From: golchowy@alchemy.chem.utoronto.ca (Gerald Olchowy)
Subject: Re: NAFTA (was Re: Bush's position on Bosnia)
Organization: University of Toronto Chemistry Department
Date: Thu, 13 Aug 1992 21:48:28 GMT

In article <1992Aug13.182903.27960@ils.nwu.edu> hooker@aristotle.ils.nwu.edu (Bob Hooker) writes:
>In article <1992Aug12.234241.23559@oakhill.sps.mot.com>,
>pjm@anegada.sps.mot.com (Patrick J. McGuinness) writes:

>> NAFTA will be good for all parties concerned.
>
>Northern Telecom,  a Canadian comapny which has many factories in the
>United States has closed several recently,  because they can now more
>easily do business with the United States from Canada,  while paying
>working less.  
>

Northern Telecom actually has expanded much more in the US and abroad
than in Canada since the FTA as it becomes one of Canada's few
successful global high tech companies.  It's CEO is actually now
an American who spends most of his time in Northern Telecoms'
Washington, DC office (actually it might be No. Virginia).

Canada tends to have a higher level of
unionization, a higher minimum wage, and laws against municipal
tax inducements to companies, which means that the manufacturing
heartland of Canada has lost many more jobs to the Southern US
right-to-work States than vice-versa.  The dropping of tariff
barriers has meant that US companies could close many of their
branch plants in Canada, and increase by 10% or so production
in US plants to supply the Canadian market since the FTA.

Now I basically support the FTA...but the FTA forced much of
the restructuring that the US will only begin to have to face
with NAFTA.  We lost manufacturing because of low American
wages in right-to-work States, we don't have that much more
to lose because of even lower wage rates in Mexico...the
manufacturing that is left is more competitive on a value-added
or technological basis rather than on the basis of cost of labor.

>My father, a 25 year employee  and middle manager at Norhtern Telecom is
>one of several hundred workers who have found themselves without a job,  at
>50, without a college degree, and in the middle of an economic down turn
>(Economists have made it quite clear that we are not in a Recession),  his
>prospects are pretty gray right now. After a life working in one company
>under one system,  he finds himself an "unskilled worker". 
>

If you think you have it bad...do you know how many Canadians are
in a similar boat because US companies because of the FTA rationalized
taking their Canadian production back home...our unemployment rate
is 11.5% in Canada...if we had a 7.5% unemployment rate up here,
we'd be jumping for joy.  The US-Canada FTA caused much more 
restructuring and dislocation in Canada than it did in the US.
Nevertheless, it was necessary and I basically support the process.

And furthermore, the US government basically executed a double-cross,
when they were negotiating the FTA, they did not announce their
intention for a future free trade agreement with Mexico, and their
intention to hub-and-spoke trade in the Americas, and thus Americans
were able to obtain concessions in the first FTA which they wouldn't
have gotten if their true intentions were known, and more concessions
in the second round from Canada, because Canada really could not allow
a hemispheric hub-and-spoke managed trade agreement with the US at
the hub.  As a result, in NAFTA, the US went after a lot of Canadian
industries that were more successful because of the original FTA, and
Canada had to accept greater American protectionism in certain
sectors like textiles and clothing for example.         

Nevertheless, barring something unforseen in the legal text, I basically
supported the US-Canada FTA, and I will support NAFTA.     

Globalization is a reality...freer trade is basically a good thing...
and thus I support NAFTA and GATT.

Gerald