Editorial

Free Trade - American Style

As most of the world's trade ministers meet in Doha, Qatar at the World Trade Organization (WTO) meeting, more than the cloud of a terrorist attack is putting a damper on their deliberations. Many of the delegations are using this forum to demand that the United States put its "free trade" rhetoric into practice and stop using "anti-dumping" legislation to block imports. They are complaining that the United States is using the WTO to penetrate their markets, but that it selectively refuses to abide by WTO decisions that adversely affect it.

A recent example is the softwood lumber dispute with Canada. The U.S. has been charging Canada with unfair softwood lumber subsidies for over a decade, but no trade organization has ever upheld the validity of these complaints. Nevertheless, the U.S. government has proceeded to impose import tariffs on Canadian softwood lumber in violation of the Free Trade Agreement (FTA) and the North American Free Trade Agreement (NAFTA). It is now becoming apparent that the U.S. has been using the same illegal tactics to bypass and violate trade agreements with all of its trading partners. As the global recession deepens, it appears that fewer of America's trading partners are willing to tolerate such protectionist behaviour any longer.

If the complaints against U.S. "anti-dumping" legislation gain momentum in this or subsequent rounds of trade negotiations, there is little doubt that the U.S. will use its economic and political might to retaliate. This, in turn, will lead to a breakdown in trade talks and an enormous setback to the U.S. agenda for neo-liberal globalization. Intensifying trade wars will become the order of the day and the United States will step up its efforts to annex the economies of the Western Hemisphere through the Free Trade Area of the Americas (FTAA).

Since the days of the Mulroney government, successive Canadian governments have insisted that closer integration with the American economy is the only way to build a strong economy in Canada. Since the implementation of the FTA and NAFTA, American access to Canadian markets has been wide open, but Canadian access to American markets has continued to face restrictions. Softwood lumber, wheat and potatoes are just some of the Canadian commodities restricted from competing in U.S. markets. In addition, during the same period the prices for other Canadian exports, such as copper and iron, have plummetted, taking the Canadian dollar with them.

Whenever the American economy declines, the Canadian economy is always the hardest hit. The U.S. tariffs on softwood lumber are expected to result in the immediate elimination of at least 30,000 jobs in the Canadian lumber industry. The overall effect on the Canadian economy and on the communities where those workers live will result in the loss of tens of thousands more jobs over the next few months. The closing of American branch plants in Canada has also eliminated thousands of jobs over the past few months, with thousands more expected as the recession deepens.

It is now clear that the United States is interested, not in "free trade", but in predatory trade. Any economy based on trade with such a trading partner will never be allowed to develop to its full potential. If the Canadian economy is to have any future, the current disastrous strategy of integration with the U.S. economy must be abandoned. Canada must develop its economy by expanding the domestic market and by building trading relations with other countries on the basis of mutual benefit and mutual respect.