Free Trade Is Not Fair Trade

Stephen Harper has been travelling around the world, signing "free" trade deals like a hockey player signing autographs. But those deals have been particularly detrimental to Ontario's economy -- and The Great Recession has put the province's manufacturers on the ropes. Tom Walkom writes:

The North American economy is being put through a wringer, in a wrenching process that began with free trade.

Before free trade, multinationals that wanted to sell in Canada had to produce here. Trade barriers may have been inefficient. But they kept people employed.

Indeed, it is only thanks to a trade barrier — the still-extant requirement that Canadian tomato juice be made from fresh tomatoes — that 250 of the 740 jobs slated for destruction at Leamington’s H.J. Heinz Co. plant are being saved

Immediately after the first free trade pact was inked, multinationals began to rationalize their North American operations. Many decided to keep their Ontario branch plants open. But instead of manufacturing a full range of products, these plants would concentrate on specific product lines that could be sold continent-wide.

For Ontario this meant that many jobs stayed.

But now, under competitive pressures aggravated by the slump, North America is undergoing stage two of globalization. In order to radically reduce costs, multinationals are centralizing all North American production in a handful of large plants.

Not surprisingly, they are choosing to situate these large plants in the U.S. rather than Canada.

Stephen Harper claims that he walks in the footsteps of John A. Macdonald. That, of course, is hokem. It was Macdonald who instituted The National Policy -- which was based on a simple quid pro quo: if you want to sell here, you have to locate here. That was the principle behind the Auto Pact.

But NAFTA put an end to the auto pact and what was left of The National Policy. It began the quest to make the world safe for capital. And it entrenched the principle that free trade is not fair trade.