In January, Donald Trump officially withdrew from the Trans-Pacific Partnership. Today, he notified Congress of his intention to “modernize” and renegotiate the North American Free Trade Agreement (NAFTA), starting a 90 day clock on reopening these negotiations. NAFTA, a free trade agreement negotiated by the governments of the United States, Mexico, and Canada, entered into force in January 1994. Since the enactment, there has been a substantial expansion of resource-intensive industries in North America at the expense of the environment, workers’ rights, and local economies. In addition, excessive investor protections have led to weakened environmental, labor, and health regulations in each of the NAFTA countries.
To be clear, Mr. Trump’s decision to renegotiate NAFTA did not arise out of these issues. Even ignoring (which we should not) the xenophobia and anti-Mexican sentiment that fueled his campaign, his purported objectives of negotiating a better trade deal for the US economy and creating more US jobs raise big concerns that NAFTA may result in greater threats to the environment and the rights of communities across North America.
However, the renegotiation poses not only a looming threat, but a potential opportunity to re-engage on NAFTA – to use this moment to make it impossible to ignore concerns about the environment, human rights, and economic inequality inherent in the current NAFTA deal.
NAFTA Impacts: Labor and Environment.
In Mexico, NAFTA increased the number of factory farms, which use more water and pesticides than small-scale or subsistence farming. Land reform and changes to mining regulations have transferred communal farmland into private and corporate hands. This facilitated the expansion of mining activities in Mexico including the use of explosives and toxic substances, which have had devastating environmental impacts. It is estimated that 28% of Mexican land has been allocated for mining, which has also given rise to land tenure conflicts and an opposition movement of communities and indigenous peoples. And while maquiladoras, export-oriented manufacturing factories owned by foreign corporations, led to rising employment levels in Mexico, their proliferation throughout Mexico has become a major source of toxic pollution and hazardous waste.
In addition to the environmental impacts in Mexico, NAFTA has contributed to expanded development and trade in fossil fuels. The proportionality clause in NAFTA’s energy chapter obligates “Canada to maintain a fixed share of energy exports, including oil and gas to the US.” This energy export requirement has supported the expansion of tar sands oil and other carbon-intensive energy industries in Canada and has the ability to constrain the government’s environmental policies and regulations.
NAFTA Impacts: Investment Protection.
Chapter 11 of NAFTA grants companies the right to sue countries for protecting the public interest under the guise of protecting investment and profits. This chapter enables foreign investors to undermine existing environmental, health, and labor regulations in the NAFTA countries and to slow or chill the development of new regulations. Experience shows that companies can and will challenge environmental and public health measures, indeed, environmental, health and labor regulations—and actions taken to implement them, have been the major focus of NAFTA Chapter 11 suits.
CIEL’s Vision for the Future of NAFTA
Given NAFTA’s historic problems, the grim track record of recent negotiations on TPP and TTIP, and the intense hostility to environmental protection and climate progress within the Trump Administration and the Congressional majority, reopening NAFTA now is more a cause for concern than celebration. We should prepare for a fight.
But an important part of doing so is recognizing that the people of North America—and the world—deserve a trade system that protects the environment and promotes economic equality, rather than undermining them. This can’t be achieved by treating human rights and environment as afterthoughts tacked on at the end of a negotiation driven by industry interests; instead, promoting human rights, increasing economic equality, safeguarding the climate and protecting the environment should be integral objectives for the NAFTA Parties. Policymakers and concerned citizens in the three NAFTA parties should demand nothing less. They should demand a NAFTA that:
- eliminates fossil fuels subsidies
- reduces trade and investment in oil, gas and coal;
- promotes sustainable supply chains and fair trade;
- incentivizes and expands socially and environmentally responsible trade and investment practices;
- fully embraces and implements the precautionary principle;;
- eliminates the current investor-state dispute settlement system; and
- creates an effective and fully independent dispute resolution system.
But none of these objectives can be achieved without a trade system that is transparent, democratic and informed by an engaged, informed public. Accordingly, policymakers should insist that NAFTA negotiations be conducted with dramatically greater transparency and public participation than past agreements.
At the end of May, CIEL will join social movements, trade unions, farmers, indigenous peoples, migrants, and human rights groups from Mexico, United States, and Canada for a summit in Mexico City to create a tri-national strategy for the ‘re-negotiation’ of NAFTA. Since NAFTA first reared its ugly head in the 1990’s networks from all three countries have been collaborating to challenge NAFTA’s neoliberal model. Now, we create an even more broad and diverse movement to strategize around actions needed to build collective power based on the principles of solidarity, internationalism, and prioritizing people and planet above profits.
Stay tuned for updates and outcomes from this meeting…
Originally posted May 18, 2017