Since the free trade frenzy began some 25 years ago, it opened the door for our capitalist class to move our manufacturing sector to low-wage countries and be able to sell their products back to us – without tariffs – at higher profits.
When XYZ Washing Machines takes its means of production overseas, Canadian “investors” benefit, but they take our well-paid real-economy manufacturing jobs along with them. And in doing so, of course, transfer our technologies to foreign countries – often technologies subsidized by our taxes.
The deindustrialization of Canada has been well underway since NAFTA and other agreements took hold, and we have seen our real wages stagnate at best. Add to that the fact that XYZ Washing Machines doesn’t pay taxes in Canada.
The Canada-China Foreign Investment Promotion and Protection Agreement can be seen to have two sides: the protection of Canadian investors in China, and the protection of China’s national resource companies on Canadian soil.
The first invites our business elite to move the rest of our productive economy – and good jobs – to China, thus exacerbating our deindustrialization and the loss of value-added production, tax revenues, etc. Soon, we will not have the know-how – or have the productive means – to make anything from T-shirts to electronic components.
This is what the proponents of free trade call benefits. And considering how much our business elite stand to gain from moving production out of Canada, it is not surprising that Prime Minister Stephen Harper and his lot are hell-bent to pass these agreements.
The other side of the agreement is even better. Laura Dawson (Dial back the hysteria on the Canada-China treaty, Nov. 2) matter-of-factly dismisses the use of these international arbitration panels when companies feel they have lost profits due to host countries passing regulations. I invite you all to look up some of these NAFTA rulings and penalties, whether the complaints were filed against Canada, Mexico, or the U.S.
It is an endless list, but just to mention a few: this past June, “Two U.S. oil companies have won their complaint against the province of Newfoundland and Labrador over spending obligations related to their participation in an offshore oil play,” The Canadian Press reports. We taxpayers are on the hook to these companies for $50 million in compensation.
Back in 1997, Canada had banned MMT, a well-known toxic gasoline additive. Ethyl Corp. took it to arbitration: the Canadian government repealed the MMT ban, issued an apology to the company and settled out-of-court with Ethyl for $13 million.
As I write – though unrelated to NAFTA or FIPA directly – Belgian taxpayers are on the hook to China for $4 billion over some dispute, through some similar type of agreement.
As a non-subsidized taxpayer, I find these to be big numbers, considering how much I paid in income tax last year. How many hospital beds does $50 million cover, I wonder?
I just can’t figure why citizens would deliberately put themselves in such a vulnerable position by signing on to these agreements, given our public debt load.
Again, it’s clear who stands to gain in all this, and it’s not us.