Time for a new narrative on NAFTA

Written by Jerry Dias and Maude Barlow, The Star, January 9, 2017.

NAFTADonald Trump’s over-the-top social media attack on a local union leader showed the U.S. president-elect might not be the working class hero he made himself out to be.

When the Steelworker offered a sober reality-check to Trump’s claim that more than 1,000 jobs had been saved at a Carrier factory in Indiana, Trump lashed out and damaged his own reputation as a politician who promised to boost America’s beleaguered industrial economy.

Granted, these are early days. The true test of Trump’s standing-up-for-the-working-class mettle will come when, and if, he follows through with his promise to renegotiate or scrap the North American Free Trade Agreement. If he truly wants to make the deal better for working people, we have a few ideas.

NAFTA captures the worst features of corporate-led, profit-driven globalization — providing transnational businesses unconditional access to markets with no requirement to invest where they sell and the right to scour a continent in search of the cheapest labour, weakest regulations and biggest tax breaks. With its remarkably poor, and unenforceable, labour provisions, NAFTA hangs like a spectre over the heads of industrial workers, the persistent threat of job loss used to justify cuts to wages and benefits.

It’s a trade deal that promised a lot for many — jobs, prosperity, higher standards — but has delivered only declining investment, employment and hourly earnings in both Canada and the U.S., while most workers in Mexico still lack free collective bargaining and livable wages.

NAFTA gave private investors extraordinary rights to challenge domestic laws under its infamous Chapter 11 — a right frequently invoked. It also requires Canada to ship consistent amounts of oil and gas to the U.S., even in the event of a national shortage, and, because it defines water as a tradable “good,” NAFTA jeopardizes Canada’s sovereignty over its water resources should any province open the door to commercial water exports in the future.

Trump’s attacks on NAFTA curried favour with the U.S. working class. His pledge to revisit (or potentially scrap) the deal is encouraging, although ripped right from Obama’s 2008 “Yes We Can” playbook.

Let’s be clear on a few things. Trade across North American borders is a good thing. For Canada’s economy, it’s essential. There’s a mistaken assumption, however, that NAFTA is a prerequisite to trade. It’s not. It’s a set of rules designed to ensure the benefits of trade are enjoyed mainly by global investment bankers, multinational corporations and the privileged class. Job creation is an added (albeit secondary) benefit, but not the likely outcome. NAFTA is not a fair deal. It was never meant to be.

It’s hard to imagine that Trump will take a high-minded view of fixing the current blueprint for continental trade to benefit all parties, but if NAFTA is to be re-examined, there are a few things we’d like to see.

For starters, all nations can commit to manage the size of existing trade imbalances, particularly in strategic sectors such as auto. Canada’s auto trade deficit with Mexico hit $25 billion last year, up more than 700 per cent since NAFTA was signed. Putting limits on such imbalances can help nations better manage trade flows, protect jobs and stave off investment drain.

Further, negotiators should explore a North American Auto Pact — a policy instrument (like its predecessor between Canada and the U.S.) to ensure each country receives a proportional share of auto investment and jobs.

A new NAFTA must strengthen human rights and labour provisions — creating a framework of fully enforceable standards that preserve collective bargaining rights and respond to Mexico’s abysmal record of union restrictions, disappearances and extrajudicial murders. Companies that circumvent these rules should be punished, and denied access to free trade.

A new NAFTA must also detach trade deals from special investor privileges. A trade agreement must not be a corporate bill of rights. Private arbitration courts shouldn’t dictate democratic rule-making. Investors should have to abide by domestic laws, just like everyone else. Scrapping Chapter 11 would be a good start.

And finally, dumping the rules around proportional energy sharing and removing water as a commercial good, service and investment would allow Canada to reclaim sovereignty over our energy and water resources.

There are many other progressive ideas to improve trade in North America, to better serve the interests of citizens and workers and make trade fair. It’s high time for a more progressive model of global trade.

Blaming the NAFTA boogeyman has proven to be good politics. Reforming the deal and changing the narrative would make for good policy.

Jerry Dias is national president of Unifor and Maude Barlow is the national chairperson of the Council of Canadians.