Oct. 4

 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.

A classic description:
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“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.”

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“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

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“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

globalization sceptics
(“state-centric” theorists) vs. strong globalization thesis
(“retreat” theorists)

 External influences are hardly new to
Canada.
 Globalization refers to the intensification of global linkages, especially economic, in the latter part of the 20 th century.

 Galt Tariffs of 1858-59
 National Policy Tariffs of 1879

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Naylor: “The Macdonald tariff produced industry in Canada but no Canadian industry” Naylor called this “industrialization by invitation”
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Bliss: “the funny thing about our tariff walls was that we always wanted the enemy to jump over them. Some walls!”

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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

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

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.

Growing Concerns about
American Foreign Policy
 Bomarc missile crisis, 1960-63
 Vietnam War

Growing Concerns Over
Foreign (esp. American) Ownership
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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

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

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.

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.

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/

More than just
NAFTA and the WTO
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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

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.
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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/

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.

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.

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-11increasing-threat-public-good

 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.