Why We Need to Fix NAFTA
For the sake of jobs, the environment, and the economic crisis, it’s time to reopen the flawed 15-year-old deal, write Maude Barlow and John Cavanagh
January 1, 2009.
It is unfortunate but predictable that fixing broken trade rules and dealing with the environment have fallen off the political radar in the still early days of a global financial and economic meltdown. Unfortunate because of how closely linked the environment, economy and globalized trade really are. But predictable because vested interests in North America who profit from NAFTA don’t want a discussion on fundamental changes to the way the economy works.
But really, isn’t this the ideal time – when financial systems are collapsing, dragging down North American manufacturing with them, all while global ecosystems verge on failure – to be re-thinking how we produce goods and the rules by which we trade them internationally?
President-Elect Barack Obama seems to think it is. And a majority of Americans and Canadians seem to agree.
“NAFTA and its potential were oversold to the American people,” claimed the Democratic election platform, which commits to “work with the leaders of Canada and Mexico to fix NAFTA so that it works for American workers.”
Earlier, when Obama was running for the Democratic Party nominee for President, he said the continental free trade and investment agreement between Canada, the United States and Mexico did not do enough to protect the environment either, and he promised to “strictly limit” the rights of corporations to challenge national, state or provincial laws that interfere with profits.
Labour organizations, environmentalists and social justice groups in all three NAFTA countries saw in these brief words a rare political opportunity to seriously revise (or scrap, as some would prefer) the 15-year-old economic straitjacket that has done little to create jobs and much to weaken public safety and environmental rules across the continent while further concentrating wealth into the hands of a tiny elite.
Meanwhile powerful and highly organized business lobbies across North America have been in panic mode since the Democratic primaries, overstating NAFTA’s economic benefits and understating its worst impacts on workers and the environment.
Yes, NAFTA has boosted trade and created enormous prosperity for a very small group of North American businesses. But statistics in Canada and the United States show that over the past 15 years wages and real incomes have stagnated for middle and lower class workers. Job creation was also lackluster and in some cases negative as thousands of high paying manufacturing jobs left the country for cheaper labour markets.
For Mexican workers the situation has been even bleaker as promised hikes in manufacturing salaries have not happened, factory jobs have left the country for Asia, and imports or ‘dumping’ of U.S. government subsidized corn have put thousands upon thousands of Mexican farmers out of work – a primary cause for the explosion of economic refugees leaving Mexico, to pick up dangerous, low paid work in the United States, since NAFTA was signed.
And now, the U.S. recession is making conditions even worse in a country that through NAFTA has become even more dependent on its neighbor to the north. Remittances from migrants working in the United States are rapidly declining and massive capital flight has forced the government to spend nearly $15 billion in reserves to try to prop up the value of the peso.
While workers have suffered, so too has environmental and public health policy. NAFTA’s Chapter 11 on investment has threatened public interest laws in all three countries by allowing corporations to sue for lost profits. Current cases include a challenge by a Dow Chemical subsidiary against Quebec’s pesticide ban, Bilcon’s challenge to a Nova Scotia decision to block a new quarry at Digby Neck, and Glamis Gold’s case against a U.S. state environmental law.
As stated by the Canadian Centre for Policy Alternatives, “Because almost any government regulation or policy affects property interests, NAFTA’s investment rules have been criticized as constraining the fundamental role of democratic governments.”
That role only increases in importance when we are faced with ecological disaster. If our trade regime prohibits us from curbing greenhouse gas emissions, banning toxic substances from entering our air and river systems, or over-logging, we’ve got to ask ourselves whether we can live without the trade regime – because we can’t live without the water we drink or the air we breathe.
For years, we’ve been told that progressive social and environmental policies are barriers to trade. The truth is that so-called “free” trade deals like NAFTA are a barrier to economic stability. We will not solve the economic crisis, and will not survive the environmental crisis, unless we loosen the shackles placed on government policy by international trade agreements like NAFTA.
Maude Barlow is Chairperson of the Council of Canadians in Ottawa, Canada, and author of Blue Covenant: The Global Water Crisis and the Coming Battle for the Right to Water.
John Cavanagh is the Director of the Institute for Policy Studies in Washington, DC, and the co-author of Development Redefined: How the Market Met Its Match.
