Monday, January 24, 2005

Building a Bridge to the 17th Century

UPS is challenging Canada Post's existence under NAFTA, according to the Globe and Mail.

Because NAFTA allows foreign companies to attack the government for policies that they claim reduce their profits, UPS says that the Canadian postal system undermines their business, and they are entitled to reparations. I haven't seen balls like this since Saudi Arabia demanded compensation from any lost oil revenues because of Kyoto.

There is a more general point here - if UPS wins this battle, then private US HMOs could begin challenging provincial health insurers, and US banks could try to destroy the CPP, and Monsanto could attack the Canadian Wheat Board. One by one, the institutions which built this country as a separate entity from our souther masters would be undermined or destroyed. We might console ourselves that Royal Bank and other Canadian companies would do the same thing to the US, but that's cold comfort when all of our once-public services are privatized. It's not too much of a stretch to think of large corporations attacking tax policies and labour laws because they undermine "competitveness".

It might seem obvious, but letting Mulroney and Reagan lock their respective countries in to a trade regime which undermines all the progresive policies of the 20th century doesn't seem like such a good idea in retrospect. William Greider has called this "undoing the 20th Century", but I think he's being overly optimistic - we're turning the clock a bit further back then that. At least the 19th century saw Democracy entrenched in the the UK, and later Europe and much (though not most) of the rest of the world through reform and revolution - in the 21st, we're seeing democracy undermined by the world's heir to the British Empire.

1 comment:

Fag Fucker said...

This is why I don't really like AP (or any wire) stories very much. They tend to be overly vague and short on crucial details. While I am less than thrilled with what UPS is doing here, they are not suing Canada Post merely for existing. They are claiming that CP 'cross-subsidizes' Purolator (a courier service not regular lettermail) which is technically a private company, although CP has something like a 95% stake in it.

From what I can remember UPS is alleging that this violates the 'national treatment' provisions of NAFTA which requires signatory governments to treat foreign corporations just like local ones. This case is still ongoing even though it was originally filed way back in 2000. Canada has since won a jurisdictional award forcing UPS to redraft its claims. I'm inclined to think that UPS will eventually lose this thing, NAFTA tribunals have tended to be fairly conservative. But it's really hard to say. NAFTA hearings are interminable and the concepts involved are INCREDIBLY intricate.

However, the main thing is that it doesn't seem like UPS is suing the Canadian government because it provides a competing service, only that it subsidizes a rival private company.

Also, it's important to remember that this "trade regime which undermines all the progresive policies of the 20th century" was actually designed to do this. The Mulroney government explicitely stated that CUFTA (precursor to NAFTA) would lock-in the Mulroney government's free-market policies so that they couldn't be undone by future regimes.