Push for free trade requires second thought
St Albert Gazette, Canada
Push for free trade requires second thought
7 March 2012
By John Kennair
Canada is a trading nation, with one-third of our Gross Domestic Product (GDP) coming from our exports. Of course, it should come as no surprise that the U.S. and Mexico make up a large proportion of this trade (approximately 76 per cent). No wonder we instinctively look toward the idea of free trade as being good. But does free trade make sense in all circumstances?
For decades Canada has sought a free trade deal with Europe, which has had limited success, but has not resulted in an agreement. Most recently, China too has postulated the idea of a free trade agreement with us. On the surface, this looks like a great idea, but is it? Asia and Europe together make up 12 per cent of our exports, with Britain and China making up seven per cent of that trade. But in real terms, these two countries only make up two per cent of our GDP. So how important are they to Canada’s economy?
Though Canada’s trade has diversified over the last decade, there has not been much of a significant change with the U.S.’s importance to us economically. We are only talking about a few percentage points of our GDP, which is at pre-free trade levels. In other words, it is very natural for Canada to trade with the U.S., based upon geography and common ties alone. Trade with Asia, however, is not as natural. Instead, it is more forced.
The question should be: why? Whose interests are being served with these calls for free trade, and how will this truly improve the lives of the average Canadian? In short, and addressing the latter question, it most likely will not improve our lives, our standard of living. In fact, in the long term, expect this to decrease. As we strive to become competitive, and the government’s revenues decrease through the reduction of tariff revenues, it’s only natural that government will have to reduce services/expenditures.
In addressing the former question, free trade with China obviously serves the interest of large internationally-based corporations, of which China’s national companies are becoming the foremost investor in western Canada. Should we be worried about this?
Free trade, historically, was something that Britain pushed for at the height of its industrial age. It was not looking for free trade with Canada, but rather its European neighbours and the U.S., so it could sell its goods. Canada and Britain’s other colonies supplied it with raw materials and were expected to purchase its products. This was one of the reasons why the U.S. fought its war of independence. It is important to remember this, as history has a way of repeating itself. Though we are talking of diversifying our trade away from the U.S., feeling like we have been imperially ruled from Washington, why would we be so willing to seek a new colonial master?
The point is that there is a paradox with Canadian independence — we are not truly independent. Instead, we kowtow to the economic interests of foreign investors, having traded our freedom and the ideas of what is best for Canadians. These may seem like radical words, but if you look at the facts, these international interests have invested little into developing Canada, except what was necessary to gain access to our resources. We, however, have invested a lot through education, health care, infrastructure and now the environment, to ensure their economic survival. Yet now these are being cut back as they have become too expensive for our governments. And free trade means a further cutback in government revenues.
So what is wrong with having an economically nationalistic perspective for once, and truly standing up for Canada, which means the average Canadian like us? The cons outweigh the pros on a free trade agreement with China, but we are racing toward this, chasing economic myths and dreams. So why do it?
John Kennair confesses to being a Canadian nationalist, in the mindset of Sir John A. MacDonald, Sir Wilfrid Laurier, O.D. Skelton, and John Diefenbaker.
