Free Trade

Global Saviour or Scourge?

Free Trade - History Free trade agreements begin to proliferate during the post WWII period  This coincides with the rise in influence of neoliberal economic thought 

Governments began to believe that free market policies were the most effective method of managing the economy

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The European Community (EC) was the first major free trade area in the world It was comprised of Western European countries (France, Belgium, Italy, Netherlands, Germany and Luxembourg) Canadian free trade really began in 1965 with the “AutoPact”, a Canada/U.S. agreement This was an example of “sectoral free trade”, involving only a single aspect of the economy

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The AutoPact had a huge effect on Canada’s economy By the late 1990’s Canada was exporting one million more cars than it was importing The AutoPact folded in 2001 after the World Trade Organization ruled that it was unfair to other car manufacturing countries By that time it was largely irrelevant, having been replaced in most senses by the Free Trade Agreement (FTA) between Canada and the U.S. in 1989

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The FTA was expanded in 1994 to include Mexico, becoming the North American Free Trade Agreement (NAFTA) Other parts of the world are also moving towards free trade, notably the Organization of American States (OAS) with the Free Trade Area of the Americas (FTAA) and the Asia-Pacific Economic Cooperation (APEC) group Neither of these larger agreements have happened yet, both being heavily protested by people who view globalization as a bad thing Canada did sign a new free trade agreement in 2013 with the European Union, a deal that could have a tremendously positive impact on the economy

Free Trade – Major Players NAFTA – the North American Free Trade Agreement is a deal between Canada, the U.S. and Mexico  It has benefited all three countries 

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The European Union (EU) is the current version of the European Community There are many more members, including nations in what used to be Communist Europe The EU has evolved into more than a simple free trade area. It now includes political policy and security Recently the EU has had difficulty with some member states that did not manage their economies very well Economic tensions have threatened to break the EU apart Canada and the EU have just signed a wide ranging free trade agreement that should have very positive effects on both

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There are 21 countries bordering the Pacific Ocean that have joined together for economic benefit The Asia-Pacific Economic Cooperation includes Canada as a member The economic plan is to have the more developed nations sign bi-lateral free trade agreements by 2010 and then incorporate those into a more comprehensive regional agreement This has not happened to date. Canada has spent most of its diplomatic trade efforts on securing a trade deal with the EU

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The Organization for Economic Cooperation and Development (OECD) includes the wealthiest countries in the world The OECD was formed in 1961and all of the founding members were well developed European and North American states The organization is still dominated by first world countries but membership has slowly expanded to other continents and to more emergent economies

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The oldest trade forum of the modern world is the World Trade Organization (WTO) It evolved from the General Agreement of Trade and Tariffs (GATT), formed in 1948 The organization has negotiated several beneficial world trade agreements, including the reduction of tariffs, anti dumping laws and the removal of non tariff barriers The current round, known as Doha, is aimed at helping developing countries but has stalled over agricultural issues and fair trade provisions

Free Trade – Current Issues TRIMS – Trade Related Investment Measures is a WTO agreement  The WTO prohibits measures like local content requirements  This is supposed to encourage trade and lift restrictions from transnational companies that move 1/3 of the world’s trade goods internally, between subsidiary branches in different countries or between the subsidiaries and the headquarters  Opponents say TRIMS are designed to prevent governments from making democratic economic decisions and exercising control over their economies 

Free Trade – Current Issues TRIPS – Trade Related Intellectual Property Rights – these are rights given to persons over the creations of their minds and they are awarded for specific amounts of time and confer exclusive ownership  The WTO says this is to prevent others from using inventions, designs or creative works without permission and/or remuneration  Opponents say that this is protecting the financial interests of big biotechnology, pharmaceutical, computer software and other businesses and that policing the rules falls on cash strapped governments and it also slows the transfer of possibly life saving technologies 

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