Sunday, January 24, 2016

Take A Pass


Soon, Justin Trudeau's Liberals will have to decide whether Canada will join the Trans Pacific Club. Murray Dobbin writes that recent studies indicate that the cost of membership in these so called free trade clubs is high:

By focusing exclusively on exports and abandoning any policy initiative aimed at strategic industrial development, Canada's economy has been going backwards in terms of value-added industries. According to the National Post's John Ivison, "the oil and gas sector's share of total exports has increased to 23 per cent in 2014 from 6 per cent a decade earlier, just as a manufacturing industry like the automotive sector has slipped to 14 per cent from 22 per cent." The trade deficit for 2015 was dismal. From October 2014 to October 2015 it reached $17.4 billion, the worst one-year total on record.

That's because, despite all the hype about free trade, these deals have always been -- first and foremost -- about investor protection:

Investment protection agreements are not primarily about trade -- they provide "investors" (that is, transnational corporations) with extraordinary rights that trump the sovereignty of those countries that sign them. But it only works at all if you have a capitalist class that actually takes advantage of these rights -- by taking risks, investing in innovation and engaging in aggressive overseas marketing -- such as the nine non-North American countries that are partners in the TPP. Otherwise we simply agree to become a punching bag for transnational corporations doing business here in Canada.

Rather than investing in other countries, Canadians have lost control of their own companies to foreigners:

As for foreign direct investment (FDI) positive numbers presented by "free trade" supporters are also extremely misleading. While most people assume that foreign investment means new production and jobs, in Canada it doesn't. In 1998, the Investment Review Division of Industry Canada prepared a report that looked at FDI in Canada. In 1997, it reached $21.2 billion -- the second-highest total on record. However, according to the study, fully 97.5 per cent of that total was devoted to acquisitions of Canadian companies. And 1997 was not an aberration. On average, between June 1985 and June 1997, 93.4 per cent of FDI went to acquisitions. In 2001 the figure was 96.5 per cent (Mel Hurtig, "How Much of Canada Do We Want to Sell?" Globe and Mail, 5 February 1998).

History tells us that, on balance, free trade has not been good for Canada. The simple truth is that the big countries -- most importantly, the United States -- set the rules in their favour. Some don't dispute this fact. But they insist that Canada still needs to join the club for defensive reasons.

Gus Van Harten, who teaches trade law at Osgoode Hall, disagrees. There are, he writes, seven good reasons for Canada not to sign on to the TPP:

1. The TPP would give special protections to foreign investors at significant public cost, without compelling evidence of a public benefit.

 2. When the TPP refers to "foreign investors," we should understand that to mean large multinationals and the super-wealthy.

3. The TPP is worse than existing agreements such as NAFTA.

4. Anything new and apparently better in the TPP, compared to NAFTA, is very likely lost because the TPP adds to, instead of replacing, existing trade agreements. 

 5. The TPP would make it easier for global banks to resist regulation.

6. The TPP is incompatible with the rule of law.

7. The TPP is disrespectful of domestic institutions, including the courts. 

Put simply, Mr. Trudeau and Company should take a pass on the TPP. 


Rural said...

"Put simply, Mr. Trudeau and Company should take a pass on the TPP. "

But wont as there is far too much corporate influence upon government (in all nations). Giving foreign corporations the ability to sue when our environmental or other laws impact their plans, or preference is given to domestic suppliers is quite simply wrong and has nothing to do with 'free trade'.

James A. Latimer said...

Very enlightening. And some of the most damning statements are from conservative media, National Post, Globe and Mail. Problem is that it has taken too long for any of them to show concern. Jobs and money have been flowing out of this country since NAFTA. Perhaps this issue, like environmental concern, is a little too late. Why wasn't this an issue to those folks over the past 10 years or more? How is it that it becomes such a huge issue now that the Liberals are leading the government? Does everything come down to politics? Mr Harper and the Conservative Party negotiated most of these trade deals after all - without any reaction other than support from these same people.

On the other hand, if Canada were to refuse to sign on to TPP is it now stands, others who are sitting on the fence would join us.

Owen Gray said...

I agree, James. If Canada refused to board the ship, others would also refuse to come on board. It's interesting that the Europeans are trying to re-negotiate the Investor Protection provisions of the European Trade Agreement.

We shouldn't assume that the TPP is a done deal.

Owen Gray said...

Absolutely true, Rural. The bottom line is that these trade agreements seek to make Keynesian solutions to economic problems impossible -- even when it's clear that Keynesian solutions are what are required now.

the salamander said...

.. Harper et al Inc. had years to build and buttress barricades to repel troubling questions, inquiries or public concerns.. and its now very easy to see how effective they were. Obstruction, delay, deceit, outright refusal, denial, scripted spokeswanks aplenty and eager hordes of Government and 'outside' law firms and lawyers. Smokescreens and Red Herrings.. and those wondrous and rapturous Holy Grail motherhood statements such as 'clearly, in the fulsomeness of time we'll release details of these nation building trade deals' and 'as the matter is before the Courts it would be unwise to comment'

That was then.. but this is now..

Justin Trudeau has not had time to dig tunnels and booby trap them as Harper et al did with such astounding determination. Nor has he fearless abject partisan lampreys hatched from Poli Sci stewing tanks like Ray Novak, Stephen Lecce, Ken Boessenkool et al.

My point you ask? Confronting fresh faced Liberal MPs and Ministers etc from the so far friendly outposts of Canadian electoral ridings should be treated as SOP .. Standard Operating Procedure to demand elected public servants - to expect and accept and reflect the political and economic and environmental concerns of the voters and communities who elected them.

I could go on to further stages or effective strategies.. but will save those for later salvos in the future as required ..

Owen Gray said...

I'm hopeful that public pressure will work with the Liberals, salamander. They say they will listen. And, if they do, I'm betting that "the public" will say, "Not this time. Not this deal."

Steve said...

Please let common sense rule. Save us from the Harper legacy.

Steve said...

another graphic that has the same message. Flush the TPP

America is about to elect a new president that no matter who it is could be called facsist beyond belief. Canada hold your ankles.

Owen Gray said...

If Balsillie is worried, Steve, we should all be worried.

Anonymous said...

The Liberals have been promoting the TPP in their meetings with business groups. If the Liberals end up voting against the TPP, it will be a shock. Their public relations strategy will be to pretend that they are signing it reluctantly, with concerns. They will shrug and will claim that Canada has no choice but to join the club without re-negotiating anything. If Canadians wanted to protect jobs, social programs, public assets and the environment, they would have voted NDP. Instead, they gave the message that they are willing to sacrifice all that in order to have a "sexy" prime minister.

Owen Gray said...

That may, indeed, wind up being the case, Anon. But I'm hoping for a different outcome.

Hugh said...

Of course they should dump the TPP. Seems like a no-brainer.

Eli Lilly is suing Canada for $500 million under ISDS in NAFTA.

ISDS is included in all these trade deals, eg. TPP, CETA, China-FIPA.

TransCanada is suing the US for $15 BILLION! under ISDS in NAFTA, what do Americans think about that?

Owen Gray said...

I'm sure they're not happy about being on the other end of a lawsuit, Hugh.

The Mound of Sound said...

Well this will be the measure of our new prime minister's real alignment, Owen. Will he stand for ordinary Canadians or for 'special interests', foreign and domestic? I've already got him figured as just another greasy petro-pol while hoping that I'm somehow misjudging Trudeau.

We've already surrendered so much state sovereignty to free trade, globalization and these draconian deals. In the process our political leadership has been transformed into a technocracy of administrators, petit fonctionnaires. They've signed away so much of their responsibility that they're incapable of anything resembling normal, healthy governance guided by any clear vision.

If I'm right about Trudeau then I expect we'll pay for that dearly before long.

Owen Gray said...

The TPP will be Trudeau's test of character, Mound. After he makes his decision, we'll know who he is.

Pamela Mac Neil said...

I agree that these trade deals are all about investor protection and the TPP is no different. These 'trade' deals have been and continue to be a major tool of implementing global neoliberal policy nationally. Canada withdrawing it's 6 planes from bombing in Syria and Iraq is no big deal to the US, even though the the opposition and the MSM make it a big deal. What the Canadian military can provide in support for the US in the Middle East is a joke and the Americans don't even care about it being a token symbol of Canadian support, besides the US did not ask for this support, Harper offered. The real pressure will come with the US wanting Canada to sign the TPP. If Canada says no, then watch the American fangs come out. The State dinner that Obama is having for Trudeau in march, is not so much to welcome the new Prime Minister of Canada, but to pressure Trudeau to commit to signing the TPP. Saying no to the US's global Neoliberalism ,the key strategy of American Imperialism is saying no to the very essence of what has created the American Empire. The pursuit of American world domination is not so much done through occupation, like the previous empires of Britain and France, but rather by controlling markets and then taking control of a countries capital, labour and resources. Saying yes to the US by signing the TPP, would remove Canadians from having control of our country. With one sweep of the pen Trudeau's signature would destroy Canadian sovereignty. The door would be open to the US and other countries to have full control our capital, labour and resources. If Canada said no then, as one of your commentors said, other countries may follow. Is it possible that Trudeau and his advisors are not aware of this? If they are aware and they go ahead with the TTP, then they are traitors. If they are not aware and they go ahead with the TPP then in their ignorance they will have sold our country to corporate rule.This Corporate rule is what Harper wanted! The investor protection, is the main reason for the TPP existing at all. The US is not going to get rid of it. Saying NO to the TPP, is saying YES to Canada's National Sovereignty and saying it Firmly!

Owen Gray said...

If the Liberals say yes to the TPP, they will be nothing more than Harper Lite, Pam. There will have been no significant change.

Hugh said...

It's interesting how, at this point, the 3 leading presidential contenders appear to oppose the TPP.

Owen Gray said...

That suggests that opposition to the agreement is building, Hugh.

Hugh said...

I just heard on the news that Canada will sign the TPP, but not necessarily ratify it. Meaning, they're still not sure about it.

Owen Gray said...

They can't dodge this one, Hugh. They have to make up their minds.

Hugh said...

Thousands are protesting the TPP in Malaysia, while in Canada most people probably don't know what it is.

"The Malaysian government remains staunchly in support of the agreement, while critics like ex-prime minister Mahathir bin Mohamad told the Malay Mail said the TPP would overreach into areas of law-making that should be reserved for Malaysia’s government alone."

Owen Gray said...

We'll pay for our complacency, Hugh.