When the North American Free Trade Agreement (NAFTA) was renegotiated into the United States-Mexico-Canada Agreement (USMCA) in July 2020, the three countries committed to a formal review of the agreement every six years.
That review process is now under way in Canada, beginning with testimonies from trade experts and advocates before the parliamentary Standing Committee on International Trade.
The Council of Canadians trade and privatization campaigner, Nikolas Barry-Shaw, spoke to the committee on June 13, 2024. Below is a transcript of his presentation. The full video is available here.
The Council was founded in 1985, in the crucible of the debates around continental free trade, first with the United States and then with Mexico. Throughout its history, our organization has campaigned against corporate trade deals like NAFTA that put profits before people and the planet.
When these deals were first being negotiated, we argued that they would decimate manufacturing employment and drive down workers’ wages in Canada, as corporations restructured their production in search of the lowest costs.
We argued that investor-state dispute mechanisms, like NAFTA’s Chapter 11, would allow corporations to sue governments for pursuing legitimate efforts to regulate business and protect the environment.
And we argued that the pressure to attract increasingly footloose foreign investors through subsidies and corporate tax cuts would inevitably erode our public services, most notably our health care system.
It gives me no pleasure to note that our warnings of what free trade would bring were largely correct.
Rather than a vigorously competitive economy, Canadians got an economic landscape dominated by oligopolies, the result of corporate consolidation on a continental scale.
Rather than a rising tide that lifts all boats, Canadians have experienced stagnant wages, rising prices, and spiraling income and wealth inequality.
Even die-hard defenders of corporate free trade deals have been forced to admit that the economic results have been dismal.
As Andrew Coyne wrote in a recent column, despite Canada’s trade and broader economic policies being “an example of everything that orthodox economics would recommend as recipes for prosperity,” productivity has slumped and growth rates have fallen. “How could this be?” Coyne writes. “We did everything right!”
The renegotiation of NAFTA into the Canada US Mexico Agreement brought several welcome departures from this tired and discredited economic orthodoxy, notably the removal of Chapter 11 and the creation of a Rapid Response Mechanism to protect Mexican workers against violations of their right to form a union.
The 2026 review of the Canada US Mexico Agreement is an opportunity to continue in this direction.
The Council of Canadians wholeheartedly supports efforts to expand enforceable labour rights protections, by widening the scope and applicability of the Rapid Response Mechanism to all workers in North America and to a broader list of labour rights violations.
We strongly believe the last vestiges of NAFTA’s Chapter 11, which live on in CUSMA’s more limited Chapter 14, should be done away with. So should investor-states dispute settlement mechanisms in other treaties that continue to constrain legitimate efforts to take climate action and protect the environment.
But it is not clear that it’s possible to reverse-engineer CUSMA into a trade and investment agreement that places workers’ rights, climate action and environmental protection ahead of corporate profits.
Despite the removal of Chapter 11, CUSMA continues to hamper the Mexican government’s efforts to re-assert its energy and food sovereignty.
In February 2023, the Mexican government announced its intention to ban the pesticide glyphosate and phase out genetically modified corn. In response to the outcry from U.S. agribusiness, the U.S. government initiated a trade challenge under Chapter 31, citing violations of CUSMA’s Sanitary and Phytosanitary Standards.
While the Mexican government has emphasized the need to protect indigenous varieties of maize from genetic contamination by GM corn, the U.S. has attempted to narrow the issue to whether GM corn is safe to consume, claiming that Mexico’s phase-out is not “science-based.”
The trouble with this regulatory standard, in addition to rejecting the precautionary principle and the wider concerns about food sovereignty that have motivated Mexico’s decision, is that it ignores enormous upstream efforts to warp the “science” deployed by agribusiness and other industries.
As the Monsanto Papers revealed, this went so far as recruiting scientists to publish studies that ultimately defended the safety of their products — some of which were secretly reviewed by Monsanto prior to publication.2
Unfortunately, the Canadian government has sided with the U.S. in this dispute and has blocked the Council of Canadians’ Northumberland chapter from presenting arguments in favour of the phase out.
The scale of the problems we face – the climate crisis first and foremost – require a rethinking of the entire economic model behind these deals.
We need trade and investment agreements that will help, rather than hinder, the shift away from fossil fuels and the massive public investment in infrastructure and manufacturing it requires, that will increase rather than erode workers’ bargaining power, and that will facilitate rebuilding our public services after years of neglect.
