NAFTA: The Good, the Bad, and the Ugly on NAFTA 2.0

NAFTA: The Good, the Bad, and the Ugly on NAFTA 2.0

Postby Oscar » Mon Oct 01, 2018 6:25 am

The Good, the Bad, and the Ugly on NAFTA 2.0

[ https://canadians.org/blog/good-bad-and-ugly-nafta-20 ]

October 1, 2018 - 4:39am

At midnight last night, Canada and the U.S. agreed on a new deal on NAFTA, one which would now be called the USMCA, the U.S. Mexico Canada Agreement, as if that was easier to pronounce. Use May Ca?

But there is the good, the bad, and the ugly within the agreement.

Good news first

• No chapter 11 between the U.S. and Canada

For many years, the Council of Canadians and others have been writing and advocating to get rid of Chapter 11, the investor-state dispute panels. This is the provisions that allow corporations to sue countries over their public interest policies. For years, we have had suits which made provinces renounce public auto insurance, accept toxins, and pay for refusing dangerous quarries.

Now, at the request of the U.S., there will be no ISDS process between U.S. and Canada. This is a paradigm shift for Canada who has been actively promoting the mechanism in deals such as CETA, (the Comprehensive Economic and Trade Agreement with Europe) and the new TPP, the CPTPP, the Comprehensive Economic and Trade Promotion Agreement). As Canada is the most sued country in ISDS with 37 cases, mostly by U.S companies. And the U.S. has only had 21 cases and never lost one, this will be beneficial to Canada’s public interest.

• No energy proportionality

Energy proportionality which obliges Canada to export a set amount of energy to the United States is not in the agreement. However, the agreement does not allow limiting exports or imports. Council of Canadians' members are responsible for this victory.

The iffy

• Culture

Canada said that it has kept its cultural exemption from the original NAFTA against pressure from the United States. This means that Canada can keep cultural protection policies which shield the culture from the marketplace and the U.S. mega cultural industries.

While this is true, it has the flaws of the original agreement. Namely, it defines cultural industries in the way that they were defined in the 1990s before Netflix, video games, and the online world.

However, the digital trade section of NAFTA disallows restrictions on digital commerce, preventing Canada from enacting future policies which would protect culture in the digital world.

• Environmental and labour chapters

It is no surprise that “climate change” does not find itself within President Trump’s agreement. While there is an environmental chapter, nothing refers to the Paris agreement. So the chapter is relatively weak. The agreement makes some reference to pollution, marine traffic, endangered animals, ozone, etc, but not to global warming.

The labour chapter and the environment chapter both suffer from weak enforcement. While the government will say that it is binding, it is only enforceable in the event that existing laws actually affect investment. There are, though, some interesting demands that Mexico reinforces collective bargaining and increase auto wages. While the labour chapter is lacking, it does reflect the concerted effort of organized labour in the three countries and would be an improvement over the original NAFTA.

• Water

The Council of Canadians has argued that water should be protected. In the original NAFTA, there was an annex which defined water as a good, and thereby Canada cannot limit exports of the water to the U.S. Moreover, Canada would be bound by proportionality provisions to export water. In this agreement, there is a side letter on water, but it is very unclear how enforceable that is. And it only applies to natural water, not to bottled water or any other water that has been made a commodity.

The Bad

• Farmers and BHG milk

The U.S. access will make a massive dive into the supply management system giving up more access than they gave in the TPP. This means that combined with the access they gave in the CPTPP, and CETA, we will have fewer farms. Farmers will have to compete with U.S. milk which is subsidized and uses BHG hormones to increase production, a substance not allowed in Canada due to its health effects.

• Gender and Indigenous Chapters

They aren’t there. Goodbye progressive trade! I am still searching for any reference to Indigenous consent in the agreement.

• Drugs and Patent Prices

Canada and Mexico caved on this. Our patents on biologic drugs will go up to 10 years. Right now, it is only five years. Remember: these are the most expensive drugs on the market but are vital for arthritis, Crohn’s and ulcerative colitis sufferer’s amongst others. It will also make the prices impossible for a public drug system such as Pharmacare to bear. Already, increasing biologic patents from 5 to 8 years were estimated at $800 million a year. According to the U.S. based Public Citizen, for access to medicines, this is the U.S’s worst free trade deal. It will also facilitate evergreening, the process of extending patents for new uses of drugs.

• Regulatory Cooperation

The agreement is filled with language about how rules—safety, environmental, food labelling and other rules are to be handled, with the idea of “cooperation”. It also talks about “risk-based” handling of regulation, which means the onus is on individuals and not industry to prove harm. Regulatory cooperation allows companies to bypass parliamentary processes and come up with its own rules. It also has administration rules which will facilitate “simpler” rules around things such as building pipelines, and ensuring that public interest rules are harder to maintain and need to be justified.

• ISDS still exists between the U.S. and Mexico

It is not, however, out of the cards between Mexico and the U.S., but it has been reduced in scope, limiting what kinds of lawsuits qualify, making sure investors really are from the country they say they are, and making sure they go through domestic courts first. Big U.S. oil, though, made a special push to keep ISDS on state contracts. Mexico has been eagerly reforming its energy contracts and wishes to review them. Government contracts in energy, telecommunications and infrastructure will be subject to ISDS provisions.

Other information

There is a dispute settlement mechanism similar to Chapter 19, a sunset clause of renewal every 16 years. There are also side letters agreeing on the process of getting rid of 232 tarriffs on steal and aluminum.

This is a preliminary analysis. With our allies, we will continue to update you with more information. It is a comprehensive agreement, so it will take some time to understand the larger ramifications.

Sujata Dey
Trade Campaigner, The Council of Canadians
[ https://canadians.org/blogs/sujata-dey ]
Oscar
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Re: NAFTA: The Good, the Bad, and the Ugly on NAFTA 2.0

Postby Oscar » Mon Oct 01, 2018 6:28 am

Canada, U.S. have reached a NAFTA deal - now called the USMCA

[ https://www.cbc.ca/news/politics/nafta- ... -1.4844623 ]

Trudeau says it's 'a good day for Canada,' but does not elaborate

John Paul Tasker, Elise von Scheel · CBC News · Posted: Sep 30, 2018 12:40 PM ET | Last Updated: an hour ago

WATCH: CBC News Network's coverage of the new agreement coming out of NAFTA negotiations 0:00

Canada and the U.S. have announced a tentative new trilateral trade deal with Mexico that includes some key concessions on issues of import to both countries — and also a reworked name: the United States-Mexico-Canada Agreement (USMCA).

"​USMCA will give our workers, farmers, ranchers, and businesses a high-standard trade agreement that will result in freer markets, fairer trade and robust economic growth in our region," Foreign Affairs Minister Chrystia Freeland and U.S. Trade Representative Robert Lighthizer said in a joint statement released late Sunday.

MORE: . . . .
Oscar
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