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Canadian Foreign Affairs Minister Chrystia Freeland. Courtesy of Wikimedia Commons

The trouble with trade

If Canada is to take a second look at its international agreements, it ought to keep workers and the environment uppermost in mind

By Dennis Gruending

Canada’s new minister of foreign affairs, Chrystia Freeland, was recruited into politics by Prime Minister Justin Trudeau and is rather influential in his inner circle. They share a belief common amongst international bankers, industrialists and many politicians that free trade and globalization are automatically good for us and that it would be dangerous to tamper with them. 

Still, it hasn’t been a good season for trade internationalists. In 2016, the British voted narrowly to leave the European Union, the world’s largest trading block. U.S. Now, President Donald Trump refuses to sign the recently negotiated Trans-Pacific Partnership Agreement because he says it would be bad for his country. Trump also says that he’ll reopen the North American Free Trade Agreement (NAFTA), which includes the U.S., Canada and Mexico — something for which he’ll want concessions. 

There’s an irony here, of course. Trump is a wealthy right-wing populist with authoritarian tendencies, and yet he’s the one challenging the international trade regime. In Canada, it was progressives, such as labour leader Bob White and Maude Barlow, chairperson of the left-leaning Council of Canadians, who fought against such agreements in the early 1990s. They said NAFTA was more about the rules for investment than about trade; that it removed power from democratically elected governments and placed it into the hands of corporations — all at the expense of ordinary people. 

It’s true that when companies migrated to lower-wage countries, jobs were created elsewhere. But, far too often, they were poor-paying and left workers without even basic protections. For example, in Bangladesh, the Rana Plaza textile factory collapsed in 2013, killing 180 employees and injuring 1,000. The building codes had been ignored, and workers were forced to remain in a setting that they knew was unsafe. They were earning between $10 and $12 per week at the time. 

For three decades, the predominant narrative has been that trade lifts all boats. If so, how do we explain that median earnings after inflation in Canada have remained flat? Or that 5 million people (500,000 of them children) continue to live in poverty? The wealth created by globalization has been trapped mainly by the elites. In fact, the Canadian Centre for Policy Alternatives reports that in 2015, Canada’s highest paid CEOs were paid 193 times more than someone earning an average wage. 

Trump, meanwhile, has stoked the anger of people who feel that they have been left behind. Unfortunately, he did that by scapegoating Latino immigrants, African-Americans and Muslim refugees, who really aren’t the cause of the hard times Americans may be experiencing. And despite his posturing, it’s unlikely that when Trump reopens NAFTA, he’ll do so with the interests of working-class Americans uppermost in mind. But he has proven, as one commentator noted, that trade agreements are about politics, and not immutable economic laws. 

If Canada is to renegotiate NAFTA, too, the focus should be on benefiting workers, protecting the environment and improving the distribution of income altogether.  

Author's photo
Dennis Gruending is an Ottawa-based author, blogger and a former Member of Parliament. His work will appear on the second and fourth Thursday of the month. His Pulpit and Politics blog can be found at www.dennisgruending.ca.
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