US NAFTA Negotiating Objectives Fail to put Citizens First

United States Trade Representative Robert Lighthizer released the US NAFTA negotiating objectives on July 17, 2017, in keeping with the plan to open negotiations on August 16. The ‘detailed’ objectives are neither detailed nor comprehensive, failing to explain how the agreement, if successfully concluded, will further the objectives required by the 2015 Trade Promotion Act (TPA). The ambiguity is coupled with the surprising fact that in many places, the objectives simply copy the TPA requirements word for word.

Despite claiming to represent workers, and voicing concerns over American sovereignty, the Trump administration does not take a stance on Investor State Dispute Settlement, which can actually contravene the public interest. This mechanism allows corporations to sue countries for enforcing their environmental, labor and health regulations in arbitral tribunals; using language taken from the TPA, the Trump administration fails to address this critical issue. As CIEL stated in our recommendations to the USTR on June 12, broad corporate rights, including ISDS, must be eliminated from NAFTA to create a trade system that protects the environment and promotes economic equality, rather than undermining them.

These corporate rights often strive for “regulatory coherence,” which is never mentioned outright in the negotiating objectives. By using ambiguous language throughout the document, the objectives call for regulatory compatibility, indicating corporate preferences and objectives for the new trade deal. In addition, the objectives call for “[p]romoting the use of impact assessments and other methods of ensuring regulations are evidence-based and current, as well as avoiding unnecessary redundancies,” which could block necessary regulations that protect against health and environmental impacts resulting from the use of new technology or chemicals. Rather than raising the bar for higher regulatory standards, the objective seems to push for a race to the bottom based on a “trade impact analysis”.  Such provisions must be left out of any trade deal, as they can significantly reduce a country’s ability to enact crucial regulation to protect its citizens and the environment from adverse impacts.

Further, continuing to deny climate change and ignore its effects, the negotiating objectives call for increased investment in energy and energy transmission. A trade agreement that continues to promote fossil fuel investment while failing to promote green energy cannot be considered an improvement in any sense of the word. As CIEL reported recently, Mexico’s energy reform opened the door to private foreign investment; the renegotiation of NAFTA may compound changes to the energy sector, likely strengthening protections of foreign investment in fossil fuels. As many nations focus on reducing greenhouse gas emissions and addressing climate impacts, the US and Mexico are rushing to access and exploit Mexico’s untapped oil and gas reserves. The new agreement must require parties to address climate change, including a binding requirement to implement policies to ensure compliance with the Paris Agreement.

To this end, the renegotiation must require robust and binding protections for the environment in an Environment Chapter, as well as other relevant chapters of NAFTA. The USTR’s inclusion of a chapter on the Environment in NAFTA is the minimum required by the bipartisan May 10, 2007 agreement between President Bush and Congressional Democrats. Since then environmental chapters have been included in all U.S. trade deals. These environmental provisions were also proposed in the Trans-Pacific Partnership, yet the environmental enforcement plan resembles what currently exists in other trade agreements and is entirely ineffective. Given the recent Dominican Republic–Central America Free Trade Agreement (CAFTA-D.R.) panel decision concerning the labor dispute between the U.S. and Guatemala—the only dispute ever brought on the basis of environmental or labor chapter violations—the standard set by the panel of “in a matter affecting trade or investment between the parties” is a bar that is nearly impossible to meet. Instead, environmental enforcement measures must enable legally binding decisions in addition to empowering citizens to bring a claim solely on the existence of environmental harm.

Moreover, the US should commit to dramatically increased transparency and public participation in the NAFTA negotiations than in past agreements, which the current USTR negotiating objectives fail to do. A commitment to transparency by the US, Canada and Mexico before negotiations begin displays a willingness on behalf of all governments to seek an agreement that prioritizes its citizens and the public interest. True transparency during negotiations means publishing draft versions of U.S. proposals for all sections of the trade agreement before the text is consolidated, soliciting public comment on the proposals, and responding to those comments prior to presenting the proposed language in negotiations. Before initiating negotiations in August, the U.S. should lead by requesting that all three NAFTA countries commit to disclosing the proposed texts for public comment both before and after each negotiating round, just as the European Union does.

Promoting human rights, increasing economic equality, safeguarding the climate and protecting the environment should be integral objectives for the NAFTA parties, yet the negotiating objectives of the USTR fall far short. CIEL joins social movements, trade unions, farmers, migrants and indigenous peoples in calling for a renegotiated NAFTA that includes priorities set forth in our recommendations to the USTR; we oppose any agreement that advances corporate interests at the expense of people and the environment. The people of North America deserve a trade system that protects the environment, promotes economic equality, and respects human rights.

By Anthony J. Cooper  CIEL Legal Intern

Originally posted July 19, 2017