DEBUNKING THE FREE TRADE MYTH: NAFTA Is by Far the Worst Agreement Canada Ever Signed

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In the aftermath of Barack Obama's and Hillary Clinton's threats to "renegotiate" NAFTA-or pull out-the usual suspects have been activated to tell the world how wonderful the deal has been for Canada and the United States.

There is no doubt that the business people who devised the scheme in the first place and sold it to politicians have benefited greatly from this investors' rights agreement and its predecessor, the Canada-U.S. free Trade Agreement. The continent's largest corporations have greatly reduced regulatory impediments to their profits, radically lowered labour costs, gutted Canada's sovereign capacity to pass new environmental legislation, and, in terms of investment restrictions, have virtually erased the borders.

All of those corporate benefits, however, have been extremely bad for other aspects of Canada and for ordinary Canadians.

But first, let's dispose of a myth about free trade: the notion that it was responsible for massive increases in trade between the U.S. and Canada. According to an Industry Canada study, 91% of the increase in trade in the 1990s was due to the cheap Canadian dollar and the sustained economic boom in the United States. Now that our dollar is at par or higher, our manufacturing exports are plummeting.

But even if NAFTA were responsible for increased trade, Canadian workers have paid a huge price. Throughout the 1990s, federal governments trumpeted the need to be "competitive" under NAFTA as an excuse to implement some of the most Draconian rollbacks of Canadian social programs ever undertaken. In the name of "labour flexibility," Paul Martin implemented drastic changes to EI eligibility, and repealed the Canada Assistance Plan, freeing the provinces to gut their welfare programs. His extreme low-inflation policy deliberately kept unemployment at high levels (8-to-10%) for most of the 1990s.

This meant that, throughout the decade, workers' real wages actually declined. They still have not caught up to 1981 levels. And the highly-paid 300,000 industrial jobs lost as a result of NAFTA are gone forever, replaced by lower-paid jobs.

NAFTA was supposed to unleash a flood of foreign investment-boosting our industrial capacity and productivity. Instead, since the first trade agreement was signed, more than 95% of direct foreign investment has been used to buy up Canadian companies. Head offices and research and development money have headed south, and Canada has seen a steady decline in manufactured goods as a percentage of its GDP for the past 10 years.

Our productivity has fallen behind that of the U.S. in virtually every year since the FTA came into effect in 1989.

The environment has also suffered almost continuously since the deals were signed-and this is according to the Commission for Environmental Co-operation, the NAFTA agency responsible for monitoring the impact of the new regime. …