(Tucker Carlson on protecting your citizens)
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
3. Lawsuits Against Canada, Chapter 11
|Company||Suit Amount||Amount Settled|
|Centurion Health||$160M||$0, fees unpaid|
|Detroit Int’l Bridge||$3.5B||$0, dismissed|
|Dow Agro Sciences||$2M||$0, withdrew|
|Ely Lily and Co.||$500M||$0, dismissed|
|Mercer International||$232M||$0, dismissed|
|Merrill & Ring||$50M||$0, dismissed|
|Mesa Power Group||$658M||$0, dismissed|
|Mobil Inv. & Murphy Oil||$66M||$17.3M|
|Pope & Talbot||$500M||$527M, USD|
|St. Mary’s VNCA||$275M||$0, no standing|
|United Parcel Services||$160M||$0, dismissed|
|V.G. Gallo||$105M||$0, dismissed|
For these “finished” claims, Canada has had to pay out $709 million, plus a substantial amount in paying its own lawyers. Also, consider the following:
-DowAgro sale, under the terms of the settlement, is still allowed to use its pesticide in Canada.
-Ethyl Corp still allowed to use MMT additive.
|Clayton/Bilcon||$101M||Lost, awaiting damages|
|Lone Pine Resources||$119M||Awaiting verdict|
|Mobile Investments||$20M||Awaiting verdict|
|Resolute Forest Products||$70M||Awaiting verdict|
|Tennant Energy Ltd||$116M||Awaiting verdict|
|Westmorehead Coal||$470M||Awaiting verdict|
Potentially another $896 million
To summarize, Canada has already paid out $709 million in various actions under Chapter 11 of NAFTA (plus the settlement from Ethyl Corp), and may be on the hook for $896 million more. And this doesn’t take legal fees and other court costs into account.
4. Job Losses Resulting From NAFTA
Research has been done on the effects of NAFTA. This released 2003 study, estimates that 879,000 jobs have been lost in the US as a direct result of NAFTA over a decade.
The conclusions were also troubling:
This is blunt and truthful. It is high paying jobs mainly in manufacturing that have been exported in the name of “free trade”, and has harmed the US workforce.
Now, here, is another study, released in 2011, dealing specifically with Mexico and NAFTA.
There is a cost to these free trade agreements. Jobs are lost domestically when it becomes cheaper to ship them to another country. Often it is manufacturing, one of the better paid jobs, where higher education isn’t needed.
Simply out, there are winners and losers in trade deals. Countries win if they export more than they import, and vice versa. While some trade surplus or deficit is inevitable, it is sustained deficits that drain wealth from the country and put people out of work.
While Canada or Mexico may sit smugly and know that they benefit from the trade deal with the US, this must be considered. With ever proposed expansion of free trade and liberalized trade, there is nothing to stop jobs from Canada and/or Mexico from being exported elsewhere.
For example, the US lost 3.4 million jobs to China since 2001. Canada could end up in that situation one day.
5. Free Trade Drives Down Wages
Ross Perot ran for President in 1992. He faced the incumbent, George H.W. Bush (Republican), and Bill Clinton (Democrat). While he came in third, Perot drove home this hard truth about free trade: it drives down wages. It forces Americans to compete for third world wages.
Perot is completely right here. It will raise the wages in Mexico, while driving down American wages. And to reiterate, Canadians should not think they are immune from this sort of practice.
The Council on Foreign Relations added:
But it is the common worker with a family to provide for who will really feel the pinch. It is cold comfort to be out work and be told “well, it raises trade and GDP”.
6. NAFTA Causes Carnage To Middle Class
Yet another EPI article. This one sums up the problems of NAFTA in very blunt terms.
- Job losses
- Pushes wages down
- Destruction of farms and small businesses
- Sets standards for globalization
The article is directly on point.
Who actually benefits from NAFTA, or similar types of deals? Not the workers, who are now forced to compete for third world wages. Not communities, who see major employers pack up and leave for better opportunities.
7. NAFTA Makes Illegal Immigration Problem Worse
When nations are reduced to “economic zones”, it forces workers to compete against those in other nations for the same piece of the pie. If jobs are eliminated on a massive scale, then the pressure is on to find work. For many Mexicans, it has meant going to the US, often illegally.
Note: this not to condone illegal immigration. However, it becomes more understandable when factors like these are considered.
The “surplus labour” sure helps large employers, and further helps to drive down wages, which of course is the entire point.
8. NAFTA Makes US Trade Deficit Worse
Here is a 2003 study on the trade deficit the US has experienced due to NAFTA.
As mentioned earlier, it is true Canada currently benefits from the US trade deficit. But as free trade expands, Canada (and other nations) could easily find themselves in the same dilemma as the US.
Sustained trade deficits bleed money from a nation.
9. NAFTA Can Override Environmental Protections
Think this is crazy? Consider some of the court action Canada has faced
CLICK HERE, for Ethyl Corp wanting $201M over MMT additive ban.
CLICK HERE, for SD Myers wants $53M for PCB ban.
CLICK HERE, for Pope & Talbot’s $500M softwood lumber suit.
CLICK HERE, for Sun Belt wanting $1.5B-$10B for lost water rights.
10. Is NAFTA Worth The Price?
Yes, it has led to economic growth and more trade. That much is indisputable. But it isn’t fair to omit some of the real costs to engaging in these free trade deals, such as TPP, or FTAA.
- Litigation over new “rights”
- Massive job losses
- Wages driven down
- Destruction to middle class
- Increased illegal immigration
- Unsustainable trade deficits
- Environmental protections are secondary
But hey, as long as the GDP keeps growing.