- Genevieve Tran
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What do international trade deals mean for your city?
Benjamin Barber says mayors need to be on the global stage? Here is a snag already within their own cities:
One important division of city government is Economic Development which incubates local talent and invests in conditions that attract business to the area. I have learned that in Toronto, Canada, at least, this is strangely not coordinated with the City's Procurement / Purchasing department i.e. the biggest potential customer in the area for these new innovative services, talent, products etc. (government is 20% of all spending). The two departments are FAR away from each other on the org chart. The Purchasing department simply goes for the lowest competent bidder, period; their main purpose being to block corruption / collusion by making decisions as universally agreeable as possible--the cheapest thing. (Not the most innovative, economically impactful, sustainable etc. thing). Long-term economic effects cannot be determined by this sole consideration. Apparently, this is the case with many cities in developed countries.
However, small new emerging businesses don't have the ability to bid as cheaply as the huge multi-nationals so they die out or move away--and then the city becomes less globally competitive without its talent. And it's unsure that the hodge-podge of financially efficient services that do run a city necessarily make it a great one. Further strangeness: city revenues are not from income tax (federal) or sales tax (state/provincial), but property tax. Which means that a city has to get people to move there and own real estate to really make money--i.e. bad when people leave.
Canada and the EU are in talks to form a free trade zone (Comprehensive Economic and Trade Agreement), which cities' aren't even at the discussion table for. However, this will open up even more contracts to outside competition. Does global competition make a city better or more economically messed up? Is this something mayors are even mandated to deal with?