1. The Growth of Free Trade

2. Growth of Free Trade Agreements
The key to the growth of economic globalization has been an explosion in the number and extent of these agreements
By 1992, an explosion of FTA’s mostly between 2 countries (bilateral) (see graph)
Opponents feared a loss of national sovereignty and the loss of a country’s ability to protect its culture, environment, labour standards and social programs

3. Tariffs
Many neo-liberal governments before the 1990s believed their role was to manage the economy and ensure full employment
They thought high tariffs could protect local economies
Therefore attempts for free trade in the early 20th century was limited

4. Western Europe First major area to move towards free trade
1958 – signing the Treaty of Rome
1971 – fuller agreement
Original members of European Community (EC) were Belgium, France, Germany, Italy, Luxembourg and the Netherlands
Since then EC now EU has expanded

5. Western Europe Cont… Denmark, Ireland, UK joined 1973 1981 – Greece
Portugal, Spain
1995 – Austria, Finland and Sweden
Their role is to not only for FTA’s but also introduced Euro, and have rapid-response military for peacekeeping
They also help countries from bilateral trade even if they don’t want to be part of the EU

6. The Next Stage… Wider free trade zones
Possible Pacific Rim Agreement and a Free Trade Area for the Americas (FTAA)
Long term intention of the World Trade Organization (WTO) is to unite the entire world through free trade and are also responsible for managing and liberalizing trade in the world

7. Free Trade and Canada

8. Early History between Canada and the US
From 1854 to 1866 limited free trade
1st prime minister Sir J.A.Macdonald won 1878 election based on National policy, free trade abandoned to protect Cdn manufacturers from American (and other) competition
1911 – PM Laurier was not reelected because of his support for FTA’s
During 30’s even more done to ensure no FTA’s were in place
Since the 30s PC governments in favour; liberals more recently

9. Auto Pact 1965 – Canada moved towards free trade
Example of sectoral free trade, since it involves only 1 part of the economy
Eliminated the border for products of the ‘Big Three’ car manufacturers (GM, Ford, Chrysler)
Now specific models that were once made only for Cdn markets were also made for U.S

10. Auto Pact’s Special Clause
Cdn government feared in a completely uncontrolled market, assembly might end up in U.S
One rule – at least one vehicle to be assembled in Canada for each car that was sold in Canada
Described as managed free trade

11. Auto Industrial Boom
The big 3 found assembly cheaper in Canada- labour costs low, high quality
S.Ont became largest auto production regime
By late 1990s, Canada exported one million more motor vehicles than t was importing (see graph)

12. Free Trade Agreement
1988 – B.Mulroney supported FTA and came into effect Jan.1, 1989 with all bilateral tariffs and other trade restrictions removed by 1999
WTO objected and the Auto Pact ended in 2000
They felt he big 3 had an unfair advantage in selling cars in N.America

13. The North American Free Trade Agreement
(NAFTA)

14. The Third Step The extension of the FTA was to include Mexico in 1994
At first glance, not significant to Canada – Mexico trade never very big
Proves risky to Canada – wages lower, lower env.standards therefore more attraction to U.S. and some Cdn businesses

15. The Future of Free Trade

16. Bilateral Free Trade
Canada has signed with Chile and Israel to stimulate trade and expand Cdn markets
Can also be seen as broad step towards FTAA
Meetings in 1994 with leaders from the nations of the Americas (except Cuba) want to develop huge free trade zone for 2005 – protests for concern of globalization

17. Pacific Rim
21 countries along pacific Rim (also members of the Asia-Pacific Economic Cooperation (APEC)
Plan to have all members by 2010, with full free trade between all members by 2020
Would be largest in the world
Like FTAA – big protests in Vancouver in 1997

18. A Global Market – should there boundaries?
An increase in economic globalization
Transnationals have been struggling with campaigns/protests –sweatshops, child labour
Critics fear Free trade has more costs than benefits
For Canada – our culture, health care, and gap between rich and poor widen

19. Opinion Piece
Write an opinion paragraph about what you think would be best for Canada. Make sure to state at least 2-3 benefits and costs. Use some examples from the presentation. Be careful of your grammar and back up your thoughts with facts.
Your reading from yesterday will help (p )