America Drives Free Trade
Mercantile Agreements Exploit Canada’s Economic Riches
Poorly negotiated free trade agreements like NAFTA enable foreign corporations to buy up Canadian companies and resources.
"We’ve signed a stunning new trade pact with Canada. The Canadians don’t understand what they’ve signed. In twenty years, they will be sucked into the U.S. economy."
One can only imagine U.S. trade representative Clayton Yeutter’s beaming smile when he made this comment on October 3, 1987 after the Canada-U.S. Free Trade Agreement (FTA) was signed.
Few Canadians know about the FTA’s national treatment clause, which gives Americans the same rights to invest in Canada as Canadian citizens. Foreign investors can buy up Canada without conditions and without limits.
The Canadian Action Party proclaims that the North American Free Trade Agreement (NAFTA) puts even more economic levers into the hands of foreign corporations.
Under Chapter 11 of NAFTA, American and Mexican companies can sue if any Canadian federal, provincial or municipal government passes or amends a law that affects present or future corporate profits. For example, foreign corporations can sue for damages if British Columbia restricts bulk water exports to the U.S. or Mexico.
Canadian Wheat Board Under Attack
Since 1935, the Canadian Wheat Board (CWB) has evolved into the world’s biggest seller of wheat and barley. Just as OPEC empowers oil-producing countries, the CWB puts marketing power into the hands of Canadian farmers.
Eyeing the hundreds of millions of dollars in annual revenue that the CWB passes on to farmers, large U.S. grain corporations continually challenge the CWB. Trade partners like China and Mexico prefer the CWB’s reliability and quality exports over ruthless American trading houses. Still, the Harper government seems poised to eliminate the CWB.
Growing Foreign Ownership
Following America-dominated free trade, over 50% of 35 Canadian industries are now foreign-owned, the highest percentage among industrialized nations. Since the FTA was signed, foreign corporations have bought over 13,000 Canadian companies. America engineered 10,000 of those takeovers.
Canadian icons such as MacMillan Bloedel, Tim Horton’s, Laura Secord, Molson’s, Montreal Canadiens and the Hudson’s Bay Company join a long list of American acquisitions. Less than a dozen widely held Canadian corporations are left listed on the TSX. Among those, Citibank has already bought almost 10% of Royal Bank shares, Canada’s largest financial institution.
Large U.S. multinational takeovers have resulted in the elimination of many Canadian head office jobs.
Canada’s Standard Of Living Lowered
Foreign corporations siphon more than US$50 billion from Canadian trade each year, making Canada’s standard of living much less than it would be without the burdensome free trade agreements. In the first three years after the FTA was signed, Canada lost one quarter of its manufacturing jobs and hundreds of industrial plants.
America continues to exploit valuable Canadian resources including oil, gas and water. America owns so much of Canada’s natural gas industry that soon Canadians will have to approach the U.S. to buy back their own gas.
Canadian Solutions To Restrictive Free Trade
The documentary Hoodwinked: The Myth Of Free Trade points out that Canada can cancel the American-dominated free trade agreements by giving six months’ notice.
At a recent premier of the film at the University of Toronto, former Canadian Prime Minister John Turner also stressed the need to toughen Canada’s negotiating posture in international trade. Rich natural resources are powerful bargaining chips that bolster Canada’s formidable position in international trade. Furthermore, Turner pointed out that Canada has fared well in multilateral trade agreements, and should focus on emerging global powerhouses rather than its tunnel vision fixation on bilateral trade with America.
David Orchard said that east-west trade flows among Canadian provinces must be developed before Canada can re-establish its economic self-sufficiency. When Ontario has a power blackout, the province should first import electricity from neighbouring Quebec or Manitoba rather than buying emergency hydro from New York state.
