Can NAFTA be improved? Some activists are hopeful about renegotiation

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The Progressive | 3 July 2017

Can NAFTA be improved? Some activists are hopeful about renegotiation

by Ethan Goffman

In late June, the Office of the United States Trade Representative convened two days of public hearings regarding the North American Free Trade Agreement, or NAFTA. The hearings brought in representatives from agriculture, textiles, iron, communications, automakers, unions, and environmental groups. Everyone was there because the stakes are high.

Meanwhile, the opportunity for public comment drew more than 100,000 petition signatures and 50,000 electronic comments, crashing a government website. The surge of grassroots energy is palpable.

“The movement that defeated TPP has a new goal—and it’s replacing NAFTA,” says Lori Wallach, global trade watch director at Public Citizen.

Those hoping for a better NAFTA want tougher, enforceable labor and environmental standards. A Citizen’s Trade Campaign letter demands that a reformed NAFTA observe “the labor rights and protections included in the International Labor Organization’s Core Conventions and policies that fulfill the Paris climate agreement and other core multilateral environmental agreements.”

NAFTA, which covers the United States, Mexico and Canada, was born despite tremendous opposition from labor and environmental groups, ratified in 1992, and came into force in 1994. Critics say it encourages a “race to the bottom,” in which companies relocate to the place with the lowest wages, labor rights, and environmental standards. In 1992, independent presidential candidate Ross Perot described a “giant sucking sound” of jobs leaving the United States for Mexico.

As a candidate, Trump blasted NAFTA as the “worst trade deal in the history of the world,” and vowed to kill it. But as President, he has yielded to pressure from his free-trade allies and announced plans to renegotiate NAFTA instead.

As a candidate, Trump blasted NAFTA as the “worst trade deal in the history of the world,” and vowed to kill it. But as President, he has yielded to pressure from his free-trade allies and announced plans to renegotiate NAFTA instead.
Some progressives view the renegotiation of NAFTA as an opportunity. “We need a fundamentally different approach to trade, one that prioritizes people and planet over profits,” says Ben Beachy, director of the Trade Program at the Sierra Club. The group wants to see strong climate change measures that support the Paris agreement.

Other groups emphasize labor rights.

The AFL-CIO blueprint for change includes addressing currency manipulation, allowing “Buy America” laws, reinforcing auto jobs, and strengthening anti-dumping rules. The Citizen’s Trade campaign leads with a call to stop incentivizing the offshoring of jobs and includes helping family farms, protecting food safety, and reducing monopolistic practices from drug companies.

So what are their chances of real progressive change?

Wallach divides the administration into a Wall Street wing that likes NAFTA, and a few Trump advisors who advocate for deeper changes, particularly when it comes to protecting jobs.

Among the latter camp is U.S. Trade Representative Robert Lighthizer, a Trump appointee. “I think it is not a legitimate competitive advantage to have very low environmental standards and I think the same thing is also true with respect to labor standards,” he said at a June 22 hearing, offering hope that the Trump Administration will prioritize American jobs, as Trump promised in the campaign.

If Trump’s base “wins the debate, the NAFTA they have in mind is certainly better than what is now in place,” says Wallach. “They don’t like the investor state, they don’t like the ban on ‘Buy America’ provisions, [and they] insist on stronger wage protection.”

Yet the Wall Street faction, which believes in unfettered free trade, is deeply entrenched in the Trump Administration. “Given that he’s stacked his cabinet with billionaires that support job offshoring and climate denial,” says Beachy, a progressive new NAFTA is “not what I would expect.” Beachy points to the lack of a transparent, open process with continuing opportunity for public input as a bad sign.

Leo Gerard, international president of the United Steelworkers, argues for “trade balance between the three countries,” so that “one wouldn’t be used as a dumping ground against the other two.” Mexican standards, he says, need to be raised substantially regarding workers’ rights and wage equality.

One core change sought by the reformers would eliminate the current investor state dispute-settlement mechanism, which allows companies to sue countries for laws that might harm corporate profits. These cases are decided by a tribunal of three corporate lawyers, with a vote of two needed to inflict a financial penalty.

Beachy cites several cases brought against laws that protect the environment. In 2012, Lone Pine sued Canada for $250 million (since revised downward to $119 million) due to Quebec’s moratorium on fracking, a case still to be decided. More recently, TransCanada launched a $15 billion suit against the United States for its refusal to move forward with the Keystone XL pipeline, a touchstone issue among environmentalists (although the suit was suspended when Trump approved the pipeline).

Beachy calls for creating “a dispute settlement process body that is both binding and independent,” rather than the current tribunal of corporate lawyers.

Regardless of the short-term outcome, the movement for a progressive new NAFTA will hand progressives a dynamic issue—and a mobilized base—in the 2018 and 2020 elections. The current renegotiation could set the stage for future battles, perhaps for deeper change.

source: The Progressive