"Free Trade" Is Not about Trade

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Fifteen years ago, this country was embroiled in the debate over the Mulroney government's Canada-U.S. Free Trade Agreement. Since that time, we have seen a proliferation of similar deals, each more comprehensive and regressive than the last.

The good news is that free trade and the corporate-driven globalization that drives it have generated an unprecedented reaction from civil society; demonstrations in opposition to free trade that began in Seattle in 1999 have spread around the world. But the bad news is that some of free trade's opponents insist on treating the subject as if it were primarily about trade.

The use of the slogan "Fair Trade, Not Free Trade" is symptomatic of the problem. Anyone seeing or hearing this slogan would reasonably conclude that the problem with free trade is the terms of trade contained in such deals. While it is undeniably true that the terms of trade between developed and underdeveloped areas of the world are a major problem, these are not directly influenced by mis-named free-trade deals.

The problem with free trade agreements is that they encompass much more than trade. In fact, some of the issues addressed in these deals have nothing at all to do with trade. For free trade to be properly understood, it must be seen as an integral part of the neoliberal policy framework that governments have, been putting in place for the past 25 years: curbing wages, rolling back social programs, privatizing government holdings and services, and deregulating corporate activity.

Neoliberalism originated in the early 1970s. By that time, the Keynesian economic policies that had been initiated after World War II. had produced an economic expansion that had lasted decades: Against the background of the full employment that characterized lengthy economic expansion, labour militancy generated strike levels not seen since the 1930s. This militancy, together with the relatively generous social spending that characterized Keynesian policies, combined to generate rising real wages, falling profits and a level of inflation that threatened financial returns. From capital's perspective, all this constituted a major crisis.

In 1975, the Trilateral Commission published a book called The Crisis of Democracy which captured capital's …