Are international Trade deals delivering on their Promises?

 Soon, Canadians will be facing new debates over multilateral trade agreements. The Comprehensive Economic and Trade Agreement (CETA was challenged by voters in one region of Belgium. Hopefully we will soon have an opportunity to speak to government about the Trans-Pacific Partnership (TPP). And one of the spin-offs of the American election could be a renegotiation of the North America Free Trade Agreement (NAFTA).

Last month, Prime Minister Trudeau promoted global trade and agreements at the G20 in Switzerland. He said such deals will improve international relations and will be good for the Canadian “middle class”. But are these trade deals good for Canadians? Shouldn’t we as citizens see and receive the benefits of global trade and these deals?

Two statistical measurements of how well Canadians are doing since signing the Free Trade Agreement (FTA 1989) are the Gini Coefficient and the Quality of Life Index. These formal tools utilize established formula and criteria to quantify certain economic values and compare these over time and to other countries.

The Gini Coefficient measures income inequality (how national wealth is distributed) and is being linked to economic and social health of a country.

Income inequality in Canada declined between the Second World War and the mid 1970s (Yalnizyan, 2010). However, this situation began to change during the 1980s, as market income inequality began to grow, while after-tax income inequality did not. In the 1990s, both market and after-tax income inequality grew. This trend of growing inequality continues today”, according to Stephanie Procyk, University of Toronto (in Understanding Income Inequality in Canada, 1980–2014 ).

The Conference Board of Canada backs this observation in its 2010 analysis of Gini Coefficients.

Income inequality in Canada has constantly increased since 1988 and has only levelled off after 2006. Canada reduced inequality in the 1980s, with the Coefficient reaching a low of 0.281 in 1989, then it rose in the 1990s, but has remained around 0.32 in the 2000s.

The 2012 report by the Canadian Index of Wellbeing (CIW), How are Canadians Really Doing? presents another perspective on the economic benefits Canadians enjoy.

Using 1994 as a starting point for measurement, the CIW was assigned a baseline score of 100. By 2010, the combination of the domains shows us that our wellbeing improved on many counts, primarily in Education and Community Vitality, but declined on others such as in the Environment and in Leisure and Culture. Pulling together all eight domains, we see the CIW composite index increases to a score of 105.7 – just a 5.7% improvement in quality of life over the 17-year period.

When you compare the robust 28.9% in Canada’s GDP to the small 5.7% growth in our wellbeing over the same time period, we have cause for deep concern. Looking more closely at the impact of the recession of 2008, it resulted in an 8.3% decline in GDP up to 2010. However, the recession resulted in a stunning 24% decline in Canadians’ wellbeing from the modest gains made up to 2008.”

In the book 20 years Later: Has the FTA Delivered on its Promise? Bruce Campbell of CCPA writes, “There will be those among the business elite who will trumpet the free trade agreement’s success. They will link it to the current buoyant economy, with its strong currency, fiscal and trade surpluses, low unemployment and low inflation. … The facts, however, cast strong doubt that the promise made 20 years ago—the promise of a better life for all Canadians—has been fulfilled. It was an empty promise made by a business elite that has reaped the benefits of these self-serving agreements, without really considering how the majority of Canadians would be affected.” (December 2007).

When we hear of another trade deal being hatched, let’s question who really benefits. Canadians may not resort to a Brexit or Trump extreme reactions to these trade deals, but we can voice our critique in a Canadian fashion. And, if proponents of these deals want our support, they should show clearly how we will benefit. If we don’t see the benefits, then we should be prepared to turn them down.

About Dennis Lewycky

Communications professional with work experience on three continents and in the fields of public consultations, mass communications and social marketing.
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