly aware of its true costs.

In today's Star, readers weigh in with their usual penetrating insights:

Re: Next U.S. president won't nix trade pacts, March 19

As free trade deals are in the spotlight this U.S. election cycle most of the discussions are vague in details, often serving up false choices or straw men instead of pragmatic insight into the issue. This is common practice among politicians, I’m not surprised. Even Bernie Sanders is kind of vague, or when he is detailed the media cuts to commercial.

But I am very surprised at David Olive with comments like, “And that also has nothing to do with trade deals” in reference to low wages and anti-unionization practices in America. I believe that with free trade deals, employers have gained tremendous leverage over labour with the simple threat of “accept our offer of a low wage or we ship your job overseas.”

Empirical evidence sure leads us to this conclusion. I sure don’t see free trade bringing us tonnes more good paying jobs as was the selling feature a few decades ago. Now new trade deals are just presented as “good for the economy.”

Then after trying to justify current trade practices as good, David Olive suggests the poor economy “has almost everything to do with three decades of bipartisan public policy that has withheld economic fairness from the majority of the U.S. population.” Well please be specific. What exactly are those unfair economic policies? Perhaps labour outsourcing, which free trade enabled. Or union busting, again enabled by the tremendous leverage trade deals granted employers.

If the argument that technology has replaced many of the jobs, why did factories move to cheaper labour markets.

Don’t take me wrong, I agree with free trade. My maple syrup for your grapefruits duty free, no problem. I’m even happy with CCM skates on the retail shelf with Asia-branded and produced skates right beside them, duty free. Now that’s free trade.

Let’s compete for market share and the consumer wins. But anecdotally, CCM skates made in Asia and sold here is not in the implied spirit of free trade.
What we’re experiencing now is vastly advantageous to corporate owners, not at all for workers.

As Donald Trump offers up scenarios of China vs America in trade deals we see one of those false choices. It’s really ownership vs labour; China is just the benefactor. China did not dictate that American companies move to China; the American companies made those choices.

Another sidebar advantage for ownership under free trade is by having local jurisdictions offering up low property taxes and such incentives to attract manufacturing plants. These trade deals are sure looking lopsided.

Doug Lata, Pickering

Re: TPP will put Canadian concerns up against U.S. demands, March 21

The Trans-Pacific Partnership (TPP) has devastating potential in terms of our environment and our democracy. It gives big business and industry powers equal to or greater than that of our elected officials.

The people of Canada didn’t vote for international big business in our election; we voted for elected representation. The TPP would diminish our nation’s sovereignty and allow other nations to set our standards and pricing. International trade is a great idea but not at the cost of our nation and democracy.

Justin Trudeau must stand by his election promise and allow public consultation on this deal. This is a deal that will directly affect many Canadians and we need to be heard.

Barbara Rose, Toronto

With "Full speed ahead" the battle cry of our intrepid 'masters,' expect nothing to change in the foreseeable future.

This Does Not Sound Good

Given that the government of Justin Trudeau is in favour of trade deals such as the TPP, its approval seems a foregone conclusion, despite its many grave potential drawbacks:



For a fuller discussion of the above graphic, please click here for both text and links.

Canada To Sign TPP

The federal government has confirmed that it intends to sign the controversial Trans-Pacific Partnership trade deal at a meeting next week in New Zealand.

But that doesn't mean the Liberal government will ultimately ratify the 12-country treaty, International Trade Minister Chrystia Freeland said Monday.

"Just as it is too soon to endorse the TPP, it is also too soon to close the door," Freeland wrote in an open letter posted on her department's website.

"Signing does not equal ratifying.... Signing is simply a technical step in the process, allowing the TPP text to be tabled in Parliament for consideration and debate before any final decision is made."

'We're very much not there yet' on TPP, says trade minister

Only a majority vote in the House of Commons would ensure Canada's ratification of the deal, she added.

Methinks that with a Liberal majority, that ratification is a foregone conclusion.

A Quick Thought About The TPP

I was not planning to write about the Trans Pacific Partnership deal gleefully announced by Mr. Harper yesterday, trade and economics not being my strong suits. However, looking at the overall details of what it entails prompts me to make an observation.

First, a few of the details:

Beef and Pork

Under the deal, Canada could double or triple its annual beef exports to Japan to nearly $300 million, according to the Canadian Cattlemen’s Association. The beef industry would see a phase out in tariffs to those countries from 39 per cent to 9 per cent over 15 years. The deal also secures Canada’s ability to export more pork to Japan, where producers sell roughly $1 billion worth of the meat annually.

Fish and Seafood

The deal means far greater access for Canadian producers to other Pacific Rim markets. Canadian seafood — from frozen fish to fresh crab and lobster —is currently slapped with tariffs of up to 15 per cent in Japan and Malaysia, 34 per cent in Vietnam and 5 per cent in New Zealand. The tariffs on fish and seafood to those countries would be gone within a decade. Japan imports a number of premium seafood products from Canada such as crab, shrimp, lobster, herring roe, sea urchins, salmon and halibut.

Forestry/wood products
About $1 billion in Canadian forest products were subject to tariffs last year. Exports to countries like Japan, Vietnam and Malaysia will gradually be reduced, thereby increasing access for these products.

Metals and Mining

Iron and steel products would benefit from Japan eliminating tariffs of up to 6.3 per cent within 10 years, Vietnam wiping out tariffs of up to 40 per cent within 10 years, Malaysia doing away with tariffs of up to 25 per cent within a decade, and Australia cutting tariffs of up to 5 per cent within four years.

I trust that you can see the pattern here. The gains under this deal for Canada reside almost exclusively in what are called primary industries. What is a primary industry?

An industry involved in the extraction and collection of natural resources, such as copper and timber, as well as by activities such as farming and fishing. A company in a primary industry can also be involved in turning natural resources into products.

Primary industry tends to make up a larger portion of the economy of developing countries than they do for developed countries.

It seems to me that the deal Canada is entering into is merely a continuation of the Harper retrograde vision of Canada as the traditional hewer of wood and drawer of water, a vision he based the bulk of our economic hopes on in his relentless promotion of the Alberta tarsands.

Value-added jobs will take a real hit under the TPP:

Automobiles and Auto Parts

An auto will need to contain just 45 per cent TPP content to qualify for free trade. And for auto parts, the figure is 40 per cent. that’s down from 62.5 per cent and 60 per cent respectively under the North American Free Trade Agreement, which this will replace. Japan already offers duty-free access to passenger vehicles and auto parts. Canada agreed to phase out its 6.1 per cent tariff on imported vehicles over five years. Malaysia and Vietnam, which have tariffs of 35 per cent and 74 per cent respectively, agree to phase them out over 12 years.

According to Unifor president Jerry Dias, that betrayal concession will cost upwards of 20,000 auto industry jobs.

And what do we get in return? Long-term elimination of tariffs that may allow for more sales of industrial pumps, medical equipment, and harvesters and mowers.

As well, there is the opening up of Canada's dairy market, in exchange for which Harper is promising billions of our tax dollars to farmers who will suffer losses.

I'll leave it to others with more wisdom to decide if all of this sounds like it will produce a net benefit for Canada.

Embracing The Veil

H/t The Toronto Star





While our prime minister claims, when attacking the niqab, that Canadians hold openness and transparency as societal values, he is happy to keep us in the dark about all of the secret negotiations going on to conclude the highly controversial Trans Pacific Partnership Agreement, leaked elements of which suggest we will be ceding a great deal of our sovereignty to multi-nationals.

Meanwhile, Mr. Harper is adopting a 'trust me' strategy, saying that no deal will be entered into unless it is a net benefit to Canadians, an assertion that others find hard to swallow, given that he has never met a multi-national that he doesn't like.



Thinking Canadians will legitimately ask why, if the deal is to be so beneficial, the negotiations have been conducted behind such a thick, almost impenetrable, veil. To those who distrust our government, the answer is likely very clear.

Please Sign This Petition

While many of us know that the Trans-Pacific Partnership Agreement is being conducted in unprecedented secrecy (except, of course, in the case of the corporate sector that has full access to the discussions), it is difficult to rally opposition to it with few facts. I received a petition request today from Doctors Without Borders along with a sobering reminder of what could emerge if the agreement comes to pass in its present form: