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Trump’s Re-Negotiation Proposal Will Make NAFTA Worse

by

As a candidate for president, Donald Trump claimed he wanted a better deal for U.S. workers. Surprise! Oh, okay, that he was lying really isn’t a surprise at all. Far from a “better deal,” the Trump administration is now offering a North American version of the Trans-Pacific Partnership.

Although it might have seemed that the TPP was dead and buried after several years of struggle by activists on both sides of the Pacific Ocean (President Trump had as much to do with TPP’s demise as a rooster does for the rise of the Sun), the TPP’s language is being used as a model for a re-negotiated North American Free Trade Agreement.

The Trump administration issued an 18-page document on July 17, announcing its “Summary of Objectives for the NAFTA Renegotiation.” Please try to contain your excitement. But to spoil the fun of actually reading the document, the net result, should these plans come to fruition, would be to strengthen corporate power, not promote the interests of working people. There is almost nothing concrete in the text’s 18 pages but much boilerplate language that reads as if it was lifted from the TPP. In fact some of the language appears to be repeated word for word.

The Sierra Club’s executive director, Michael Brune, summarized the “Summary of Objectives” document this way:

“In a blunt display of hypocrisy, Donald Trump appears to want to copy and paste the weak labor and environmental provisions of the TPP, a deal that Trump claimed to hate. Based on today’s ‘plan,’ one could be forgiven for concluding that Trump’s opposition to the TPP was merely political theater and this administration has no intent of fundamentally changing NAFTA.”

Friends of the Earth was no more inclined to give the benefit of the doubt:

“Trump’s statement indicates he plans to step up his war on public health and the planet by modeling NAFTA’s provisions related to environmental regulation on the TPP. These objectives appear to set the stage for a stealth attack on strong regulation of food, agriculture, chemicals, and biotechnology.”

It would be all too easy to say “We told you so,” but, really, was it realistic to expect a billionaire who built his empire on screwing working people and who has populated his cabinet with a rouge’s gallery of corporate plunderers to do otherwise?

Meet the bosses’ panel, same as the old panel

Any re-negotiation that doesn’t eliminate the investor-state dispute settlement (ISDS) provision isn’t a serious re-negotiation. The “Summary of Objectives” document doesn’t, and it isn’t. Instead, the document offers a few reforms that will not change the substance of ISDS. The key passage states: “Establish a dispute settlement mechanism that is effective, timely, and in which panel determinations are based on the provisions of the Agreement and the submissions of the parties and are provided in a reasoned manner.”

That is consistent with the sort of language one can find in most any so-called “free trade” agreement. And that is actually a part of the problem — the one-sided tribunal decisions repeatedly handed down that strike down environmental and health regulations are consistent with “provisions of the agreements.” So the Trump administration’s goal would change nothing.

The only specific changes proposed are that tribunal submissions and final decisions be made publicly available, and that hearings be open to the public. As these proposals are found on the last page they do not appear to be at all a priority. Measures to reduce the secrecy of the process are welcome, but these would have no practical effect on the inherent unfairness of this process.

The same tribunal that handles complaints by multi-national corporations against government regulation, an arm of the World Bank, will still handle these complaints. The same structure, under which corporate lawyers who specialize in representing these corporations in regulatory disputes alternate between being lawyers and judges, handing down decisions with no accountability and no appeal, would remain in place.

There is no mention of NAFTA’s Chapter 11, which is the agreement’s linchpin. Chapter 11 codifies “equal treatment” in accordance with international law and enables corporations to sue over any regulation or other government act that violates “investor rights,” which means any regulation or act that might prevent the corporation from earning the maximum possible profit regardless of harm to others.

The rulings that have previously been handed down will remain as precedents that will be used in future hearings. If an earlier tribunal ruling said that a ban on a known carcinogen is prohibited by NAFTA rules protecting “investor rights,” that precedent will remain in place and be used as a justification to knock down the next health or environmental rule. That the tribunal would have some of the veil of secrecy lifted from its decisions won’t change any of this. As long as Chapter 11 exists, the same one-sided decisions will be handed down. As long as the investor-state dispute settlement provision exists, the same one-sided decisions will be handed down.

There is no “reform” that can make this system fair. There is no alternative to eliminating completely the entire investor-state dispute settlement system. The Trump administration is offering cosmetic changes that leave untouched the ability of corporations to force the reversal of rules protecting health, safety, labor or environmental standards.

Capital beats people in trade language

The “Summary of Objectives” document purports to adopt standards for labor and for the environment, but the language used is very similar to the language proposed for the Trans-Pacific Partnership and in use in other so-called “free trade” agreements. There is little at all in these stated goals that differs from the stated goals that Obama administration put forth for the Trans-Pacific Partnership. They are meaningless window dressing.

In the language of trade agreements, rules benefiting capital and erasing the ability of governments to regulate are implemented in trade-agreement texts with words like “shall” and “must” while the few rules that purport to protect labor, health, safety and environmental standards use words like “may” and “can.” So although the Trans-Pacific Partnership was promoted as constituting a big advance in protections for labor, health, safety and the environment, those were empty platitudes.

The Trump administration’s supposed intentions here are even less sincere given its undisguised contempt for environmental concerns.

The only specific change proposed is the elimination of Chapter 19, which means the elimination of anti-dumping review panels. The Institute for Agriculture and Trade Policy said the elimination of Chapter 19 would ensure that dumping of commodities (illegal for industrial goods) will occur unchecked by countervailing duties. Agricultural dumping of subsidized U.S. crops under NAFTA has driven millions of Mexican farmers off their lands. As more are driven off the land, more Mexicans will be forced to migrate to the United States by whatever means necessary and Mexican agriculture will continue to be badly hurt.

As for employees in manufacturing, The “Summary of Objectives” document does not meaningfully address the offshoring of jobs, or NAFTA’s prohibition of “buy local” rules.

Nor does the above exhaust the list of proposals that will allow multi-national capital to run wild. The objectives concerning “trade in services, including telecommunications and financial services,” appear to be cut and pasted from the Trans-Pacific Partnership and the Trade In Services Agreement. The goal of prohibiting “discrimination against foreign services suppliers” and against “restrictions on the number of services suppliers in the markets” signal the intention to eliminate any meaningful restrictions regulating the financial industry.

One prominent goal of the Trade In Service Agreement was to enable giant financial companies, particularly those based in the U.S., to take over the banking and financial systems of small countries, and it appears the Trump administration seeks to retain this goal, whether to directly target Mexican or Canadian banking, or alternatively as a model to be imposed in future trade deals.

Health and environmental laws will still be “barriers to investment”

Consistent with the objectives of the Trans-Pacific Partnership, the Trump administration says it wants to “Establish rules that reduce or eliminate barriers to U.S. investment in all sectors in the NAFTA countries.” What that passage means is that, consistent with what is written above, the intention is for the elimination of as many restraints on corporate behavior as possible.

Multi-national corporations consider a “barrier” to profits any rules or laws that protect health, safety, labor standards or the environment. Thus eliminating “barriers to investment” means eliminating protective laws. This would reinforce the tendency of the tribunal that renders decisions on corporate complaints to rule against protective laws.

There is nothing to celebrate in this re-negotiation. The North American Free Trade Agreement has been disastrous for working people and farmers in all three countries. The United States had a net displacement of 850,000 jobs through 2010 directly attributable to NAFTA, according to Economic Policy Institute calculations. U.S. food prices have risen 67 percent since NAFTA took effect, despite an increase in food imported from Mexico and Canada.

In Canada, the social safety net has been weakened while corporate revenue has doubled and manufacturing jobs disappeared. Composite revenues of 40 of Canada’s biggest businesses increased 105 percent from 1988 to 2002, while their workforces shrank by 15 percent and unemployment benefits were cut. In Mexico, nearly five million family farmers have been been displaced, inflation-adjusted wages are barely above the 1980 level and an unrestrained increase in mining has devastated Mexico’s environment.

Is it really necessary to make this worse? Yet that is what the Trump administration is proposing for its re-negotiation — another bait and switch. This follows another project for corporate plunder, President Trump’s supposed $1 trillion infrastructure plan, which is actually a plan for new “public-private partnerships.” Public-private partnerships are nothing more than a variation on straightforward schemes to sell off public assets below cost, with working people having to pay more for reduced quality of service.

No actual money is being committed. Rather, senior Trump administration advisers call for handing out $137 billion in tax credits for private investors who underwrite infrastructure projects. These officials claim that, over 10 years, the credits could spur $1 trillion in investment.

Trade policy is yet one more front on which a fight must be waged. “Free trade” agreements have very little to do with trade and much to do with imposing corporate wish lists. As with all “free trade” agreements, the fault lines are along class, not national, interests. Industrialists and financiers around the world understand their class interests and are united to promote their interests. Working people uniting across borders, in a broad movement, is only path toward reversing corporate agendas that accelerate races to the bottom.

More articles by:

Pete Dolack writes the Systemic Disorder blog and has been an activist with several groups. His book, It’s Not Over: Learning From the Socialist Experiment, is available from Zero Books.

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