Nafta
The list of active Foreign Investment Promotion and Protection Agreements (FIPA) between Canada and other nations is lengthy; such treaties — intended to blow open doors to foreign investors — have been made with countries such as Poland (1990) Trinidad and Tobago (1996) Jordan (2009) and most recently and contentiously China (2014). But a new Canadian Centre for Policy Alternatives (CCPA) study titled Ascent of Giants: NAFTA Corporate Power and the Growing Income Gap suggests that FIPAs might not be nearly as beneficial for the masses as advertised.
“All the gains from industrial advancement and technological change have gone to business and especially large business” says Jordan Brennan author of the study and an economist at Unifor. “Those two things go together. If we don’t differentiate prosperity and ask who is becoming more prosperous and what the relationship is between state policy and that differentiated prosperity then we’re almost being dishonest.”
Imports and exports measured as a percentage of GDP grew slowly as the average tariff rate dropped attaining a high point of 83.2 per cent in 2000. Since then that percentage has plummeted: the World Bank pegged Canada’s 2013 number at 61.9 per cent. GDP growth and unemployment rates have subsequently stagnated. It’s a result Brennan chalks up to a shift in emphasis from investment in fixed assets to mergers and acquisitions.
“In the background of that period was another transformation that as far as I can tell no one is describing and that is the huge merger waves that have led to enormous restructuring in the corporate sector” he says. “It’s really those effects that are more significant but no one is discussing them.”
