JOHN CHUCKMAN COMMENT: A COLUMNIST WRITES OF HARPER’S TRADE POLICY AND HOW HE IS SUPPOSEDLY AVOIDING CANADA’S BEING A SPOKE IN THE AMERICAN HUB WITH MAJOR NEW EFFORTS ABROAD   Leave a comment

 

 

 

JOHN CHUCKMAN

POSTED RESPONSES TO A COLUMN BY JOHN IBBITSON IN TORONTO’S GLOBE AND MAIL

If this is true, why is creepy Harper pursuing the nightmare of perimeter security with the U.S.?

The column is little more than reverse-psychology Harper boosterism.
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A reader writes:
“Free trade isn’t so great when one partner is WAY bigger than the other.”

In economics we know that the smaller partner in a free-trade deal gains disproportionately compared to the larger one.

That is why all free-trade deals with the U.S. are complex: the U.S. tries to gain maximum advantage out of that known starting point.

In fact, many U.S. free trade deals are little more than enticements to small countries to sign on to voluntary American involvement and interference.

Such deals mean the U.S. only has to threaten to abrogate the treaty to hold a genuine hammer over the head of a small country.

All of the deals with places in South America and Central America are of precisely that nature.

And what has Harper done in these matters?

Dutifully run down to Central America to sign parallel agreements in keeping with American policy – these deals have all been virtually economically worthless to Canada and represent zero Canadian initiative.

I haven’t seen a sign of what Ibbitson is blubbering about.

In fact, Harper’s is the most cringing and servile government in our history with regard to America and its interests.
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“Free-trade is a myth.”

That statement is certainly true.

True free trade exists only in theory, just as the form of economic organization we call perfect competition exists only in theory.

All free-trade agreements are forms of managed trade, managed according to some negotiated set of rules.

The free trade of classical economics is beneficial to all partners, however the smaller and less sophisticated economy – the one making the greatest economic gains – has to make the largest adjustments.

That means that while the economy as a whole gains, individual regions and industries can suffer badly in the transition. Canada certainly experienced this under North American free trade.

Keenly aware of the vast size of its markets and their attraction to smaller countries, the United States never, never signs a free-trade agreement without squeezing maximum geo-political advantage out of it.

The geo-political price may in fact outweigh the economic gains to the smaller partner in the view of many citizens of the smaller country.

You do not get anything for free, and certainly not in free trade agreements.

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