ICYMI – Canadian and Ukrainian PMs sign deal to screw over Ukraine’s working class

It’s a great misfortune that the very words “trade agreement” have been known to cause eyes to glaze over, yawns to spring unbidden to mouths, and minds to wander. “I should probably do the laundry when I get home,” you think, “but I don’t really want to,” as some blowhard drones on about the significance of CETA or the TPP (that second one’s by yrs truly, btw -I am that blowhard!).

Trade agreements are notoriously boring subjects. They are stuffed with arcane legal terminology and have an absolute alphabet soup of acronyms, and they are entirely lacking in sex appeal, action shots, and gripping human interest angles. For precisely these reasons, they don’t sell newspapers or attract viewers. The most exciting visuals you’re gonna get out of them is a formal signing ceremony, replete with the flags of the member nations and earnest besuited politicians earnestly mumbling about the incalculable benefits of free trade and the incredible economic opportunities that will ensue from this agreement – a scene much like this one:

That’s right – Canada just signed a free trade agreement with Ukraine! Surprise! Bet you didn’t hear about it.

But before your eyes go all focussed-on-the-middle-distance-y and your mind gloms on to the first thing it can find to distract you from the menace of listening to me talk about the nuances of a bilateral trade agreement with an eastern European nation, just let me say that I promise to do my best to make it entertaining. (Although I can’t do anything about the total lack of sex appeal, I can promise you some rock and roll if you stay tuned to the end.)

This signing ceremony departed from the typical script in a few ways, the most relevant of which is that the agreement was explicitly acknowledged as being political. Canada’s bilateral ties with Ukraine were presented as a powerful blow against Russian terrorism – yes, literally “terrorism”:

Beyond its potential economic value, though, the trade agreement cemented Canada’s involvement in helping Ukraine move away from Russian influence, Yatsenyuk said as he thanked Harper for his resolve in achieving the deal.

“You, together with our international friends and partners, you are the flagship in supporting Ukraine in our quest and fight against the Russian-led terrorists,” Yatsenyuk said before the two men shook hands.

The agreement also comes just weeks ahead of a fall federal election campaign in which Harper is expected to draw heavily on his Conservative party’s support for Ukraine as an indication of how Canada under his leadership has stood up against Russian President Vladimir Putin’s push to retake territory lost in past conflicts.

How this trade deal fits into the narrative of Canada’s supposedly unyielding support for the (illegal coup-installed) Ukrainian regime in the face of Russian “aggression” is a bit of an open question. Upon closer examination, it looks like the latest step in a total hollowing out of the Ukrainian state for the benefit of Western corporations and investors.

In the aftermath of the Maidan protests last year and the subsequent ousting of Ukraine’s president, the nation’s oligarchs have managed to sink their tentacles even deeper into every facet of the Ukrainian economy, with the result being that they are well-positioned to benefit from agreements like this one – so much so that the Ukrainian Prime Minister called on Canadian oligarchs to help save Ukraine from its own super-wealthy people:

Ukraine’s Prime Minister is calling on Canadian investors to take part in a massive privatization of state assets organized by Kiev as a way of weakening the power of wealthy oligarchs blamed for spreading corruption in his country.

Arseniy Yatsenyuk cited, for instance, Ukrainian businessmen who have been “sitting like vampires” on the country’s publicly owned energy sector…

Ukraine is preparing to spin off billions of dollars of government enterprises – including power generation and distribution assets and chemical plants – and the government wants Western investors to bring more orderly business methods to the Eastern European country.

“I don’t want Ukrainian tycoons to buy these state-owned enterprises,” Mr. Yatsenyuk said. “We would be happy to see Canadian folks buying Ukrainian assets and bringing into Ukraine good corporate governance, new investment and new jobs.

“That is what I asked the Canadian Prime Minister: ‘Please tell your investors and your businesses to jump into Ukraine.’”

By “Canadian folks” he doesn’t mean little people like you and me, just in case you weren’t sure.

Yatsenyuk, by the way, was hand-picked by US Assistant Secretary of State Victoria Nuland to be Ukraine’s Prime Minister in the months of chaos leading up to last year’s coup, which was extensively sponsored by the American government. Is it at all surprising to see him trying to sell out Ukraine’s public utilities and government enterprises to big-time Western investors?

(Incidentally, Nuland and her husband Robert Kagan have made a living, in and out of government, by promoting, instigating, and profiting from war – Bob Dylan even wrote a song about her!*)

We could wonder about what the impact of this massive sell-out of Ukraine’s public assets will be on the nation’s economy – but fortunately, we don’t have to. We have a fantastic historical parallel from the early-to-mid-90s: the IMF-controlled Russian transition to capitalism which became known as shock therapy, which is:

A sudden and dramatic change in national economic policy that turns a state-controlled economy into a free-market one. Characteristics of shock therapy include the ending of price controls, the privatization of publicly-owned entities and trade liberalization.

And how did that work out for Russia?

Between 1991 and 1997, Russian GNP – i.e. the value of all goods and services that Russia produces – went down 83%. Agrarian production decreased 63%. Investment decreased 92%. 70,000 factories were closed down. This led to Russia producing 88% fewer tractors, 76% fewer washing machines, 77% less cotton fabric, 78% fewer TV-sets – the list is endless.

In a country without unemployment, 13 million people lost their jobs. Those who still have work have had their wages cut in half. The average life span for men has been shortened by six years. Six years!

Such a change normally occurs only when a country is hit by a massive war, an epidemic or famine. None of this has happened in Russia. Still, the average life span decreased, in just a few years, to the same level as in India, Egypt and Bolivia.

And all that without the additional compounding factor of a festering civil war consuming the most industrially productive region of the country.

The parallels with contemporary Ukraine are even stronger than they look at first glance – consider, for instance, the role of the IMF in dictating the country’s economic policies since the coup government took power:

Ukraine’s government is in the middle of implementing a set of stringent economic reforms agreed to in April [2014] with the International Monetary Fund (IMF) in exchange for a $17 billion bailout. Although Kiev has been commended by the IMF for a “bold economic program,” the loan’s terms, combined with Ukraine’s political and economic crisis, are a recipe for disaster…

The IMF demands that Ukraine make immediate cutbacks to reduce the fiscal deficit. To meet this requirement, Kiev has already enacted a series of laws raising excise and property taxes,reduced social income support expenditures for retirees and public employees, frozen Ukraine’s minimum wage, and cut public-sector wages.

And now we can add to that the dumping of Canadian exports onto a now-unprotected Ukrainian domestic market, as the Ukrainian Prime Minister urges Canadian oligarchs to buy up his country’s publicly-owned assets and enterprises.

If Harper’s trying to show solidarity with the Ukrainian people, he sure has a funny way of showing it.

As John Helmer, the longest continuously serving foreign correspondent in Russia, noted last week:


“Harper is saving the Ukraine by damaging its farmers,” a Toronto source says, “and keeping Canada’s steelmills protected from one of the few exports the eastern Ukraine can still turn out. If that’s not cynical politics for gullible voters, I don’t know what is.” According to another Canadian analyst of the Ukrainian conflict, “this is money-making for a small circle of Ukrainian-Canadian business figures, their friends in Ottawa, and the ultra-nationalists in Ukraine.”

(If you’re interested in the nitty-gritty of the deal, click through for the full article; Helmer breaks down exactly who benefits from this, and believe you me, it ain’t the Ukrainian proletariat.)

There’s a few major takeaways from this story.

One is that Harper is not afraid to pursue trade agreements for the benefit of Canada’s wealthy elite. As the Star notes in their coverage of this deal, Canada has concluded trade agreements with a whopping 39 nations since Harper took power in 2006, as opposed to six in all the years prior. That’s a huge deal, and it’s massively under-discussed. In fact, I’ll be so bold as to predict that these trade agreements will be Harper’s longest-lasting (and most toxic) political legacy.

Another is that this government consistently tries to use the complex and tumultuous situation in Ukraine to try to win votes among Eastern Europeans in Canada. As I wrote last month about Canada’s planned military involvement in Ukraine over the course of the summer:

Mostly this story is frightening because of the sense I get that Harper is doing all of this for domestic political advantage. Preston Manning has said of his one-time protege that Harper was always totally uninterested in foreign affairs, and indeed, on Harper’s watch, Canada has become something of a laughingstock internationally. The decisions this government takes on international issues always seem designed to either appeal to their base or attract voters from a swing constituency – and it’s easy to see this as an appeal for Eastern European votes this fall. That was also the calculus behind the proposed Monument to the Victims of Communism.

So we’re sending the Canadian military – in a strictly advisory role this time, they swear! – to get involved in yet another complex and seemingly intractable conflict based on some hyperbolic rhetoric and the hope of winning some votes for the CPC, on the orders of a guy who doesn’t give a damn about the nuances of geopolitics.

Yeah, this isn’t gonna end well.

(That military mission, by the way, has been delayed due to various legal and diplomatic obstacles, but Defence Minister Jason Kenney insists it’ll be underway ASAP.)

Look, I know that it’s hard to get worked up over a reduction in pork tariffs, or whatever, but the plain and simple truth is that these deals have disastrous consequences for working people both here and abroad. They help to enrich the already-obscenely wealthy, they take power out of the hands of governments and put it into the hands of corporations, and they weaken the social safety nets which protect the most vulnerable.

This particularly agreement was explicitly acknowledged as political by the leaders of the countries involved, but all of these trade deals are political. They’re negotiated and implemented in the pursuit of political goals – a more perfect capitalism, higher profits, fewer regulations, more “labour flexibility” (which is code for you getting screwed re: wages and working conditions).

We have to fight the haze of boredom surrounding all these economic buzzwords and find ways to care about these trade deals. They matter, and they have a big impact.

* Legal disclaimer – not technically true. But also too check out this wicked Pearl Jam cover – Eddie Vedder kills it on the vocals. Like, the sustained contempt and rage in his voice is masterful. (Do your best to ignore that asshole David Letterman.)

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