The Backlash of Free Trade

Submitted by Richard on Sun, 06/04/2008 - 5:37pm

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The Backlash of Free Trade

Overseas Shipping Containers

In the The Vancouver Province, August 22, 2007, was this story: Free trade headed for ‘backlash’ – Workers must share in the benefits, say top U.S. economists..
(Kelly Patterson, CanWest News Service)

This article could just as easily been written about the Canadian economy and in one sense it is, considering how close Canada is tied economically to the US.

Here are a few excerpts:

“Soaring levels of inequality have put the future of free trade in jeopardy”

“Inequality is greater now than at any other time in the past 70 years, ”

“Only four per cent of Americans – those with doctorates and professional graduate degrees – saw their mean real money earnings rise from 2000 to 2005, they note. Earnings fell for the other 96 per cent.”

“Like Canada, the U.S. is near full-employment levels, but wages over a long period of time 'have stagnated for most of the labor force,”

The inequality has been growing since the 1970s, the article notes. For example, the median real income grew just 11 per cent, versus 121 per cent for those in the 99th percentile, from 1966 to 2001.

The reasons for the short-falls in the median real income are a combination of factors.

Our governments over the past 35 years, have not had the foresight to see where the real economy of our nation lies; In the people of Canada. Governments have bowed to the pressures of big business and international lobby groups and allowed the resources of our nation to be exported away under the mantle of global trade. This has accounted for huge losses in resource processing jobs. Foreign owned multi-nationals were allowed to buy up our resources and Canadians were left to dig the ore, drill the oil and hew the wood for export. The main resource that was exported out of Canada was well paying jobs in processing and manufacture.

Along with the exporting of our manufacturing, our governments allowed international retailers to dominate the Canadian retail markets with overpowering box stores whose only goal was profit; – import cheap and under-price the independents. The mom and pop stores, which once gave character and true service to our neighborhoods, were forced to close. Canada became a nation of impersonal shopping malls and franchises.

Corporations, knowing that they could not compete head to head on quality and function, used advertising as their main focus aimed mainly at entrenching the nations' young people. A new culture arose, which glorified style and glitz over substance and quality. Price before service. Exactly what the multi-national importers of foreign goods required; a people out of touch with reality. They became unstoppable and put our nation at their mercy. As the youth grew older, they lost touch with traditional values and remained attracted to the glitter of the mall and the convenience of one-stop shopping, even paying super high prices just for the status associated with the product. The Gap was born and Nike ran the circus.

Meanwhile Canada opened it's doors to an influx of people of differing cultures, many of whom basked in new found freedoms not really understanding what made Canada the strong nation they now live in. Many were willing to take jobs at less pay and more hours only to the delight of the now dominant multi-nationals operating in Canada. Few of the new Canadians shopped at the independents, opting instead for the lower price and convenience, which soon became attractive even to the older generations of Canadians.

The only way ahead for Canada's economy now is to keep building more highrises, more roads, more mega-centers, more public venues. Most of this construction is for government (taxpayer) projects. Even this new construction, through the process of open tender, has become dominated by foreign contractors who pay substantially less than their Canadian counterparts. The unionized worker has been forced to capitulate. The majority of the workforce in Canada is now employed in tourism and service jobs, all too often at minimum wage or just above.
 

The following from:

Canadian Economy Online.

“Despite the transformations now rippling through the Canadian marketplace, the most dramatic structural change our economy has undergone is the rise of the services sector. Though our goods-producing industries account for 33% of our national economy, the Canadian services sector is much larger, employing three out of four Canadians and generating two-thirds of our gross domestic product.”

“What exactly makes up the Canadian services sector? It’s easy to picture the physical products churned out by our manufacturing, agriculture, mining, forestry and construction industries, but the value of the services sector is less tangible. Goods need to be delivered, and this involves storage services, truck drivers, rail carriers and bicycle couriers. The actual exchange of goods often requires legal and financial services to process the transactions. Canadians also want to shop, eat out, and be entertained by movies, operas, concerts and ballets.”
 

In order to keep step with the new economy, every level of government is forced to keep increasing taxes, decreasing the median real income even further, taking away any advantage the average Canadian worker could gain. But, the tax well is depleting. From federal, to provincial, to municipal, all levels of government are forced to diminish services; less health care, less policing, less educational resources, and so on --

If the Government of Canada continues to allow that much economic wealth to be sucked out of the country;

Yes, there will be a backlash!

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