Free Trade

The recent action taken by the Gen-
eral Agreement on Tariffs and Trade
(GATT) against the west coast fishing
industry should sound an alarm on the
potential threat to jobs posed by a free
trade agreement with the United States.

An estimated 4,000 jobs in the fish
processing industry are at stake if a trade
ruling, already endorsed by a GATT
panel, is ratified by the full council of
GATT when it meets in Geneva March
22.

But when the provisions of the free
trade deal are also taken into account,
much more is at stake than just the fish-
ing industry — thousands of jobs in
resource processing, present and future,
could be in danger.

Three years ago, several American fish
processors based in Alaska, filed a com-
plaint before GATT, charging that Can-
adian government export
regulations —which stipulate that sock-
eye and pink salmon as well as roe
herring must be processed in Canada
before export — were in violation of
GATT trade rules.

Although the regulations are intended
mainly to ensure quality control, they
have been responsible for thousands of
jobs being retained in Canada by Cana-
dian workers. And if the regulations are
eliminated, both fishing industry unions
and the processing companies warn,
salmon and roe herring caught in Can-
ada could be sent to the U.S. for process-
ing or even to low-wage countries such
as Korea and the Philippines.

In a long-delayed decision brought
down last year, the GATT panel upheld
the Americans’ complaint. Even then,

PROCESSING ROE HERRING ..

jobs could go to

_if the GATT ruling gO
the U.S. or offshore.

however, the decision left open the pos-
sibility of an agreement being worked
out between the U.S. and Canada.

The dispute was later referred to the
free trade negotiations for resolution.
But despite the fact that Newfoundland
Premier Brian Peckford was successful in
winning an exemption for the east coast
fishing industry, the U.S. refused to give
up what it had won at GATT. It has
continued to insist that the regulations
are in violation of GATT rules and must
be scrapped.

Even in the face of the U.S. position,
Canada could block the final adoption
of the GATT decision by exercising its
veto — as it is within its rights to do.

“Canada has a veto ... and it’s time
that this country asserted its sovereignty
... and said, no, this is going to cost us
too much,” Jack Nichol, president of the
United Fishermen and Allied Workers
Union declared at a union rally in Van-
couver March 4. The UFAWU has
waged a coastwide campaign against the
GATT ruling and took a lobby to
Ottawa in an effort to convince the fed-
eral government to prevent the U.S.
from using the GATT to threaten thou-
sands of jobs in the B.C. fishing indus-
try.

But the federal government has
declined to use its power to veto the rul-
ing. It has argued that to do so would
“rock the boat” over the free trade
agreement. Government ministers have
even suggested that some industries
“may have to be sacrificed.”

Initially, the U.S. could have ended
the dispute by what is known as the
“mirror regulation” solution —

es through these

THE LITTLE TRVCK DRIVER FROM BAIE COMEAY DELIVERS

adopting similar regulations in the U.S.
to those currently in effect in Canada.
Instead, the U.S. chose to penalize
Canada. That should give Canadians a
good indication of what they can
expect from the U.S. under the free
trade agreement.

What is worse, however, is that by
signing the agreement, Canada will close
the door to two options which are now
open: to veto the GATT ruling or to
refuse to implement it (as the U.S. has
done with several GATT rulings in the
past). Under the provisions of the free
trade deal, all GATT decisions — which
currently are voluntary — would

become binding.

The government’s position that it will
not block the GATT ruling poses a dan-
gerous precedent that could be repeated
over and over again under the free trade
deal. And all our resource industries
could be affected.

Canada has long depended on special
industry regulations, regional develop-
ment programs and other forms of
government assistance to create jobs and
to promote economic development. That
is particularly so in the manufacturing
industry where government intervention
has been necessary to ensure that resour-
ces are not always shipped out in their

S4 e Pacific Tribune, Supplement, March 16, 1988

An interview
with William
Kashtan

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