Francis On Free Trade

note to enraged libertarians: this is Sam`s syndicated
column! Complain to him, not us!]

"Free trade" and its partner,
"globalization," are the happy thoughts of the day, with
few in either party of any ideological persuasion
expressing disagreement. But there are reasons to
disagree with the direction in which the words point.
Last week an article in the New York Times
reminded us of some of them.

So dependent on exports to the
United States have both Mexico and Canada become, the

, that our recession means they slump too.
Each country now sends the United States more than 85
percent of its exports, but when we have a recession,
which we now do, Americans stop buying. That means
Mexico and Canada suffer. But, because both nations are
now linked with the American economy through the North
American Free Trade Agreement (NAFTA), there`s nothing
anyone can do about it.

"This is the price both countries
are paying for their close integration with the United
States," Riordan Roett, an international economist at
Johns Hopkins University, told the Times. "They
benefit greatly when the United States grows, but when
there is a downturn they feel the social and economic
consequences immediately."

In the case of Canada, the slump
means that its manufacturers are stuck with a large
inventory of goods they can`t sell—expected to carry
over until 2002. That means Canadian companies halt
production, since they can`t sell any more goods, and
start laying off workers. Unemployment in Canada is now
4.7 percent and may rise to more than 6 percent this

In the case of Mexico, as the
governor of the country`s central bank, Guillermo Ortiz,
told the Times, "The weakened economy in the
United States will mean decreased Mexican exports, less
direct foreign investment and delays in the start of
important new manufacturing projects."

Eventually, both countries will no
doubt recover, but even so, there are some lessons to be

Lesson One is that trade means
dependence. The more a nation trades with another, the
more dependent its economy becomes with those of other
nations. That`s the main reason Free Trade Utopians
always gabble on about how free trade means world peace.
Unfortunately, it has never meant peace, and it`s not
uncommon for major trading partners to go to war with
each other.

The more one nation trades with
another, the more dependent they become on each other,
and the more vulnerable each is to the weaknesses in the
economy—and government and society and culture of the
other. If the consumers of Nation A no longer want to
sip Wonder Cola during their siestas, then Nation B,
which exports Wonder Cola, takes a dive—and so do all
the workers and investors who depend on the nasty
beverage in Nation B. But if Nation A has a revolution
or a religious awakening or a civil war, it may start
restructuring its economy to avoid any connection with
Nation B at all. Then Nation B may take a dive and not
come to the surface again.

But, if Lesson One of Free Trade is
dependence on economies, states and cultures over which
we have no control or influence, Lesson Two is that
Lesson One may mean political integration as well. Free
trade drives transnational government and the erosion of
national sovereignty—precisely so one (or each) country
can have control of what goes on in the other one.
Indeed, that`s exactly what the U.S. ambassador to
Canada, Paul Cellucci, suggested last summer.

Bubbling with glee at the immense
success he thinks NAFTA represents, Mr. Cellucci told
Canada`s National Post that he believes the
borders between the three North American states should
be dismantled. "Mr. Cellucci," the Post

, "the former governor of Massachusetts and
a close friend of George W. Bush … suggested the
borders between Canada, the United States and Mexico be
dismantled with the aim of achieving a more fully
integrated economy." A Canadian transnationalist,

Maurizio Bevilacqua,
chairman of the Canadian House
of Commons finance committee, made similar noises. "With
NAFTA, the economies of Canada, the U.S. and Mexico are
becoming increasingly integrated…. we have to take the
logical steps in maximizing the benefits of such an

Just so. The next logical step
after free trade breeds economic interdependence is the
political and cultural interdependence that dismantling
the borders would mean. If tax policies, regulations,
labor laws and other politically driven forces in Nation
A affect its economy, then those dependent on Nation A`s
economy in Nation B will have to have a say in
determining what they are.

Most Americans bought into the
premises of free trade and globalization without
thinking through their implications for national
sovereignty, national independence and the survival of
the American identity as a civilization and a nation.
But the implications are clear enough, and maybe we
should start thinking about them now.

Sam Francis webpage  


January 03, 2002