Five things Trudeau should be thinking about re: the negotiation of NAFTA 2.0


Photo by Andrew Harrier/ Bloomberg.

As the third round of NAFTA negotiations come to Ottawa this September 23-27, here are five things Prime Minister Justin Trudeau should be thinking about:

1 Why the rush?
US President Donald Trump wants a NAFTA 2.0 deal to be concluded by the end of this year. That's roughly a four-month negotiation period (in contrast to other 'free trade' deals that can take eight years or more to negotiate). The government should take its time and not be rushed into a deal on someone else's timeline.

We are deeply concerned that rushing the negotiations will result in a deal that has not been thoroughly studied, whose full implications are not known, an agreement that lacks the due diligence of sober and second thought, and that is very likely not in the best interests of people and the environment.

We understand that the timeline is at least partly informed by the upcoming July 1 general election in Mexico, and the desire to have the negotiations completed well before that election campaign begins (where, not incidentally, the leading progressive candidate has been deeply critical of NAFTA), but trade deals historically have always taken much longer to negotiate and for good reason.

2 More transparency, please.
In October 2015, Trudeau, in reference to Harper announcing the conclusion of the negotiations on the Trans-Pacific Partnership, rightly criticized the government of the day for failing "to be transparent through the entirety of the negotiations" and for not immediately sharing all the details of the agreement.

While there may be briefings on NAFTA for Members of Parliament, advisory councils, maybe even business groups and some 'stakeholders', there has been insufficient public consultation and disclosure.

In other words, the prime minister has failed his own transparency test.

3 Dig into how new chapters could address the problem of old chapters.
The Council of Canadians is opposed to the Chapter 11 investor-state dispute settlement provision, Article 605, the energy proportionality provision, and the inclusion of water as a tradable good, service and investment in the original NAFTA.

Apart from the suggestion that the Chapter 11 ISDS provision could be replaced by the Investment Court System provision (found in the Canada-European Union Comprehensive Economic and Trade Agreement), there doesn't appear to be movement on either energy proportionality or water.

We wish there were.

We encourage the government to study the risk of bulk water exports (given water is a tradable good under NAFTA), look into its ability to meet its Paris climate agreement commitments given the energy chapter (and how difficult that chapter makes it to cut exports to meet domestic needs and to achieve a 100 per cent clean energy economy by 2050), and look into legal opinions on whether the Investment Court System is a substantive improvement on ISDS (there are research papers that say it is not).

And if there is to be a new environment chapter, as suggested by the government, let it be that it trumps the investment and energy chapters; if there is going to be an Indigenous rights chapter, let it include the adoption of the United Nations Declaration on the Rights of Indigenous Peoples, specifically the right to free, prior and informed consent; and if there is going to be a gender rights chapter let it lift up the rights of women too often hurt by the lower-wage jobs created by free trade agreements.

4 Study beyond economic orthodoxy because you are dealing with an unorthodox US president.
The president of the United States is a very scary person. We were likely all frightened by his speech at the United Nations yesterday. He has also been very clear that he is willing to tear up NAFTA because it is the "worst deal" ever.

We strongly encourage the government to research in an in-depth way the alternative scenarios should NAFTA be cast aside by Trump. The Canadian Centre for Policy Alternatives says that World Trade Organization tariff rules would apply and Canadian exporters would face an additional $3.5 to $5 billion in custom duties. The CCPA says this is a "speed bump", but it would not bring trade to a "screeching halt".

Is the government looking into this too? If not, it should.

5 Be prepared to walk away.
Many commentators on all sides of the debate have said that a bad deal would be worse than no deal. We strongly encourage the government to consider this question and publicly comment on it.

In fact, we released an Ekos Research poll today that found that 76 per cent agreed with the statement, "In the event that NAFTA negotiations result in a bad deal for Canadians and the environment, Canada should walk away from the deal." This statement was supported by 69 per cent of the Conservatives polled, 77 per cent of Liberal respondents, 80 per cent of the Bloc Quebecois supporters, 81 per cent of the NDP voters, and 90 per cent of those who back the Green Party.

While that step may be very hard to fathom for the government, we think it's prudent, in any negotiation, to be prepared to say 'no deal'.

That poll also says:

  • 63 per cent of respondents believe Chapter 11 should be eliminated
  • 70 per cent don't want the energy proportionality provision, and
  • 80 per cent want the clauses that make water vulnerable to export removed.

For more information and analysis, please see our NAFTA campaign web-page.