FREE TRADEGlobal Saviour or Scourge?

Free Trade - History

Free trade agreements begin to proliferate during the post WWII period

This coincides with the rise in influence of neo-liberal economic thought

Governments began to believe that free market policies were the most effective method of managing the economy

Free Trade - History The European Community (EC)

was the first major free trade area in the world

It was comprised of Western European countries (France, Belgium, Italy, Netherlands, Germany and Luxembourg)

Canadian free trade really began in 1965 with the “AutoPact”, a Canada/U.S. agreement

This was an example of “sectoral free trade”, involving only a single aspect of the economy

Free Trade - History The AutoPact had a huge effect

on Canada’s economy By the late 1990’s Canada was

exporting one million more cars than it was importing

The AutoPact folded in 2001 after the World Trade Organization ruled that it was unfair to other car manufacturing countries

By that time it was largely irrelevant, having been replaced in most senses by the Free Trade Agreement (FTA) between Canada and the U.S. in 1989

Free Trade - History The FTA was expanded in 1994 to include Mexico, becoming the

North American Free Trade Agreement (NAFTA) Other parts of the world are also moving towards free trade, notably

the Organization of American States (OAS) with the Free Trade Area of the Americas (FTAA) and the Asia-Pacific Economic Cooperation (APEC) group

Neither of these larger agreements have happened yet, both being heavily protested by people who view globalization as a bad thing

Canada did sign a new free trade agreement in 2013 with the European Union, a deal that could have a tremendously positive impact on the economy

Free Trade – Major Players NAFTA – the North American Free Trade

Agreement is a deal between Canada, the U.S. and Mexico

It has benefited all three countries

Free Trade – Major Players

The European Union (EU) is the current version of the European Community

There are many more members, including nations in what used to be Communist Europe

The EU has evolved into more than a simple free trade area. It now includes political policy and security

Recently the EU has had difficulty with some member states that did not manage their economies very well

Economic tensions have threatened to break the EU apart Canada and the EU have just signed a wide ranging free trade

agreement that should have very positive effects on both

Free Trade – Major Players There are 21 countries bordering the Pacific Ocean that have

joined together for economic benefit The Asia-Pacific Economic Cooperation includes Canada as a

member The economic plan is to have the more developed nations sign

bi-lateral free trade agreements by 2010 and then incorporate those into a more comprehensive regional agreement

This has not happened to date. Canada has spent most of its diplomatic trade efforts on securing a trade deal with the EU

Free Trade – Major Players

The Organization for Economic Cooperation and Development (OECD) includes the wealthiest countries in the world

The OECD was formed in 1961and all of the founding members were well developed European and North American states

The organization is still dominated by first world countries but membership has slowly expanded to other continents and to more emergent economies

Free Trade – Major Players

The oldest trade forum of the modern world is the World Trade Organization (WTO)

It evolved from the General Agreement of Trade and Tariffs (GATT), formed in 1948

The organization has negotiated several beneficial world trade agreements, including the reduction of tariffs, anti dumping laws and the removal of non tariff barriers

The current round, known as Doha, is aimed at helping developing countries but has stalled over agricultural issues and fair trade provisions

Free Trade – Current Issues

TRIMS – Trade Related Investment Measures is a WTO agreement

The WTO prohibits measures like local content requirements

This is supposed to encourage trade and lift restrictions from transnational companies that move 1/3 of the world’s trade goods internally, between subsidiary branches in different countries or between the subsidiaries and the headquarters

Opponents say TRIMS are designed to prevent governments from making democratic economic decisions and exercising control over their economies

Free Trade – Current Issues TRIPS – Trade Related Intellectual

Property Rights – these are rights given to persons over the creations of their minds and they are awarded for specific amounts of time and confer exclusive ownership

The WTO says this is to prevent others from using inventions, designs or creative works without permission and/or remuneration

Opponents say that this is protecting the financial interests of big biotechnology, pharmaceutical, computer software and other businesses and that policing the rules falls on cash strapped governments and it also slows the transfer of possibly life saving technologies

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