EDITORIAL

Liberal budget part of
the great sell-out

rime Minister Jean Chretién’s historic retreat on
Canada’s social programs has clearly been

spelled in the February 22 budget. So too has the
Liberal government's plans to sell off, privitize,
and restructure Canada and cater to the U.S. in
the new age of the North American Free Trade

Agreement (NAFTA).

In an overt attempt to appease and please
U.S.investment houses and investors the Liberals are speed-
ing up the federal goverment’s divestment in its own country
and is opening wide the doors for wholesale privitization of
social and other public services.

Leading the list of cuts is a two year, $7 billion reduction of
transfer payments to the provinces for health care, education,
and welfare. This will see across-the-board reductions in the
province's abilities to fund essential services. In British Co-
lumbia in 1996 alone the government says that the federal
cutbacks will cost health, education, and social services over
$457 million. This will means that fewer health care services
will be universally covered, student tuition fees will skyrock-
et, and welfare payments will be curtailed.

The Feds intend to offload responsiblilty for the country’s
health care system onto the provinces, which will then create
a two-tiered system where the wealthy can pay to get better
services and the less fortunate will have to wait for inferior
services.

As more hospital and medical services are contracted out
and privitized, U.S.hospital-management services will be free
to bid on Canada’s medicare system. They are poised to take
advantage of Canada’s divestment in universal health care
and the NAFTA will ensure that there will no obstacles for
the multinational corporations.

Next on the list will be Canada’s Health Care Act itself
which guarantees universal, portable, comprehensive, and
publicly funded health care within a publicly administered
system. The Liberals are thinking about doing away with the
Act itself and replacing it with “national standards” on health
care.

On February 18, only 9 days before the budget, Finance
Minister Paul Martin said cutting of social services hurts peo-
ple’s health, their ability to train, to get works and in the long
run adds to the defecit.Then he went ahead and did exactly
what he said he should not do.

The goverment also announced the elimination of 45,000
federal civil service jobs. The largest cuts will be seen in
Transport Canada’s Ministry where 20,000 jobs will be pared
down to 4,000 as the government plans to sell off the coun-
try’s national railway system.

Pitching this sell-out was Transport Minister Doug Young,
who went to New York to meet with Wall Street Investors to
spread news of the government's privitization efforts. The
minister also told the Americans that they will soon be able
to bid on $1 billion worth of Canada’s air navigation system
as it goes fully private.

Under the NAFTA, U.S. corporations will be given national
priority. The minister was in New York to give thirsty in-
vestors the news.

Another big privitization deal will be the sell-off of the fed-
eral government’s remaining 70% share in Petro Canada.
Canada’s petroleum industry will most certainly be up for
grabs to foreign investors as well.

In addition, the Liberals are likely going to privitize weath-
er services, food inspection and regulation, fishing licensing
and several other public services.

The federal-provinicial Forest Resource Development
Agreements (FRDA’s) are being almost eliminated completely
with $200 million in cuts as 20 regional offices will be closed.
Canada’s number one employer and number one source of
earnings is being ignored and denied significant funding for
research and development.

For short-term reasons, the Liberals are parcelling up and
selling off the country. And in the meantime they are going to
bust up Canada’s social programs and offer the broken pieces
to multinational corporations. This is a budget that the Mul-
roney government would have been proud of.

LUINBERUORKER

Official publication of WA-CANADA

Norman GARCIA GERRY STONEY . . President
Editor NEIL MENARD .. Ist Vice-President
FRED MIRON . . 2nd Vice-President
WARREN ULLEY . . 3rd Vice-President
5th Floor, HARVEY ARCAND . . 4th Vice-President.
1285 W. Pender Street TERRY SMITH. . Secretary-Treasurer
Vancouver, B.C.
V6E 4B2

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Mexican peso nosedives and American attacks on
Canada continue as the NAFTA celebrates its first year

Just more than a year after
the North American Free
Trade Agreement (NAFTA)
was put into place by the
United States, Canada, and
Mexico, all hell has broken
loose. Mexico’s currency has
plummeted, the U.S. is contin-
uing its attack on Canada de-
spite the agreement, and
Canada’s Prime Minister Jean
Chretien is acting like a cham-
pion of free trade.

In December of 1994 and
the first part of this year the
Mexican peso dropped in val-
ue by 40%. The Mexican econ-
omy, touted by pro-free
traders as a modern miracle,
plummeted as the country’s
peso was finally realized for
being overvalued.

Now with one of NAFTA’s
partners in deep trouble, a
$50 billion U.S. lifeline has
been floated to Mexico by the
U.S. government, the Interna-
tional Monetary Fund, the
Swiss-based Bank of Interna-
tional Settlements, and the
Canadian government.

The obvious questions have
arisen. What has gone wrong?
How could this possibly have
happened? How can so many
supposed experts been so
wrong? Why was the Mexican
peso so overvalued? How
could so many financial wiz-
ards have been so wrong
about Mexico’s economy?

It appears that the peso
was artificially propped up by
those who wanted to see a
NAFTA put into place. While
the agreement was being ne-
gotiated, the peso was inflat-
ed as so that Mexico labour
would not appear to offer as
cheap of labour as it does
now. Now with the devalued
peso, Mexico offers even
cheaper labour. At the same
time Mexican workers are
helpless victims which face
wage rollbacks, inflation, and
further economical setbacks,

In short the U.S. is holding
up the peso from even further
collapse and not without con-
siderable strings attached. To
receive the loan guarantees
Mexico is paying up front
with high interest payments

and direct revenue from sales
of oil. Mexico is the U.S.’s
second largest source of for-
eign crude.

During NAFTA negotiations
the U.S. wanted Mexico’s

state-owned oil industry on.

the table and couldn’t get it.
Now the it has a grip on the
country’s oil revenue and
won't let go until Uncle Sam
says so. The U.S. Congress
has also attempted to influ-
ence Mexico’s foreign policy
as a result of the bailout.
Mexico’s decade of eco-
nomic reform was the wonder
child of the International

The first year of
NAFTA has
shown that U.S.
protectionism is
stronger than
ever and the
Mexican miracle
ts a hoax

Monetary Fund and U.S.
banking interests. Now listen
to what the IMF is saying.

“This is the first crisis of
the next century,” say the
IMF’s managing director
Michel Camdessus. “I cannot
promise that we will not see
new crises of this kind even
before the next century.”

In the meantime the Mexi-
can government is violently
putting down a peasant revolt
in the state of Chiapas and
other parts of the country,
where the government has
shut down the news media.
The rebel Zapatista Army of
National Liberation, which
first came to the forefront in
January of last year, has chal-
lenged the North American
Free Trade Agreement which
has had devastating effects on

the corn growing peasants of
Chiapas. A flood of subsidized
U.S. corn has put small farm-
ers out of business with noth-
ing to do for survival.

The Americans are pushing
hard for Canada to drop tar-
iffs against poultry and dairy
products and drop its supply
management system for farm-
ing. Although Canada abided
by a ruling from the Uruguay
round of talks under the Gen-
eral Agreement on Tariffs and
Trade, that it would drop bor-
der restrictions in favour of
tariffs, the U.S. says that
Canada must immediately
drop tariffs under the NAFTA.
Canada says that the GATT
overrules the NAFTA and will
not drop them. If it does, then
Canada’s small farms, espe-
cially the 36,000 dairy farmers
in Quebec, will be devastated.

The Americans are also
pushing the Canadian Govern-
ment to abolish the Canadian
Wheat Board. Presidential
candidate Richard Lugar, a
Republican from Indiana says
the “American farmers now
feel they are competing with
the government of Canada.”

At the same time no coun-
try subsidizes its grain pro-
ducers more that the U.S. It
has forced Canada to curb its
durum wheat sales to the U.S.
and used it multi-billion dollar
Export Enhancement Pro-
gram to subsidize American
wheat and push Canadian
wheat sales out of Mexico
and China.

Jean Chretien’s answer to
all of this is to parade around
Latin America, dubbed as the
“godfather” of free trade. For
eleven days an : Jana, Chre-
tien went to Chile, enti
Brazil, Trinidad, Cana
Brazil with a government/
business delegation to extol
the virtues of the NAFTA.

His pre-election promise to
get agreements with what
constitutes a subsidy or what
constitutes illegal dumping
under NAFTA has gone
nowhere. Canada’s requests
in these areas have been sys-
botnets ignored by the

DEP CPR DE PDIP IOP HITE C908

LUMBERWORKER/MARCH, 1995/5