Most Canadians don't benefit from free trade: Report

So the rich get richer and the poor get poorer under these rules, big surprise.  I guess if Free Trade was nothing but a bust for the average Joe, the North American Union will be a killer:

Beth Gorham

World - Friday, September 29, 2006 @ 02:00

free trade in North America has resulted in sharp gains for the rich at the expense of the average Canadian worker, says a report from the U.S. Economic Policy Institute released Thursday.

In fact, lower-income Canadians are worse off than they were before free trade and cuts to federal social programs at the same time have compounded the problem, said co-author Bruce Campbell, executive director at the Canadian Centre for Policy Alternatives.

The Ottawa-based think-tank is an independent non-partisan organization that promotes research on economic and social policy "from a progressive point of view" - according to its website - and concerns about social and economic justice.

Similarly, the U.S. institute carries out economic research and education, with a "concern for the the living standards of working people."

While trade between the NAFTA partners has grown rapidly, the free trade deals have not helped all workers, the report says.

"The most striking feature of this growing inequality has been the massive gains of the richest one per cent of income earners at the expense of most of the population," said Campbell, who called for a major assessment of the costs and benefits of the North American free trade Agreement.

"Economic and political elites promised that free trade would usher in a golden era of prosperity for Canada. It clearly has not delivered the goods."

The institute's report found similar problems in Mexico and, to a lesser extent, the United States.

"In each nation, workers' share of the gains from rising productivity fell and the proportion of income and wealth going to those at the very top of the economic pyramid grew," said Jeff Faux, founder of the Washington-based think-tank.

NAFTA came into effect in 1994, five years after the Canada-U.S. free trade deal. In 2005, two-way trade between Canada and the United States approached nearly $US500 billion, while U.S.-Mexican trade amounted to about US $290 billion, both figures sharply higher than when the trade deals began.

Campbell said both agreements were supposed to boost living standards, help close the productivity gap with the United States, create a more efficient economy and strengthen Canada's social safety net. Yet, there is no evidence Canada gained a special advantage in the American market, said Campbell, and the country's share of U.S. imports actually fell after 1994.

Big business, though, has done well. A study of 40 non-financial member companies of the Canadian Council of Chief Executives found their combined revenues jumped 105 per cent between 1988 and 2002, while their overall workforce shrank by 15 per cent.

The wealth hasn't trickled down, said Campbell, despite steady productivity growth in the Canadian economy. "If free trade was supposed to usher in a new era of rising living standards, reversing the sluggishness of the 1980s, the record reveals quite the opposite."