It's not just the Council of Canadians talking. It’s the OECD, the IMF, and even articles inItalian Vogue magazine about Thomas Piketty, economist and income inequality guru. Recently, Oxfam said that the world’s richest 62 people, most living in the U.S., own as much wealth as half of the population.
But growth is good, right? We’ll all have good jobs, a Prada handbag and a new car. But growth doesn’t necessarily mean the average Canadian is better off. Many economists are pointing to the phenomenon of economic growth with stagnant job growth. As one writer wrote in the Guardian, “In the last 35 years, the world has experienced the fastest economic growth in human history. Yet, according to the Organization for Economic Co-operation and Development (OECD), unemployment went up.” Maude Barlow, chair of the Council of Canadians, explains eloquently how Canada’s income distribution before the signing of the North American Free Trade Agreement resembled that of an egg, with a healthy middle class. It has since hollowed out in the middle. If we look at the economy like a pie with workers getting a certain portion and corporations another portion, in the four decades before NAFTA, workers were getting more of the pie. Since NAFTA, workers have been getting a smaller portion, according to Bruce Campbell of the Canadian Centre for Policy Alternatives. In particular, people without college educations see declines in their incomes. Joseph Stiglitz, the American economist and Nobel laureate, says in the New York Times, “The argument was always that the winners could compensate the losers. But the winners never do. And that becomes particularly relevant when we have a society with as much inequality as we have today.” There is also the myth that somehow trade deals will “open markets,” that signing a trade agreement means we’ll soon be selling more car parts to Japan, and wheat to Malaysia for example. David Hamilton, an economist in the officer of Senator Céline Hérvieux-Payette, crunched the numbers. Free trade agreements have been proliferating but, in some cases, have exacerbated trade deficits. They have not created trade surpluses. Jim Stanford, senior economist with the Unifor trade union, writes: “These FTAs will have zero immediate impact on key indicators like employment, investment and exports (and their long-run impact, likely negative in my view, won't be dramatic in any event). But signing FTAs is a high-profile symbolic act, which makes the government seem competent and globally engaged (especially when cheered on by the breathless boosterism of most of the media).” Trade agreements are also seen as lowering tariffs. But the World Bank says tariffs amongst TPP countries are already low. The goal is to go after non-tariff barriers. These take many forms, but can affect areas such as government procurement, regulations, policies and supports that a country may institute. Out of the 30 chapters in the TPP, only two truly focus on tariff elimination, while six deal with traditional trade issues. So, what trade agreements are really doing is fixing the rules of international trade. Rules, in themselves, are not bad things. But these rules are far from innocent. The TPP is the new corporate rulebook, and it is eroding our public policy space to benefit the world's plutocrats.
"What trade agreements are really doing is fixing the rules of international trade. Rules, in themselves, are not bad things. But these rules are far from innocent.
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