How not to oppose free trade with China

By Gerard Di Trolio

As Donald Trump’s blustering over NAFTA over the past several months has given way to negotiations, an important story has not picked up much attention.

Workers at Honda Lock factory in Zhongshan, Guangdong province,are striking for a better pay. 10JUN10
Striking Workers at Honda Lock factory in Zhongshan, Guangdong in 2010

Three rounds of exploratory talks for a free trade agreement (FTA) between Canada and China have taken place with the most recent round happening in Ottawa this past July. Canada has also signalled its interest in signing a FTA with Mercosur which is a South American trade bloc that counts Argentina, Brazil, Paraguay, and Uruguay as members.

Shortly the second round of the China-Canada FTA talks concluded in April China’s ambassador told a group of business leaders in Montreal, “we hope to speed up the process and sign the agreement.”

Trudeau is looking to diversify Canada’s trade relationships and send a message to Washington about trying to ditch or seriously renegotiate NAFTA. But missing in most of the media coverage so far is what the Canadian public thinks of a FTA with China.

A poll conducted at the beginning of April shows Canadians are “88 per cent are “uncomfortable” or “somewhat uncomfortable” with the idea of allowing Chinese state-owned corporations to take over high-tech Canadian firms and lifting restrictions Chinese investments in Alberta’s oil sands.”

They’re right to be against such a deal. But how opposition to the deal is framed is very important.

It is all too easy to fall into a xenophobic framework when it comes to opposing free trade with China. Canada has a shameful history of anti-Chinese racism with the brutal treatment of Chinese workers in building the transcontinental railway as well as the Chinese Head Tax being among its most obvious legacies. Today the issue of Chinese immigration is not fuelling fear of China, there is still a sense that it is Chinese who will be taking Canadian jobs, especially in manufacturing.

As historian Dana Frank has pointed out, “Buy American” campaigns have never benefitted American workers whose jobs are at risk, but have contributed greatly to racist and xenophobic attitudes when it comes to trade policy. This undermines the ability to build international worker solidarity.

The main reason a FTA with China should be opposed is the power that such an agreement gives to corporations over governments and workers.

The investor-state dispute settlement (ISDS) system favours big business over national sovereignty. Such a system allows corporations to sue national governments for national or local policies that may discriminate against foreign corproations. During NAFTA re-negotiations, Ottawa has signalled its desire to keep the treaty’s ISDS in the form of Chapter 11 in place. This despite that Canada is the most sued country in NAFTA under Chapter 11.

This limits the scope of governments to regulate health, environmental protection, labour policies. Governments at the local, provincial, and national level are also constrained in being able to promote economic development by explicitly choosing local or national businesses for procurement purposes (the threat of an ISDS suit is often enough to quash even the contemplation of these policies).

There is currently a debate as to what extent it has been free trade versus automation and productivity gains that are responsible for the decline in manufacturing jobs in advanced economy.

Trade liberalization has undoubtedly lead to some job losses – even those who argue technology is the main culprit still acknowledge that free trade is still responsible from 20-25% of manufacturing job losses in advanced economies. But the share of manufacturing employment had still been declining a decade or two before the massive expansion of free trade deals. China itself is deindustrializing as its economy becomes more advanced creating a larger service sector. Many industrial jobs in China are being relocated to Vietnam where wages are lower and countries like Ethiopia seek to mimic the state guided development of manufacturing industries, which benefited China and other East Asian economies.

The labour movement in advanced economies needs to rethink their approach to opposing FTAs. While it sounds like a right wing cliche to say that many manufacturing jobs won’t come back, it is true in many cases. Labour intensive industries like textiles are unlikely to increase in number even if there is a shift to protectionism in the U.S.

The idea that manufacturing jobs are a panacea to economic problems in Canada is a mystification. Once upon a time those jobs were precarious and very dangerous. It was the labour movement that managed to transform them into jobs that supported the middle class.

Instead of chauvinistic campaigns like “buy Canadian,” the answer to the rise of precarious work and other declining conditions for workers is to rebuild and reorient the labour movement to the reality of the today’s industries in advanced economies. That means raising employment standards for all workers, organizing the service sector as well as the logistics sector, which has emerged as a new choke point that labour can exert its pressure in the modern economy.

The other component of any effective anti-FTA strategy is international solidarity. Aiding labour movements in other countries is essential in ending the global race to the bottom in labour conditions. This is something that is overlooked by nationalist buy local campaigns that target working class people. Any kind of new international economic order would see institutions like the IMF and World Bank not pressure countries to abandon tariffs and subsidies to infant industries and allow them a way to develop their economies where workers have protections and all wealth created doesn’t flow to the Global North. Enforceable international minimum labour standards and a global minimum wage are just some of the policies that activists must push more forcefully.

The labour movement in Canada needs a new way of talking about and opposing free trade that leaves no worker in any country behind.

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One thought on “How not to oppose free trade with China

  1. This article thankfully avoids (and condemns) the chauvinistic and sometimes racist opposition to relations with China, and the superficiality and problems associated with “Buy American/Canadian…” so-called ‘solutions’. The problem with it is that it accepts the total reorganization of economies and international relationships associated with neoliberalis, and seems to pose union organizing of the restructured economic landscapes as a panacea. Organizing is critical, but posing an alternative to trade liberalization, export dependency and relegation of investment decisions (like the role of manufacturing) to private capital. That is the main problem with these FT agreements.

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