IMM #4(G): Michelle Rempel Lies: Temporary Foreign Workers “ARE” Eligible For PR Pathway

1. Mass LEGAL Immigration In Canada

Despite what many think, LEGAL immigration into Canada is actually a much larger threat than illegal aliens, given the true scale of the replacement that is happening. What was founded as a European (British) colony is becoming unrecognizable due to forced demographic changes. There are also social, economic, environmental and voting changes to consider. See this Canadian series, and the UN programs for more detail. Politicians, the media, and so-called “experts” have no interest in coming clean on this.

CLICK HERE, for UN Genocide Prevention/Punishment Convention.
CLICK HERE, for Barcelona Declaration & Kalergi Plan.
CLICK HERE, for UN Kalergi Plan (population replacement).
CLICK HERE, for UN replacement efforts since 1974.
CLICK HERE, for tracing steps of UN replacement agenda.

Note: If there are errors in calculating the totals, please speak up. Information is of no use to the public if it isn’t accurate.

2. Important Links

CLICK HERE, for CPC policy declaration.
conservative.party.of.canada.policy.declaration

CLICK HERE, for Rempel tweet #1.
CLICK HERE, for Rempel tweet #2.
CLICK HERE, for Rempel tweet #3.
CLICK HERE, for Rempel tweet #4.

3. Annual Immigration Reports To Parliament

2004.annual.immigration.report.to.parliament
2005.annual.immigration.report.to.parliament
2006.annual.immigration.report.to.parliament
2007.annual.immigration.report.to.parliament
2008.annual.immigration.report.to.parliament
2009.annual.immigration.report.to.parliament
2010.annual.immigration.report.to.parliament
2011.annual.immigration.report.to.parliament
2012.annual.immigration.report.to.parliament
2013.annual.immigration.report.to.parliament
2014.annual.immigration.report.to.parliament
2015.annual.immigration.report.to.parliament
2016.annual.immigration.report.to.parliament
2017.annual.immigration.report.to.parliament
2018.annual.immigration.report.to.parliament
2019.annual.immigration.report.to.parliament

(0) Archived listings of Reports

4. Scale Of “Temporary” Migration

Year Stu TFWP IMP Total
2003 61,293 82,151 143,444

2004 56,536 90,668 147,204

2005 57,476 99,146 156,622

2006 61,703 112,658 174,361

2007 64,636 165,198 229,834

2008 79,509 192,519 272,028

2009 85,140 178,478 263,618

2010 96,157 182,276 278,433

2011 98,383 190,842 289,225

2012 104,810 213,573 318,383

2013 111,865 221,310 333,175

2014 127,698 95,086 197,924 420,078

2015 219,143 73,016 175,967 468,126

2016 265,111 78,402 207,829 551,342

2017 317,328 78,788 224,033 620,149

2018 356,876 84,229 255,034 696,139

This table was complied using data from 2004 to 2019 Annual Immigration Reports to Parliament. As “Shadow Minister” for Immigration, Rempel would presumably have read these reports.

5. Temporary Workers Getting PR

That is from page 15 of the most recent (2019) Annual Immigration Report to Parliament, which covers the year 2018. It does quite clearly state that temporary workers are transitioning to permanent residents.

The same information is also available from Statistics Canada, although they only seem to estimate the overall rates for students and also temporary workers.

6. Official CPC Policy Is TFW ==> PR

Article 139 of the CPC Policy Declaration is to convert temporary workers to permanent residents where possible. Rempel, as Immigration “Shadow Minister” or “Critic” presumably would have known that.

7. Rempel Supports Cheap Foreign Labour

Consider this for a moment: Michelle Rempel nearly became Immigration Minister. She supports putting Canadians to work in agriculture ONLY if it’s not possible to import a foreign work force. Nice to see a conservative finally being honest about this though.

It’s nice (in some sense) to see Rempel come out and admit that these “temporary” workers are in fact driving wages down, but she seems to support the idea.

8. Rempel Indifferent To Remittances Sent Off

Yes, temporary workers in Canada (and other Western nations) will often send money back home? But it’s no big deal, right? It won’t have any harmful effect? Perhaps not.

Year Total ($B) To 1st World To 3rd World Diff.
2013 $581B $177B $404B $227B
2014 $592B $162B $430B $268B
2015 $582B $142B $440B $298B
2016 $573B $144B $429B $285B
2017 $613B $147B $466B $319B
2018 $689B $161B $528B $367B

Sources For The Chart
CLICK HERE, for World Bank, remittances in 2013.
CLICK HERE, for World Bank, remittances in 2015.
CLICK HERE, for World Bank, remittances in 2016.
CLICK HERE, for World Bank, remittances in 2017.
CLICK HERE, for World Bank, remittances in 2018.

Another interesting article on the subject of remittances came from the Vancouver Sun. It echoed the World Bank’s estimate of $24 billion leaving Canada in 2012, but covered other relevant points as well.

ABUSE AND DUBIOUS MOTIVATIONS
Since the migration of one person to another country is often a family decision, many migrants feel guilty and pressured to send money to people, some of whom they fear may misuse it.
.
Most migrants remit in the belief the money will go to food, housing, health care and education. But reports frequently arise about how hard-earned remittance money is misspent, going to big-screen TVs or even drinking binges.
.
In addition, Canadian economist John Hoddinot says many migrants send remittances to their parents, uncles and aunts to “ensure hereditary rights,” meaning they have to do so for the long haul and have no guarantees their goal will be realized.

Conservatives claim that these “temporary” workers will boost the local economy. But how exactly is that the case when billions are sent away annually as remittances? It’s not like Rempel doesn’t know this is happening.

9. Real Effects Of CANZUK

In keeping with conservative mentality that we only need to conserve economic growth, let’s look at CANZUK. It is official CPC policy, addressed in article 152 of the policy declaration. See a previous review of it.

Think about it: CANZUK essentially comprises two elements (a) free trade; and (b) open movement. It also has the potential to expand to include India, Pakistan, Bangladesh and other Commonwealth nations.

(a) In a free trade system, jobs get sent overseas to where things can be made cheaper, which will DECREASE the supply of jobs in Canada.

(b) With open immigration, people can come to Canada freely, which will INCREASE the demand for what jobs remain.

In a situation where you have many more people competing for far fewer jobs, what happens to the wages? They are driven down, and this is a policy conservative politicians in general support.

10. Thoughts On Rempel Tweets

It is absurd that such a high ranking official seems to know nothing about the temp-to-PR pipeline in Canada. Either that, or she knows and just pretends it doesn’t exist.

While it was nice to see the effect on wages addressed, it’s frustrating that Rempel supports the very policies that drive them down in the first place. One would think that ensuring your own citizens have work and livelihoods is more important than importing foreign scabs who will work for less.

The concept of remittances destroys the narrative that economic immigration is beneficial to the local economy. Sending billions out of the country each year does nothing to help.

But this is the difference between conservatives and nationalists. CONSERVATIVES seem to think only in terms of economic growth, stock markets and low prices. NATIONALISTS, on the other hand, care about the well being and stability of their own people. Different priorities.

Centre For Israel And Jewish Affairs #3: Information About This “Non-Profit”

1. Important Links

(1) https://canucklaw.ca/foreign-interference-in-canadas-democracy-centre-for-israel-and-jewish-affairs/
(2) https://canucklaw.ca/centre-for-israel-and-jewish-affairs-an-assault-on-free-speech-and-democracy-in-canada/

(3) Corporations Canada Search
(4) http://archive.is/XBouH
(5) https://lobbycanada.gc.ca/app/secure/ocl/lrs/do/clntCmmLgs?cno=111&regId=895791
(6) http://archive.is/czbFk
(7) https://lobbycanada.gc.ca/app/secure/ocl/lrs/do/vwRg?cno=111&regId=895791&blnk=1
(8) http://archive.is/NR9tZ

2. Context For This Article

In the first piece, we looked at the extended pattern of political lobbying by CIJA, including Senators, and MPs in the House of Commons from all parties. Over 1200 “communications reports” took place over the last 20 years, or about 1 every 6 days.

Period (2019-09-01 to 2020-01-14)

The second article covered the agenda that CIJA was pushing. Beyond generic business interests, CIJA is pushing an anti-free speech agenda. “Hate speech” according to this group, is essentially anything Jews don’t like and can claim to be offended by.

In fact, CIJA has, for many years, been lobbying the Federal Government to make licensing of media personalities mandatory. This is so the Israeli lobby can claim “hate speech” to shut down people and views that they disagree with. It can also be used to silence those who speak uncomfortable truths.

Now, let’s get into the nuts and bolts of this Federal “Non-Profit” Group which is waging war on free speech in Canada.

3. Corporate Documents & Filings

cija.01.directors
cija.02.directors
cija.03.director.changes
cija.04.Form4006
cija.05.Form4022.annual.return
cija.06.Form4006.changes.among.directors
cija.07.bylaws.and.governance
cija.08.certificate.of.continuance

By no means is this an exhaustive list of the documents available, but it should provide a good indication of what CIJA is, how it operates, and what its goals are.

4. By-Laws: Voting Members

Member Number of Memberships
The Atlantic Jewish Council 3
Calgary Jewish Federation 1
Jewish Federation of Edmonton 1
Hamilton Jewish Federation 1
Jewish Federation of Ottawa 3
The Jewish Federation of Victoria and Vancouver Island Society 1
Jewish Federation of Winnipeg Inc. 3
London Jewish Federation 1
the Montreal Federation 13
the Toronto Federation 15
UIAC 4
UIAC, in trust for the Jewish community of Regina* 1
UIAC, in trust for the Jewish community of Saskatoon* 1
UIAC, in trust for RJCO (excluding London and Windsor)* 1
the Vancouver Federation 4 Windsor Jewish Federation 1
TOTAL 54

Unsurprisingly, it is weighted so that larger areas like Toronto and Montreal get more voting power. This happens in many organizations.

Worth asking: do all of these branches support CIJA’s overall war on free speech? Do they all support the suppression of ideas they don’t like, and uncomfortable truths?

5. CIJA’s Agenda (Certificate Of Continuance)

cija.08.certificate.of.continuance

Now let’s take a look at the actual goals.

Straight from the source. CIJA’s goal (among others) is to influence political affairs in “its” version of what it views as hate speech and anti-Semitism. In other words, ban things that Jews don’t like.

From the first article, it was shown that CIJA had 1248 “communications reports” over the last 20 years. Could it be they have finally made some progress in clamping down on free speech in Canada?

6. Politicians In Bed With Israeli Lobby

Current candidate for leadership of the CPC, Erin O’Toole, openly shills for Israel. See here, and here for just a few examples.

When Maxime Bernier ran for the CPC leadership in 2016/2017, his main critique of the UN is that it was dysfunctional, and spends too much time condemning Israel. Really? For an ex-Foreign Affairs Minister, that is the best you can do?

Two non-voting Directors of CIJA are of a particular interest. One is John Baird, former CPC Cabinet Minister. The other is Dexter Darrell, former Premier of Nova Scotia.

cija.02.directors

Stockwell Day, ex-CPC Cabinet Minister was on CIJA BOD
Sheila Copps, ex-LPC Cabinet Minister was on CIJA BOD

Rafi Brass: Raphael (Rafi) Brass has been a government consultant at Bluesky Strategy Group since April 2015 and worked on Parliament Hill for two Liberal MPs. He will be joining the Board as a delegate from CIJA’s Young Leaders Circle.

Rafi Brass is an ex-staffer, for 2 Liberal MPs.
Now he’s a Director with CIJA.

Of course, these names here represent only a small portion of what actually goes on. More to come in a follow-up article.

7. Where Things Stand

CIJA is a lobbying organization that is extremely influential in Canada. It has political connections across party lines and spends an inordinate amount of time lobbying and promoting Jewish interests.

By itself, this may not be a problem. However, promoting the interests that this group does directly interferes with Canadian interests. A politician cannot be “CANADA FIRST” and be an Israeli shill at the same time. As the expression goes, a dog cannot have 2 masters.

This group is anti-Canada, and anti-free speech, to name just a few criticisms. Showing what it really does is important to educate the public.

Economic Policy Institute Research On Societal Costs

(From U.S. Census Bureau in 2014)

(EPI reports on rise in “temporary” labour)

(EPI on surging U.S. trade deficit with China)

(EPI on globalist trade driving down wages)

(EPI on free trade & mass migration removing bargaining power)

(EPI on responding to currency manipulation with tariffs)

(EPI on 3.4M jobs lost to China)

(CPC policies are to: create new immigration pilot programs, transition “temps” to permanent residents where possible)

(CPC policy is also implementation of CANZUK)

(Tucker Carlson on foreign replacements at Uber getting preferential treatment. He also calls out Charlie Kirk’s “stapling green cards to diplomas” line)

1. Offshoring, Globalization, Free Trade

The other posts on outsourcing/offshoring are available here. It focuses on the hidden costs and trade offs society as a whole has to make. Contrary to what many politicians and figures in the media claim, there are always costs to these kinds of agreement. These include: (a) job losses; (b) wages being driven down; (c) undercutting of local companies; (d) legal action by foreign entities; (e) industries being outsourced; and (f) losses to communities when major employers leave. Don’t believe the lies that these agreements are overwhelmingly beneficial to all.

2. Important Links

(1) https://canucklaw.ca/facts-figures-the-ugly-truth-about-replacement-migration-in-canada/
(2) https://www.census.gov/newsroom/press-releases/2014/cb14-130.html
(3) https://prospect.org/power/stem-shortage-myth/
(4) https://www.epi.org/publication/pm195-stem-labor-shortages-microsoft-report-distorts/
(5) https://www.epi.org/publication/temporary-labor-migration-programs-governance-migrant-worker-rights-and-recommendations-for-the-u-n-global-compact-for-migration/
(6) https://www.canada.ca/en/news/archive/2014/06/government-canada-overhauls-temporary-foreign-worker-program-ensuring-canadians-are-first-line-available-jobs.html
(7) https://www.epi.org/publication/briefingpapers_fdi_fdi/
(8) https://www.epi.org/publication/webfeatures_snapshots_archive_11052003/
(9) https://www.epi.org/publication/standard-models-benchmark-costs-globalization/
(10) https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/
(11) https://www.epi.org/publication/adding-insult-to-injury-how-bad-policy-decisions-have-amplified-globalizations-costs-for-american-workers/
(12) https://www.epi.org/press/tariffs-are-not-an-appropriate-response-to-currency-manipulation/
(13) https://www.epi.org/publication/the-china-toll-deepens-growth-in-the-bilateral-trade-deficit-between-2001-and-2017-cost-3-4-million-u-s-jobs-with-losses-in-every-state-and-congressional-district/
(14) https://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/tpp-ptp/text-texte/09.aspx?lang=eng

3. Context For This Article

True, the content of this site is primarily focused on Canada. However, the issues that face the United States are similar. What happens over there spills over here, and there is lots of data available on it.

There are 2 linked concepts to discuss:

  • Mass Economic Immigration
  • Free Trade Agreements

How are these ideas linked? Because they are 2 ends of the same problem. Mass economic immigration involves importing large numbers of people into a country. It leads to a much higher supply of workers, and more competition for the same jobs. As a result, it helps drive down wages as it becomes an employer’s market. It INCREASES the demand for jobs in developed countries. Free trade works by exporting jobs and entire industries to other nations where the work can be done for less. In other words, it DECREASES the supply of local jobs available. Now combine them.

MORE competition + LESS work = disaster.

For the purposes of this article, concerns that the U.S. has can be viewed as happening (or at risk to happen) in Canada as well.

The Economic Policy Institute (EPI) is a left leaning think tank in Washington. Among the topics it covers are free trade and immigration. EPI points out repeatedly that there are high social costs to the conservative or libertarian policies. Let’s get into it.

4. STEM Field Is Glutted

The U.S. Census Bureau reported today that 74 percent of those who have a bachelor’s degree in science, technology, engineering and math — commonly referred to as STEM — are not employed in STEM occupations.

“STEM graduates have relatively low unemployment, however these graduates are not necessarily employed in STEM occupations,” said Liana Christin Landivar, a sociologist in the Census Bureau’s Industry and Occupation Statistics Branch.

According to new statistics from the 2012 American Community Survey, engineering and computer, math and statistics majors had the largest share of graduates going into a STEM field with about half employed in a STEM occupation. Science majors had fewer of their graduates employed in STEM. About 26 percent of physical science majors; 15 percent of biological, environmental and agricultural sciences majors; 10 percent of psychology majors; and 7 percent of social science majors were employed in STEM.

These numbers are shocking. It speaks volumes about the state of education when half (or more) of STEM graduates aren’t even employed in fields relating to their studies.

The EPI report tends to focus on the relevance of these findings to guest worker programs and other immigration issues. The tech industry has long suggested that it cannot find STEM workers in America and therefore needs immigration changes that will enable it to bring in more workers from abroad. Skeptics have rebuffed that the tech industry really is just interested in cheaper STEM labor and that its proclamations about a dearth of STEM-qualified domestic workers is just a convenient cover story. This report provides ammunition to the latter camp to say the least.

It’s a long repeated myth that the United States (and Canada too) cannot find qualified STEM people. Strange, as there are so many of them coming out of schools. But the real issue seems to be finding “cheaper” workers.

Contrary to its report and public statements, Microsoft (and other employers in STEM fields) already have plenty of avenues to hire and retain new foreign graduates to work in STEM occupations. Recent research suggesting that the most highly educated graduates in STEM fields are in fact remaining in the United States for the long term supports this conclusion. Keeping the best and brightest foreign STEM workers in the United States to fill labor shortages in STEM occupations should be a national priority, but recent data show that no significant labor shortages exist, and suggest that an adequate number of foreign graduates in STEM fields are already remaining in the United States to fill the limited job openings available in the stagnating U.S. labor market.

The EPI study claims there is no shortage of tech workers available, and that rather this is a manufactured crisis used to bring in even more people. Why? To drive down wages. U.S. workers will often be willing to work for less if they know it’s easy to replace them. And if need be, just replace them anyway.

5. “Temporary” Workers Depressing Wages

What appears to be a neat match between excess labor supply in some countries and unfulfilled demand in others is often messy in practice. Economics teaches that there are often alternative ways of producing goods and services, so that recruiting and hiring migrant workers is only one option available to firms and employers. The alternatives may include making jobs more attractive to local workers, using labor-saving mechanization, or increasing imports. Employers who approach governments for permission to hire migrant workers have usually decided that employing migrant workers is their best or least expensive option, and the question for governments is whether to permit employers to hire migrants and to determine how to regulate the movement and employment of migrant workers.

The major policy question for governments weighing claims of labor shortages is whether they should allow naturally occurring wage changes to balance labor supply and demand when employers complain of labor shortages, or whether they should use migration policy to admit new workers into the country to address shortages. And if governments decide to admit new migrant workers, the next question that arises is what the terms and conditions of their admission should be. For example, should new migrant workers be admitted as permanent immigrants with freedom in the labor market or as temporary workers who are tied to a particular employer? In recent decades, many governments have chosen the latter, leading to a proliferation of TLMPs.

Many countries have youth exchange programs to facilitate cultural exchanges and promote development in poorer countries (Table 1, row 4). Japan allows employers to hire trainees who work and learn for several years, while the J-1 visa program in the United States allows exchange visitors to work while learning about the United States and traveling, for a few months to a few years, depending on the program. Australia has a Working Holiday Maker program that allows youth from many countries to work to earn money to cover the cost of their vacation in the country. While these are not standard TLMPs, they are included in Table 1 because some of these programs have been criticized as operating mainly as employment rather than cultural exchange programs and, as a sort of “TLMP in disguise,” offering few protections for local workers and fewer protections and benefits for migrants than traditional TLMPs (Costa 2011; Stewart 2015; Osumi 2018).

Other rationales for TLMPs include allowing multinational corporations and firms to move employees between offices and subsidiary companies in different countries. These mobile workers include intra-company or intra-corporate transferees (ICTs), and “posted” workers, who are workers employed by a company in one country who are sent or posted to work in another. As with other programs not linked explicitly to labor shortages, governments usually allow multinational corporations to move managers and workers with specialized skills from one country to another with minimum bureaucracy. However, abuses have arisen, and some employers wind up using ICTs and posted workers as low-cost guest workers because the programs sometimes lack prevailing wage rules, or the ICT or posted-worker wages are exempt from all or some payroll taxes (Avalos 2014; Flinders 2011).

I would disagree with this report in one area: the notion that these are temporary workers. The reality is that people are staying longer and longer, and many transitioning into permanent residents. So the temporary label is somewhat misleading.

In Canada, the Temporary Foreign Worker was loudly criticized for replacing Canadians with cheap foreign labour. The response was to split up the TFWP, and to boost the International Mobility Program (which was basically an open work permit). This was a cosmetic solution that didn’t address the real problem.

EPI points out that a lot of these temporary positions pay less and have less job security. That is true. The response will be to enshrine ever more rights on these “temporary” workers. EPI is also correct that a lot of the support behind increasing these programs is the cheaper labour that results from it.

6. Remittances Sent Abroad

This was covered in a previous article, but what about the money that gets sent overseas by “temporary” workers in this country? It is billions every year.

Aside from welfare cases (which is another story), yes the wages were fairly earned. But it is disingenuous to exclude this fact from the debate. Economic immigration leads to money being sent outside the country.

7. Free Trade, Soaring Trade Deficits

The rapidly growing U.S. trade deficit with China is directly linked to the growth of multinational firms operating in China. Of China’s more than $200 billion in exports in 1998, over 40% had their source in multinational firms operating in China (Ministry of Foreign Trade and Economic Cooperation 2000).

• The activities of U.S. multinational firms, together with China’s protectionist trade policies, have had a significant role in increasing the U.S. trade deficit with China. A 10% increase in the level of U.S. direct investment in an industry in China is associated with a 7.3% increase in the volume of U.S. imports from China and a 2.1% decline in U.S. exports to China in that industry. • Supporters of China’s WTO and PNTR agenda typically assert that jobs lost to China trade threaten only low-skill, low-wage jobs in the United States, while expanded exports to China will create high-wage U.S. jobs. However, the changing composition of imports from China over the last 10 years has led increasingly to job losses among higher-wage and more-skilled U.S. manufacturing workers. Although in 1989 only 30% of imports from China competed against goods produced by high-wage industries in the U.S. market, by 1999 that percentage had risen to 50%. [2] To make matters worse, although U.S. workers are five times as productive as their Chinese counterparts, average compensation in the United States is at least 10 and maybe even 20 times larger than that paid by U.S. multinationals to Chinese workers. Thus, U.S. workers will be unable to compete with the much cheaper labor in China despite their higher levels of productivity. U.S. firms build export-oriented production base in China

Trade between the U.S. and China is not a level playing field, to put it mildly. Hypocritically, China relies on its own protectionist measures while doing what it can to secure access to U.S. markets. And because many of the U.S. corporate leaders put profit over well being of their people, they are quite happy to outsource U.S. to China. Products get made cheaper, but American workers pay with their jobs and livelihoods. Of course, this is not limited to one country. NAFTA caused the same problems.

In addition to the lost jobs, this creates a huge trade deficit, where hundreds of billions of dollars leave the U.S. annually. Certainly there will always be some surpluses and deficits in trading internationally. But it can’t be so one sided as it is simply unsustainable.

8. Free Trade Driving Down Wages

A standard model estimating the impact of trade on American wages indicates that growing trade with less-developed countries lowered wages in 2011 by 5.5 percent—or by roughly $1,800—for a full-time, full-year worker earning the average wage for workers without a four-year college degree. One-third of this total effect is due to growing trade with just China.

Trade with low-wage countries can explain roughly a third of the overall rise since 1979 in the wage premium earned by workers with at least a four-year college degree relative to those without one. However, trade with low-wage countries explains more than 90 percent of the rise in this premium since 1995.

For full-time wage earners without a college degree, annual earnings losses due to trade with low-wage nations are larger than income losses under a hypothetical policy that permanently extends the Bush-era tax cuts by making across-the-board cuts to government transfer payments such as Social Security, Medicare, Medicaid, and unemployment insurance.

Free trade has hurt the middle class more than anyone else. Manufacturing was a booming industry that people — mainly men — could earn a decent living even without higher education. However, profit driven corporations have outsourced more and more of that manufacturing, leaving those worker to fight for lower paying jobs.

The topic of wage stagnation has also been covered by Pew Research. If wages stay the same, or decrease, but inflation remains, then real buying power decreases.

Serious question: how much will it help these companies in the end when no one can afford to buy their products?

9. Free Trade Removes Bargaining Power

The textbook analysis of the effects of trade on wage suppression discussed earlier assume that these effects run through trade flows that shift the relative demand for different types of labor. But trade’s effects on wages could run through other channels as well. After all, in the real world, wages are not set in perfectly competitive labor markets solely through shifts in demand and supply curves. Rather, the relative bargaining power of employers and employees matters greatly for wage-setting, and the threat effects of growing globalization surely hamstring this bargaining power for many American workers. In previous eras, the only fallback position for employers in the face of a breakdown in wage bargaining was to stop production. Now employers have the option of setting up production facilities abroad. This improved fallback position boosts employers’ bargaining power vis-à-vis their American employees, and this can lead to substantial downward pressure on wages.

As is always the case, measuring bargaining power at all, let alone its ebb and fall, is difficult, so the precise empirical impact of this channel of globalization’s wage-suppressing effects is hard to gauge. But there is growing evidence that these effects could be significant. Bertrand (2004), for example, shows that import competition tears down the protection that incumbent workers’ wages have traditionally enjoyed against rising unemployment. Senses (2007) finds that offshoring is associated with greater elasticity of labor demand—implying that wage gains will cut more sharply into employment gains. Bivens (2006) finds evidence that industry-level rent-sharing is eroded by growing import shares. Jayadev (2007) finds capital account openness associated with a shift from labor to capital income shares across countries, and attributes this finding to the bargaining channel. Anderson, Tang, and Wood (2006) construct a model of globalization eroding American workers’ privileged access to institutional and human capital and lowering wages through this channel. They find empirically that greater ease of movement of high-credential, high-skill managers leads to wage declines for American labor, supporting the predictions of their model.

To clarify, this article faults both the mass migration policies and free trade policies in creating these problems. In both cases, it becomes a race to the bottom. Either we import a replacement workforce here, or we export the work to the foreign labour force. The result is much the same.

It is also pointed out that collective bargaining and other rights get eroded once the option to replace the workforce becomes practical. So much for looking after your own.

10. Tariffs V.S. Currency Manipulation

According to Scott, Trump’s proposals fail to effectively address currency manipulation, the single largest cause of manufacturing job loss over the past 20 years. While Trump cites currency manipulation as a major problem, Scott argues, his strategy for dealing with it—calling for higher tariffs on imports from currency manipulators and promising to negotiate “better” trade deals—doesn’t reflect an analytical understanding of how currency manipulation works and what to do about it.

“Trump could not, as pledged, bring back American manufacturing jobs by negotiating ‘great trade deals’ because he doesn’t understand why globalization and trade and investment deals have hurt U.S. workers,” said Scott.

Trump’s plan to deal with currency manipulation by imposing tariffs would make other countries’ goods more expensive in the United States but do nothing to make U.S. goods less expensive in those countries. Scott recommends that the Fed conduct countervailing currency intervention (CCI) by buying up large amounts of foreign assets denominated in the currencies of the surplus countries, and impose a “market access charge,” a tax or fee on all capital inflows that would reduce the demand for dollar-denominated assets and hence the value of the currency.

It’s nice to see currency manipulation being addressed. Of course, if one or more parties plays games with their currency, they can in effect create products dirt cheap. They won’t have to worry about massive imports, since other nations won’t be able to undercut their manipulated prices.

Trump seems to have a fight-fire-with-fire mentality, but it doesn’t really work when others are not willing to act in good faith.

11. Free Trade Wrecks Communities

The growth of the U.S. trade deficit with China between 2001 and 2017 was responsible for the loss of 3.4 million U.S. jobs, including 1.3 million jobs lost since 2008 (the first full year of the Great Recession, which technically began at the end of 2007). Nearly three-fourths (74.4 percent) of the jobs lost between 2001 and 2017 were in manufacturing (2.5 million manufacturing jobs lost).

The growing trade deficit with China has cost jobs in all 50 states and in every congressional district in the United States. The 10 hardest-hit states, when looking at job loss as a share of total state employment, were New Hampshire, Oregon, California, Minnesota, North Carolina, Rhode Island, Massachusetts, Vermont, Wisconsin, and Texas. Job losses in these states ranged from 2.57 percent (in Texas) to 3.55 percent (in New Hampshire) of total state employment. The five hardest-hit states based on total jobs lost were California (562,500 jobs lost), Texas (314,000), New York (183,500), Illinois (148,200), and Pennsylvania (136,100).

The trade deficit in the computer and electronic parts industry grew the most: 1,209,000 jobs were lost in that industry, accounting for 36.0 percent of the 2001–2017 total jobs lost. Not surprisingly, the hardest-hit congressional districts (those ranking in the top 20 districts in terms of jobs lost as a share of all jobs in the district) included districts in Arizona, California, Illinois, Massachusetts, Minnesota, New York, Oregon, and Texas, where jobs in that industry are concentrated. A district in Georgia and another in North Carolina were also especially hard hit by trade-related job displacement in a variety of manufacturing industries, including computer and electronic parts, textiles and apparel, and furniture.

Between 2001 and 2011 alone, growing trade deficits with China reduced the incomes of directly impacted workers by $37 billion per year, and in 2011 alone, growing competition with imports from China and other low wage-countries reduced the wages of all U.S. non–college graduates by a total of $180 billion. Most of that income was redistributed to corporations in the form of higher profits and to workers with college degrees at the very top of the income distribution through higher wages.

Trade with China has caused an estimated 3.4 million jobs to be lost from 2001 to 2017. These job losses have hit every state, and every community.

Directly impacted workers lost $37 billion in wages, and non-college graduates $180 billion overall. How is this at all desirable, or even sustainable to keep driving down wages and incomes? How is outsourcing many of the better paying jobs good for the host country?

Again, it doesn’t matter how cheaply China (or other 3rd world nations) can build their products. If no one can afford to buy them, then they won’t sell.

12. Loss Of Sovereignty

This has been addressed in other posts, but nearly all free trade deals contain a “National Treatment” Clause. In plain English, these clauses prohibit nations from taking any measures to protect jobs or industries. Canada has ben successfully sued for doing so in the past.

See Article 9.4 in the Trans-Pacific Partnership, or Chapter 11 in NAFTA.

13. How Does This Benefit Us?

In short, it doesn’t.

Allowing large numbers of people into the country, causing extra demand for work and driving down wages doesn’t help. And we haven’t even gotten into cultural compatibility. Nor the money removed from the economy when vast sums of remittances are sent abroad.

Nor does outsourcing our industries and jobs to the 3rd World help us. Sure, products get made cheaper, but these offshoring kills people’s livelihoods. And what good is all of the formal education received if the jobs that should have resulted are sent away?

Mass economic migration and free trade are two sides of the same coin. The effects are much the same. But you won’t hear conservatives or libertarians talk about this. Ironically, more left leaning political parties are inclined to address such topics.

Globalism (and globalization) kill societies.

Job Outsourcing As A Profession, Stagnant Wages, Mass Migration

(the Business Development Bank of Canada on outsourcing)
<center

(Deloitte’s Global Outsourcing Survey)

(The Privacy Commissioner of Canada)

(the International Chamber of Commerce)

(Pew Research on wage stagnation)

(Conservative Party of Canada’s specific policies are to turn “temporary” workers into permanent residents wherever possible)

1. Offshoring, Globalization, Free Trade

The other posts on outsourcing/offshoring are available here. It focuses on the hidden costs and trade offs society as a whole has to make. Contrary to what many politicians and figures in the media claim, there are always costs to these kinds of agreement. These include: (a) job losses; (b) wages being driven down; (c) undercutting of local companies; (d) legal action by foreign entities; (e) industries being outsourced; and (f) losses to communities when major employers leave. Don’t believe the lies that these agreements are overwhelmingly beneficial to all.

2. Important Links

(1) https://canucklaw.ca/remittances-the-hidden-cost-of-economic-immigration/
(2) https://www2.deloitte.com/content/dam/Deloitte/nl/Documents/operations/deloitte-nl-s&o-global-outsourcing-survey.pdf
(3) https://www.forbes.com/sites/deeppatel/2017/07/17/the-pros-and-cons-of-outsourcing-and-the-effect-on-company-culture/#25179527562d
(4) https://codeable.io/top-companies-outsourced-development/
(5) https://sidebysidereviews.com/hr-outsourcing-review/
(6) https://www.bdc.ca/en/articles-tools/operations/operational-efficiency/pages/outsourcing-pros-cons.aspx
(7) https://www.cbc.ca/news/business/cibc-outsourcing-jobs-india-1.4045759
(8) https://www.priv.gc.ca/en/privacy-topics/employers-and-employees/outsourcing/02_05_d_57_os_01/
(9) https://iccwbo.org/media-wall/news-speeches/icc-releases-global-outsourcing-guide/
(10) https://www.chamberofcommerce.org/best-human-resources-outsourcing-companies
(11)https://www.epi.org/publication/charting-wage-stagnation/
(12) https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/

3. Context For Anti-Free Trade Take

So-called “Conservatives” and “Libertarians” trumpet the values of free trade, or economic liberty. They claim that removing barriers to trade and employment will result in the enrichment of society as a whole.

Worth noting that these same groups support massive immigration from the 3rd world. The fraudulently titled “Temporary Foreign Worker Program” is a great example. It forces Canadians to compete for jobs against imported, foreign (often subsidized) competition. This hurts workers who struggle to find work which will pay a living wage. Now, we all know the vast majority of these “temps” will never leave, though that has been addressed in other articles.

Corporatists and business leaders support both: (a) free trade; and (b) mass economic migration. This allows companies to get people to work for less, and to outsource jobs much more easily. But while these are profitable, there is little to no societal benefit.

4. Stagnant, Even Declining Wages

A quote from the left leaning Economic Policy Institute. This covers the main causes of wage stagnation. Although written in the U.S, Canada is experiencing the same issues. We should take note of this:

This paper provides a brief overview of some of the causes of wage stagnation and inequality. Sources in the references section provide a more complete analysis. Excessive unemployment, not only during and after the Great Recession but over most years since 1979, has suppressed wage growth, adversely affecting low-wage workers more than middle-wage workers but having little impact on high-wage workers. Global integration with low-wage countries, accelerated by particular trade policies (e.g., admission of China to the World Trade Organization in the late 1990s) has adversely affected wages of non–college educated workers. The erosion of labor standards (beyond the decline in the real value of the minimum wage) and weak enforcement have also put downward pressure on wages. Extensive wage theft, worker misclassification, weakened prevailing wage laws and overtime protections, and the failure to modernize our labor standards to provide sick leave, family leave, or minimum vacation schedules all hurt wage growth. The increased presence of undocumented workers who are vulnerable to employer exploitation also undercuts not only the wages of these workers but also those in similar fields.

A lot of reasons wages in the U.S. are stagnant. Two big reasons are: increased (often illegal) immigration; and trade policies which outsource jobs to nations with a lower standard of living.

Take this message away: “More” people are now competing for “less” jobs. From a supply-and-demand perspective, it can’t help but push down wages. Pew Research has studied this trend, and concluded it to be a real issue.

5. Connecting: Outsourcing Jobs, Wages, Economic Migration

Mass (economic) migration and outsourcing jobs a.k.a. “free trade”, actually end up serving the same goal, which is to displace workers in their home countries.

How so? Outsourcing high-paying jobs to the third world drives down the SUPPLY of work that is available to Canadians (and to others in 1st World countries). Importing large numbers of cheap foreign workers has the effect of driving up the DEMAND for what jobs remain. The public gets screwed at both ends.

Far more workers available, competing for far fewer jobs. It becomes an employer’s market, where workers are forced to compete based off on who can live off of less. As a result, the real purchasing power of wages has declined over the years.

True, there are factors besides increased immigration and outsourcing jobs. However, they are two big ones, and the impacts cannot be ignored.

6. Lack Of Privacy Safeguards In Outsourcing

There is nothing in PIPEDA that prevents organizations from outsourcing the processing of data. However, regardless of where information is being processed—whether in Canada or in a foreign country—organizations subject to PIPEDA must take all reasonable steps to protect that information from unauthorized uses and disclosures while it is in the hands of the third-party processor.

Organizations must also be satisfied that the third party has policies and processes in place, including training for its staff and effective security measures, to ensure that the information in its care is properly safeguarded at all times.

Organizations need to make it plain to individuals that their information may be processed in a foreign country and that it may be accessible to law enforcement and national security authorities of that jurisdiction. They must do this in clear and understandable language. Ideally they should do it at the time the information is collected. Once an informed individual has chosen to do business with a particular company, they do not have an additional right to refuse to have their information transferred.

When personal information is in the hands of a third-party service provider operating on foreign soil, it is subject to the laws of that country and no contract can override that. This could mean, for instance, that the organization may be obliged to respond to a subpoena or other mechanism that would give law enforcement officials access to personal information.

To be fair, it is acknowledged that the Privacy Act came into effect 30 years ago, and couldn’t possibly have taken this information age into account.

But think about this for a moment. If you are an employee, your information may still be shared and viewed on foreign lands by third parties. This can happen even if your job has not been outsourced. Potentially, this can happen if any major part of the business has been outsourced.

This is not limited to employees either. Customers or clients can have their personal information used in ways that would violate privacy in Canada, just as long as it takes place in another country. Seems to be an end run around real privacy.

7. Business Development Bank of Canada On Outsourcing

Here are some advantages of outsourcing
.
Financial benefits
-Clean up your balance sheet by eliminating assets, and have a more stable cash flow
-Strategic optimization—Think about your company’s core mission and whether it is relevant to continue certain operations
-Better management of the outsourced activity—In theory, you can choose a supplier that is a leader in the field
-Market discipline—You can align your costs with those of suppliers in the field
-Technology—In theory, you gain access to state-of-the-art technologies
Flexibility—The resources no longer used in one area can be redirected to the company’s core operations
.
Here are some risks of outsourcing
-Loss of expertise—You lose know-how and skills that may prove critical to your long-term competitiveness. –Information from suppliers helps in new product development.
-Dependence on the supplier—If you resume carrying out the outsourced activity yourself, it can take years to reach the level of performance you used to enjoy. But if the supplier’s service deteriorates, or if their price rises, you may want to take back the activity.
-Loss of control over costs—Improved production facilities may generate larger gains than outsourcing. Look at internal solutions before considering external solutions.
.
Here are some reasons not to outsource a production facility
-You have highly qualified employees
-You need contact with suppliers and customers
-Research and development is done in the plant
-Production operations are properly focused
-You have control over production costs
.
Here are some lessons on outsourcing
-Look for compatible goals
-Focus on the best solution, not the lowest price
-Use a very detailed contract and up-to-date legal experts
-Share risks
-Involve key players
-Document the transition phase
-Communicate clearly from the beginning

Notice the link never talks about the social costs of outsourcing jobs. People are hurt by mass layoffs. In no way does this advocate for communism or socialism, but there is a real impact to be taken into account when jobs are sent out of country. Not just the workers themselves, but families — especially children — are impacted by this.

There is no mention, or even implication that a company owes any sense of duty or loyalty to employees. This applies not only to newer employees, but to longer term ones. People who may have contributed greatly to an organization are clearly expendable in this mindset.

This is short sighted for another reason. If good paying jobs leave the community en masse, then who exactly is going to buy your products? You need a job, and an income, to buy things.

Furthermore, the same people pushing for outsourcing to lower costs are often the same ones who advocate for mass migration to fill jobs. Why the contradiction? Because it is about creating a larger pool of cheap labour.

8. Forbes: Outsourcing & Company Culture

3. Lower Labor Cost
Did you know there are approximately 300,000 jobs outsourced by the United States each year?
Every company has its own reason for doing this, with many chasing lower labor costs
. You don’t want to trade quality for price, but outsourcing often allows you to get the best of both worlds. By searching a global talent pool, it’s easier to find the right talent at the right price.

This Forbes article from 2016, is more balanced in its approach that the last one. This author is blunt about it: outsourcing is mainly done in order to cut production costs.

A positive work culture leads to a higher level of productivity, so you don’t want to do anything to jeopardize this. Some of the ways outsourcing can negatively affect company culture include:
• Upset employees as they may feel they are being replaced

Here, a major downside is admitted: employees may feel like they’re being replaced. However, we don’t need the words “may feel”, because they are being replaced by outsourcing. There’s nothing ambiguous about it.

9. CBC And Outsourcing At Banks

As part of the transition, staff losing their positions must train other local CIBC employees. Those employees then train the workers in India who will be taking over the jobs.

Although they aren’t directly training their replacements, the situation isn’t sitting well with some affected staff who spoke with CBC News. They asked that their identity be protected because they fear repercussion from CIBC — one of Canada’s largest banks.

“It’s very, well, depressing,” said one employee about having to pass on his work knowledge so that someone in another country can replace him.

“A lot of people would have rather just been let go immediately than to sort of, if you will, suffer [through this].”

“It feels like no one cares for us,” said another employee. “The environment is really bad. People are bitter.”

A surprisingly good article from the CBC outlines outsourcing at CIBC. To add insult to injury, the workers being let go are forced to train their replacements as a last act. In fairness, RBC pulled a similar stunt, and was also publicly ridiculed.

While these banks outsourcing jobs caught a lot of public attention, there are many such actions that do not. As such, the public likely has no idea of how prevalent this issue is, or how many industries it threatens to hit.

10. There Is Always A Cost

Globalist Conservatives and Libertarians love to trumpet the free market, and the potential for economic growth. Yet they never discuss the downsides of these ideals.

They never talk about economic immigration drives up the number of workers in a country, forcing competition against actual citizens. Two such programs are the Temporary Foreign Worker Program, and the International Mobility Program. Students can also work up to 20 hours/week while in school. With more workers, wages don’t rise to keep up with inflation, as there are now more workers to help depress them.

All of these “temps” can usually apply to become permanent residents. This not only solidifies the imbalance, but imports other cultures into Canada. However, this has been addressed elsewhere.

They never talk about how “free trade” policies lead to the outsourcing of jobs, eliminating work opportunities in the host countries. Examples are NAFTA, the Tran-Pacific Partnership, and the proposed CANZUK. Sure, there will be some jobs coming back, though they are likely lower paid, and for less hours.

Who exactly is going to be buying your manufactured goods, if people are losing jobs? Or how will they afford them if the jobs don’t pay enough? How do communities benefit from exporting their employment opportunities?

There is always something else to consider.

Why Trump Left The Trans-Pacific Partnership

(Straight from the source)

(Trump: T.P.P. is “rape” of our country)

(Trump says T.P.P. would have to be much better)

(Video from Brookings Creative Lab, omits key details)

(Government link for TPP, now referred to as CPTPP)

(Canada’s Bill C-79, October 2018)

1. Offshoring, Globalization, Free Trade

The other posts on outsourcing/offshoring are available here. It focuses on the hidden costs and trade offs society as a whole has to make. Contrary to what many politicians and figures in the media claim, there are always costs to these kinds of agreement. These include: (a) job losses; (b) wages being driven down; (c) undercutting of local companies; (d) legal action by foreign entities; (e) industries being outsourced; and (f) losses to communities when major employers leave. Don’t believe the lies that these agreements are overwhelmingly beneficial to all.

2. Important Links

(1) https://www.parl.ca/LegisInfo/BillDetails.aspx?Language=E&billId=9970461&View=5
(2) https://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/cptpp-ptpgp/index.aspx?lang=eng
(3) https://www.forbes.com/sites/peterpham/2017/12/29/why-did-donald-trump-kill-this-big-free-trade-deal/#28d62e0b4e62
(4) https://www.brookings.edu/blog/unpacked/2017/03/24/trump-withdrawing-from-the-trans-pacific-partnership/
(5) https://www.nbcnews.com/business/economy/why-trump-killed-tpp-why-it-matters-you-n710781
(6) https://www.businessinsider.com/heres-why-trump-hates-the-trans-pacific-partnership-so-much-2016-11
(7) https://www.reuters.com/article/us-usa-trump-business-idUSKBN1571FD

3. Media Reviews On T.P.P. Withdrawal

President Trump believes otherwise. Throughout his election campaign, he referred to the TPP as a “horrible deal”, and would withdraw the U.S. from it when elected. When he became president, getting the U.S. out of the TPP was one Trump’s first acts, since he believed that it steals American jobs while benefiting large corporations.

Trump wasn’t entirely wrong. Companies from developed countries that signed up to the deal, such as Japan and the United States, would have outsourced to developing countries that have low-cost labor and fewer labor laws, such as Vietnam. In which case, unemployment in developed countries could have risen.

The Forbes article very bluntly points out that Donald Trump viewed TPP not as an opportunity, but as a threat to American jobs and American prosperity. While corporate heads would have gained from the treaty, those gains would not be shared with the U.S. public. The following NBC article, goes on to explain further.

As divisive as that language sounds, whoever got into the White House was likely to ditch the TPP. Hillary Clinton, adopting a progressive issue from Bernie Sanders, also came out against the deal during her run, saying in August, “I will stop any trade deal that kills jobs or holds down wages, including the Trans-Pacific Partnership. I oppose it now, I’ll oppose it after the election and I’ll oppose it as president.”

The idea was that if everyone brought down taxes on exported goods, U.S. companies would pay less for imports — while benefiting from cheaper labor overseas.

“Companies love free trade,” said Velshi. “Companies get to share profits with shareholders, the government gets the taxes, but workers don’t get their fair share.”

The article is extremely critical of free trade agreements, such as T.P.P. In short, jobs can and are outsourced to the 3rd world because it is so much cheaper. In turn, workers on the developed world are forced to accept much lower standards of living in order to compete.

Other media reports much the same content. Overall, Donald Trump believes that T.P.P. would be incredibly harmful to America as a whole.

In a Reuters article, Trump laid it out very plainly what he thinks of exploitive trade agreements:

“A company that wants to fire all of its people in the United States, and build some factory someplace else, and then thinks that that product is going to just flow across the border into the United States – that’s not going to happen,” he said.

Is this an attack on international trade as a whole? No. It is a rejection of lopsided treaties which one side benefits greatly at the expense of another. It is not a rejection of trade agreements which are MUTUALLY beneficial.

4. “National Treatment” Clause Returns

The so-called “national treatment” provisions were a very harmful part of NAFTA, which was signed in 1995. It allowed governments and companies to sue other governments if their business plans or environmental laws were considered unprofitable. From Chapter 11 of NAFTA.

Article 1102: National Treatment
1. Each Party shall accord to investors of another Party treatment no less favorable than that it accords, in like circumstances, to its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments.
2. Each Party shall accord to investments of investors of another Party treatment no less favorable than that it accords, in like circumstances, to investments of its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments.
3. The treatment accorded by a Party under paragraphs 1 and 2 means, with respect to a state or province, treatment no less favorable than the most favorable treatment accorded, in like circumstances, by that state or province to investors, and to investments of investors, of the Party of which it forms a part.
4. For greater certainty, no Party may:
(a) impose on an investor of another Party a requirement that a minimum level of equity in an enterprise in the territory of the Party be held by its nationals, other than nominal qualifying shares for directors or incorporators of corporations; or
(b) require an investor of another Party, by reason of its nationality, to sell or otherwise dispose of an investment in the territory of the Party.

This clause has caused all sorts of headaches in the name of “free trade”. (See Free Trade #2 for more details). No longer are there countries, but merely “economic zones”.

Now take a look at the Trans-Pacific Partnership.

Article 9.4: National Treatment
1. Each Party shall accord to investors of another Party treatment no less favourable than that it accords, in like circumstances, to its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory.
2. Each Party shall accord to covered investments treatment no less favourable than that it accords, in like circumstances, to investments in its territory of its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments.
3. For greater certainty, the treatment to be accorded by a Party under paragraphs 1 and 2 means, with respect to a regional level of government, treatment no less favourable than the most favourable treatment accorded, in like circumstances, by that regional level of government to investors, and to investments of investors, of the Party of which it forms a part.

Look familiar? It should. It is virtually the identical language that formed the basis of lawsuits (many successful), in Canada. Being a part of this agreement means signing away a good deal of your sovereignty.

5. Impact Of Previous “Free Trade” Deals

The Economic Policy Institute, a think-tank in Washington, releases reports and findings related to trade and commerce. Here are some of the their more interesting reports.

claims that trade with China has grown the bilateral trade deficit between 2001 and 2017 cost 3.4 million U.S. jobs, with losses in every state and congressional district. Keep in mind this wasn’t really free trade, but liberal trade.

This one claimed in 2003 that NAFTA had led to a net loss of 879,000 jobs in the United States, with most of them going to Mexico, where wages are much lower.

This one outlines the growing trade deficit with Canada and Mexico under NAFTA. While some deficit or surplus is to be expected in trade, it should never be one sided.

This one is another report about the mounting job losses as work continues to be outsourced, hurting American families.

This one outlined many harmful effects of free trade policies. One particularly rough one was forcing workers to accept much lower pay in order to keep their jobs. These trade policies bring cheap foreign labour into the equation as new competitors, and have the effect of driving down wages.

There are many other articles on these topics, but the 5 provided here should be enlightening on the dark side of putting profit over societies.

6. Currency Manipulation In “Free Trade”

Donald Trump has repeatedly called out the practice of currency manipulation, particularly with China. By manipulating the currency, nations can sell goods at what amounts to a much lower price.

First, a bit of background. The Chinese currency, called the renminbi, is what’s known as a policy currency. That means that unlike the U.S. dollar, which rises and falls in value in free market trading, the currency’s value against the dollar is set by the People’s Bank of China, an arm of the Chinese government.

While the PBOC has gradually tried to make the value of the renminbi more reflective of market forces, setting trading bands in which the renminbi is allowed to fluctuate every day, in the last analysis it is still under government control. Put another way, the value of the renminbi is manipulated by the government and always has been. It’s just that when Beijing was manipulating the value so that the renminbi appreciated against the dollar in the last few years, nobody in Washington complained.

When the Chinese Government manipulates its currency, it does so in order to artificially cheapen the costs of its products, and to gain an advantage over competitors.

In a “free market” world, this sort of thing should never be allowed.

It’s not free trade if all the nations involved aren’t playing by the same rules. It causes resentment and reduces goodwill.

7. Populism Is Protecting Your People

Leaders should protect the employment prospects of their citizens. The livelihood of the nation depends on there being opportunities for people to work and create lives for themselves. Countries should not be signing one-sided agreements which benefits others exclusively to the detriment of themselves.

So-called economic libertarianism promotes free trade throughout the world. This is sold as economic freedom, but it glosses over the hard truths involved. Outsourcing the employment of your nation is just corporate globalism. There is nothing populist or nationalist about throwing your people out of work en masse.

Perhaps Tucker Carlson lays it out the best. He uses the example of automated truck driving putting millions of drivers out of work.

Donald Trump’s pledge to pull the U.S. out of the Trans-Pacific Partnership was the right decision for the American public. He promised to bring jobs back to the country and create opportunities at home, and that was extremely popular.

In fairness, he has dangled the possibility of rejoining at some point, though the terms would have to be much better.

The Trans-Pacific Partnership, Bill C-79

(Government link for TPP, now referred to as CPTPP)

(Canada’s Bill C-79, October 2018)

1. Offshoring, Globalization, Free Trade

The other posts on outsourcing/offshoring are available here. It focuses on the hidden costs and trade offs society as a whole has to make. Contrary to what many politicians and figures in the media claim, there are always costs to these kinds of agreement. These include: (a) job losses; (b) wages being driven down; (c) undercutting of local companies; (d) legal action by foreign entities; (e) industries being outsourced; and (f) losses to communities when major employers leave. Don’t believe the lies that these agreements are overwhelmingly beneficial to all.

2. Important Links

(1) ttps://www.parl.ca/LegisInfo/BillDetails.aspx?Language=E&billId=9970461&View=5
(2) https://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/cptpp-ptpgp/index.aspx?lang=eng
(3) https://www.epi.org/publication/the-china-toll-deepens-growth-in-the-bilateral-trade-deficit-between-2001-and-2017-cost-3-4-million-u-s-jobs-with-losses-in-every-state-and-congressional-district/
(4) https://www.epi.org/publication/webfeatures_snapshots_archive_12102003/
(5) https://www.epi.org/blog/naftas-impact-workers/
(6) https://www.epi.org/publication/webfeatures_snapshots_archive_11052003/

Note: After the US withdrew from the agreement, it was renamed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

3. Trading Partner Brunei, Stoning Gays

On a side note, Brunei, a small nation governed by Islamic law, announced it would stone gays to death in accordance with religious law. It seems extremely hypocritical for the virtue-signaling Prime Minister Trudeau to have such a trading partner. However, under public pressure, Brunei has apparently backed down from the measure.

4. Portions Of Bill C-79

Causes of action under sections 9 to 13
.
8 (1) No person has any cause of action and no proceedings of any kind are to be taken, without the consent of the Attorney General of Canada, to enforce or determine any right or obligation that is claimed or arises solely under or by virtue of sections 9 to 13 or an order made under those sections.

Causes of action under Agreement
.
(2) No person has any cause of action and no proceedings of any kind are to be taken, without the consent of the Attorney General of Canada, to enforce or determine any right or obligation that is claimed or arises solely under or by virtue of the Agreement.
.
Exception
.
(3) Subsection (2) does not apply with respect to causes of action arising out of, and proceedings taken under, Section B of Chapter 9 or Article 11.‍22 of the TPP.

Right away is a red flag. If you are a private party, there may be instances where litigation is required to protect your interests (from unfair trade practices perhaps). However, the wording makes it clear that legal action is not possible here unless the Attorney General signs off on it.

As for the exceptions, Chapter 9, Section B refers to disputes among investors, and encourages the parties to resolve the problems themselves. Article 11.22 outlines dispute mechanisms for financial services.

Payment of expenditures
.
12 The Government of Canada is to pay its appropriate share of the aggregate of
(a) any expenditures incurred by or on behalf of the Commission,
(b) the general expenses incurred by the committees, working groups and other bodies established under the Agreement and the remuneration and expenses payable to representatives on the Commission and those committees and to members of those working groups and other bodies, and
(c) the expenses incurred by panels and arbitration tribunals established under the Agreement and the remuneration and expenses payable to the panellists on those panels, to arbitrators and to any experts retained by those panels or arbitration tribunals.

Not only will Canada be forced to pay its “share” for Commission expenses, but will in effect pay to set up an alternative quasi-judicial system. Not only will Canada have to pay for that, but legal and expert expenses, and any judgements awarded against.

Orders — Article 28.‍20 of TPP
.
13 (1) The Governor in Council may, for the purpose of suspending benefits in accordance with Article 28.‍20 of the TPP, by order, do any of the following:
(a) suspend rights or privileges granted by Canada to another party to the Agreement or to goods, service suppliers, investors or investments of investors of that party under the Agreement or any federal law;
(b) modify or suspend the application of any federal law, with respect to a party to the Agreement other than Canada or to goods, service suppliers, investors or investments of investors of that party;
(c) extend the application of any federal law to a party to the Agreement other than Canada or to goods, service suppliers, investors or investments of investors of that party; or
(d) take any other measure that the Governor in Council considers necessary.

The Governor in Council can apparently:

  • Suspend rights or privileges
  • modify or suspend application of Federal law
  • extend Federal law to others not previously included
  • Do anything else deemed necessary

Without clarification or at least guidance of the topic, this is extremely vague. Worse, is the Governor in Council can make these changes without requiring consent of the public.

Most of the rest of the Bill goes into detail about how tariffs on many different items will be reduced to zero.

However, like with most free trade agreements, Bill C-79 does not address an important topic: protection of jobs for people at home. That will be addressed later.

5. Sections Of CPTPP Text

While the agreement is very long, let’s look mainly at Article 9, as it has some of the more unsettling information in it. To be blunt, it removes nations’ abilities to protect their people from foreign competition. The downside to free trade.

Article 9.4: National Treatment
1. Each Party shall accord to investors of another Party treatment no less favourable than that it accords, in like circumstances, to its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory.
2. Each Party shall accord to covered investments treatment no less favourable than that it accords, in like circumstances, to investments in its territory of its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments.
3. For greater certainty, the treatment to be accorded by a Party under paragraphs 1 and 2 means, with respect to a regional level of government, treatment no less favourable than the most favourable treatment accorded, in like circumstances, by that regional level of government to investors, and to investments of investors, of the Party of which it forms a part.

This is basically the same language used in NAFTA, where no preference could be given to host countries. In short, it doesn’t matter if another party can outbid and outcompete you. Terms just as favourable must be given.

Article 9.5: Most-Favoured-Nation Treatment
1. Each Party shall accord to investors of another Party treatment no less favourable than that it accords, in like circumstances, to investors of any other Party or of any non-Party with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory.
2. Each Party shall accord to covered investments treatment no less favourable than that it accords, in like circumstances, to investments in its territory of investors of any other Party or of any non-Party with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments.
3. For greater certainty, the treatment referred to in this Article does not encompass international dispute resolution procedures or mechanisms, such as those included in Section B (Investor-State Dispute Settlement).

This is much the same idea. If you treat a non-party (someone outside the agreement) a certain way, then a party within the agreement must get at least the same, if not better, treatment.

A bit misleading is the use of the term investment. Most people think of stocks and bonds as investments. While true, this agreement considers basically anything to be an investment. Here is a quote from the definitions section of Article 9.

investment means every asset that an investor owns or controls, directly or indirectly, that has the characteristics of an investment, including such characteristics as the commitment of capital or other resources, the expectation of gain or profit, or the assumption of risk. Forms that an investment may take include:
(a) an enterprise;
(b) shares, stock and other forms of equity participation in an enterprise;
(c) bonds, debentures, other debt instruments and loans;
(d) futures, options and other derivatives;
(e) turnkey, construction, management, production, concession, revenue-sharing and other similar contracts;
(f) intellectual property rights;
(g) licences, authorisations, permits and similar rights conferred pursuant to the Party’s law; and
(h) other tangible or intangible, movable or immovable property, and related property rights, such as leases, mortgages, liens and pledges,

Beyond the traditional sense of investments there is more. Any business itself, business contracts, property, or tangible or intangible items are also considered investments.

And what about countries wanting to nationalise (take public ownership), of their “investments”? Remember, under the definition provided, an investment is pretty much anything.

Article 9.8: Expropriation and Compensation
1. No Party shall expropriate or nationalise a covered investment either directly or indirectly through measures equivalent to expropriation or nationalisation (expropriation), except:
(a) for a public purpose
(b) in a non-discriminatory manner;
(c) on payment of prompt, adequate and effective compensation in accordance with paragraphs 2, 3 and 4; and
(d) in accordance with due process of law.
2. Compensation shall:
(a) be paid without delay;
(b) be equivalent to the fair market value of the expropriated investment immediately before the expropriation took place (the date of expropriation);
(c) not reflect any change in value occurring because the intended expropriation had become known earlier; and
(d) be fully realisable and freely transferable.
3. If the fair market value is denominated in a freely usable currency, the compensation paid shall be no less than the fair market value on the date of expropriation, plus interest at a commercially reasonable rate for that currency, accrued from the date of expropriation until the date of payment.
4. If the fair market value is denominated in a currency that is not freely usable, the compensation paid, converted into the currency of payment at the market rate of exchange prevailing on the date of payment, shall be no less than:
(a) the fair market value on the date of expropriation, converted into a freely usable currency at the market rate of exchange prevailing on that date; plus
(b) interest, at a commercially reasonable rate for that freely usable currency, accrued from the date of expropriation until the date of payment.

This actually does make some sense, as it provides some protections to companies and insures that their property won’t just be converted into the government’s.

However, the wording is such that any legitimate measures a nation might make to go about its business might be construed as “expropriating” or as “nationalising”. The language seems worded poorly on purpose.

And it doesn’t mention that nations have legitimate interests in protecting the jobs of its people, and the local economy. Governments are supposed to protect their people first and foremost.

Article 9.9: Transfers
1. Each Party shall permit all transfers relating to a covered investment to be made freely and without delay into and out of its territory. Such transfers include:
(a) contributions to capital;
(b) profits, dividends, interest, capital gains, royalty payments, management fees, technical assistance fees and other fees;
(c) proceeds from the sale of all or any part of the covered investment or from
the partial or complete liquidation of the covered investment
;
(d) payments made under a contract, including a loan agreement;
(e) payments made pursuant to Article 9.7 (Treatment in Case of Armed Conflict or Civil Strife) and Article 9.8 (Expropriation and Compensation); and
(f) payments arising out of a dispute.

Pull the covered investments freely and without delay? Again, almost anything is an investment under this agreement. This actually has the potential to do serious harm. Businesses wishing to leave could pull all of their “investments” and drain the country of its wealth quite quickly.

Article 9.11: Senior Management and Boards of Directors
1. No Party shall require that an enterprise of that Party that is a covered investment appoint to a senior management position a natural person of any particular nationality.
2. A Party may require that a majority of the board of directors, or any committee thereof, of an enterprise of that Party that is a covered investment, be of a particular nationality or resident in the territory of the Party, provided that the requirement does not materially impair the ability of the investor to exercise control over its investment.

This ignores a basic reality. People are loyal first and foremost to their homes and their tribes. Do people want a bunch of foreigners, with in-group preference for their homelands to be controlling so much? Probably not, but free trade deals do not deal with nations, but “economic zones”.

Inserting a condition that it not “materially impair” is vague and open to interpretation. As such, it seems almost worthless.

Article 9 is the most troubling in the agreement. But it is worth addressing one point in Article 28, which covers dispute resolution.

Article 28.4: Choice of Forum
1. If a dispute regarding any matter arises under this Agreement and under another international trade agreement to which the disputing Parties are party, including the WTO Agreement, the complaining Party may select the forum in which to settle the dispute.
2. Once a complaining Party has requested the establishment of, or referred a matter to, a panel or other tribunal under an agreement referred to in paragraph 1, the forum selected shall be used to the exclusion of other fora.

An interesting detail, parties filing complaints can shop around. There is no fixed place to do so. While this sounds fine on the surface, such could be open to gaming the system.

6. Potential For Huge Job Losses

Companies close down and new ones start up. That is normal in a capitalist society. However, free trade deals in general pose a complication. When it becomes more advantageous (ie “cheaper”) to produce a good in another country, there is always a risk. What will stop a company from closing down, laying off all its staff, and relocating in the foreign nation? Legally, nothing, at least in many cases.

The previous pieces on NAFTA addressed some on the downsides to free trade deals. The CPTPP would likely cause the same sorts of issues.

Let’s use the United States as an example. It lost 3.4 million jobs to China between 2001 and 2017 due to “liberalized trade”. Further, another 879,000 jobs have been lost as a direct result of NAFTA.

Beyond the direct job losses, trade deals have the effect of driving down wages. This is especially true for manufacturing jobs, which are traditionally well paid. The reason is leverage. If a company can threaten to relocate in order to pay its (new) workers much less, then current employees can be forced to accept significantly less compensation. One reason tariffs are applied to goods is to counter the vast discrepancies that can exist between nations.

In very lopsided trading arrangements, the benefits are not equal. Again, referring to the US, trade deficits can balloon very quickly. While some surplus or deficit is inevitable, the trading relations cannot continue unless the parties benefit fairly equally. Large trade deficits drain wealth from a nation. This is money being taken out of the country and not being spent on people here.

The CPTPP addresses NONE of these issues. Is this a form of protectionism? Yes, and there’s nothing wrong with that.

7. Conclusions Regarding C-79 & CPTPP

NAFTA was tricky enough, even with just 3 nations, all on one continent. CPTPP has more, and it covers a much larger geographic area. The wealth discrepancies are even larger.

While this is touted as an economy growth tool, the CPTPP doesn’t indicate at all how the citizens will benefit. Under the “National Treatment” provisions, foreigners must be given the same considerations as locals. If it becomes more economical to lay off people and move assets, then it’s done. There can be no protection for locals, which is what a government should be doing.

Free trade agreements tend to create a “race to the bottom”. If it becomes more profitable to ship work and jobs to another country, it is done. Locals will have to accept far less in order to compete, driving down their standards of living.

Communities benefit when there is work and wealth. Exporting it for overall economic growth is cold, and reduces people to mere cogs in a machine.

Difficult to see how average people will benefit from CPTPP.