DISSENTING OPINION BY THE NEW DEMOCRATIC PARTY

PETER JULIAN MP– NDP CRITIC ON TRADE - March 28, 2007

“It is never too late to become what you might have been.”

George Elliot

The report of the Standing Committee on Trade lacks balance because it fails to represent the views of many of the progressive groups and associations that came and presented to the Committee on issues of fair trade. The perspective and hard work of groups such as trade unions, associations for fair trade, experts and economists, who in total represent millions of Canadians and hundreds of thousands of workers is ignored.

Although the NDP supports some of the recommendations in the report (1,2,3), many are one sided, lack focus, or reach a conclusion for the wrong reasons. 

The Committee endorsed recommendation 13 to push forward the Security and Prosperity Partnership (SPP) without any preliminary hearings or research on this central issue to Canadian sovereignty.  Also, concerns about the automotive and shipbuilding sectors that were raised in a variety of ways at this Committee are not reflected in its report or its recommendations (i.e. recommendation 4).  Recommendation 9 does not specify that the government’s best practices should include an impact assessment, and the consequences on human rights before a Foreign Investment Protection and Promotion Agreement (FIPA) is concluded.

The NDP is pleased that the committee agreed to substantive changes to recommendations 5, 6, 7  to include a better protection against trading away Canadian advantages in strategic areas, to provide better ground support for communities in Canada that try to develop trade relations with their countries of origin, and also to increase marketing support so that Canadian products are recognized and appreciated abroad. The framework included in recommendation 22 is an important move towards re-setting our trade priorities.

Generally, the report is based on the assumption that fast tracking deregulation and blind faith in bilateral free trade will create sustainable and positive prosperity and employment, despite the facts pointing to greater disparity and the existence of many trade models that differ in both assumptions and solutions.

For instance, the facts show that the Canadian manufacturing base has been steadily eroding since the FTA was brought in, and that it eroded further with NAFTA.

The facts also show that since the FTA was signed, a smaller proportion of Canadian households have been getting a greater share of income, but the report recommends more of the same bilateral trade policies that have created such growing disparity in the sharing of prosperity and have dramatically reduced the policy space available to Canada’s governments, a policy space critical to ensure that Canada remains a sovereign nation.

Under the NAFTA for instance, inequality in Canada has grown dramatically; 60% of Canadian families have seen their income decline, another 20% have seen their income stagnate, while the very wealthiest of Canadians have seen massive increases in their incomes.

Bilateral deals of the FTA-NAFTA type have led to an increase in fiscal, social and environmental dumping, causing downward pressure on taxes, social programs and environmental standards, as investor’s demands persistently trump social development, worker’s rights and environmental priorities.

Under NAFTA the Government of Canada conceded privileged US access to Canada’s strategic oil and gas, water and forests resources, in return for a binding dispute settlement mechanism that failed to work, as evidenced throughout the softwood lumber crisis. NAFTA’s energy sharing provisions force Canada to increase its non renewable crude oil & gas production to supply the US economy and to import half of the oil required for domestic Canadian consumption from unsecured sources. This has not only compromised the economic welfare of future generations but is also leading to irreversible harm to the environment. 

The Canadian Association of Labour Lawyers in a June, 2006 report on extending free trade with Central America (CA4FTA) has pointed out that Canada’s existing free trade arrangements are essentially faulty and have not delivered. The Association has reported, “While it is true that trade between the three North American partners has increased, the perceived economic benefits have been hard to discern for workers.  Economic growth in Mexico over the last ten years has been sustained at (…) 1 percent on a per capita basis.  As a result, the Mexican economy has not been able to generate enough employment for its growing labour force.  Hence, real wages in Mexico have been declining over the last ten years at a rate of 0.2 percent per year.  As a result, income disparity between the U.S. and Mexico has actually increased over the last ten years, by 10.6 percent.¹”  

The issue is not one of more trade or less trade, but what system and rules of trade are best for economic development and poverty reduction. With some notable exceptions, the majority report has failed to define and provide the available options.

NEW DEMOCRATS BELIEVE A Canadian Trade Strategy should be inclusive and not surrender control over key elements of Canada’s industrial development and energy policy which ensure that the goals of the market are consistent with the broader public good.  A Canadian trade policy must balance the needs of business with those of Canadian citizens and civil society and must be accompanied by flanking policies that ensure public investment in health, education and infrastructure.

A NEW DEMOCRATIC fair trade policy is rooted in the following principles:

Supply Management creates certainty and predictability in highly cyclical agricultural markets without skewing world prices. Marketing boards provide the opportunity for smaller farmers to connect with the market and generate economies of scales. They are not just essential for the Canadian family farm, whose prosperity is at the heart of the rural economy and of a national food policy, but is also a blueprint for developing nations who seek to develop counterweights to the domination of transnational agri-businesses. Canada should be leading in promoting supply management to other nations.

New Democrats support the consensus reached in Ottawa at the second annual North American Forum on a People-Centered Approach to Trade in June of 2006. The consensus seeks the development of a people-centered approach to trade in support of democratically negotiated and ratified transparent agreements and the presentation of common legislation in the three national parliaments. The purpose is to ensure that the process of trade and investment is a net creator of good jobs that provides solid income and does not put employment, the environment or sovereignty at risk in any of the trading partners.