Free Trade agreement
There are many advantages and isadvantages of the Free Trade Agreement between Canada and America, yet Canada is not getting much of a good deal, only in certain ways are Canadians at an advantage. Some advantages are: an increase in production, and better U. S-Canada relations. Some of the disadvantages are: diminished population growth, loss of Jobs, diminished sovereignty, and workers facing concessions on wages, working conditions, and living standards. To begin, an advantage to the FTA is an increase of production.
Canadian businesses would increase production to keep up with American producers, so as not to be bought out. With more investment in Canadian businesses due to elimination of tariffs, Canadian industry will grow and expand, increasing production and efficiency (Bain Pg. 376). Another reason why the Free Trade Agreement is an advantage to Canada is that it helps relations between Canada and the U. S, because the two nations have not always seen eye to eye, they now have something to connect them. The FTA helps the two countries get on each other’s good side due to help from one another in business and trade.
To sum it up, there are not very many reasons why the Free Trade Agreement is an advantage, but there are some. There are many reasons why the FTA is a disadvantage. Firstly, the population of Canada isn’t increasing like it should; because of the FTA our workers are going to America to get Jobs because America can offer more money to their workers because they have the money to do it, whereas Canadian businesses are lowering wages to make more money to try to keep up with the American production.
Canadian workers follow the raw materials to America “The land of opportunity’ to get more money. Everyone leaves to America making our population not increase because if they stay here, the workers may not earn good oney, so they cannot spend it, so goods do not get produced. “The result: a downward economic spiral”(Finn Pg. 10). Another reason the FTA is a disadvantage is increased unemployment. Many American companies that have branch plants operating in Canada will become redundant and be shut down. These branch plants were established in Canada to provide shelter behind the tariff wall.
Tariffs were not added to selling price of their products because they were behind the tariff wall. Under the FTA, there are no tariffs, so the branch becomes unnecessary, and the customers can be supplied equally well if not better and cheaply from one plant in he U. S. The closing of these branch plants results in many Canadian Jobs disappearing (Conklin Pg. 28). Also, many businesses that are owned completely by America, where there is a bigger market and more opportunity for growth, and there are no taxes to sell products to Canada from the U.
S under the FTA. The moving and shutting down of these factories and plants creates more unemployment and less Job opportunities (Bowker Pg. 32). Many Canadians considering starting a business in Canada may be lured to America to start their business, because with the removal of ariffs, these companies can supply Canadian customers Just as easily from America while being nearer the larger American markets with the advantage of lower operating costs. This idea of starting businesses in the U.
S instead of Canada, takes away Jobs from Canadian workers before even giving them a chance. Another reason for the FTA to be a disadvantage is Canada as a nation losing its sovereignty and independence. Ownership and control of Canadian industry and resources will gravitate towards the United-States under the Free Trade Agreement. Decision making for these industries will be transferred to the boardrooms in America. Economic power’s movement is usually followed by political power, so it is probable that Canada could face the eventual loss of political independence.
Lastly, an example of the disadvantages of the FTA is Canadian workers facing concessions on wages, working conditions, and living standards (Conklin Pg. 30). Canada’s extensive social benefit programs like, health care system, unemployment insurance benefits, and family allowance, which do not exist on the same scale in the U. S, are vulnerable to attack as “unfair subsidies” to be reduced or eliminated. Which in turn would ncrease the cost of living for Canadians affected by the changes.
Money would be needed to help pay for businesses without help, which could lower workers wages and have many workers losing their Jobs. The Americans are basically trying to assimilate the Canadians and take away their distinction and independence. So in summation, the FTA is not very advantageous because of Job loss, minimal population growth, disappearing sovereignty and worker concessions. Therefore, the disadvantages of the Free Trade Agreement outweigh those of the advantages, so Canada is not getting a very good deal.