Tuesday, October 10, 2017
NAFTA 2.0 - Time to Get it Right or Kill It
*Originally published in Lawyer's Daily on October 10, 2017
There is a long list of items that U.S. President Donald Trump has put on his “to kill” list, including Obamacare, Planned Parenthood, the Department of Education, immigration and most recently, NAFTA. Trump called the North American Free Trade Agreement the “worst trade deal ever made” in U.S. history and indicated he may have to kill the deal.
Canada’s Prime Minister Justin Trudeau and Mexico’s President Enrique Pena Nieto, on the other hand, are scrambling to renegotiate with Trump in order to save NAFTA. But why the mad rush to feverishly save NAFTA? It’s not like it has widespread support among the people of those three countries and I am sure if the planet had a vote — it would be a resounding no.
So what’s the big deal about NAFTA? NAFTA is a legal agreement that came into effect on Jan. 1, 1994, to eliminate most of the tariffs on trade between the three signatory countries with the intention of encouraging trade on a massive scale. However, it is important to note that Canada and the U.S. already had massive trading relations prior to NAFTA and would continue to trade on a large scale, even if Trump kills NAFTA.
Although NAFTA is clearly a trade deal, the promise made to the citizens of all three countries was that it would improve the standard of living for all. While it is hard to analyze NAFTA’s impact on the Canadian economy in isolation from many other factors — by many accounts, NAFTA has not been the economic saviour it was originally touted to be when it was first signed.
More recent studies have concluded that there have been minimal, if any, positive impact on welfare in the three countries. In fact, Canada’s welfare shows an actual decline of 0.06 per cent. Some experts have argued that NAFTA has created more economic instability than actual benefit as millions have lost their jobs, wages have stagnated generally and decreased in Mexico. Similarly, while Canada’s trade increased by 11 per cent during NAFTA, its terms of trade (relative price of imports to exports) decreased by 0.11 per cent. This doesn’t even take into account the true cost of environmental destruction or the localized impacts on Indigenous peoples in all three countries.
Some have referred to NAFTA as the end result of negotiations between self-interested transnational corporate elite largely benefitting corporations — not people or the planet. Numerous civil society organizations in all three countries have rallied against NAFTA 2.0 unless there are substantive amendments — including many thousands protesting in the streets in Mexico. First Nations in Canada, tribal governments in the U.S., and Indigenous peoples in Mexico have been left in the dark and have no meaningful say in whether NAFTA goes ahead and if so, on what conditions. Here in Canada, the negotiations themselves are taking place in relative secrecy and there are no widespread consultations with Canadians, civil society organizations, experts and no legal consent by First Nations.
The important question is whether we want to save NAFTA at all costs and what are those costs?
We have a great deal to worry about after all. Remember former Canadian Prime Minister Harper’s secret Trans-Pacific Partnership negotiations? Just like Trudeau’s process, there were no widespread consultations with First Nations for the TPP either. The draft TPP agreement was eventually leaked and revealed that there were no real protections for human rights, First Nation’s rights, the environment or women. There is a very real concern that Canada’s negotiators are relying on similar TPP wording for NAFTA — so as not to rock the trade negotiations.
While we are all distracted with NAFTA, the TPP negotiations we thought were dead — continue under the radar. On Sept. 30, Canada announced a 30-day consultation period regarding its ongoing TPP discussions with other nations including Australia, New Zealand, Japan, Peru and Singapore and others (minus the U.S.).
First Nations and Canadians alike have a great deal to worry about. While welfare has decreased for Canadians since NAFTA, socioeconomic conditions have decreased to crisis levels for First Nations. NAFTA has had other devastating impacts. Many Mexicans have lost their farms and were subjected to substandard working conditions. There has been significant environmental destruction in all three countries and current NAFTA rules undermine attempts to address climate change by states. Indigenous women and girls suffered increased violence at the hands of the extractive industry bolstered by NAFTA — think about the thousands of murdered and disappeared in Canada-U.S.-Mexico near mining projects or man-camps. To make matters worse, there are no concrete legal protections, enforcement mechanisms or redress for violations of Indigenous rights, human rights or the environment under NAFTA.
If that were not bad enough, Investor-State Dispute Settlement — known as ISDS — leaves the decision-making for all disputes in the hands of a couple of trade lawyers. The relevant laws considered in their decision-making are rooted within NAFTA and laws relating to human rights, Indigenous rights and environmental protections are not factored in. Under NAFTA’s controversial ISDS provisions, Canada has earned the “most-sued country” title having paid out hundreds of millions of taxpayer money to large corporate investors who have sued Canada under ISDS. While the U.S. has yet to lose a single case under ISDS, Canada stands to potentially lose billions more — not including the millions in legal fees.
The perceived benefits of NAFTA are far outweighed by the significant harms to people and the planet. If Trump kills the deal, the world would not end. Trade between the three countries would continue. We must keep in mind that this deal impacts the lands, waters, resources and safety of First Nations in Canada and legally, this deal cannot go ahead without their free, prior and informed consent. That is, assuming Trudeau meant what he said at the United Nations General Assembly last month when he said Canada accepts the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) without qualification. Article 19 is very clear that Canada must obtain the free, prior and informed consent of Indigenous peoples before adopting any measure that may affect them.
So, perhaps the solution lies with First Nations? NAFTA is dead without First Nation consent anyway — so, Trudeau ought to start the good faith consultation process before his negotiators make promises they can’t keep.
Link to the article as originally published in Lawyer's Daily on Oct.10, 2017: