From Protectionism to Globalization: The Rise and

Internationalization of Canadian Capital

February 4

External influence on Confederation After Britain’s repeal of the Corn Laws

(1846) and the end of the Reciprocity Treaty with the US (1854-1866), Canada was without a trading partner.

Fear of American military power, the Fenian raids and the rivalry over the western portion of the continent were factors leading to Confederation in Canada.

Internal Influence on Confederation Political deadlock in the Province of

Canada.

Economic development was occurring and the emerging industrial and political elite saw benefits to be had in building Confederation and transcontinental project.

Pre-Confederation Economic Development The strength of the wheat economy in Upper

Canada/Canada West/Ontario combined with immigration and a canal and railway building spree to launch economic development and the beginnings of industrialization around the mid 19th century.

At the time of Confederation, Canada was the 8th largest manufacturing country in the world. By 1871, manufacturing accounted for just under 25% of GDP.

Confederation Ryerson: Confederation resulted from “the

growth of a native, capitalist industry, with railway transport as its backbone, and expansion of the home market as the prime motive for creating a unified and autonomous state”

Naylor: “Confederation itself was little more than an elaborate exercise in public finance”

Underhill: “government of the people, by lawyers, for big business”

Protectionism Galt Tariffs of 1858-59 National Policy Tariffs of 1879 The tariffs distinguished between semi-

finished goods and industrial materials (10-20 percent duty) manufactured equipment (25 percent) and finished consumer goods (30 percent).

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!”

Canadian statism What was the significance of the active

Canadian state? a pragmatic, public enterprise culture latent socialism (which is described positively or

negatively depending on the author) public enterprise for private accumulation

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

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

Postwar Trade LiberalizationCanada 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 OverForeign (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

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 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.)

Anti-Globalization Movement “Anti-globalization” movement or

“global justice” movement?

Birth of a movement in Canada In Canada, the “anti-globalization” movement

has its roots in left nationalism of the late 60s and early 70s.

Its intellectual roots are provided by the New Canadian Political Economy (NCPE), including the dependency theorists and the Marxist theorists.

Fight Against the FTA Council of Canadians, formed 1985 Pro-Canada Network, 1987 which becomes

the Action Canada Network, 1991, later becomes the Solidarity Network, 1998, and then fizzled out around 2004.

Citizens Concerned about Free Trade led by David Orchard

NAFTA

Battle Against NAFTA: Common Frontiers

Side Agreements were negotiated: North American Agreement on

Environmental Cooperation (NAAEC) North American Agreement on Labor

Cooperation (NAALC)

APEC Summit, Vancouver 1997 Asia-Pacific Economic Cooperation The RCMP acted with significant force to try and

keep protesters completely out of the sight of the delegates, including the Indonesian president Suharto.

The controversy over the RCMP response led to an inquiry from 1998 to 2000. The inquiry was highly critical of the RCMP and the federal government.

http://archives.cbc.ca/war_conflict/civil_unrest/clips/2016/http://archives.cbc.ca/politics/federal_politics/clips/11710/

Selected Anti-Globalization Demos Around the World Geneva, WTO, May 1998. Köln, Germany, G8, June 1999. Seattle, WTO, November 1999. Davos, World Economic Forum, January 2000. Washington, DC, IMF, April 2000. Prague, World Bank/IMF, September 2000. Genoa, G8, July 2001, one protester shot dead. Kananaskis, Alberta, G8, June 2002.

Quebec Summit, April 2001Video: View from the Summit.Featuring: demonstrations against the Free Trade Area of the Americas

(FTAA), including a march of 50,000 people. Operation Salami: formed during the movement against the

proposed Multilateral Agreement on Investment (MAI). It organized and promoted peaceful civil disobedience, obstruction

CLAC: Anti-Capitalist Convergence favoured and supported a diversity of tactics: green zone – festive demonstration, yellow zone - obstruction, red zone - disruption

Thomas D’Aquino, president of the Business Council on National Issues, now the Canadian Council of Chief Executives.

Richard Feinberg, American academic and former consultant to the US State Department.