FTAA looks to be a winner
But increasing labour mobility would make a deal freer, fairer

Last week, a marketing columnist spent a grueling two-hour lunch in a Montreal bistro racking his brains for column ideas. The bill came to $12.00. His waiter earned two bucks for carrying a slice of pizza and a couple of cups of coffee, ten feet.

Waiters have one of the hardest jobs around. Done properly, the task has less to do with taking orders and delivering food and a lot to do with selling. Using everything from a sharp presentation, pleasant manner and gift of gab, a good waiter can significantly boost the price of the average order.

A well timed "would you like drinks?" can add $12.00 to a sale, as can a "would you like to see the desert menu?" In fact, what the public describes as a waiter's "tips" could better be labeled his sales commission.

Although many waiters turn the profession into a happy career, the position is just as often used as an entry level or temporary "pay-the-bills," job. In today's fast changing economy, many university marketing, communications and other graduates are working as waiters.

But one of the less talked about stories emerging from the just completed Free Trade Area for the Americas conference in Quebec City, is that waiters are among the biggest winners of any agreement that is likely to emerge.

That's because unlike the free trade among European countries, U.S. states and Canadian provinces, a FTAA agreement is unlikely to take any significant steps to increase labour mobility among member countries. And among the first to feel the effects if we allowed more immigrants into Canada would be waiters, since just about anyone can become one.

In fact, that omission is a boon to all Canada's unskilled, semi-skilled workers, not just waiters. Our nation's unskilled employees are vastly overpaid when compared to their hemispheric cousins. The $2.00 tip a Canadian waiter often gets comprises half, and sometimes even the whole day's wages, of a worker in some South American countries.

Unskilled and semi-skilled labour is now Canada's largest protected segment. That means Canadian consumers are paying more than they should for a wide range of services from taxi rides to haircuts.

Trade between countries is most efficient, when both use their resources to the fullest. If FTAA negotiations do not improve labour mobility among its member countries, a deal would significantly reduce one of the main competitive advantages of poorer countries - their large pool of unskilled workers.

Sure northern investors can extend the practice of setting up factories such as those on the Mexican/U.S border, to other South American countries. But unless this privilege is balanced, by giving more South American workers the chance to work in northern countries, the wage gap between unskilled workers is likely to grow.

Under a FTAA agreement that is likely to emerge, southern economies would lose the opportunity to grow and nurture protected industries, as Canada was able to do for almost 100 years. When companies in these industries close and restructure, workers -stuck within the borders of their respective nations -- will lose considerable negotiating power in dealing with multinational corporations.

These companies operate across borders, and are free to negotiate to get the best deal with the country that provides the cheapest employees. The only way to restore the balance of power - as European states have discovered -- is to provide workers with some degree of labour mobility, in other words to let them work in any country they want.

For the system to work best, if companies can negotiate with workers in any country to establish plants there, workers need to be allowed to negotiate to get jobs in other counties as well. That means if Mexican autoworkers feel exploited, they can go work in a Ste-Catherine St. bistro instead.

Unrestricted mobility among FTAA partners is of course out of the cards. There remains a significant prejudice in many countries toward guest workers including Canada. However much can be accomplished within the existing regime to boost labour mobility including increased quotas and preferential treatment for immigrants from FTAA members.

The fact that poorer FTAA partners appear to be interested in going ahead with a deal that does not include significant progress on labour mobility should not be interpreted to mean it is a bad idea. It is very difficult for national governments to push for moves that will result in people leaving their own countries.

The impact of hemispheric free trade on Canadian marketers should not be overstated. More than 80 per cent of Canadian trade is with the U.S., and the bulk of the rest goes to Japan and Europe. However there are significant new opportunities for new export markets in South America, notably in natural resources and high technology.

But free trade need not be limited to manufactured products, or even to services. To work best, provisions for increased labour mobility among partners need to be worked into the agreement. Canada needs to send some of its university-educated waiters to teach, and seek out opportunities in South American economies, and we need to welcome more, cheaper, workers to come and work as waiters.

E-mail can be sent to Diekmeyer at: peter@peterdiekmeyer.com

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