Is the U.S. a Trade Bully?
When the Canada-United States trade pact was being negotiated representatives on both sides worked long hours to craft an agreement that would see the borders open to more trade between the two countries which would eventually be free of customs duties and tariffs. At that time there was a great hue and cry raised within each of the countries by those in each community which feared a deleterious impact which might result from such a pact. Basically, each thought the other would begin dumping of goods which received undue government support (farm and industry subsidies), and each also felt that manufacturing jobs would be lost with the spectre of an open border.In Canada, a government fell because of the looming trade pact, with the incoming government whose head had originally stated he would not support it, actually becoming the impetus to move ahead with the pact. It became a done deal, and was celebrated at the highest government levels as being good for both countries, and that the pact itself had written into it all the formulas to create a 'level playing field' along with a trade dispute tribunal which would study disputes and bring forward resolutions, should the occasion of a disagreement between the two countries arise.
Some of the worst fears in both countries of job losses did not, after all, appear to materialize, and in any event, it was rationalized that to be competitive in an ever-increasingly competitive business and manufacturing world, any business that couldn't compete didn't deserve to stay in business. After all, what better exemplifies the business atmosphere of the United States than stiff competitiveness? Isn't that what the Free Enterprise System so lauded by Americans is all about? Well, there's always the little matter of lobbying by Congressmen, Senators, State Governors on behalf of their constituents, right?
Then came the three-way trade deal as the original pact between Canada and the United States was expanded to include Mexico, thus encompassing the North American continent in a combined free trade agreement. Makes sense, right? Well, there's a lot of cheap labour in Mexico whose economy has never been as robust as those of her neighbours, and which has always been troubled as a weaker market, less able to provide for its population to live the fabled North American lifestyle of plenty for all. Naturally, jobs migrated southward, and Mexico too began to prosper, although it also chafed from time to time, at the obvious unfairness demonstrated toward it by protectionist elements within the U.S.
As did Canada. The United States represents to Canada its largest trading partner, billions of dollars of goods being transferred to the U.S. on a daily basis. This is of utmost importance to Canada's economy. Its thirty-two million population cannot possibly generate sufficient opportunity for growth in production and manufacturing, so Canada looks to the United States for its economy to grow and keep growing, in lock-step with the economy of the U.S. But the United States is a far more powerful country than is Canada, with a population at least ten times that of Canada. The U.S., although it wants and also does require trading opportunities to ensure its economy keeps growing, doesn't really need it to the same extent; its sizeable and growing population has sufficient requirements to keep the country in good economic health.
So this wealthy country, sure of its pre-eminent place in the world, as a cultural titan, a manufacturing giant, an economic powerhouse takes second place to no other nation. Other nations look upon the United States as the ultimate success, truly the one country on this earth which is self sufficiently wealthy, both in the industriousness of its citizens and the wealth of its resources. Hard not to swagger, isn't it, from time to time? Human nature, after all.
So, yes, the U.S. is, always has been, and always will be a trade bully, trade agreements aside, safeguards through arbitration aside, for the United States can, does and always will set aside any judgements brought down which are not in its favour. That's the way it is, that's the way Congress will always see that it is.
Tough cookies, I guess.
posted by Pieface @ Saturday, October 01, 2005
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