Canada has long undermined impoverished countries’ bid to draw greater benefits from their commodities. Ottawa’s opposition to Indonesia’s move to add value to its nickel and rejection of its call for a producers’ partnership is a recent example.
Canada is a third-party supporter of a European Union lead suit against Indonesia at the World Trade Organization (WTO). They challenged Jakarta’s restriction on exports of unprocessed nickel and bauxite. Indonesia is appealing a WTO ruling that found its measures to be inconsistent with the body’s prohibition of export restrictions and bans.
Irrespective of WTO rules, the world’s largest nickel producer has generated huge benefits from the move. In short order the value-added benefits Indonesia garnered from the commodity rose 20-fold from US$1.1 billion to $20.8 billion.
Last year Indonesia raised a nickel producers’ partnership with Ottawa. As the world’s sixth biggest producer, Canada could benefit from stabilizing and boosting the price of the commodity. But Ottawa rejected the proposal out of hand. “We are not looking at that particular model in the way that they have proposed,” industry minister Mary Ng told the Financial Post in an article they headlined “Global nickel cartel off the table as Canada’s trade minister rebuffs Indonesia’s approach”.
Canada could benefit from higher nickel prices, but it isn’t interested in even exploring the matter due to the country’s position towards the apex of global capitalism and extractivism. Historically, this country has supported wealthy nations at the WTO, IMF and similar forums while repeatedly opposing the formation of producers’ agreements designed to help poorer commodity dependent nations reverse the deeply unequal terms of global trade. In the 1970s Canada resisted a producers’ organization for iron put forward by poorer producers and helped block a copper agreement supported by the South at the Integrated Program for Commodities. Ottawa also opposed the International Bauxite Agreement. In a similar vein, Canada was broadly hostile to the International Coffee Agreement and poorer countries’ bid for a better deal in sugar negotiations. (In criticizing “neocolonialism”, Ugandan president Yoweri Museveni recently noted that “the global business for coffee is worth $460 billion… But of those $460 billion the coffee producing countries of the whole world share only $25 billion and Africa shares only $2.4 billion out of $460 billion.” Starbucks alone had over $32 billion in revenue last year.)
Ottawa has prioritized low-cost raw material imports over social justice. As the global mining powerhouse, Canadian capital is hostile to “resource nationalism”. Ottawa has promoted and greatly benefited from IMF structural adjustment programs that privatized state resource firms and liberalized resource sectors. Producers organizations worry capitalists as they often lead to greater public ownership of resources (the best-known example of a producers’ cartel is OPEC, which is dominated by nationalized oil firms).
Benefiting from liberalized resource regimes, Canadian companies have extracted nickel in Guatemala, Dominican Republic, Madagascar and elsewhere. Halfway through the last century the Sudbury based International Nickel Company (INCO) controlled nearly 90 per cent of nickel production outside the communist countries. In Indonesia INCO greatly benefited from the pro foreign investor policies General Suharto adopted after his shockingly brutal coup. To prevent the spread of leftism and nationalist economic policies in Asia, Canada supported the overthrow of Indonesia’s independence leader Sukarno in 1965 and the subsequent murder of over half a million suspected supporters. Suharto would rule for over three decades.
Ottawa assisted INCO’s operations in Indonesia even though its mine on the island of Sulawesi displaced an indigenous community. INCO’s interests in Indonesia were one reason Ottawa continued to ally with Suharto in the 1990s despite growing opposition to his occupation and violence in East Timor.
Coups, colonialism, invasions and various forms of political subterfuge are important elements in explaining the unequal terms of global exchange. Reducing global inequities requires economic interventions irrespective of “free-market” ideology or WTO rules. It’s unsurprising that Canadian capital and its enabler in Ottawa are hostile to measures that chip away at inequities they benefit from.
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