December 7, 2013

"Too early to tell"

(an unpublished rebuttal of Licia Corbella, Calgary Herald editorial writer)

David Orchard

Licia Corbella's praise for Brian Mulroney and the Canada-U.S. Free Trade Agreement (FTA),"Free trade deal has proven the critics wrong," Province, November 22, 2013, brings to mind the anecdote of Chinese leader Chou En Lai being asked what he thought of the French revolution. "It's too early to tell," he said.

Corbella pronounces the FTA a flourishing success and declares that " it is virtually impossible to find a credible critic of free trade." Trade volumes have tripled in twenty years, she says, as if that settles it.

In fact, our exports have been flat for well over a decade. According to a recent Bank of Montreal report this export slump is "the biggest challenge" facing Canada's economy. Oil and gas make up our largest export and we are giving our oil to the US at slightly over half of world price. No wonder Americans are taking more; they are receiving a massive $30 billion annual subsidy from Canadians to do so! Hardly something to brag about.

Furthermore, a majority of our exports to the US are intra-corporate, i.e. US subsidiaries taking our resources, for example, south to their parent corporations. This is not free trade. Nor is the allotment of a permanent percentage of our energy to the US, (FTA sec. 409, 904), which puts US interests ahead of our own. Meanwhile, under the FTA, east-west trade in Canada and our trade with other countries has fallen significantly, loosening the ties that bind our country and putting even more of our foreign trade eggs in one basket.

Corbella claims that "millions of new jobs were created on both sides of the border." Perhaps in theory, but on the ground in the first four years of the FTA Canada lost 24% of its manufacturing jobs and the trend has continued. Since 2000 Canada has lost another 20% of its manufacturing and today has 1.4 million unemployed. From Electrolux to Hershey to Heinz Ketchup the list of plant closures grows ever longer. Corbella makes particular mention of Peerless Clothing having done extremely well under the FTA, but what is the sum total? According to Statistics Canada in the last decade the output of Canada's clothing industry has fallen over 50%, from $3.6 billion to $1.4 billion and the number of jobs has plunged from 106,226 to 25,670. Since 1992 the market share of clothes made in Canada has cratered from 65% to 16%.

As for control of our economy, in the first two decades of the FTA 10,000 Canadian businesses were taken over by foreign, mostly US companies. These takeovers continue unabated. Stelco was bought by US Steel and shut down. Not long ago our grain industry was majority Canadian owned. It has now largely in foreign hands. Are these, too, examples of flourishing success?

Our economy, along with our sovereignty, was further weakened when, under NAFTA, every US corporation received the right to sue Canada for laws that it views as inconsistent with the FTA and NAFTA. In the last twenty years US corporations have launched, or stated their intention to, over three dozen lawsuits against Canada, to overturn environmental laws, laws banning bulk export of Canadian water, Quebec's moratorium on fracking, Canada's embargo on the pesticide Lindane, and many others. Canada was forced to pay Ethyl Corp. of Virginia $19.3 million for banning its gasoline additive as a neurotoxin—and reverse its ban—and had to pay $130 million to Abitibi Bowater in Newfoundland as a compensation for that province taking back its water rights when the company announced it was closing its operation. The impact of these cases on our sovereignty is immense as Canadian laws and regulations are overturned. The precedents they are setting will affect our country for decades and reveal Mulroney's declarations of triumph as overconfident and self-congratulatory.

The Mulroney-Corbella team also ignores statistics that show Canadian incomes as a whole have stagnated since the FTA . The gap between the rich and the poor has grown faster in Canada during the last twenty years than in all but one other OECD country. The concentration of income has returned to Depression-era levels, according to economics professor Thomas Lemieux of the University of British Columbia.

As for Corbella's claim that "it is virtually impossible to find a credible critic of free trade," John A. MacDonald, George Etienne Cartier, R.B. Bennett, John Diefenbaker, Pierre Trudeau and John Turner all strongly opposed Canada entering a free trade deal with the US because of the threat to our sovereignty and our freedom to create and maintain world class Canadian industries. This leadership Canada is sorely missing today.

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