From: HANLY@BrandonU.CA
Subject: Free Trade Paper
Followup-To: alt.activism.d
Originator: rich@pencil.cs.missouri.edu
Organization: Progressive Economists Network, PEN-L@USCVM.BITNET
Date: Sat, 3 Oct 1992 16:55:25 GMT

    "A TRADE DEAL SIMPLY LIMITS THE EXTENT TO WHICH THE U.S. OR OTHER
    SIGNATORY GOVERNMENT MAY RESPOND TO PRESSURE FROM THEIR CITIZENS."

     Michael Walker, Executive Director of the Fraser
     Institute, describing what he sees as a POSITIVE [sic]
     characteristic of "free trade" agreements.
 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
    The economic stagnation that has gripped the world economy for the
    past twenty years appears to be deepening [..]  There is a growing
    realization that the global economic crisis -- the most severe
    since the 1930s -- is spreading.
 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
    Responding to pressure from the corporate sector, conservative
    governments around the world have been following a
    political/economic strategy for economic restructuring designed by
    organizations like the International Monetary Fund and the World
    Bank.  In accord with this strategy, governments have privatized
    government- owned assets, deregulated the private sector
    (including financial institutions), cut back social spending,
    undermined progressive taxation, reduced corporate taxes, and
    imposed regressive consumption taxes.


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From:	IN%"<@ccu.UManitoba.CA:PEN-L@USCVM.BITNET>"  "Progressive Economists Network 30-SEP-1992 17:37:46.83
To:	IN%"<@ccu.UManitoba.CA:PEN-L@USCVM.BITNET>"  "Multiple recipients of list PEN-L"
CC:	
******************************************************************
Subj:	Jalapa Paper on Free Trade
******************************************************************
Date: Wed, 30 Sep 1992 15:12:07 PDT
From: shniad@SFU.CA
Subject: Jalapa Paper on Free Trade
To: Multiple recipients of list PEN-L <@ccu.UManitoba.CA:PEN-L@USCVM.BITNET>
Reply-to: Progressive Economists Network <@ccu.UManitoba.CA:PEN-L@USCVM.BITNET>
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X-Envelope-to: HANLY



     G.A.T.T., THE CANADA-U.S. FREE TRADE AGREEMENT AND
                         N.A.F.T.A.:



     ECONOMIC RESTRUCTURING AND THE CORPORATE GAME PLAN




                    A PAPER PRESENTED BY


                         SID SHNIAD
                      RESEARCH DIRECTOR
              TELECOMMUNICATIONS WORKERS UNION,
             VANCOUVER, BRITISH COLUMBIA, CANADA


                           TO THE


                 THIRD COLOQUIO DE XALAPA --
    "REESTRUCTURACION PRODUCTIVA Y REORGANIZACION SOCIAL"
                    OCTOBER 7 TO 10, 1992





"THE FUTURE AWAITING THE AMERICAS....A TIME FOR EMPOWERING
THE POOR THROUGH NEW INVESTMENT, TRADE AND GROWTH.  A TIME
FOR CULTURAL RENEWAL.  OUR EFFORTS -- AND THE EFFORTS OF
MILLIONS OF CITIZENS OF THE AMERICAS -- CAN ACHIEVE NEW
GAINS FOR HONEST, DEMOCRATIC AND LIMITED GOVERNMENT.  AND
TOGETHER, WE CAN USHER IN A NEW ORDER OF PEACE, A NEW TIME
OF PROSPERITY, BOTH ANIMATED BY PERSONAL FREEDOM."

     U.S. President George Bush, explaining why he favours
     free trade.







"A TRADE DEAL SIMPLY LIMITS THE EXTENT TO WHICH THE U.S. OR
OTHER SIGNATORY GOVERNMENT MAY RESPOND TO PRESSURE FROM
THEIR CITIZENS."  (Emphasis added.)

     Michael Walker, Executive Director of the Fraser
     Institute, describing what he sees as a positive
     characteristic of free trade agreements.

     The Fraser Institute is a corporate-financed right wing
     think tank located in British Columbia, with strong
     organizational and financial links to right wing think
     tanks the world over.   Its Board of Directors has
     included such economic luminaries as Friederich Hayek
     and George Stigler, as well as Sir Alan Walters,
     Margaret Thatcher's chief economic strategist.

     The Fraser Institute has been the architect of much of
     the detailed planning behind the corporate assault on
     Canadian society that has occurred over the past
     fifteen years.  It plays an active propaganda role as
     well, sponsoring speeches by notables such as Milton
     Friedman and has hosted speaking tours by Roger
     Douglas, the Finance Minister of New Zealand in the
     former Labor government whose economic program featured
     unprecedented deregulation of that country's economy.




FREE TRADE:  THE BACKGROUND

  The economic stagnation that has gripped the world
economy for the past twenty years appears to be deepening.
Daily news reports from around the world bring word of
increasing unemployment, collapsing real estate markets,
currency devaluations and panicking financial markets.
There is a growing realization that the global economic
crisis -- the most severe since the 1930s -- is spreading.

  Responding to pressure from the corporate sector,
conservative governments around the world have been
following a political/economic strategy for economic
restructuring designed by organizations like the
International Monetary Fund and the World Bank.   In accord
with this strategy, governments have privatized government-
owned assets, deregulated the private sector (including
financial institutions), cut back social spending,
undermined progressive taxation, reduced corporate taxes,
and imposed regressive consumption taxes.

  Corresponding efforts have been made in the realm of
international trade negotiations.   Although governments and
corporations would have us believe that  the 1988 Canada-
U.S. Free Trade Agreement and the 1992 Canada-U.S.-Mexico
North American Free Trade Agreement stemmed from a modest
desire to reduce tariffs and liberalize the rules governing
international trade, this explanation has little to do with
what is actually transpiring here.  To understand what is
really at issue in these negotiations and how these
developments parallel other parts of the international
restructuring strategy, we must take a brief  look at the
history of multinational trade discussions.

  When international representatives met in Havana in 1947
to discuss the establishment of an International Trade
Organization (ITO), many delegates -- particularly the
British, Australians and New Zealanders -- expressed a
commitment to collectivist and socialist policies.  The
draft charter of the ITO reflected this commitment,
obligating member countries to promote full employment, to
guarantee labour standards, and to allow for the
expropriation of  the assets of  foreign companies with
compensation to be paid in local currencies.

  Hostile to the ITO's policy orientation, American
business interests and their trade representatives worked to
undermine the organization before it came into existence.
Their efforts paid off; its charter was never presented to
the American Congress.

  In place of the ITO, the U.S. promoted a plan for the
creation of the General Agreement on Tariffs and Trade
(GATT).  Established in 1948, GATT was designed to be an
international trade body with a strictly limited mandate.
Its role was simply to reduce tariffs on a specific set of
internationally traded goods.

  By the time of the Tokyo round of negotiations in the
1970s, the tariffs on the goods specified in the original
GATT agreement had been largely eliminated.  Having achieved
its original mandate, however, GATT did not cease to exist.
In subsequent negotiations -- particularly the Uruguay Round
which began in the mid-1980s and continues today --
representatives to GATT have been addressing issues that go
far beyond the organization's original mandate.

  Negotiators in the Uruguay Round are addressing an agenda
that has been expanded in three key areas: the application
of GATT rules to cover goods not covered by the original
GATT agreement, like textiles and farm commodities; the
application of GATT rules to trade in services; and the
removal of what the corporate sector refers to as technical
barriers to trade --  national laws and regulations that are
deemed to impede corporate behaviour.

Trade in Services

  Although the U.S. has relinquished its postwar dominance
in the area of manufacturing to the Japanese and the
Europeans, it continues to enjoy tremendous strength in the
areas of data processing, banking, insurance, advertising,
engineering and telecommunications.  Attempting to build on
this strength, Washington has tried repeatedly to add trade
in services to the list of items discussed at the GATT
negotiating table.

  There has been strong resistance to this American
pressure.  Control over certain services, especially those
related to the financial sector, has long been considered
the exclusive domain of national governments.  Because such
control provides the means necessary to manage national
economies, governments have been reluctant to relinquish
command of this sector to foreigners.  Control over others,
including data processing and telecommunications, promises
to be a growing source of wealth and power in the future.

  During the Tokyo Round of GATT negotiations, American
businesses tried repeatedly to add trade in services to the
international trade agenda.   At that time they were forced
to back off in the face of strong foreign opposition.  But
the American effort to add trade in services to the
international trade agenda was renewed in the early 1980s,
spearheaded by James Robinson.

  Robinson was the chairman of both the American Express
Company and the international trade committee of the U.S.
Business Roundtable.   His company, which was encountering
barriers in its attempts to expand its financial business
abroad, had a direct interest in seeing trade in services
added to the international trade agenda.  In an effort to
overwhelm foreign opposition, Robinson enlisted powerful
allies -- including the Citicorp financial organization, the
Arthur Anderson consulting company and firm of  the Peat
Marwick organization of financial and managerial advisors --
to form a lobbying group that promoted the inclusion of
services in a new round of GATT negotiations.

  These lobbying efforts paid off in 1984, when the U.S.
Congress passed a trade bill giving services the same
priority status in trade negotiations as goods and granting
the U.S. president power to retaliate if an American company
suffered discrimination when it tried to sell its services
abroad.  The trade bill also authorized the U.S. government
to enter into bilateral free trade agreements, covering
goods and services, with Canada and Israel.

  While trade between Israel and the U.S. is relatively
limited, the trading relationship between Canada and the
U.S. is the largest in the world.  Consequently, a potential
deal with Canada was looked upon as having great importance;
a comprehensive agreement between the two countries would go
far to advance the cause of trade in services at the GATT
table.  Clearly the American Congress and the high-powered
forces that had promoted the 1984 trade bill understood the
important connection between these two levels of trade
negotiation.

Technical Barriers to Trade

  "Technical barriers to trade" are national laws and
regulations deemed to impede corporate behaviour.   An
outstanding example is the U.S. Marine Mammal Protection
Act.

  This law, which went into effect in 1972, prohibits the
importing of tuna into the United States from countries
where fishermen use purse seine nets that kill thousands of
dolphins annually.  The law was renewed  in 1988 despite
strong efforts by the corporate-dominated Reagan government
to defeat it.

  Under the terms of this Act, products sold by the Mexican
tuna industry cannot be imported into the United States
because Mexico uses the kind of nets that kill dophins.  In
1991, the Mexican government sued the U.S. government, using
the provisions of GATT, to argue that the Marine Mammal
Protection Act constituted a barrier to trade!

  The Reagan Administration tried unsuccessfully to scuttle
the Marine Mammal Protection Act when it came up for renewal
in 1988.  The Bush Administration, acting in the same
spirit, offered a token defense against Mexico's charges
when the matter was brought before the GATT panel convened
to deal with the matter.

  In a decision that could have unimaginable effects, the
panel sided with Mexico.   If allowed to stand, this GATT
ruling will have devastating consequences for environment
regulations and any other governmental efforts to intervene
in the economy to offset the destructive behaviour of
transnational corporations.

A Supra-national Dispute Settlement Agency

  In the continuing Uruguay Round of the GATT negotiations
as well as in multinational trade agreements, the Bush
Administration is working to expand the power of
transnational capital and limit the ability of national
governments to pursue the policies they deem necessary to
meet their citizens' needs.

  In a parallel effort, there is pressure at the GATT table
to create an international agency with a mandate to enforce
a pro-corporate, laissez-faire economic agenda.  The text of
the Uruguay Round agreement circulating among trade
negotiators contains an appendix which calls for the
establishment of a Multilateral Trade Organization (MTO)
whose  mandate would be to adjudicate and make binding
rulings in disputes arising over barriers to trade.  Further
restricting the freedom of governments to act as they see
fit on behalf of their citizens, signatories to the new
agreement will be required to accept or reject the new GATT
text -- including the provision establishing the MTO --
without amendment.

THE 1988 U.S.-CANADA FREE TRADE AGREEMENT

  The American push for bilateral trade agreements with
Canada and Mexico complements the strategy the U.S. is
pursuing at the GATT negotiating table.  The signing of
these treaties has been driven by the desire of the American
government and U.S.-based transnational corporations --
supported by their partners north and south of the border --
to limit the ability of governments to intervene in their
economies in pursuit of social goals.

  As explained earlier, free trade plays an important role
in the corporate agenda that is reshaping the world.   This
agenda includes privatization of government-owned assets;
deregulation of the private sector, including financial
institions; cutbacks in social spending; a shift in the tax
burden from the corporate sector to the general population
through a combination of reduced corporate taxes, the
flattening of progressive income tax rates and the adoption
of regressive consumption taxes.  What follows is a
description of how the Canada-U.S. Free Trade Agreement
complements these efforts in Canada.

Investment

  American corporations have long seen foreign countries'
restrictions on investment activity as an illegitimate
interference in their operations.   When the government of
Liberal Prime Minister Pierre Trudeau established the
National Energy Program (NEP) in 1980, for example, American
oil companies and their Canadian counterparts were outraged.
By establishing government-run oil exploration companies and
limiting foreign ownership, the NEP was designed to increase
the Canadian government's control over the industry and the
revenues it derived from oil.

  In accord with the desires of the American industry and
its counterparts in Canada, the Canada-U.S. Free Trade
Agreement included a key section -- Article 904 -- which
severely limits the Canadian government's ability to
intervene in the country's energy sector.  Paragraph 904(a)
prevents the Canadian government from restricting the export
of energy to the U.S. unless there is a proportionate
reduction in the amount of that energy source produced for
the internal Canadian market.  Paragraph 904(b) prevents
Canada from imposing a higher price on energy exported to
the U.S. than is charged on the domestic market.

  Patricia Carney, who was the Conservative government's
Minister of International Trade during the Canada-U.S. free
trade negotiations, served as an advisor to the Canadian oil
industry before she became a Member of the Canadian
Parliament.   Ms. Carney points proudly to Article 904,
saying that it was designed to make it impossible for the
Canadian government to enact another National Energy
Program.

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		  [ . . . c o n t i n u e d . . . ]
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