When "Free Trade" ain't free

In the absence of any long term prospect for a Free Trade Area of the Americas, Canada has decided to go it alone and try for bilateral agreements.    This started with the Chrétien Liberals but has continued under PMS.

To date, we've signed agreements with Chile, Costa Rica, Panama, and Peru.   Of these, Costa Rica was the most ill advised because of its refusal to do anything to stop the child sex trade and continuing to admit into the country as "tourists" people who have solely as their purpose for their visit exploiting minors.    A new agreement is due to come into effect with Colombia but that too was a terrible decision because of Colombia's appalling human rights record and a still ongoing drug war.

Now the PM is visiting Brazil promoting the start of talks for a free trade agreement with it (and quite possibly the other countries in the Mercosur grouping:  Argentina, Paraguay and Uruguay -- Venezuela's pending membership is on ice because of objections from Paraguay), and also another FTA with the "Central America Four" of El Salvador, Guatemala, Honduras and Nicaragua.

I've often written here in my space that Canada should not limit its sights only on the US and Mexico, that we need to have looser restrictions on trade with other countries as long as they have a record of generally playing by the commonly accepted trade rules.   That explains our agreement with EFTA (Iceland, Liechtenstein, Norway and Switzerland) and the pending comprehensive trade and labour agreement with the EU.   And why we have also signed bilateral agreements with Israel and Chile.

The problem is that "free trade" is a misnomer.   The more accurate name is a "permanent most favoured nation status" treaty -- that is, a country that is granted MFN status by a third country will be treated no worse or better than any other country also given MFN by the same third country.


Real free trade, as commonly understood (the truly free movement of goods, services, capital, people and information between member states) only exists in two zones in the world -- the Mercosur and the EU.   And it's the EU that has really taken it to levels even its founders could not have imagined not just with open borders and a common refugee asylum policy but also a common currency (for most), agriculture and sales tax collection policy.   It even allows for hot police pursuits across national borders with limits.

But things certainly aren't perfect.   Take mobile communications.  We Canadians are all too familiar with what happens when we get too close to the border with the US -- our cell phones may already think they are in the US and we get charged with huge roaming charges.   But this gets worse in Europe because it is possible to cross many borders without even noticing within mere hours.   It is especially bad in Northern Ireland, roughly the size of Connecticut, where as many as one third of calls can be routed through the South.    It gets pretty annoying having to constantly swap SIM cards. 

More important is that the EU has long insisted new members abide by certain human rights policies.    There are some hypocracies in this such as how some countries within the block treat ethnic minorities, such as the Roma.   But it does insist that general respect for humans for potential new members is a must, as is respect for generally accepted national boundaries    This explains what is holding Turkey's membership up on two fronts:   Its illegal occupation of North Cyprus, and its continued persecution of Kurds and Armenians.



In my opinion, it was wrong to negotiate a trade deal with Mexico not because of its low wages but because of its bad record on police procedures as well as a never ending drug war which has gotten only more intense in the last few years.   And to be bald, no thinking person should have even contemplated talking to Costa Rica or Colombia until they showed signs they were genuinely interested in cleaning up their acts.    Looser trade restrictions over time should be linked to progress in areas of justice and basic human rights, with permanent MFN the end of the road.   Then and only then can real restriction loosening can begin -- starting with a customs union and slowly progressing towards the final goal of monetary union and unrestricted movement of peoples.

Brazil has come a long way in this regard as have the other countries in Mercosur.   But the Central America Four?   The Soccer War between Honduras and El Salvador was forty years ago and the border between the two still has not been fully demarcated.   Daniel Ortega is back in power in Nicaragua and he has severely restricted the rights of women.   The ceasefire has held in Guatemala but just barely and not long enough (it's just been four years) to demonstrate it has changed its ways for good.

So, I say -- if a country has proven its worth, then yes.   If not, then no.   Don't just open the barn door and expect only fresh air to come in if the apple core is rotten.   That's why it was a mistake to grant MFN to Mainland China.   Free trade ain't so free if it means compromising our principles.   Any country that doesn't acknowledge their misdeeds and tries to bully its away should not be given the time of day.   And that also applies to Canada -- beginning by finally shutting down the asbestos mines.