Economy & Trade, Global, Global Geopolitics, Headlines, North America

NORTH AMERICA: Hemisphere Entangled in U.S.-Woven Net

Paul Weinberg

TORONTO, Mar 28 2003 (IPS) - A handful of Canadian soldiers are currently serving with the U.S., U.K. and Australian militaries in the attack on Iraq, although Ottawa has officially refused to join the U.S.-led invasion of Baghdad.

Another 1,000 soldiers from this country, three ships and a few planes are patrolling in the Persian Gulf, ostensibly to support the U.S.-led ”war against terrorism” and enforce economic sanctions against Iraq.

That military integration is robbing Canada of some of its independence, argues Steven Staples, a defence analyst with the Ottawa based Polaris Institute.

”The Canadian military forces that are on the ground in the Persian Gulf right now are a really good example of how our integration with other forces is really undermining our independent policy,” Staples told IPS.

But agreements like the North American Free Trade Agreement (NAFTA) are binding Canada ever tighter to its giant pervasive southern neighbour in many fields – and business groups here would like to see the nations virtually sewn together.

That would result in U.S. political and economic priorities becoming even more paramount, says Bruce Campbell, director of the Ottawa based and union supported Canadian Centre for Policy Alternatives.

As the world’s remaining super power and largest economy, Washington already dominates NAFTA. ”The extent of our vulnerability and dependency has taken a quantum leap,” since the deal was signed in 1992, Campbell told IPS.

Canada retains some autonomy and can decide whether it wants to sell water, keep its energy resources at home to meet domestic needs or support a U.S.-led military assault on the Saddam Hussein regime in Iraq.

But all of this would disappear, says Campbell, if NAFTA is renegotiated to include shared continent wide policies in a raft of areas, including resources, commercial standards and defence – in essence a common market, as advocated by the Canadian Council of Chief Executives (CCCE).

Where Mexico fits into this Canadian notion is unclear.

Business leaders here like CCCE president Thomas d’Aquino are preoccupied with ensuring that Canada’s trade in goods and services, 90 per cent of which goes to the United States, are not disrupted at the Canada-U.S. border by increased security measures instigated by Washington in wake of the terrorist attacks on New York and Washington on Sep. 11, 2001.

”Forget about the border. The border as it stands now is a second-century concept. I am talking about a 21st century concept,” says d’Aquino, who envisions law-abiding Canadian and U.S. citizens effortlessly crossing their common border with the swipe of an encrypted identity card.

Ottawa and Washington have already negotiated a joint approach to treating refugees – who come largely from developing countries – as part of a greater emphasis on border security. Advocates here say Canada is clamping down on claimants in order to fall in line with less-generous U.S. rules.

And under NAFTA, foreign investors are challenging regulations that restrict the provision of some services to national bodies, such as the delivery of mail here by the government affiliated Canada Post.

Such issues provide plenty of ammunition for those unions, community groups and farmers who oppose further integration under NAFTA, says Karen Hansen-Kuhn, a trade programme co-coordinator for the Washington D.C. based Development Gap. ”There would certainly be opposition to deepening (NAFTA) at this point.”

The most active opposition to more free trade is in Mexico, adds Hansen-Kuhn. ”Since NAFTA began, one and a half million farmers have gone out of agriculture, in some cases because of the reduction in subsidies and the massive imports (of items like corn) from the U.S.”

One Mexican farmers’ movement, ‘The Countryside Can’t Take it Anymore’, is pushing for NAFTA to be renegotiated, while two million Mexicans cast ballots against the proposed Free Trade Area of the Americas (FTAA) in a referendum conducted by the Mexican Action Network on Free Trade, adds Hansen-Kuhn.

The FTAA would create a free trade zone of 34 nations stretching from Alaska to the tip of South America and worth nine trillion U.S. dollars. It is being strongly opposed by the government of Brazil as well as many civil society groups in Latin America.

While business groups continue to lean on border security issues to buttress their call for greater Canada-U.S. integration, economic scandals south of the border and a surprising hot Canadian economy are dampening enthusiasm for that idea, says Jim Stanford, an economist for the Canadian Auto Workers.

”During most of the 1990s, Canada was lagging behind the Americans. Our economy was in the worst decade since the 1930s and we were introspective and kind of lacked confidence. Now we are outperforming the Americans. I think it is the fifth year in a row that our economy is growing faster, our employment rate is higher,” he says.

Stanford attributes the current boom to a cheaper Canadian dollar and more competitive domestic manufacturers (particularly in automobiles, machinery and aircraft).

In contrast, the U.S. manufacturing sector appears to have shrunk considerably with the rise of imports and the departure of many companies for Mexico, Central America and even China, where workers can be paid considerably less, says Hansen-Kuhn.

NAFTA has also ushered in a rise in part-time and service employment, where salaries are 13 per cent below what people were paid previously, she adds.