NAFTA has helped Canada
Toro @ Sun Nov 27, 2005 10:19 am
This is from a paper by Professor Daniel Tefler at the Rotman School of Management published in the American Economic Review in 2004.
Some highlights
$1:
In 1988, the average Canadian tariff rate against the United States was 8.1 percent. The corresponding effective tariff rate was 16 percent. Perhaps most importantly, tariffs in excess of 10 percent sheltered one in four Canadian industries. Given that these industries were almost all characterized by low wages, low capital-labour ratios, and low profit margins, the 1988 tariff wall was indeed high.
... Employment losses of 5 percent translate into 100,000 lost jobs and strike me as large, not least because only a relatively small number of industries experienced deep tariff concessions. Indeed, most of these lost jobs were concentrated in the most-impacted, import-competing industries. For this group, with its 12 percent job losses, one in eight jobs disappeared. This number points to the very large transition costs of moving out of low-end, heavily protected industries. It reflects the most obvious of the costs associated with trade liberalization.
It is difficult to be sure whether these transition costs were short-run in nature. However, two facts drawn from the most recent seasonally adjusted data suggest that they probably were short run costs. First, the FTA had no long-run effect on the Canadian employment rate which was 62 percent both in April 1988 and April 2002. Second, Canadian manufacturing employment has been more robust than in most OECD countries. For example, between April 1988 and April 2002, manufacturing employment rose by 9.1 percent in Canada, but fell by 12.9 percent in the United States and by 9.7 percent in Japan. This suggests, albeit not conclusively, that the transition costs were short run in the sense that within 10 years the lost employment was made up for by employment gains in other parts of manufacturing.
... the Canadian tariff concessions raised labour productivity by 15 percent in the most-impacted, import-competing group of industries. This translates into an enormous compound annual growth rate of 1.9 percent. The fact that the effect is smaller and statistically insignificant at the plant level suggests that much of the productivity gain is coming from market share shifts favouring high productivity plants. Such share shifting would come about from the growth of high-productivity plants and the demise and/or exit of low-productivity plants.
... The plant-level numbers indicate that the FTA raised labour productivity in manufacturing by 7.4 percent or by an annual compound growth rate of 0.93 percent. The industry-level numbers are about the same. These numbers, along with the 14-15 percent effects for the most-impacted importers and exporters, are enormous. The idea that an international trade policy could raise labour productivity so dramatically is to my mind remarkable.
... The Canadian tariff concessions raised Canadian imports from the United States by 54 percent. ... The Canadian tariff concessions lowered Canadian imports from the rest of the world by 40 percent.
...There is modest evidence ... that the FTA reduced import prices by 7 percent for the most-impacted import-competing products.
... Most commentators expected Canadian wages to fall in response to competition from lessunionized, less-educated workers in the southern United States. ...For all workers, the tariff concessions raised annual earnings. For example, the total FTA impact is a rise of 3 percent at both the industry level and the plant level. ... At the plant level, earnings rose for both production and non-production workers. At the industry level, earnings gains were concentrated among production workers. ... a 3 percent rise in earnings spread over 8 years will buy you more than a cup of coffee, but not at Starbucks. The important finding is not that earnings went up, but that earnings did not go down in response to competitive pressures from the U.S. South.
... unionization does not offer an explanation of modestly rising earnings.
... There is a presumption in the popular press that anything to do with globalization will worsen income inequality. It is thus reassuring that there is absolutely no evidence that the FTA worsened income inequality.
... Several strong conclusions emerged from the analysis. First, the FTA was associated with substantial employment losses: 12 percent for the most-impacted, import competing group of industries and 5 percent for manufacturing as a whole. These effects appear in both the industry- and plant-level analyses. Second, the FTA led to large labour productivity gains. For the most-impacted, export-oriented group of industries, labour productivity rose by 14 percent at the plant level. For the most-impacted, import-competing group of industries, labour productivity rose by 15 percent with at least half of this coming from the exit and/or contraction of low-productivity plants. For manufacturing as a whole, labour productivity rose by about 6 percent which is remarkable given that much of manufacturing was duty free before implementation of the FTA. Third, the FTA created more trade than it diverted and possibly lowered import prices. Thus, the FTA likely raised aggregate welfare.
... Employment losses of 5 percent translate into 100,000 lost jobs and strike me as large, not least because only a relatively small number of industries experienced deep tariff concessions. Indeed, most of these lost jobs were concentrated in the most-impacted, import-competing industries. For this group, with its 12 percent job losses, one in eight jobs disappeared. This number points to the very large transition costs of moving out of low-end, heavily protected industries. It reflects the most obvious of the costs associated with trade liberalization.
It is difficult to be sure whether these transition costs were short-run in nature. However, two facts drawn from the most recent seasonally adjusted data suggest that they probably were short run costs. First, the FTA had no long-run effect on the Canadian employment rate which was 62 percent both in April 1988 and April 2002. Second, Canadian manufacturing employment has been more robust than in most OECD countries. For example, between April 1988 and April 2002, manufacturing employment rose by 9.1 percent in Canada, but fell by 12.9 percent in the United States and by 9.7 percent in Japan. This suggests, albeit not conclusively, that the transition costs were short run in the sense that within 10 years the lost employment was made up for by employment gains in other parts of manufacturing.
... the Canadian tariff concessions raised labour productivity by 15 percent in the most-impacted, import-competing group of industries. This translates into an enormous compound annual growth rate of 1.9 percent. The fact that the effect is smaller and statistically insignificant at the plant level suggests that much of the productivity gain is coming from market share shifts favouring high productivity plants. Such share shifting would come about from the growth of high-productivity plants and the demise and/or exit of low-productivity plants.
... The plant-level numbers indicate that the FTA raised labour productivity in manufacturing by 7.4 percent or by an annual compound growth rate of 0.93 percent. The industry-level numbers are about the same. These numbers, along with the 14-15 percent effects for the most-impacted importers and exporters, are enormous. The idea that an international trade policy could raise labour productivity so dramatically is to my mind remarkable.
... The Canadian tariff concessions raised Canadian imports from the United States by 54 percent. ... The Canadian tariff concessions lowered Canadian imports from the rest of the world by 40 percent.
...There is modest evidence ... that the FTA reduced import prices by 7 percent for the most-impacted import-competing products.
... Most commentators expected Canadian wages to fall in response to competition from lessunionized, less-educated workers in the southern United States. ...For all workers, the tariff concessions raised annual earnings. For example, the total FTA impact is a rise of 3 percent at both the industry level and the plant level. ... At the plant level, earnings rose for both production and non-production workers. At the industry level, earnings gains were concentrated among production workers. ... a 3 percent rise in earnings spread over 8 years will buy you more than a cup of coffee, but not at Starbucks. The important finding is not that earnings went up, but that earnings did not go down in response to competitive pressures from the U.S. South.
... unionization does not offer an explanation of modestly rising earnings.
... There is a presumption in the popular press that anything to do with globalization will worsen income inequality. It is thus reassuring that there is absolutely no evidence that the FTA worsened income inequality.
... Several strong conclusions emerged from the analysis. First, the FTA was associated with substantial employment losses: 12 percent for the most-impacted, import competing group of industries and 5 percent for manufacturing as a whole. These effects appear in both the industry- and plant-level analyses. Second, the FTA led to large labour productivity gains. For the most-impacted, export-oriented group of industries, labour productivity rose by 14 percent at the plant level. For the most-impacted, import-competing group of industries, labour productivity rose by 15 percent with at least half of this coming from the exit and/or contraction of low-productivity plants. For manufacturing as a whole, labour productivity rose by about 6 percent which is remarkable given that much of manufacturing was duty free before implementation of the FTA. Third, the FTA created more trade than it diverted and possibly lowered import prices. Thus, the FTA likely raised aggregate welfare.
Link
Arctic_Menace @ Sun Nov 27, 2005 10:31 am
Yeah, but it has also screwed us over and made living with the USA difficult as well.
Motorcycleboy @ Sun Nov 27, 2005 11:35 am
I don't think anyone looking at the economics of NAFTA can seriously argue that it's been a bad deal for Canada.
Although TORO has provided copious quotes and stats supporting that assertion in his post, one need only look at the basics to understand why NAFTA is a good thing.
1. Canada is an export economy, and our major market is the US. Anything that eases the free-flow of goods across the border is going to be good for an exporter like us.
2. The Liberals campaigned in 1993 on a platform that included tearing up the agreement. Yet, once in power, they chose not to do so. Why? The Liberal Party of Canada includes a huge number of members who are virulently anti-American. If NAFTA were bad economic policy, then politically, it would have been very much in the interests of the Liberal Party to do away with it. They didn't. That says something.
xerxes @ Sun Nov 27, 2005 11:52 am
It also might of had something to do with the fact that the agreement to join NAFTA had already been made when the Liberals came into power and their hands were tied to an extent.
Motorcycleboy @ Sun Nov 27, 2005 12:09 pm
xerxes xerxes:
It also might of had something to do with the fact that the agreement to join NAFTA had already been made when the Liberals came into power and their hands were tied to an extent.
Hands were tied? Well, the US has violated the agreement repeatedly on softwood lumber. If Canada was looking for an excuse to get out of NAFTA, one would think that would be a stick they'd be weilding quite liberally these days. Especially when one takes into account their recent policy of "America-Bashing" in the lead up to the election.
But I've yet to hear Martin or any other Liberal state they're planning to pull us out of NAFTA. If it's such a bad deal, why aren't they tearing it up?
xerxes @ Sun Nov 27, 2005 12:16 pm
Because we're past the point of no return. As good as it is to say NAFTA screws us over, doing so would screw us over as well. Our countries are too integrated, too used to NAFTA to go back.
NAFTA has its benefits and it also has its problems. Just becasue it has problems doesn't mean would shoud pull out of it. We ought to try and address them and correct them to the best of out ability.
Motorcycleboy @ Sun Nov 27, 2005 1:01 pm
xerxes xerxes:
Because we're past the point of no return. As good as it is to say NAFTA screws us over, doing so would screw us over as well. Our countries are too integrated, too used to NAFTA to go back.
NAFTA has its benefits and it also has its problems. Just becasue it has problems doesn't mean would shoud pull out of it. We ought to try and address them and correct them to the best of out ability.
NAFTA has its benefits and it also has its problems. Just becasue it has problems doesn't mean would shoud pull out of it. We ought to try and address them and correct them to the best of out ability.
What do you consider to be problems?
Scape @ Wed Nov 30, 2005 2:39 am
Canadian ownership of business for one.
Canadian laws being overruled by NAFTA for two. (private water, 2/3 of oil and gas production must be sold to US markets even if there is a shortage)
Canadian R&D going south as opportunities dry up as all the headquarters (and thus investment) is down south.
One can also look at the upswing in the Canadian economy before FTA/NAFTA and see that indeed the upswing in the economy was already well on it's way and the change in the market caused by the trade agreement actually slowed the upswing in the economy because of the uncertainty. It is a non sequitur to assume FTA/NAFTA are responsible for the upswing when the ink on the agreement wasn't even dry.
Let's look 1st at the increase of import/export and put some reasonable perspective upon it. Canada's biggest gains in exports to the US since FTA was auto and auto parts, agro and energy. In all three cases the upswing from FTA was minimal. In the case of the auto industry the upswing was in relation to the auto pact that represent Canada's protectionism at it's best and most successful. This advantage was amplified in relative value to the Canadian dollar and was bloated due to double accounting as car parts are counted as import exports as they cross the boarder and counted again as the completed product.
The most dramatic upswing was the energy sector that was on the upswing irregardless of NAFTA as the demand for energy in the US market was growing (and still is) so rapidly.
The last area of growth was agro and sadly a small minority have reaped the harvest of this blighted crop as Canadian farmers and consumers ended up getting the shaft.
PDF : Lessons from NAFTA: The High Cost of “Free” Trade
The figures shown are not adjusted for inflation:
----------------------------- 1988 2002
Canadian agri-food exports $10.9B $28.2B(Exports have tripled since 1988 and 7x since 1975)
Realized net farm income $3.9B $4.1B (if adjusted for inflation net farm income dropped 24%)
Farm Debt $22.5B $44.2B (today interest on the debt is equal to net farm income. The banks are taking twice as much from our farms then the families on the farms are earning.)
Wheat:Farmgate price $4.93/bushel $4.48/bushel
Prices are for #1 Canadian western red spirng wheat
Bread:Grcery store price $1.12/loaf $1.46/loaf
Grain handling:
# of farmer owned co-ops 4 0
Flour Mills:
Canadian ownership 50% 21%
Malt Plants:
Canadian ownership 95% 12%
Employment
in Agro-food processing 277,300 274,900 jobs
Freight rates 7.15/tonne $35.68/tonne
Fertilizer price $374/tonne $539/tonne
# of Canadian farmers 293,089 246,923
Price of Diesel 25.0c/litre 33.5c/litre
# of major
machinery companies 6 3
Federal spending on
Farm support $4.7B $3.5B
Dairy:% of farm co-ops 60% 35%
Pork Chops: grocery $ $6.88/kg $9.54/kg
# hog farmers 33,760 11,565
Hogs:Farmgate $ $1.44/kg $1.46/kg
Packing plant pay $9.38/hr $9.65/hr
Reference
The net result is Canadian farmers are being driven out of the market and are being bought up, cheap, by US conglomerates. The manufacturing base has been hit even worse:
NAFTA at 7
False Promise
$1:
Between 1989 and 1997, 870,700 export jobs were created, but during the same period 1,147,100 jobs were destroyed by imports. Thus, Canada’s trade boom resulted in a net destruction of 276,000 jobs.
Manufacturing employment bore the brunt of corporate restructuring, most severely in the first wave (1989-93), falling by 414,000 or 20% of the workforce. (The number of manufacturing establishments fell by 19% during 1988-95). High-tariff sectors were especially hard hit—leather experienced a 48% drop in employment, clothing 31%, primary textiles 32%, and furniture 39%. But employment was also slashed in medium-tariff sectors such as machinery (32%) and electrical and electronic products (28%). By the end of the decade manufacturing employment was still 6% below its 1989 level. Employment in clothing, for example, was still 26% below 1989, and electrical/electronics was down 19%. Wages were flat or falling even in the so-called winning export sectors.
Manufacturing employment bore the brunt of corporate restructuring, most severely in the first wave (1989-93), falling by 414,000 or 20% of the workforce. (The number of manufacturing establishments fell by 19% during 1988-95). High-tariff sectors were especially hard hit—leather experienced a 48% drop in employment, clothing 31%, primary textiles 32%, and furniture 39%. But employment was also slashed in medium-tariff sectors such as machinery (32%) and electrical and electronic products (28%). By the end of the decade manufacturing employment was still 6% below its 1989 level. Employment in clothing, for example, was still 26% below 1989, and electrical/electronics was down 19%. Wages were flat or falling even in the so-called winning export sectors.
Toro @ Mon Dec 12, 2005 8:16 pm
$1:
Shaking the Booga-Wooga Stick that is NAFTA's Chapter 11
In today's Globe and Mail, Jim Stanford is upset at how the BC govt handled their teachers' strike: legislation, fines, etc. This is of course a defensible and understandable position for someone who works for a union, but he lets his indignation get the better of him when he reaches for the NAFTA Chapter 11 Booga-Wooga StickTM:
What the workers need is Chapter 11 (subscription req'd): NAFTA's Chapter 11 allows corporations to sue governments for any policy change held to undermine their future profits (defined broadly as "expropriation"). Corporations have sued governments over everything from environmental regulations to postal delivery. Canada has been targeted the most.
Here is the chapter is question, and here's how it's been applied. A quick look disposes of that last claim fairly quickly. If you discard notices to claim that were subsequently withdrawn, then Canada has been targeted the least. And even if you don't, we come in second.
There's no reading of Chapter 11 that suggests that firms can sue the Canadian govt to compensate for a policy change that cost them profits; they have to show that they were treated worse than Canadian-based firms.
So how has Chapter 11 played out? Since 1995, the federal government has received 11 ‘Notices of Intent to Submit a Claim to Arbitration’ from US-based corporations. Of these,
* four have yet to submit a claim,
* three made claims and then withdrew them,
* one file is active (UPS),
* one claim was rejected,
* one claim was settled before it came to arbitration, and
* one claim was upheld.
That’s it. In 10 years, US corporations and their hordes of lawyers have managed to achieve precisely ONE victory under Chapter 11.
That victory was the S.D. Meyers case. From what I can tell, this is exactly the sort of case that Chapter 11 was designed to deal with: a ministerial order that ran counter to what her own officials advised, but which served the interests of a Canadian competitor. Can anyone think of a good reason why PCBs should be sent 3500km from Toronto to Alberta for disposal instead of the 500km to Cleveland?
Shaking the Chapter 11 Booga-Wooga StickTM is a widely-used rhetorical device. Speculating about why that is so appears to be a depressing exercise: one that I'll deal with another time.
In today's Globe and Mail, Jim Stanford is upset at how the BC govt handled their teachers' strike: legislation, fines, etc. This is of course a defensible and understandable position for someone who works for a union, but he lets his indignation get the better of him when he reaches for the NAFTA Chapter 11 Booga-Wooga StickTM:
What the workers need is Chapter 11 (subscription req'd): NAFTA's Chapter 11 allows corporations to sue governments for any policy change held to undermine their future profits (defined broadly as "expropriation"). Corporations have sued governments over everything from environmental regulations to postal delivery. Canada has been targeted the most.
Here is the chapter is question, and here's how it's been applied. A quick look disposes of that last claim fairly quickly. If you discard notices to claim that were subsequently withdrawn, then Canada has been targeted the least. And even if you don't, we come in second.
There's no reading of Chapter 11 that suggests that firms can sue the Canadian govt to compensate for a policy change that cost them profits; they have to show that they were treated worse than Canadian-based firms.
So how has Chapter 11 played out? Since 1995, the federal government has received 11 ‘Notices of Intent to Submit a Claim to Arbitration’ from US-based corporations. Of these,
* four have yet to submit a claim,
* three made claims and then withdrew them,
* one file is active (UPS),
* one claim was rejected,
* one claim was settled before it came to arbitration, and
* one claim was upheld.
That’s it. In 10 years, US corporations and their hordes of lawyers have managed to achieve precisely ONE victory under Chapter 11.
That victory was the S.D. Meyers case. From what I can tell, this is exactly the sort of case that Chapter 11 was designed to deal with: a ministerial order that ran counter to what her own officials advised, but which served the interests of a Canadian competitor. Can anyone think of a good reason why PCBs should be sent 3500km from Toronto to Alberta for disposal instead of the 500km to Cleveland?
Shaking the Chapter 11 Booga-Wooga StickTM is a widely-used rhetorical device. Speculating about why that is so appears to be a depressing exercise: one that I'll deal with another time.
http://worthwhile.typepad.com/worthwhil ... index.html
Thematic-Device @ Mon Dec 12, 2005 8:40 pm
Wow scape, your information is based on a supreme lack of understanding about the markets you complain about, their histories, or the global trends. What you whine about has nothing to do with NAFTA.
Scape Scape:
Canadian ownership of business for one.
How do you expect canadians to be allowed to invest in foreign markets if they allow no one to invest in theirs? For every one dollar an american has invested in canada, a canadian has five invested in the US. Do you see us trying to restrict that?
$1:
Realized net farm income $3.9B $4.1B (if adjusted for inflation net farm income dropped 24%)
Farm Debt $22.5B $44.2B (today interest on the debt is equal to net farm income. The banks are taking twice as much from our farms then the families on the farms are earning.)
Wheat:Farmgate price $4.93/bushel $4.48/bushel
Prices are for #1 Canadian western red spirng wheat
Farm Debt $22.5B $44.2B (today interest on the debt is equal to net farm income. The banks are taking twice as much from our farms then the families on the farms are earning.)
Wheat:Farmgate price $4.93/bushel $4.48/bushel
Prices are for #1 Canadian western red spirng wheat
This is the trend across the globe and on both sides of the border. NAFTA has nothing to do with it. The over production trap has everything to do with it.
$1:
Freight rates 7.15/tonne $35.68/tonne
Been going on since before the great depression...
$1:
Price of Diesel 25.0c/litre 33.5c/litre
There is a Global shortage, since canada sells and buys on the global market what do you think will happen
$1:
Federal spending on
Farm support $4.7B $3.5B
Farm support $4.7B $3.5B
You've really been beaten into a frenzy with your anti-american sentiment, by politicians conveniently avoiding the blame. Who the hell do you think controls federal farm support? It isn't the US Govt. buddy.
$1:
The net result is Canadian farmers are being driven out of the market and are being bought up, cheap, by US conglomerates. The manufacturing base has been hit even worse:
This is a general trend, one which has repeatedly shown itself throughout the past century of agriculture, happening to US and Canadian farmers, and has nothing to do with NAFTA
$1:
$1:
Between 1989 and 1997, 870,700 export jobs were created, but during the same period 1,147,100 jobs were destroyed by imports. Thus, Canada’s trade boom resulted in a net destruction of 276,000 jobs.
First world nations do not manufacture as much any more, post-industrial societies rely upon highly skilled generally service sector jobs. This again falls as a "Global Trend" and has nothing to do with NAFTA.
Scape @ Tue Dec 13, 2005 3:32 am
$1:
OTTAWA, Dec. 12 /CNW Telbec/ - The future of Canada's public
post office will be decided by a private trade tribunal operating
from the World Bank headquarters in Washington D.C. The hearings
over our post office will run from December 12-17th.
The Canadian Union of Postal Workers (CUPW) and the Council
of Canadians (the Council) are concerned that the tribunal, which
is looking at a complaint filed by United Parcel Service (UPS),
could issue a decision that has disastrous implications for
postal and other public services.
UPS is using Chapter 11 of the North American Free Trade
Agreement (NAFTA) to demand financial compensation of $185
million CDN from Canada's federal government. This amount will
double if UPS wins damages to date.
UPS claims its investments are being limited by Canada's
publicly funded network of mailboxes and post offices. It
believes this network gives Canada Post an unfair advantage when
delivering parcel, express and courier services that are in
competition with private courier services.
"If UPS wins, Canada Post may opt to get out of the courier
business which would spell disaster for the longer term
financially viability of Canada Post. The corporation needs the
profits it gets from the courier business to provide universal
service," says CUPW National President Deborah Bourque.
Ottawa-based trade lawyer Steven Shrybman, who represents the
groups, says that the UPS case also spells trouble for other
public services because most compete at least to some extent with
the private sector. "If UPS succeeds, the case is likely to open
floodgates to claim by other US companies seeking to break into
the health care or water service markets in Canada," says
Shrybman.
Jean-Yves Lefort, trade campaigner for the Council of
Canadians, argues Canada must rescind these investment rules
adding "it is outrageous that NAFTA allows the future of Canadian
public services to be determined by a private arbitral tribunal
operating behind closed doors in Washington D.C."
post office will be decided by a private trade tribunal operating
from the World Bank headquarters in Washington D.C. The hearings
over our post office will run from December 12-17th.
The Canadian Union of Postal Workers (CUPW) and the Council
of Canadians (the Council) are concerned that the tribunal, which
is looking at a complaint filed by United Parcel Service (UPS),
could issue a decision that has disastrous implications for
postal and other public services.
UPS is using Chapter 11 of the North American Free Trade
Agreement (NAFTA) to demand financial compensation of $185
million CDN from Canada's federal government. This amount will
double if UPS wins damages to date.
UPS claims its investments are being limited by Canada's
publicly funded network of mailboxes and post offices. It
believes this network gives Canada Post an unfair advantage when
delivering parcel, express and courier services that are in
competition with private courier services.
"If UPS wins, Canada Post may opt to get out of the courier
business which would spell disaster for the longer term
financially viability of Canada Post. The corporation needs the
profits it gets from the courier business to provide universal
service," says CUPW National President Deborah Bourque.
Ottawa-based trade lawyer Steven Shrybman, who represents the
groups, says that the UPS case also spells trouble for other
public services because most compete at least to some extent with
the private sector. "If UPS succeeds, the case is likely to open
floodgates to claim by other US companies seeking to break into
the health care or water service markets in Canada," says
Shrybman.
Jean-Yves Lefort, trade campaigner for the Council of
Canadians, argues Canada must rescind these investment rules
adding "it is outrageous that NAFTA allows the future of Canadian
public services to be determined by a private arbitral tribunal
operating behind closed doors in Washington D.C."
National treatment is Canada's last will and testament. It allows US companies to invest in Canada without condition or limit. We can now no longer say, "you are welcome if you invest in BC, Ontario or PEI" and we can not ever say, "You are welcome to export X amount of your output in our market." Nor can we can say," You can do research and development in Canada with clause that if you leave early to leave the technology behind."
Also we can not impose ANY limit. We can't say, "You can't buy more than 50% of any industry" because NAFTA says they can buy IT ALL and we can't say, "You can't own more than 60% of our oil and gas reserves" because that treaty says they can buy it all.
Chapter 11 is the arbitration process of the treaty. On it's face it reads as a fair an balanced document to the agreement of all parties. It is why Canada surrenders the wheat board, auto pact, protection from US dumping in Canadian markets and elimination of tariffs. The bitter reality is in the administration of that process. In the US there is a handful of lawyers to hear the claims of the arbitrary process while in Canada we have full staffing. Since the US has never agreed to the definition of what constitutes a subsidy we have been in a cycle of constant appeals to the same board clogging it with demands that the US is taking it's sweet time to address. While the rulings will always favor Canada they will always be delayed by an endless round of foot dragging and appeals with the ultimate goal of Canada seeking trade rulings in a US justice system where the laws are all in favor of the US meanwhile Canadian industries wither on the vine and the rest is sold, cheap. We were better off under the WTO! Time to get back to the GATT, yesterday!
Investment is the key indicator of the true nature of the damage that this flawed agreement has created. Research and development will not go to companies that are subject to hostile takeover that the nation of Canada is currently facing. With that over our head how can we run our own country? An example of this is research in motion. Canadian innovation like the Blackberry is being held up by not another competitor but by a patent HOLDING firm! They aren't even making a product for fuck sakes! The fate of BlackBerry is the same fate Canada is facing under NAFTA. Fair trade is a fantasy, free trade is possible but not like this as the cost is far to high. Our industries will be bought up, as they have thus far to date, one by one.
USCAdad @ Fri Dec 16, 2005 11:14 am
I would really like to see Canada out of NAFTA. Given the recent US actions, Canada is in a perfect place to agree with Shrub, scrap NAFTA and go back to the bargaining table. I would like to see a narrower enforceable treaty that explicitly had water off limits. I would flock to the party that had this as a promise.... I'd want to see the document and stamped envelope. Hard one for Martin to promise.
Scape @ Fri Dec 16, 2005 2:33 pm
http://www.canadianactionparty.ca/
Toro @ Fri Dec 16, 2005 6:02 pm
I think Scape's argument here demonstrates why those who are undecided should listen carefully to what some of the anti-free trade people are saying since they seem to attribute many bad things to NAFTA that have nothing to do with free trade, not to mention gross apocolyptic exaggerations.
First, as mentioned above, so far, there has only been one ruling against Canada in a decade, which cost the government a few million dollars. Perhaps the opponents like Scape will be correct in the future, but they really haven't been so far.
$1:
OTTAWA, Dec. 12 /CNW Telbec/ - The future of Canada's public
post office will be decided by a private trade tribunal operating
from the World Bank headquarters in Washington D.C. The hearings
over our post office will run from December 12-17th.
post office will be decided by a private trade tribunal operating
from the World Bank headquarters in Washington D.C. The hearings
over our post office will run from December 12-17th.
This is an exaggeration. The future of Canada Post is not at stake. The case revolves around whether or not Canada Post is using its monopoly position to subsidize its rapid delivery service. I have no idea who will win the case but I do know that Canada Post will continue to operate even if it loses. Its a monopoly! Postal services around the world compete against the likes of FedEx and UPS, continue to operate and will do so in the future.
The following paragraph below are examples of mischaracterizations by the opponents of free trade.
Scape Scape:
Chapter 11 is the arbitration process of the treaty. On it's face it reads as a fair an balanced document to the agreement of all parties. It is why Canada surrenders the wheat board, auto pact, protection from US dumping in Canadian markets and elimination of tariffs.
The Auto Pact had become irrelevent more than a decade before the FTA was signed since Canada is a net exporter of cars. Non-American auto firms, which weren't subject to the Auto Pact, located in Ontario because Ontario is a good place to make cars, as witnessed by Toyota's recent decision to expand production.
As for the Wheat Board, there was a ruling by the WTO in favour of Canada (remember Scape wants to scrap the WTO) but I'm not sure there has been any ruling from NAFTA that threatens the Wheat Board.
In regards to dumping and the elimination of tariffs, of course there's the elimination of tariffs! Its a bloody free trade pact! That's a good thing because Canada benefits enormously from international trade since nearly 40% of our GDP is due to exports, and 80-85% of exports go to the US. As for dumping, dumping is a bogus argument in economics. Its a political tool used by domestic interests to fend off foreign competition. For example, about half of all dumping actions in America are brought forth by the steel industry. Using Scape's logic, the egregious Byrd amendment is okay since it protects American interests against dumping.
Scape Scape:
Since the US has never agreed to the definition of what constitutes a subsidy
Well, neither did Canada. Its not like Canada was at the table begging the US with definition after definition. Canada couldn't adequately define it either, and it was agreed by both parties to address this issue some time in the future. To set the Americans up as the bogeyman is disingenuous.
Scape Scape:
we have been in a cycle of constant appeals to the same board clogging it with demands that the US is taking it's sweet time to address. While the rulings will always favor Canada they will always be delayed by an endless round of foot dragging and appeals with the ultimate goal of Canada seeking trade rulings in a US justice system where the laws are all in favor of the US meanwhile Canadian industries wither on the vine and the rest is sold, cheap. We were better off under the WTO! Time to get back to the GATT, yesterday!
Think about what Scape is arguing. He is saying that we should get rid of a court that is always adjudicating in Canada's favour (which is an exaggeration.) Why would we get rid of that? Its also a gross exageration that the US never complies. That is simply false, and you can read about all the cases here. The reality is that there has always been anti-trade interests in the US and always will be. Currently, Canada has three options when disputing a trade case with the US - NAFTA, the WTO and US courts. Scape would rather us have only two and thus have less leverage. That doesn't make any sense.
$1:
Investment is the key indicator of the true nature of the damage that this flawed agreement has created. Research and development will not go to companies that are subject to hostile takeover that the nation of Canada is currently facing. With that over our head how can we run our own country? An example of this is research in motion. Canadian innovation like the Blackberry is being held up by not another competitor but by a patent HOLDING firm! They aren't even making a product for fuck sakes! The fate of BlackBerry is the same fate Canada is facing under NAFTA. Fair trade is a fantasy, free trade is possible but not like this as the cost is far to high. Our industries will be bought up, as they have thus far to date, one by one.
Again, this has zero, zip, nada to do with NAFTA! RIMM lost a case in a US court based on patent infringement. I'm not a lawyer so I'm not in a position to judge whether the RIMM argument was valid or not. But to try to link the decision to NAFTA has about as much credibility as saying every Canadian death for any reason is due to NAFTA!
For anyone who's interested, here is Chapter 11 of NAFTA
http://www-tech.mit.edu/Bulletins/Nafta/11.invest
USCAdad @ Fri Dec 16, 2005 10:17 pm
Dang, trading a beggars court for renewed control on vital resources. What an idiot thing to wish for.