By: Penney Kome
CALGARY: "We all benefit from trade," insists Industry Minister Pierre Pettigrew. He also says that Free Trade has, "broadened Canadians' choice of increasingly cheaper and better products." As chief shopper and bottle-washer for our household, I'm not convinced. I often shop at Calgary Co-op, where the receipts include a little note at the bottom that says: "Today you saved $xx by shopping here." This feature makes it easy to monitor how well I stick to the weekly specials.
On my last big Co-op (www.calgarycoop.com) run, the cashier looked at the bottom of my receipt and her eyes popped. "That's the biggest saving I've ever seen," she said. She leaned over and patted my hand. "You did good today, hon," she said.* (see bottom)
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Combined with the Internet, properly-done free trade really could be a consumer's best friend |
When I double-checked the receipt for scanning errors, the secret of my success was clear. From toilet paper to frozen pasta dinners, I bought mostly Co-op's own house brands. These are quality wares, locally-produced, not advertised, with minimal packing or shipping. Co-op policies require Co-op to support local farmers and manufacturers. Co-op's approach is "branded outsourcing" at its best - the practice of buying pre-made products and adding a private brand label.
Free trade, conversely, strikes me as branded outsourcing at its worst. International food giant Kraft, for instance, no longer makes any cheese. It buys up batches and re-packages them with the Kraft label. The consumer pays extra for the brand, but the chain of accountability for product quality is broken. That seems to be what free trade is about: allowing capital to buy goods or services where they are cheapest, repackage them, and ship the products to where prices are highest. Contrary to the Trade Minister's arguments, I see no proof that transborder shipping itself lowers prices.
Quite the reverse effect is obvious in products already manufactured in tax-free, regulation-free Export Zones, in countries such as Mexico and the Philippines. It's common practice for a pair of running shoes that cost less than $10 US to manufacture in such places to sell for more than $150 in the US.
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At our house, monthly electrical costs doubled, and our natural gas heating costs tripled when Alberta privatized hydro and deregulated natural gas |
Marketing - more than production or shipping costs - determines prices for goods made abroad. No matter how cheap the labour and materials are, corporations will sell their brand name products for whatever the markets will bear.
When Maude Barlow warned ten years ago that NAFTA would lead to a "race to the bottom, she didn't mean bottom-dollar prices. "Harmonizing regulations" usually means DE-regulation abandoning price restrictions, not to mention labour and environmental standards. Alberta, like California, has been through energy de-regulation this winter, and seen the perverse consequences of so-called free market adjustments. At our house, monthly electrical costs doubled, and our natural gas heating costs tripled. We gave a faint two cheers to see the provincial rebate noted on our electrical bill; it was money we never actually received, and our costs rose anyway.
As Andrew Nikiforuk described in his "Power Trip" article for ROB Magazine, "[De-regulation] has given industry some of the highest power rates in North America, and transferred an estimated $5 billion from consumers to power companies," in provincial subsidies for energy costs.
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If US drug companies write severe patent restrictions into the FTAA, Canadians will pay much more for drugs |
Hands up all those who believe that the $5 billion would have been better spent to restore physiotherapy for seniors so they can continue to live independently. Or to buy public schools the textbooks required for the new provincial curriculum, rather than our school council having to fundraise to buy them. Or perhaps to put two or three more MRIs in every hospital to eliminate waiting lists.
Ah, but such expenditures would detract from the first principle of free-market philosophies: that every aspect of our society is a saleable commodity. Whatever the local impact of energy de-regulation, it has succeeded in its main objective, which was to create profit for investors.
As a consumer, I want prices to stay pegged to actual costs, with a reasonable mark-up for retail expenses. When prices soar to thousand of times the actual cost of production, I get concerned and angry. Consider pharmaceuticals. US laws stringently protect corporate Intellectual Property Rights. Taxol and Tamoxifen are two widely-used cancer fighting drugs developed by the US National Institute of Health that actually cost more in the US than in Canada and other FTAA countries.
"When I took Vermont women who have breast cancer to Canada," Vermont Rep Bernard Sanders told the House, "they found that this lifesaving drug [Tamoxifen] was sold there for one-tenth the price that it was sold in the United States, despite the role that US taxpayers paid in developing the product."
If US drug companies write their severe intellectual patent restrictions into the FTAA, Canadians will pay much more for those drugs, not because of increased costs on the manufacturers' part, but because the pharmaceutical companies will be able to set their own prices. Combined with the Internet, properly-done free trade really could be a consumer's best friend. Imagine being able to review a company's environmental and labour practices as well as prices before deciding which product to order. Imagine networking with other consumers to force a manufacturer to provide satisfactory services, across borders.
That's the kind of free trade I could live with. In the meantime, I'd put more faith in the Trade Minister's assurances about "increasingly cheaper and better products," if I could even imagine him standing in line at a grocery store, much less checking the bottom of the receipt for his savings.
Read More/Do More:
Independent Vermont Rep Bernard Sanders speech on pharmaceutical prices - www.house.gov/bernie/publications...
James Love, Center for Responsive Law - www.cptech.org/pharm/belopaper.html FTAA and Intellectual Property US draft includes bids for exclusivity on: surgical procedures; databases such as stock exchange records, Internet routing structures, sports scores and statistics. US draft would challenge Canada's laws on cigarette packaging; Guatemala's laws on packaging infant formula; and Brazil's practice of distributing cancer drugs for free.
Canadian Centre for Policy Alternatives - www.policyalternatives.ca
A 10-Point Justice Agenda for the Americas - www.ecej.org/10%20point%20agenda.htm
Dollars and Democracy: Canadians Pay the Price of Privatization - Privatization and Globalization are two sides of the same coin - www.cupe.org/issues/privatization...
Energy, Free Trade, and the Price We Paid, by Dr Larry Pratt, a report for the Parkland Institute - www.ualberta.ca/PARKLAND/ESenergyfreetrade.html
WHOSE Economy? Conference upcoming May 10-13 - www.socialjustice.org/economy
CAW page on Free Trade - www.caw.ca/campaigns&issues/ongoingcampaigns...
CAW briefing paper: Globalization as Ideological Drive - www.caw.ca/campaigns&issues/ongoingcampaigns...
Canadian Alliance on Trade and the Environment - www.sierraclub.ca/national/trade-env/ftaa-faq.html
Council of Canadians: The FTAA and the Threat to Democracy - www.canadians.org/campaigns...
Campaign for Labor Rights - www.igc.apc.org/trac/nike/announce/clr.html
PRO-FTAA SOURCES
www.americascanada.org/menu-e.shtml - Despite the prospect of benefits from economic integration, income disparities and the absolute numbers of those living in poverty in the Americas have increased.
Pierre Pettigrew: The FTAA will be good for Canada - webapps.dfait-maeci.gc.ca/minpub/Publication.shtml... - Pettigrew quote: "Competitive imports have reinforced the dynamism of our economy and broadened Canadians' choice of increasingly cheaper and better products. I've said it before and I'll say it again: we all benefit from trade."
Official FTAA website: (pretty dry) - www.ftaa-alca.org/alca_e.shtml
*For the curious: I saved $107 and spent $270 for about a month's worth of staples, meals and snacks for a household that includes growing boys with teenage appetites.
Penney Kome is a Calgary author and journalist and Editor of Women'space - www.womenspace.ca.
Other articles from the Kome connections
Posted, April 16, 2001
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