Free Trade or “Fair” Trade?

I believe in free trade only if it is ‘fair trade’. That is not the case presently in the final rounds of negotiations between the two countries. As a participant to the North American Free Trade Act (NAFTA) talks and subsequent legislation as a Canadian MP in the early ‘90s, I have seen what havoc hasty decisions can create.

There are five remaining outstanding problem areas that need to be addressed and actions that need to be taken by Panama before Canada considers a Free Trade Agreement with us. These include specific actions to meet ILO labor standards, resolution of the tax haven issue, a lifting of the ‘corporate veil’, a firm and enforced commitment to specific environmental protection, and effective measures taken to protect Panamanian jobs in agriculture and fishing.

US House Ways and Means Chairman Charles Rangel has outlined similar deficiencies and refuses to move forward with a deal until they are addressed. Why aren’t the Canadians listening? Why isn’t Ottawa demanding full disclosure in corporate and financial institution transactions?

It saddens me to see my country dodge these important principles in order to get a ‘trophy’ trade agreement with Panama. Does Canadian Prime Minister Stephen Harper’s minority government believe that it can pass such a bogus deal that contains so few guarantees? Surely, opposition parties in the House of Commons won’t be caught napping when this measure comes up for a vote.

AIG LOVES PANAMA (as a tax haven). AIG is the Wall Street company that took a massive multi-billion bailout from former President Bush and spent millions on executive bonuses. Now, AIG is suing Uncle Sam for $306 million in taxes it paid because its Panama subsidiary operates in a tax-haven—not subject to US taxes. No wonder that AIG, along with other bailed-out banks, is a fervent believer in the Bush-initiated Free Trade Agreement talks with Panama, which is fast-tracked in Ottawa, but stalled in Washington.

The AIG-linked Star International Company Inc. (SICO) is AIG's largest private shareholder and manages AIG’s employee compensation fund. Since it is chartered in Panama, SICO is one of 350,000 firms (second to Hong Kong) that are subject to few or no regulations and taxes.

The Panama FTA agreement with the States or Canada could give SICO and other Panama-registered corporations expanded powers to dodge taxes and public-interest regulations throughout the world (like policies that jail tax cheats, and expose money laundering and shady financial dealings). As if this weren’t bad enough, the FTA could undermine the effectiveness of foreign tribunals and force taxpayers to compensate corporations subject to regulations that could cut future profits.

Canada has much to gain by waiting for the outcome of Panama’s national elections on May 3 before ratifying a Free Trade Agreement. Then, Canada will be dealing with a new government that will be in place for at least five years. Furthermore, the FTA won’t become a political football distorted for political purposes during the upcoming elections. Finally, waiting until year’s end for ratification will give Canadian trade negotiators a better perspective as to the impact of the proposed regulations and allow for greater feedback from both Canadian and Panamanian stakeholders.

What could be more fair?

Speaking of ‘fair’ : As I leaf through the newspaper ads in my Toronto hotel room (yep, part of my annual book tour) I’m surprised at how prices have dropped. My Hilton room cost $80 U. S. through Priceline.com (regular price $300 a night) and a 7-night stay at Panama’s Royal Decameron all-inclusive resort costs $747, plus $191 taxes (all Canadian $, which is about 80 cents U. S. This is for an April 6 flight from Toronto. That’s what I call a ‘fair’ trade.