Trade Agreements

The government of Canada aggressively - and quietly - advocated the Multilateral Agreement on Investments (MAI) through the OECD, even though this ran counter to the opinions of most Canadians. The agreement was finally abandoned in 1998, but most of the items being negotiated through MAI are now on the table through the World Trade Organization (WTO) and the Free Trade Agreement for the Americas (FTAA). Canada's position towards further "liberalization" is clearly affirmative.

The devastating failure of the WTO is that it regards expanded trade and investment as an end in itself. As such, the main agents of international trade and investment, transnational corporations, become the prime agents of the WTO negotiations, and direct the values and goals of the WTO. Essentially, the WTO, as an international legal body, is intricately connected to large corporations and their representative organizations, including the US Business Round Table and Canada's Business Council on National Issues (BCNI). These organizations seek to create an easy regulatory environment with as few restrictions and requirements as possible, while including strong protections for their interests. This, of course, is commonly called "unregulated capitalism". Such organizations are also privately run and financed and have no interest in protecting citizens' rights or the public weal.

Canada's Constitution, in keeping with the UN Universal Declaration of Human Rights, confirms the person as the legitimate basis for our country and clearly lays out our rights as citizens - the right to life, freedom of movement, expression, association, and secession, and establishes that the citizen is the source of legitimacy in the government of our country. Our constitution is supposed to protect and preserve the dignity and primacy of the citizen, and to allow the mechanisms of democracy to determine public policy in Canada.

A government that was committed to the primacy of the citizen would insist that an international agreement would start with this premise and that negotiations on how to conduct international trade and investment would proceed from a desire to embody this premise. Such an agreement would entrench the UN Universal Declaration on Human Rights, and would conduct all negotiations in such a way that they met the criteria of the Declaration. Corporations that wanted freedom to move in an unrestricted manner would have to demonstrate that their actions were the "least damaging to human rights" and the burden of proof would be on corporations to prove that their actions fulfilled these criteria.

Unfortunately, the fact of the WTO agreement is a complete reversal of this. Instead of corporations acting in such a way that they preserve the dignity of citizens, governments need to preserve the freedom of corporations, laws must be the "least trade restrictive," and the burden of proof is on the government to demonstrate that the laws are "necessary." Worse, the government of Canada has been an active participant in the negotiations and is fully committed to this perverse, corporate vision of internationalism. As a result, Canada's membership in international trade agreements like the North American Free Trade Agreement (NAFTA) and WTO restrict the ability of our government to enact public policies that would protect and enhance our rights.

Some details of the WTO agreement:

All of these rules, in addition to specifically prohibiting government action and laying out clear consequences for offenders, introduce a "chill factor" - that is, countries avoid passing laws that might put them in violation of WTO rules. The sovereignty of nations is thus grossly compromised. If there is any concern that these claims are exaggerated, kindly regard some examples of NAFTA and the WTO in action:

Ironically, the majority of what we call "international trade" actually consists of trade in armaments among governments - hardly commercial trade in any meaningful sense. Of the remainder, most trade is intrafirm - that is, between different divisions of the same company. Clearly, the biggest beneficiaries of trade and investment liberalization are the transnational corporations who are able to take advantage of corporate sovereignty in international affairs. This has had clear and demonstrable consequences for Canada's sovereignty. Most of the FDI in Canada has been US corporations buying Canadian corporations - Metronet, Macmillen Bloedel, 20% of Bell Canada, Newcourt Credit Group, Nova Chemicals, Peoples Jewellers, Shoppers Drug Mart, Tim Hortons, Bauer, Labatt Breweries, Birks, and so on. In 1997, foreign owned companies made over 31% of corporate revenues in Canada. Total foreign investment in Canada was $240 billion, up from $122 billion in 1989. Interestingly, a free market zealot like The Globe & Mail's Jeffrey Simpson can be moved to write: "Nobody likes to say this any more - economic nationalism being apparently passe - but foreign control of Canadian manufacturing might be among the reasons foreign firms are more likely to do major research at home than abroad." (Globe & Mail, Nov 17, 1998, p. A25) Evidence of this comes from Canada's drop to seventh in US patent issues, behind countries like Taiwan and South Korea. Therefore, even the trade equals growth argument, which seems to be the only redeeming quality of these trade agreements, is highly dubious at best.

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Copyright © 2000, 2002 by Ryan McGreal