Volume 38, Number 6: November/December 2004

CLC Policy

On the Trading Block

We agree with the Canadian Labour Congress’s controversial position paper that free trade has not been a total “economic disaster.” But we disagree that economic integration has gone so far that measures to reduce our dependency and challenge this right-wing direction cannot be contemplated. In this sense, the Canadian Labour Congress’s new industrial policy paper is a deep disappointment. Instead of insisting on new directions in economic policy, the CLC’s new paper lacks critical leadership, merely offering new concessions to free trade and the rule of the market.

Economic problems of poverty, unemployment and the lack of democratic direction over the economy are worse now than they were in the late 1980s, when the Canada-U.S. Free Trade Agreement was first signed. Not all of this can be blamed on free trade,” per se. As we have noted many times in CD, the free-trade agreements are part and parcel of a right-wing movement to strengthen the free market and the rights of corporations. What the agreements do is lock us into this regime by effectively prohibiting governments from taking any measures that restrict the behaviour of multinational corporations.

Since 1989, the Canadian state has used free trade as an excuse to create a so-called “level playing field” with the U.S., a euphemism for driving down Canadian wages and reducing union power. For example, the federal government gutted unemployment insurance so that fewer than 40 per cent of the insured are now eligible to collect. It also repealed the Canada Assistance Plan, which allowed the provinces to gut their welfare programs. And it instituted a monetary policy aimed at deliberately keeping the unemployment rate high (eight to nine per cent through most of the 1990s).

The result is that, while total employment rose over the period, the new jobs created to replace those lost to free trade overwhelmingly paid less and offered fewer benefits. Within the club of OECD countries, Canada is now second only to the United States in the percentage of the workforce doing low-paid work.

From the 1980s into the 1990s, the union movement in Canada extended its strategy of social unionism, working with social coalitions across a wide number of sectors. This still finds its mark in the health coalitions, but it is stalling if not reversing elsewhere – particularly in the pleas for subsidies by unions that should know better. What’s the alternative? Consider the demand for a national drug program. So long as the drug industry remains privately owned, a universal drug program would be prohibitively expensive. It only becomes an achievable goal if a federal crown corporation is created to research, develop and manufacture prescription drugs. The CLC should be leading the demand for the creation of such a crown corporation.

Instead of writing papers justifying further concessions, Canadian unions should be calling for the abrogation of NAFTA and a halt to Canadian participation in the plans for a Free Trade Area of the Americas. Furthermore, the CLC should be leading the opposition to the continent-wide customs union being drafted by a new trilateral task force co-chaired by John Manley. This new customs union wants to create common immigration, security, defence and energy policies for Canada, the U.S. and Mexico. Its net effect will be to extend the retrograde effects of free trade and to surrender what little sovereignty is left.

Of course, the demand for the abrogation of NAFTA and other NAFTA-plus pacts means nothing if it is not part of an overall industrial strategy aimed at a more self-reliant and regionally balanced economy. This is why in our election pamphlet, entitled A Different Canada is Possible, written in conjunction with the Socialist Project of Ontario and the UFP in Québec, CD began to articulate a set of such alternative economic policies. This is also the reason why we think Canadian unions and social movements need to reaffirm pushing state policy in a more democratic and egalitarian path.

Bullies like the United States and the business elites in Canada who support them can’t be stopped by conceding political and intellectual debates. The Americans and their allies here will be forced to desist from their imperialist policies and the reckless imposition of free trade and neoliberalism everywhere only if we resist. This is why the Canadian union and social movements should remain at the forefront of those challenging their policies with better, more humane alternatives.

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