NAFTA: What is on the table?

NAFTA: What is on the table?

Postby Oscar » Fri Aug 31, 2018 9:10 am

NAFTA: What is on the table

[ https://canadians.org/blog/nafta-what-table ]

August 29, 2018 - 4:20 pm

With a constantly shifting North America Free Trade Agreement (NAFTA), Foreign Affairs Minister Chrystia Freeland has rushed to Washington to have talks with the U.S. While much of the agreement is still discussed in secret, here's what we know is on the table.

Chapter 19 dispute resolutions

The U.S. often penalizes foreign companies if they believe there is dumping of products. The U.S. government has an internal system that can be arbitrary as shown with softwood lumber or the 300 per cent duties slapped on Bombardier [ https://business.financialpost.com/tran ... mping-duty ]. NAFTA's Chapter 19 is an independent review process. In the U.S.'s negotiations with Mexico, Mexico agreed to get rid of Chapter 19. The U.S. will be asking the same of Canada.

Rules of Origin

In this, Canadian autoworkers and the Canadian government have been satisfied with changes to rules of origins, saying they will help protect higher wages in the industry.

· 75 per cent would be North American content.

· 40 to 45 per cent of the content would have to be made from high wage workers, those making more than $16 an hour.

Unifor President Jerry Dias says that “I believe this will stop bleeding in Canada.” However, he does have questions on whether it would apply to assembly workers or to specialized workers, and how it will be applied. [ http://canada.autonews.com/article/2018 ... -agreement ]

The previous Mexican regime was very insistent in not having this clause in the agreement. However, the incoming Mexican regime wants to raise Mexican wages to counteract emigration, keeping Mexicans at home. The incoming government has gone as far to suggest high wage export zones where minimum wage would be more than doubled.

Dairy


Canada’s supply management system controls the amount of imports and internal production. Instead of subsidizing our farmers, we ensure that production is adjusted to what the market can bear. This means that farmer’s wages do not fluctuate. It also means we get to keep our high-standard locally produced milk, which is BGH hormone free [ Canada’s supply management system controls the amount of imports and internal production. Instead of subsidizing our farmers, we ensure that production is adjusted to what the market can bear. This means that farmer’s wages do not fluctuate. It also means we get to keep our high-standard locally produced milk, which is BGH hormone free. With the TPP, and with CETA, we have allowed more exports, which has comprised farmer’s livelihoods. This could happen in NAFTA, as well. ]. With the TPP, and with CETA, we have allowed more exports, which has comprised farmer’s livelihoods. This could happen in NAFTA, as well.

Today the Globe and Mail reported that Canada is considering concessions on supply managemnt. Bruce Muirhead, Professor at the University of Waterloo, says that it is death to the industry. (Subscription Required)

“It is like death by a thousand cuts. At what point is supply management so compromised by the amount of market share that we’ve given up for one reason or another that the system doesn’t work any more?”

Farmers do have large support though. Québec is in the middle of provincial elections and all leaders, including Premier Phillipe Couillard, and CAQ leader François Legault, who is leading in polls, have committed to defending supply management. (French only - no translation available)

Sunset Clause

Mexico agreed to a sunset clause that will provide a review of NAFTA every six years on whether to extend the agreement 16 years more [ https://www.marketpulse.com/20180827/us ... ar-review/ ]. Canada doesn’t want this clause, but whether it is good or not depends on the balance of power between corporations and the public every six years. So far, Canada has said this would be a deal breaker.

Energy


Mexico had protections in the original NAFTA for its publicly owned energy industry. Mexico has since privatized parts of it. In the NAFTA 2.0, there attempts to enshrine the privatization.

According to Mexican president-elect Andrés Manual Lopez Obrador (also known as AMLO), this has been taken away and been reduced to three paragraphs. (Spanish only - no translation available)

On energy proportionality, we are still waiting to see if the provision that guarantees that Canada export a percentage of energy exports to the U.S.is still there. The Council of Canadians has repeatedly and vocally called for its removal. [ https://canadians.org/nafta-energy ]

We also hear echoes of industry pushing for a large amount of regulatory cooperation on energy. This would mean less ability for governments to restrict pipelines and other infrastructure.

As Honorary Chair Maude Barlow and I said in a recent CBC piece [ https://www.cbc.ca/news/opinion/nafta-n ... -1.4802486 ], “There are still huge problems with, for example, an enhanced North American energy strategy that promotes fossil fuels and fracking. As NAFTA moves toward regulatory harmonization, or toward harmonization of standards, we should be mindful of Trump's efforts to lower the U.S.'s own environmental standard” [ https://www.cnn.com/2018/08/02/politics ... index.html ].

Environmental and Labour chapters


The United States Trade Representative claims that there are “enforceable” labour chapters [ https://ustr.gov/about-us/policy-office ... st-century ] that exceed the TPP and NAFTA. AFL-CIO and others seem to be optimistic, but the details need to be worked out [ https://www.washingtonpost.com/news/pos ... 871df07e4f ]. They would commit Mexico to free collective bargaining. With company-controlled unions, and minimally independent unions, that would be a step forward. All parties to the deal would also be required to respect International Labour Organization standards.

On the environment front, they are also bringing in an environment chapter, but once again, one has to see the final text to see if there are actually binding commitments.

We need truly robust chapters that commit us to the Paris accord, and can be strong enforced.

Chapter 11

The Trump administration has been advocating to get rid of Chapter 11, the Investor-State Dispute Settlement (ISDS) provisions allow companies to sue governments over public interest and environmental policies that affect their investments. The Council of Canadians also has a long-standing campaign to get rid of ISDS. [ https://canadians.org/nafta-isds ]

According to the Washington Post, Canada and the U.S. may agree to not have ISDS between Canada and the U.S. If that is true, that would be a major victory for Canada, since we are the most sued partner in NAFTA. [ https://www.washingtonpost.com/news/pos ... 1b20d4c205 ]

ISDS would still exist between Mexico and the United States but in a reduced form. It would narrow the scope of what investors could claim limiting it to direct expropriation.

But at the same time, Mexico has accepted old-style ISDS provisions on both energy and telecommunications. This means that the Mexican government's attempts to review energy contracts, reverse energy reforms [ https://canadians.org/blog/big-oil-wins ... main-nafta ], and ban fracking [ https://www.ecowatch.com/mexico-bans-fr ... 25998.html ], could face serious challenges, It could very well be a roadblock to AMLO’s reforms.

Water

From what we see, there has been no movement on water being a tradable good in the annex. [ https://canadians.org/nafta-water ]

Culture

NAFTA's original agreement allowed Canada to make exemptions for its cultural industry. This meant that Canada did not have to open cultural industries to market liberalization. It could then create its own rules to protect cultural industry and thus our distinct voices in Canada, Québec, and Indigenous communites. While this examption was not perfect-- it gave the U.S. the right to retaliate-- the U.S. is pressuring Canada to give this up. More than 100 Canadian, Québecois and Indigenous artists- such as Margaret Atwood, Susan Swan, Michel Tremblay, Pierre Curzi, and Phillipe Falardeau-- signed our letter asking to protect culture in NAFTA. [ https://canadians.org/media/nafta-more- ... nt-protect ]

Intellectual Property

In the agreement with Mexico and the United States, they agreed to intellectually property rules, such as 75 years copyright and extensions of biological patents to 10 years. Canada currently has only eight years of protections for biologic drug patents.

Again, these are the life-saving drugs that are used for arthritis and a whole host of other conditions. This would compromise Canadians ability to get affordable medicine, and increase the profits of U.S. pharmaceutical companies.

The Mexico-U.S. deal also gets rid of Mexico’s ability to prevent data from being stored out of the country, by the likes of Amazon, Google and Microsoft. Canada has policies ensuring federal contractors keep Canadian data in Canada.

Financial Services

In the agreement between the U.S. and Mexico, Mexico, Mexico agreed to liberalize the financial industry and treat U.S. financial companies as their own. With the 2008 financial crisis not far behind, we have to remember that our strong financial regulations were essential in weathering the economic storm.

GMOs

As with CETA and the TPP, there are provisions in the US-Mexico agreement that limit the countries' abilities to regulate GMOs. [ https://ustr.gov/about-us/policy-office ... griculture ]

We can’t just cave in!

NAFTA negotiations are clearly very complicated with so much on the table.

Because since there is so much at stake for people and the planet, we are asking our government to hold the line. In a recent op-ed on the CBC [ https://www.cbc.ca/news/opinion/nafta-n ... -1.4802486 ], Maude Barlow and I argued that the end of NAFTA is not the end of the world. Canada must resist being bullied into an agreement that doesn’t protect us: 76 per cent of Canadians said if we get a bad deal, we should walk away. [ https://canadians.org/media/poll-if-naf ... -walk-away ]

Please take a moment now to tell Prime Minister Justin Trudeau and Foreign Affairs Minister Chrystia Freeland not to cave into bully tactics. [ https://secure.canadians.org/page/29648/action/1 ]


Blogs by Sujata Dey
Trade campaigner for the Council of Canadians
[ https://canadians.org/blogs/sujata-dey ]
Oscar
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