Globalization: Its Impact on Canada Us Canada tariff war

    Globalization: Its Impact on Canada Us Canada tariff war

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    Key Insights

    Canada and 
Globalization
Oct. 4
    1/24
    Globalization
◼ Globalization takes a variety of forms: 
economic (trade, investment), social 
(migration), cultural, etc.
◼ The impact of globalization upon the state 
and the economy is widely debated.
    2/24
    How new is globalization?
A classic description:
◼ “The need of a constantly expanding market for 
its products chases the [capitalist class] over the 
entire surface of the globe. It must nestle 
everywhere, settle everywhere, establish 
connexions everywhere.”
◼ “The [capitalist class] has through its 
exploitation of the world market given a 
cosmopolitan character to production and 
consumption in every country.”
    3/24
    How new is globalization?
◼ “Modern industry has established the world 
market, for which the discovery of America 
paved the way. This market has given an 
immense development to commerce, to 
navigation, to communication by land.” 
◼ Marx and Engels, 1848
    4/24
    How new is globalization?
◼ “The discovery of America, the rounding of the Cape, 
opened up fresh ground for the rising bourgeoisie. The 
East-Indian and Chinese markets, the colonisation of 
America, trade with the colonies, the increase in the 
means of exchange and in commodities generally, gave to 
commerce, to navigation, to industry, an impulse never 
before known, and thereby, to the revolutionary element in 
the tottering feudal society, a rapid development.” 
◼ Marx and Engels, 1848
    5/24
    Globalization and the State
globalization sceptics 
(“state-centric” theorists) 
vs. 
strong globalization thesis 
(“retreat” theorists)
    6/24
    Canada and Globalization
◼ External influences are hardly new to 
Canada.
◼ Globalization refers to the intensification of 
global linkages, especially economic, in the 
latter part of the 20th century.
    7/24
    Protectionism
◼ Galt Tariffs of 1858-59
◼ National Policy Tariffs of 1879
    8/24
    Protectionism
◼ Naylor: “The Macdonald tariff produced 
industry in Canada but no Canadian 
industry” Naylor called this “industrialization 
by invitation”
◼ Bliss: “the funny thing about our tariff walls 
was that we always wanted the enemy to 
jump over them. Some walls!”
    9/24
    Debating Free Trade
◼ Wilfrid Laurier and the 
Liberals campaigned on 
freer trade with the US in 
1891 and 1911.
◼ Both times they lost to the 
Conservatives.
◼ “No truck nor trade with 
the Yankees” – Robert 
Borden, 1911
    10/24
    Second World War
During the Second World War, Canadian and 
American defence policy and production for 
the war effort were highly integrated.
◼ Ogdensburg Agreement 1940 created 
Permanent Joint Board on Defence
◼ Hyde Park Declaration 1941
    11/24
    Postwar Trade Liberalization
Canada signed on to the General Agreement on 
Tariffs and Trade (GATT) in 1947.
Successive rounds of negotiations led to an 
increasingly open trading environment.
    12/24
    Growing Concerns about 
American Foreign Policy
◼ Bomarc missile crisis, 1960-63
◼ Vietnam War
    13/24
    Growing Concerns Over
Foreign (esp. American) Ownership
◼ Pipeline Debate 1956
◼ Royal Commission on Canada’s Economic Prospects, 
Gordon Report, 1956-57
◼ George Grant, Lament for a Nation, 1965
◼ Taskforce on Foreign Ownership and the Structure of 
Canadian Investment, Watkins Report, 1967-68
◼ Kari Levitt, Silent Surrender: The Multinational Corporation in 
Canada, 1970
◼ Task Force on Foreign Ownership, Gray Report, 1970-72
◼ The Waffle, 1969-74
◼ Committee for an Independent Canada, 1970-81
    14/24
    Federal Government Response to 
Economic Nationalism
◼ Canada Development Corporation 1971
◼ The Third Option 1972
◼ Foreign Investment Review Agency 1973
◼ Petro-Canada 1975
◼ National Energy Program 1980
    15/24
    Canadian Business Embraces 
Continentalism
◼ Business groups like the BCNI (which later 
becomes the CCCE) and think tanks like C.D. 
Howe Institute helped generate a business 
consensus by the early 1980s in favour of free 
trade with the US.
    16/24
    Canadian State Embraces 
Continentalism
◼ Royal Commission on the Economic Union and 
Development Prospects for Canada, Macdonald 
Commission, 1982-85
◼ Canada-US Free Trade Agreement (FTA), 1989
[http://archives.cbc.ca/politics/prime_ministers/clips/9807/]
◼ North American Free Trade Agreement 
(NAFTA), 1994
◼ Meanwhile, GATT was transformed into the 
World Trade Organization (WTO) in 1994.
    17/24
    The FTA and NAFTA: 
More than ‘free trade’ agreements
Along with trade in goods, these deals cover:
◼ services
◼ investment and investor rights
◼ national procurement policies
◼ intellectual property rights
◼ energy provisions (Canadian govts can not act to give 
Canadians preferential access to Canadian energy, such as oil. US 
consumers and business have their access to Canadian energy 
protected.) More info: see http://parklandinstitute.ca/research/summary/over_a_barrel/
    18/24
    More than just 
NAFTA and the WTO
◼ Canada’s Free Trade Agreements, Foreign 
Investment Promotion and Protection 
Agreements (FIPAs) and other international 
economic agreements, both current and 
proposed. 
◼ List from the Department of Foreign Affairs 
and International Trade website:
http://www.international.gc.ca/trade-agreements-accordscommerciaux/agr-acc/index.aspx
    19/24
    Secure Access to US Market?
The Softwood Lumber Dispute (1982 to present)
◼ US producers have argued that Canada engages in unfair 
trading practices. Responding to the complaints, the US state 
has imposed various duties on Canadian softwood lumber 
imports to the US.
◼ Canada has repeatedly won disputes through NAFTA and the 
WTO.
◼ Unrelenting US pressure (and protectionism) has forced the 
Canadian government to the bargaining table, most recently 
resulting in the Softwood Lumber Agreement of 2006.
◼ http://www.cbc.ca/news/background/softwood_lumber/
    20/24
    NAFTA Chapter 11: Investment
NAFTA’s investor-state dispute settlement 
mechanism allows foreign investors to 
bring claims against NAFTA governments 
for infringements of the investor rights 
outline in chapter 11 of NAFTA.
Foreign investors have used chapter 11 to 
challenge a wide range of state actions, 
including environmental regulations.
    21/24
    NAFTA Chapter 11: Investment
Canada settled a dispute out-of-court with Ethyl 
Corporation paying $13 million.
A tribunal upheld a complaint by S.D. Myers Inc. 
requiring Canada to pay $5 million plus interest.
A tribunal upheld a complaint by Pope & Talbot 
Inc. requiring Canada to pay approximately 
$915,000.
In 2000 a tribunal ruled that Mexico should pay 
$16.7 million to Metalclad Corp.
    22/24
    NAFTA Chapter 11: Investment
In 2008, Dow Chemicals launched a suit over 
Quebec’s ban on lawn pesticides.
In 2008, Corn Products International was awarded 
$58.38 million in a dispute with the Mexican 
government. 
In 2009, Cargill was awarded $US 77.3 million in a 
dispute with the Mexican government. 
In 2010, agreed to a settlement paying $CAD 130 
million to AbitibiBowater.
More info: see http://www.policyalternatives.ca/newsroom/updates/nafta-chapter-11-
increasing-threat-public-good
    23/24
    Impact of Globalization
◼ Globalization places constraints on the 
ability of governments to regulate their 
economies.
◼ The extent of those constraints is a matter 
of great controversy.
◼ The net benefits or disadvantages of 
globalization are also hotly debated.
    24/24

    Globalization: Its Impact on Canada Us Canada tariff war

    • 1. Canada and Globalization Oct. 4
    • 2. Globalization ◼ Globalization takes a variety of forms: economic (trade, investment), social (migration), cultural, etc. ◼ The impact of globalization upon the state and the economy is widely debated.
    • 3. How new is globalization? A classic description: ◼ “The need of a constantly expanding market for its products chases the [capitalist class] over the entire surface of the globe. It must nestle everywhere, settle everywhere, establish connexions everywhere.” ◼ “The [capitalist class] has through its exploitation of the world market given a cosmopolitan character to production and consumption in every country.”
    • 4. How new is globalization? ◼ “Modern industry has established the world market, for which the discovery of America paved the way. This market has given an immense development to commerce, to navigation, to communication by land.” ◼ Marx and Engels, 1848
    • 5. How new is globalization? ◼ “The discovery of America, the rounding of the Cape, opened up fresh ground for the rising bourgeoisie. The East-Indian and Chinese markets, the colonisation of America, trade with the colonies, the increase in the means of exchange and in commodities generally, gave to commerce, to navigation, to industry, an impulse never before known, and thereby, to the revolutionary element in the tottering feudal society, a rapid development.” ◼ Marx and Engels, 1848
    • 6. Globalization and the State globalization sceptics (“state-centric” theorists) vs. strong globalization thesis (“retreat” theorists)
    • 7. Canada and Globalization ◼ External influences are hardly new to Canada. ◼ Globalization refers to the intensification of global linkages, especially economic, in the latter part of the 20th century.
    • 8. Protectionism ◼ Galt Tariffs of 1858-59 ◼ National Policy Tariffs of 1879
    • 9. Protectionism ◼ Naylor: “The Macdonald tariff produced industry in Canada but no Canadian industry” Naylor called this “industrialization by invitation” ◼ Bliss: “the funny thing about our tariff walls was that we always wanted the enemy to jump over them. Some walls!”
    • 10. Debating Free Trade ◼ Wilfrid Laurier and the Liberals campaigned on freer trade with the US in 1891 and 1911. ◼ Both times they lost to the Conservatives. ◼ “No truck nor trade with the Yankees” – Robert Borden, 1911
    • 11. Second World War During the Second World War, Canadian and American defence policy and production for the war effort were highly integrated. ◼ Ogdensburg Agreement 1940 created Permanent Joint Board on Defence ◼ Hyde Park Declaration 1941
    • 12. Postwar Trade Liberalization Canada signed on to the General Agreement on Tariffs and Trade (GATT) in 1947. Successive rounds of negotiations led to an increasingly open trading environment.
    • 13. Growing Concerns about American Foreign Policy ◼ Bomarc missile crisis, 1960-63 ◼ Vietnam War
    • 14. Growing Concerns Over Foreign (esp. American) Ownership ◼ Pipeline Debate 1956 ◼ Royal Commission on Canada’s Economic Prospects, Gordon Report, 1956-57 ◼ George Grant, Lament for a Nation, 1965 ◼ Taskforce on Foreign Ownership and the Structure of Canadian Investment, Watkins Report, 1967-68 ◼ Kari Levitt, Silent Surrender: The Multinational Corporation in Canada, 1970 ◼ Task Force on Foreign Ownership, Gray Report, 1970-72 ◼ The Waffle, 1969-74 ◼ Committee for an Independent Canada, 1970-81
    • 15. Federal Government Response to Economic Nationalism ◼ Canada Development Corporation 1971 ◼ The Third Option 1972 ◼ Foreign Investment Review Agency 1973 ◼ Petro-Canada 1975 ◼ National Energy Program 1980
    • 16. Canadian Business Embraces Continentalism ◼ Business groups like the BCNI (which later becomes the CCCE) and think tanks like C.D. Howe Institute helped generate a business consensus by the early 1980s in favour of free trade with the US.
    • 17. Canadian State Embraces Continentalism ◼ Royal Commission on the Economic Union and Development Prospects for Canada, Macdonald Commission, 1982-85 ◼ Canada-US Free Trade Agreement (FTA), 1989 [http://archives.cbc.ca/politics/prime_ministers/clips/9807/] ◼ North American Free Trade Agreement (NAFTA), 1994 ◼ Meanwhile, GATT was transformed into the World Trade Organization (WTO) in 1994.
    • 18. The FTA and NAFTA: More than ‘free trade’ agreements Along with trade in goods, these deals cover: ◼ services ◼ investment and investor rights ◼ national procurement policies ◼ intellectual property rights ◼ energy provisions (Canadian govts can not act to give Canadians preferential access to Canadian energy, such as oil. US consumers and business have their access to Canadian energy protected.) More info: see http://parklandinstitute.ca/research/summary/over_a_barrel/
    • 19. More than just NAFTA and the WTO ◼ Canada’s Free Trade Agreements, Foreign Investment Promotion and Protection Agreements (FIPAs) and other international economic agreements, both current and proposed. ◼ List from the Department of Foreign Affairs and International Trade website: http://www.international.gc.ca/trade-agreements-accordscommerciaux/agr-acc/index.aspx
    • 20. Secure Access to US Market? The Softwood Lumber Dispute (1982 to present) ◼ US producers have argued that Canada engages in unfair trading practices. Responding to the complaints, the US state has imposed various duties on Canadian softwood lumber imports to the US. ◼ Canada has repeatedly won disputes through NAFTA and the WTO. ◼ Unrelenting US pressure (and protectionism) has forced the Canadian government to the bargaining table, most recently resulting in the Softwood Lumber Agreement of 2006. ◼ http://www.cbc.ca/news/background/softwood_lumber/
    • 21. NAFTA Chapter 11: Investment NAFTA’s investor-state dispute settlement mechanism allows foreign investors to bring claims against NAFTA governments for infringements of the investor rights outline in chapter 11 of NAFTA. Foreign investors have used chapter 11 to challenge a wide range of state actions, including environmental regulations.
    • 22. NAFTA Chapter 11: Investment Canada settled a dispute out-of-court with Ethyl Corporation paying $13 million. A tribunal upheld a complaint by S.D. Myers Inc. requiring Canada to pay $5 million plus interest. A tribunal upheld a complaint by Pope & Talbot Inc. requiring Canada to pay approximately $915,000. In 2000 a tribunal ruled that Mexico should pay $16.7 million to Metalclad Corp.
    • 23. NAFTA Chapter 11: Investment In 2008, Dow Chemicals launched a suit over Quebec’s ban on lawn pesticides. In 2008, Corn Products International was awarded $58.38 million in a dispute with the Mexican government. In 2009, Cargill was awarded $US 77.3 million in a dispute with the Mexican government. In 2010, agreed to a settlement paying $CAD 130 million to AbitibiBowater. More info: see http://www.policyalternatives.ca/newsroom/updates/nafta-chapter-11- increasing-threat-public-good
    • 24. Impact of Globalization ◼ Globalization places constraints on the ability of governments to regulate their economies. ◼ The extent of those constraints is a matter of great controversy. ◼ The net benefits or disadvantages of globalization are also hotly debated.


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