Home » Posts tagged 'free trade'
Tag Archives: free trade
As trade tensions rise between the United States of America and its traditional allies, Canada’s Foreign Minister Chrystia Freeland hits the right note in responding to U.S. President Donald Trump as she accepts the Diplomat of the Year Award from Foreign Policy magazine.
Below are both the full video and transcript of her speech courtesy of ForeignPolicy.com
“Tonight, I would like to speak about a challenge that affects us all: and I believe worries us all, and that is the weakening of the rules-based international order and the threat that resurgent authoritarianism poses to liberal democracy itself.
I’d like to start on a personal note. In the 1980’s and 1990’s, I studied and worked as a reporter in what was first the USSR and while I was living there [it] became independent Ukraine and Russia.
My experience of watching from the inside as this vast authoritarian regime crumbled, profoundly shaped my thinking. It was a euphoric moment, and one in which it was tempting to imagine that liberal democracy was both inevitable and invulnerable.
As Francis Fukuyama put it, we seemed to have reached the ‘end of history’.
Fukuyama wasn’t, of course, arguing that history had ground to a halt. Rather, he was saying that the half-century-long competition between liberalism and authoritarianism had been settled and that liberal democracy had won. What a seductive argument.
Now, we harbored no illusions then, that institutions such as the WTO, or the IMF, or the World Bank, or the U.N. were perfect. Or that that our own democracies at home with their sausage-making methods of legislating and governing were without flaw.
But there was a broad consensus that the Atlantic nations, plus Japan, led an international system of rules that had allowed our peoples’ to thrive and which would surely continue to do so. Crucially, this was built as a system that other nations, emerging powers could join, and join they have.
The past 25 years have seen the rapid rise of the global south and Asia, most prominently China, as major economic powers in their own right. We created the G20, with Canadian leadership I might add. Russia was invited into the G7 making it the G8 in 1998, and the WTO in 2012. China has been a WTO member since 2001.
In Latin America, in the Caribbean, in Africa, and in Asia, developing countries have joined these institutions and accepted their rules, and that has delivered ever-greater living standards to their people.
But although this was and remains a broadly positive evolution, with extraordinary gains, in reducing extreme poverty, lengthening lives and decreasing infant mortality, one assumption about this great global shift turned out to be wrong: that was the idea that as authoritarian countries joined the global economy and grew rich, they would inevitably adopt Western political freedoms too. That hasn’t always happened. Indeed, in recent years, even some democracies have gone in the other direction and slipped into authoritarianism, notably and tragically, Venezuela. And some countries that had embarked on the difficult journey from communism to democratic capitalism have moved backwards. The saddest personal example for me is Russia.
Even China, whose economic success in lifting hundreds of millions of people out of poverty is one of the great accomplishments of recent times, stands as a rebuke to our belief in the inevitability of liberal democracy.
And within the club of wealthy Western nations, we are seeing homegrown anti-democratic forces on the rise. Whether they are neo-Nazis, white supremacists, incels, nativists, or radical anti-globalists, such movements seek to undermine our democracies from within. Liberal democracy is also under assault from abroad. Authoritarian regimes are actively seeking to undermine us with sophisticated, well-financed propaganda and espionage programs. And they seek to suborn smaller countries, those wavering between democracy and authoritarianism.
Now, the idea that democracy could falter or be overturned in places where it had previously flourished may seem outlandish. But other great civilizations have risen and then fallen. It is hubris to think we will inevitably be different. Our Prime Minister likes to say about our country that Canada didn’t happen by accident and it won’t continue without effort.
The same can be said of liberal democracy itself.
Now let’s set aside the external malevolent actors for a moment. Why are liberal democracies vulnerable at home?
Here’s why: Angry populism thrives where the middle class is hollowed out, where people are losing ground and losing hope, even as those at the very top are doing better than ever. When people feel their economic future is in jeopardy — when they believe their children have fewer opportunities than they themselves had in their youth, that’s when people are vulnerable to the demagogue who scapegoats the outsider, the other, whether it’s immigrants at home or trading partners abroad.
The fact is, middle-class working families aren’t wrong to feel left behind. Median wages have been stagnating. Jobs are becoming more precarious, pensions uncertain, housing, childcare, and education harder to afford. These are the wrenching human consequences, the growing pains, if you will, of the great transformative forces of the past 40 years — the technology revolution and globalization.
Now, of the two, technology is having the greatest impact. But even free traders like me need to recognize that globalization has contributed as well. So, what’s the answer?
I think we are agreed that it is not, as the Luddites unsuccessfully proposed at the start of the Industrial Revolution, to stop the march of technology. We all love our smartphones too much.
When it comes to trade though, we do need to introduce labor standards with real teeth as Canada and the EU have done in our free trade agreement, and as we are discussing as part of our ongoing NAFTA modernization negotiations. It is long past time to bring the WTO up to date with the realities of 2018 and beyond. We need to seriously address non-tariff barriers to trade and force technology transfers.
However, and overwhelmingly, the chief answer to the legitimate grievances of the middle class lies in domestic policies.
The middle class and people working hard to join it need the security that comes from educationing your youth, health care for your family, good jobs for your children, and dignity in your retirement.
We need to think about what the jobs of the future for our citizens will be, and ensure that those jobs will pay a living wage and that our people have the skills to do them. Perhaps most importantly, and this is work that would benefit from international cooperation, in a 21st century in which capital is global but social welfare is national, we need to ensure that each of our countries has the durable tax base necessary to support the 99 percent.
But setting our own house in order is just one part of the struggle. The truth is that authoritarianism is on the march and it’s time for liberal democracy to fight back. To do that, we need to raise our game.
One device strongmen use to justify their rule is the Soviet trick of whataboutism. The strategy of false moral equivalency which holds that because democracies are inevitably imperfect, they lack the moral authority to criticize authoritarian regimes.
We heard this species of cynical rhetoric for example, from the Venezuelan foreign minister at the Organization of American States meeting in Washington just last week. We must be smart enough to see through it. It’s possible, indeed necessary, for us to acknowledge that our own democracies aren’t perfect.
The record of my own country’s relationship with indigenous peoples, for example, is one of tragic failure.
But admitting our mistakes doesn’t discredit us. On the contrary, it is one of the things that makes us who we are. Authoritarianism is also often justified as a more efficient way of getting things done. No messy contested elections, no wrenching shift from one short-termist governing party to another, no troublesome judicial oversight, no time-consuming public consultation. How much more effective the apologists argue for a paramount leader with a long-term vision, unlimited power and permanent tenure, to rule.
We need to resist this corrosive nonsense. We need to summon Yeats’ oft-cited passionate intensity in the fight for liberal democracy and the international rules-based order that supports it.
Remember those great words at Gettysburg. Government of the people, by the people, for the people, shall not perish from the Earth. Preserving Lincoln’s vision means striking back. It means resisting foreign efforts to hijack our democracies through cyber-meddling and propaganda. It means outshining the other models and encouraging those who are on the fence. And it means governing with integrity.
Facts matter. (applause) Truth matters. (applause) Competence and honesty among elected leaders and in our public service matter. (applause)
Now, I’d like to speak directly to Canada’s American friends and to my own many American friends who are here in this room.
Let me begin by simply saying: Thank you.
For the past 70 years and more, America has been the leader of the free world. We Canadians have been proud to stand at your side and to have your back. As your closest friend, ally, and neighbor, we also understand that many Americans today are no longer certain that the rules-based international order of which you were the principal architect and for which you did write the biggest cheques, still benefits America.
We see this most plainly in the U.S. administration’s tariffs on Canadian steel and aluminum imposed under the 232 national security provision. We share the world’s longest undefended border. Our soldiers have fought and died alongside yours in the First World War, in the Second World War, in Korea, in Afghanistan, and in Iraq.
The idea that we could pose a national security threat to you is more than absurd, it’s hurtful.
The 232 tariffs introduced by the United States are illegal under WTO and NAFTA rules. They are protectionism pure and simple. They are not a response to unfair actions by other countries that put American industry at a disadvantage. They are a naked example of the United States putting its thumb on the scale in violation of the very rules it helped to write. Canada has no choice but to retaliate with a measured, perfectly reciprocal, dollar for dollar response. And we will do so. We act in close collaboration with our like-minded partners in the EU and Mexico.
They too are your allies, and they share our astonishment and our resolve.
Chrystia continues her speech in Canada’s other official language (French) then reverts to English, as below…
No one will benefit from this beggar-thy-neighbour dispute. The price will be paid in part, by American consumers and American businesses and the price will also be paid by those who believe that a rules-based system is worth preserving.
Since the end of the Second World War, we have built a system that promoted prosperity and prevented smaller and regional conflicts from turning into total war. We’ve built a system that championed freedom and democracy over authoritarianism and oppression. Canada for one, is going to stand up in defense of that system. We will not escalate and we will not back down.
We remember a time when the United States believed great international projects like the Marshall Plan or the reconstruction of Japan were the path to lasting peace. When America believed its security and prosperity were bolstered by the security and prosperity of other nations. Indeed, that America could only be truly safe and prosperous when its allies were too. This vision, the greatest generation’s vision, was crucially dependent on the rules-based international order and the postwar institutions built to maintain it. It was based upon the willingness of all, especially the strongest, to play by the rules and be bound by them. It depended on the greatest countries of the world giving up, collectively, on the idea that ‘might made right’.
Now, the Second World War was over 70 years ago, it is reasonable to ask whether our grandparents’ hard-won wisdom still applies today. I am certain that it does and for some new reasons.
After the devastation of the Second World War, the United States was the unquestioned colossus, accounting alone for half the world’s economy. Today, the U.S. economy stands at just a quarter of the world’s. Together, the EU, Canada, and Japan, your allies in the G-7 and beyond, account for just a little bit more. China, meanwhile, produces nearly 20 percent of the world’s GDP. And in our lifetimes, its economy is set to become the world’s largest.
Now, that’s not necessarily a bad thing.
Americans, Canadians, and Europeans are much richer and healthier, and live longer than our grandparents did. The ‘rise of the rest’ has been a chapter in the story of our own increased prosperity. And it’s only natural that the 85 per cent of people who live outside the industrialized West should, over time, account for a greater and growing share of the world’s wealth.
But that shift leaves the Western liberal democracies with a dilemma. How shall we behave in a world we no longer dominate?
One answer is to give up on the rules-based international order, to give up on the Western alliance and to seek to survive in a Metternichian world defined, not by common values, mutually-agreed upon rules and shared prosperity, but rather by a ruthless struggle between the great powers governed solely by the narrow, short-term, and mercantalist pursuit of self-interest.
Canada could never thrive in such a world. But you, still the world’s largest economy, may be tempted. That, of course, is your sovereign right. But allow me, as your friend to make the case that America’s security amid the inexorable ‘rise of the rest’ lies in doubling-down on a renewed rules-based international order. It lies in working alongside traditional allies like Canada and alongside all of the younger democracies around the world.
From the Americas, to Africa, to Asia, to the former Soviet Union — who are so keen to join us and who yearn for leadership, you may feel today that your size allows you to go ‘mano a mano’ with your traditional adversaries and be guaranteed to win. But if history tells us one thing, it is that no one nation’s preeminence is eternal.
That is why the far wiser path and the more enduring one is to strengthen our existing alliance of liberal democracies. To hold the door open to new friends. To countries that have their own troubled past such as Tunisia, Senegal, Indonesia, Mexico, Botswana, or Ukraine.
To reform and renew the rules-based international order that we have built together. And in so doing, to require that all states, whether democratic or not, play by these common rules.
This is the difficult truth. As the West’s relative might inevitably declines, now is the time when, more than ever, we must set aside the idea that ‘might is right’. Now is the time for us to plant our flag on the rule of law so that the rising powers are induced to play by these rules too.
To explain my faith in you, in America, let me remind you of the ‘City on the Hill’ Ronald Reagan evoked in his farewell speech in 1989. It was a tall, proud city, built on rocks stronger than oceans, windswept, God-blessed, and teeming with people of all kinds living in harmony and peace. A city with free ports that hummed with commerce and creativity and if there had to be city walls, the walls had doors and the doors were open to anyone with the will and the heart to get there.
This city, open to trade, open to immigrants, speaks to Canada’s values too. Indeed, these are the values of liberal democracy. These values are under attack from outside our walls. Most corrosively, even inside the shining city some have begun to doubt them. My country, Canada, believes in these values. We are ready to defend them and the rules-based international order that unites all of the world’s cities on the hill.
Our friends among the world’s democracies in Europe, in Asia, in Africa, and here in the Americas are shoulder to shoulder with us. We all know we will be strongest with America in our ranks and indeed, in the lead. But whatever this great country’s choice will turn out to be, let me be clear that Canada knows where it stands, and we will rise to this challenge. Thank you.” — As read by Chrystia Freeland, Foreign Minister for Canada, June 14, 2018
by John Brian Shannon | June 11, 2015
The secrecy surrounding these agreements is a complete non-starter for me.
The obsessive secrecy is enough to tell me everything about this being a corporatist agenda on the one hand — and a latter-day containment policy concerning China (or any country that crosses the U.S.A.) on the other.
It really muddles the difference between trade and governance as many commentators have said.
Elizabeth Warren, as usual, has it right; “If transparency would make it harder to sell the final product to the public, it raises serious questions about the desirability of what is being negotiated.” — Elizabeth Warren (paraphrased by Professor Dani Rodrik)
Yet, having said all of that, I’m strongly in favour of international trade agreements!
What NAFTA could’ve been, vs. what it became
To this day I’m a strong proponent of NAFTA — but NAFTA had the potential to be so much more.
Instead, some of the more mediocre minds took over what was a grand overriding vision of peace, order, and good governance for all of North America — and one of the vehicles to help make that happen was the original NAFTA agreement, which was to be followed up by additional agreements, e.g. NAFTA II and NAFTA III.
But because it was handled so badly, the public mood turned against NAFTA and all talk of later NAFTA agreements were dropped like a stone
To state it a different way; The corporatist agenda greedily precluded the long term interests of North America.
And what did we get in exchange from corporations for opening up the North American market thereby allowing corporations to make additional billions per year?
They took their NAFTA windfall profits they had earned in North America to Asia, and 2/3rds of North American manufacturing jobs went to Asia, as well.
Thanks for that.
But it’s not the fault of corporations. They’re in business to make money for their shareholders — which increasingly, means the 1 percent.
To one person, the actions of these corporations might seem profoundly ungrateful to North America — while to another person, these corporations acted in their best interests.
It depends who you work for, I guess…
If you’re a person who works for 1 percent of the population, then this result is acceptable to you. If you’re a person who works for the 99 percent, then this is a wicked bit of business indeed.
Occupy Wall Street protests and other anti-corporate sentiments didn’t materialize out of thin air.
The Occupy movement happened because 99 percent of the population suddenly realized that both the corporations and government were ‘against’ the little guy — you know, the people who actually pay the bills and fight in wars — not the cabal of the 1 percent and their government acolytes
If we pass TTIP and TPP in a shroud of secrecy to further satisfy the corporatist agenda the #OWS protests will seem a minor historical disruption by comparison. (Just a friendly warning from someone who believes in trade agreements)
Some look for advantages between signatories of trade agreements
Which completely misses the point.
In the NAFTA example, many people were spending endless hours trying to decide if the NAFTA agreement benefited Canada? Did it benefit the U.S. more? Or perhaps Mexico was the main beneficiary?
NAFTA was about lowering barriers to improve the free flow of trade between the North American partners with the goal of making North American products and services more competitive in all respects — against other trading blocs or nations. Not against each other.
THAT is what NAFTA was about. Which many people missed originally, or have since forgotten.
It’s too bad that the subsequent windfall profits ended up strengthening the Asian economy instead of the North American economy where all of those profits had been earned
So; Are those corporations ‘traitors’ to North Americans — or are those corporations ‘heroes’ to their shareholders?
The answer is glaringly obvious.
If you’re a one percenter (or a government acolyte of the 1%) then these corporations were ‘doing their duty to shareholders’ under legal boundaries set by government policymakers and financial regulators, even though the optics look incredibly bad for both corporations and government policymakers.
If you’re a ninety-nine percenter you probably view these corporations as ‘traitors’ to North America — even though these corporations followed the letter of the law. Everything else is just spin for you.
A summary of NAFTA?
1. It could’ve been so much more.
2. The corporations made additional billions (maybe even trillions) due to NAFTA, and in that respect it scores a clear win for corporations — but they have lost much of the support and good will of ‘We the People’ in the process.
3. The additional revenue made by corporations due to the NAFTA agreement are now in China not doing a damn thing for the North American economy where those windfall NAFTA profits were earned, making NAFTA the third-largest transfer of wealth in modern history.
(a: The largest wealth transfer in modern history was from the Old world to the New world, b: the second-largest wealth transfer in modern history was from the West to the oil rich Kingdoms, since 1932)
4. NAFTA was a major instrument in the creation of the 1 percent and the societal problems that have since flowed from rising inequality.
Unprecedented in modern history, the 1 percent own more wealth than 1/2 of the world’s population and by 2030 the 1 percent will own 3/4 of the world’s total wealth.
Leaving only 1/4 of the world’s wealth for the 99 percent to exist on, going forward…
Can you say… inequality? Or how about… protest marches? This time with billions of protesters.
As productivity has only little room for improvement in the developed world, the only other factor to allow the present economic paradigm to continue is falling incomes for the 99 percent
If you don’t recognize that as a looming societal apocalypse, you’re not an economist.
If you are an economist, I apologize in advance for your nightmares.
It looks like it’s up to citizens to stop policies that are clearly skewed to benefit the 1 percent and are increasingly detrimental to the 99 percent.
- The Muddled Case for Trade Agreements (Project Syndicate)