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THE LITTLE TRYCK DRIVER FROM

BAIE COMEAY DELIVERS

Free trade — road to economic servitude

The
Tory Buciget

and the Corporate plan
tructure Canada

2

_ The following is an excerpt from labor
Journalist and researcher Ben Swankey’s
newly-completed book The Tory Budget: The
Corporate Plan to Restructure Canada, pub-
lished by the Centre for Socialist Education.
It is available directly from the centre, 105,
2747 E, Hastings, Vancouver, V5K 1Z8 or
from the People’s Co-operative Bookstore.

The same corporate sector which was
almost completely united behind the effort
_ to elect the Mulroney government today is

demanding far reaching changes in the
Canadian economy. These demands amount
to a radical right-wing program to remove
all government legislation which regulates
the conduct of corporations, to eliminate
entirely all competition from the public sec-
tor by selling off crown corporations and
contracting out government services, to vir-
tually eliminate corporate taxation, to end
em on foreign investment and
i Overs, and to move towards full integra-
1on of the Canadian economy with the U.S.
economy, beginning with free trade...

The demand for a form of free trade
agreement with the U.S. is now the com-
fia Policy of every sector of Canadian
Gime industry, and right-wing politi-
his 1¢ Royal Bank sums up the demand
oats ay: “The free flow of goods and servi-
oe ‘Toss international boundaries is mut-
" y beneficial to all nations. The more
ee an economy is to the rest of the world,

1€ greater its economic efficiency and the

gher its Standard of living. We recom-

mend that Canada should regard better
access to that (U.S.) market through free
trade arrangements as its primary objecti-
ve. . it makes the most sense for free trade
arrangements to advance on a sector-by-
sector rather than an overall basis.”

The Canadian Manufacturers Associa-
tion recommends “an interim agreement
(with the U.S.) leading to the formation of a
free trade area.”

According to the Fraser Institute, Can-
ada is “barricaded from affluence by high
tariff walls.” It argues that “economic self
sufficiency” and “economic nationalism”
are “‘a condemnation to national poverty”
and comparable to “racism, sexism, anti-
semitism, anti-Catholicism”’. ..

What would be the results for Canada if
the government were to agree to free trade
with the U.S.? One of the immediate conse-
quences would be the closing down of U.S.
branch plants in Canada. Many of these
plants were established here in the first place
to get under tariff barriers and to produce
for the Canadian market. Once the tariff
barriers are removed the reason for the
existence of these plants disappears. The
U.S. parent corporations could supply the
Canadian market from their U.S. opera-
tions with lower costs.

A second consequence would be that the
Canadian market would be flooded imme-
diately with cheaper goods from the U.S.,
driving Canadian manufacturing plants out

‘of business. The result of both of these

developments would be the loss of literally
hundreds of thousands of Canadian manu-
facturing jobs in such industries as furniture
manufacturing, shoe-making, textiles’ and

electrical goods. All of this would be .

accomplished with the promise of low con-
sumer prices. But once the Canadian pro-
ducers were out of business and the
transnationals had the market sewn up,
they would raise the prices to all the traffic
could bear.

Even the supporters of free trade admit to
some of the problems that would result.

. “Free trade arrangements would result in

dislocations in some industries,” states
Donald MacDonald. “A policy of free
trade would mean the loss of jobs for Cana-
dians,” the Fraser Institute agrees, but this
is of no great concern because the main
losers would be “protected factory owners
and the well-paid, highly-unionized work-

ers.” Not only will many Canadian com-
panies be put out of business, others will
decide it is more profitable to move their
operations to the U.S. Even now they “have
a strong reason to locate in the U.S.,” says
Thomas D’Aquino, president of Business
Council on National Issues.

There are other far-reaching changes that
would come with free trade. The idea of free
trade is based on the principle that compet-
ing companies in the two countries are on
an equal footing, with neither group enjoy-
ing special privileges which give them an
advantage. This means that many of the
laws and business practices of the two
countries would have to be changed to be in
line with each other. It isn’t hard to predict
which country, Canada or the U.S., would
change to match the standards of the other.
The U.S. with its manufacturing and mil-
itary might and a population ten times
greater, is not about to change its business
practices for the purpose of accomodating
Canada. Canada would be forced to change
its practices and institutions. This would
mean “a fundamental shift in the philo-
sophy of government and the economy” in
Canada. ~ ;

In the U.S. for example, natural resour-
ces are privately owned, rather than state-
owned as in Canada, where they are
licensed to the private sector to exploit. Free
trade “could lead to the private ownership
of Canadian forests.” The same principle
would apply to minerals, oil; fish and water.

Free trade would also “make it virtually
impossible to have a tax system in Canada
different from that of the United States
.. Even without free trade there is tremend-
ous pressure on Ottawa to bring its tax
system in line with that of the U.S.”

Since the U.S. does not have medicare,
our medicare system could also be under
attack as a result of a free trade agreement.
Labor legislation governing hours of
work, holidays with pay, minimum wages
and the right to organize would be chal-
lenged by free trade arrangements. Envir-
onmental protection laws would be reduced
to the low level of protection in the U.S.
Canadian culture, always under pressure
from the U.S., would be further under-
mined. “It would be difficult for Canada to
maintain cultural barriers such as those dis-
criminating against U.S. television and U.S.
magazines.”

In short, free trade would mean a loss of
whatever economic independence we have
left; it would also completely undermine our
national independence and national sover-
eignty. It is almost inconceivable that so
many sections of big business would be in
full support of a policy to completely sell —
out Canada. By supporting free trade Can-
adian big business has shown just how little
regard it has for Canadians and our coun-
try. The fact that thousands of people
would be thrown out of work and end up on
UI and welfare is not important to them. It
is obvious why the transnationals support
free trade. They would completely capture
the Canadian market and exploit this
market for more profit. There are, as well, a
very few Canadian corporations that would
benefit from free trade. They are big enough
to be able to penetrate the U.S. market and
to meet U.S. competition. However the pri-
vate gain of these few companies can in no
way compensate for the massive harmful
impact of this policy on a majority of Cana-
dians. Joe Clark, Canada’s Minister of
External Affairs, summed up the right-wing
justification of the sellout of Canada to the
USS. in these words: “The modern purpose
of Canadian nationalism is to express our-
selves, not protect ourselves.”

Canadian working people must have no
illusions about what is actually proposed.
The Communist Party, for example, has
issued this warning: “Closer integration
with the United States is advocated by right-
wing businessmen who argue that free trade
with the U.S. will hurt some Canadian
industries but will help others by opening up
the huge U.S. market to the surviving Can-
adian industries. It glosses over the fact that
Canada has been, and is suffering dire eco-
nomic and political consequences for its
existing high degree of integration with, and
dependence on the U.S. economy. To inte-
grate even more closely with the U.S. would
be to worsen the problems and structural
distortions which this integration has
brought so far. There can be no doubt that
in any competition between Canada and

U.S. firms over the same market, the U.S. _

will have the scale and financial resources to
win. It is no accident that the advocates of
closer integration invariably express right _
wing views in all other areas, including —
social and foreign policy.” :

PACIFIC TRIBUNE, SEPTEMBER 18, 1985 ¢ 5

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