Free Trade?

or Bullshit?

We have all heard of the term "Free Trade" But for a moment think about the words not from a Economics perspective but from a psychological one. "Free" is a positive word. We all love getting things for free!  And "Trade" is a positive word because we all like the idea of trading something that we don't want for something that we do want.  So if a politician was talking about "Free Trade" the words themselves would generate a positive reaction. And if a politician generates a positive reaction you would tend to vote for them in an election.  But is Free Trade really a positive activity or does it just sound like a positive activity? Is it Bullshit?  Lets consider the facts. Lets look at the math! 

When you have "free trade" huge ships like this come to your ports and unload products made in their country by their employees. They may make these products for very low wages in very poor working conditions with material of questionable standards. The cargo is unloaded and distributed to retail outlets where you purchase it. Billions of dollars of wealth then flow out of your country to the country which made the products. This is called "free trade" 

 

Free trade is an incredibly stupid and harmful idea unless the products also made by your workers are sold abroad in quantity and there is a level of balance in the trade. If our factory workers are making $30+ an hour plus benefits in an environmentally sensitive factory then we simply cannot have free trade with a country where their workers are earning 30 cents an hour and few if any benefits in a factory belching pollutants into the environment. What happens is exactly what has happened over the last few decades. Manufacturing will move to the country with the cheapest labor and our manufacturing plants will close down and our workers will lose their jobs.

The labor rates are incredibly low in some countries and their workers often make less in one day than our workers make in one hour! So if he same product is made the labor component is much higher in our country than the foreign country. Then all they need to do is get it here and monster container ships do that at very low cost because the cost for each item is usually just pennies. We call this "free trade".  

We must take steps to protect our local market so that our manufacturers will have a reasonable percentage of it. I suggest a minimum of 50% of our consumer market would work well. The last I heard we were at less than 10% meaning that 90% of our consumer goods were made in other countries. And once you close down your factories, sell the equipment, fire the staff and sell your well established trade names and brands it is very difficult and very expensive to start them up again. And some more bad news -the 10% of consumer products made in Canada are 65% made by foreign owned companies. In Canada, Canadian owned manufacturing is just about dead. We once made high quality products with Canadian employees who earned a good income and the net earnings were kept in Canada to boost our economy even more. That has changed.

The profit from imported manufactured goods goes back to the country making them. It does NOT stay in Canada. And wealth is what supports our standard of living and our infrastructure. In fact although our retailers managed to keep some profits from foreign goods now more goods are being sold online from the foreign suppliers. This means that even a higher percentage of profits from retail sales are going offshore. And to make things worse if that is even possible you will notice that the biggest retailers in Canada are now foreign owned. Even Tim Horton's is foreign owned as is KFC and McDonalds and Dairy Queen and the list goes on and on. 

When we purchased Christmas cards this year we discovered that all of them in the stores were made in China! Don't tell me that Canada can't produce a Christmas card! When we purchased our Christmas tree from Metro we discovered that the damn tree was produced in Washington State! We have a zillion trees in Canada. I have nothing against our American cousins they are great neighbors and friends and I love Chinese food- but when Canadians are unemployed why are we supporting the workers in other countries just because our borders are open to free trade?

 

Free trade ONLY works to build wealth IF the balance of payments is positive for our country.  In Canada today we can't even produce our own socks, underwear or clothing, our shoes, shirts and pants, cars and all our consumer products are being designed and or produced in foreign countries or in Canadian based factories owned by foreigners.  To make matters worse people from these countries are now using the wealth they built up from Free Trade and are buying property, resources and office buildings in Canada and are in the midst of taking over neighborhoods and resources and remaining Canadian businesses. China and India are the two largest economies now doing this. People from China and India are hard working, productive people and I have friends from those two groups.  But free trade is causing huge problems in the form of uncontrolled immigration, foreign investments and take overs and the loss of wealth to these countries. And in 2017 we seemed locked into a politically correct world where our politicians are afraid to venture away from the concept that is called Free Trade. As a result our governments are not protecting our economy and foreign countries are taking over.      

Something to think about eh? A local joke in Canada these days is "what separates China and India?  -The Fraser River! If you live in BC you will understand the joke. If you live in Brampton Ontario you will understand the migration of people from a certain country. If you live in the GTA you will understand what I am talking about. But in some areas north of the 100 mile band clinging to the US border where 90% of the Canadian population lives our citizens are not aware that large areas of Canada are being taken over by foreign interests all thanks to Free Trade. 

You might wonder why I am interested in this topic. I am semi-retired and at age 68 I have graduated from a very good Canadian University, worked in management positions is small and large companies in Finance and production and I have owned my own businesses. I have been a Registered Publisher in Canada since 1996. I have a pretty good sense of humor. I have participated in our economy since being a paper boy in my youth and I do understand how it works. Based on this understanding we have published a book about how business really works in Canada and I think that if you are interested in business you would enjoy reading it!

Our book is called Your Very First Billion.  You can purchase a copy either in print or e-book format. Not only would that help us support this site it will help you too! The book is in novel format and not only do you learn a lot about how business really operates you also will have fun reading it! Some readers have admitted to us that it is "the best book they ever read on business". Another one of our very interesting books is called UnReal-Estate Canada and it explains why our real estate industry is actually the largest single source of GDP in Canada and how to best deal with it. 

 

If like me you have concerns about Free Trade in Canada and our problems with establishing a reasonable level of Canadian owned manufacturing then please write your Member of ParliamentPremiers and Prime Minister

 

 


 

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