Social protection as an unfair subsidy?

Travis Fast

The Globe and Mail is running an article online
in which it is reported that the WTO is reviewing EI as a potential unfair subsidy to the fishing industry.

While there are lots of problem with the way EI / UI has been used as a poor stand in for regional economic development in the Maritimes, even the thought, however, that the WTO could consider social protection as an unfair subsidy to industry is both hogwash and dangerous.

This just opens up a Pandora’s box of problems. Is universal health insurance an unfair subsidy? Think about it. Why should a US company which has to shoulder some of the cost of its employee’s healthcare have to compete against a Canadian company which does not?

By employing such logic any number of social programs and supports could be declared trade and investment distorting. The good news is that despite what the Cons would like to happen—i.e. the WTO made us kill social protection—this dog will not hunt with the Europeans or with the many other nations.

That said, it is fine display of just how corrosive the managed trade and investment regime we now have under the WTO is. At a time when Free Trade dogmatists are pumping out reams of paper warning of a growing tide of sentiment against that great oxymoron called free trade, this is indeed bad timing.

If the free traders at the WTO do not want to be unmasked as vicious apologists that the they are, then they should decline this dance. Nothing could be worse PR.


2 thoughts on “Social protection as an unfair subsidy?

  1. Wow. At least one beaver has been busy – whatever happened to that lonely hack that used to post here every now and again? The GATS is indeed a dangerous thing and not just because firms in other countries will have recourse to declare things like universal health care an unfair advantage. In fact what the GATS will do is enable private firms operating in sectors with publicly funded competitors to cry fowl and force governments to either offer the same subsidies or, more affordably, cut subsidies all together (childcare, and education). The Canadian Association of University Teachers has produced some excellent work on this and its worth reading, not least because the WTO has responded directly. And the WTO’s response is worth a look see too – the counter argument that they put forward is that any signee to the GATS can de-list certain sectors, that is states can choose to protect services identified as nationally important. This is just sheer bullshit – not all states are created equal, and the ability of key states to force terms upon smaller, trade dependent players is old hat. Really old hat. Only in some poorly modeled facsimile of reality could such logic work. Now all we need is our major trade unions to start calling for “free trade” with Asia. Shit.

  2. Archie can you post the links to those documents and I will place them at the bottom of the post. Also why don’t you think about making some posts.

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