Volume 52, Issue 2: Summer 2018

Opportunity knocks

Illustration by Theo Moudakis

It’s not clear why Donald Trump is acting like a one-man wrecking crew out to demolish the global trading system that took shape in the post-war period. It would be hard to make the case that he is doing the bidding of the world’s corporate elite, since, on the whole, they are not dissatisfied with the current arrangement. By and large they designed the rules governing international trade. They sought the free trade and investment agreements that most countries have signed onto. They are the “one per cent” — the chief beneficiaries of the prevailing economic order.

Whatever Trump’s reasons, we have to ask ourselves whether Canada should be scrambling to preserve whatever it can of NAFTA or work out a bilateral agreement, the option that the U.S. seems to prefer. The answer is No on both counts. These agreements, whether multilateral or bilateral, are about free trade in name only. They are essentially designed to protect the rights of investors from regulations and legislation that interfere with their capacity to maximize profits. They give foreign capital the right to sue governments for pursuing policies in the public interest that limit their opportunities to make money. Among other restrictions, this obviously bans government from ever taking business into public ownership. They mainly redistribute trade and in particular shift the focus of trade from domestic to export markets. That’s why Canada is as dependent today on the U.S. economy and extractive resources as it has ever been: the U.S. takes three-quarters of all Canadian exports; exports amount to 30 per cent of GDP and nearly half are resource-based. NAFTA has secured Canada’s unique status as a satellite staple state within the American empire.

We should seize this unexpected opportunity to withdraw from NAFTA and any other agreement that puts corporate interests before the public interest. Canada is a trading nation and always will be and the U.S. economy will always be a major factor in Canadian economic life — but our economic stability depends on an inward turn toward an east-west rather than a north-south axis, wherever possible replacing global value chains with domestic ones and choosing democratic national planning over capitalist global planning. That means wresting major investment decisions away from corporate control and democratizing them. It means transforming the financial system into a public utility and having community, worker, environmental and Indigenous representatives on every major corporate and institutional governing body.

Even if it comes from an elephant’s ass, we can’t afford to look this gift-horse in the mouth.

Cy Gonick founded Canadian Dimension in 1963 and remains the magazine’s guiding spirit as well as playing a central role in the day-to-day work of publishing and editing. Now retired from academia, Cy taught economics at the University of Manitoba and more recently at the University of Winnipeg.

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