Let me say I'm in agreement with much of what has already been said. Of course, real incomes have fallen, especially during the 1990s. For many families, real incomes are lower now than they were then. Certainly real incomes now are higher than they were back in 1990, but I'm not so sure the reason for that is free trade.
In fact, if I look at the manufacturing sector from 1991 to 2004, there were 600,000 net new jobs created in manufacturing in this country. Those jobs wouldn't have been created if it had not been for the ability of manufacturers to expand their businesses, particularly across North America. Granted, there were significant job losses in the transition period between 1989 and 1991, but we're still about 250,000 net new jobs ahead of where we were in 1990. In fact, we were at record levels of employment in 2004 in Canadian manufacturing. The fact that the Canadian dollar has gone up by 50% over the last three years has taken a big whack out of employment, but that's not the result of NAFTA or free trade. It is a result of global financial markets, yes.
Echoing what everybody else has said, I think the key factor and one of the reasons why our real income levels have tended to lag is because we had a huge deficit and a huge debt that we had to pay down that was threatening the fiscal viability of this country . That's what we did during the 1990s and that's why real income growth has lagged in this country. I can tell you real income growth in the United States is going to take a similar whack over the next ten years.
We do need, in order to make sure that Canadians can participate in the type of business that is going on today, much more investment in skills and in workforce capabilities and much more investment in productivity. When you look at Scandinavian countries, the European countries, you find two things in their tax system. One is that the tax system does not penalize entrance into the labour market. Secondly, their tax systems--and this may seem strange, but it's true--are some of the lowest in the world in terms of business investment. The Scandinavian countries, Ireland, all have very low tax rates on business. That allows businesses to invest in new technology. It means they're growing their businesses and providing the tools and technologies for their employees to grow their business. I think that's where we really should be focused.
Your major point is on international business policy. Do we need different agreements in different markets and a different style of negotiating? Yes, we definitely do, because what we're trying to achieve in North America is different from what we're trying to achieve in China, India, Brazil, or in Australia and Europe. We have to deal particularly with the non-tariff barriers that Glen has mentioned.
I don't think we can deal with these non-tariff barriers on the basis of the trade agreements that we've traditionally tried to negotiate. We need different approaches to this. We need approaches where we can have guaranteed access into markets that get at the regulatory differences, the regulatory barriers, in particular.