Eyes on Trade
Public Citizen's Global Trade Watch blog on globalization and trade
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It is useful to separate fact from myth when it comes to corporate-led globalization, the North American Free Trade Agreement (NAFTA), the Security and Prosperity Partnership (SPP) and Prosperity and recent attempts to expand NAFTA to countries like Peru, Colombia and Panama. The facts are sufficiently disturbing!
Question: WHAT IS NAFTA?
Answer: The North American Free Trade Agreement (NAFTA) is an international commercial agreement between the United States, Mexico, and Canada that was passed by Congress by a margin of 234-200 in 1993 under truncated "Fast Track" trade voting procedures. Congress voted on what is called "implementing legislation" which incorporated the NAFTA text itself into U.S. federal law. Thus NAFTA's rules are binding upon federal, state and local governments. Unlike the trade agreements that preceded it, NAFTA's scope extended far beyond traditional trade matters, such as tariffs and quotas setting terms for sale of goods across borders. Instead, NAFTA included extensive rules limiting how the U.S. government can regulate foreign investors operating here, the ownership and domestic regulation of foreign-owned services being provided within the United States, and even how your tax dollars can be spent. NAFTA's foreign investor protections also established incentives for U.S. firms to move production offshore, promoting a race-to-the-bottom in wages for workers. NAFTA also set limits on environmental and safety standards. One result: we exported good jobs and imported unsafe food. The agreement also included special provisions requiring the United States to open its roads to Mexico-domiciled trucks.
Question: IS THERE A NAFTA SUPERHIGHWAY BEING CONSTRUCTED?
Answer: There is no evidence of congressional planning or funding for a ten-lane, four-football-field-wide version of a raised NAFTA Superhighway cutting through the United States. However, a significant amount of federal transportation funding has been appropriated since NAFTA's implementation to widen and expand several major existing highways that have been designated – often by legislators seeking the additional highway funds − as "NAFTA corridors." These include north-south routes connecting major U.S.-Mexico border crossings and routes connecting highways that head into the Midwest. As noted below, a 2005 National Corridor Infrastructure Improvement Program does include improvements to several existing route that connect Mexico to Canada through the United States. Funding also was allocated for a Kansas "inland port" that was to provide for a U.S. Customs clearance point for Mexican goods well within U.S. territory. Funding has also been allocated to expand various U.S.-Mexico border crossings. The Trans-Texas corridor is an expansive highway planned for construction in Texas that will connect U.S.-Mexico border crossings, and its traffic is unlikely to come to a halt at the Texas border.
These expenditures were not part of a secret conspiracy, but rather part of open recognition – often by those who simultaneously claimed NAFTA would create jobs here – that in fact NAFTA would result in production being moved to Mexico's lower wages and thus an ever increasing volume of goods shipped to the U.S. market from Mexico. Since NAFTA's inception, what was a balanced trade flow between the United States and Mexico has exploded into a $62 billion deficit of goods now being produced in Mexico.
Question: WHAT APPROPRIATIONS HAVE BEEN MADE TO FACILITATE BORDER TRAFFIC?
Answer: The 2005 federal surface transportation bill "SAFETEA-LU" authorizes transportation programs for highways, highway safety, and transit for the 5-year period 2005-2009. The bill created the current National Corridor Infrastructure Improvement Program and continues the Coordinated Border Infrastructure (CBI) program of previous years. The National Corridors program is authorized at nearly $2 billion over five years, FY2005-2009, and CBI at $883 million over five years, FY2005-2009. The National Corridors Program is the most likely to foster development of NAFTA Superhighways, since several designated corridors, #18 TX-MI (I-69), #23 TX-MN (I-35), #27 TX-MT, and #26 AZ-MT, essentially already cross the United States to link the Mexican and Canadian borders. However, there does not appear to be sufficient coordination and funding to turn one of these corridors into a continuous 10-lane highway. The cost of rehabilitating or renovating so many miles of much-less-than-super highway into a 10-lane behemoth is far beyond the amounts authorized for these programs. Believe it or not, the CBI program actually permits the funding of improvements to Mexican and Canadian as well as U.S. roads!
Question: ARE NAFTA TRUCKS REALLY COMING?
Answer: While a NAFTA Superhighway is still the stuff of nightmares, NAFTA may already be on a highway near you. On September 7, 2007 the Bush administration steamrolled Congress and opened all U.S. highways to Mexico-domiciled trucks – a move for which Congress is in the process of denying funding. The actual text of the NAFTA trade agreement included a U.S. commitment to deregulate long-haul cross-border trucking. Translated out of NAFTA-ese, that provision required that the United States permit trucks from Mexico, where drivers are paid a fraction of U.S. driver's wages, to travel beyond a pre-established 20-mile border transfer zone and onto all U.S. roads. After negotiating and signing NAFTA, the Clinton administration refused to implement this aspect following repeated studies by the U.S. Department of Transportation's own Inspector General that showed that neither Mexico's long-haul fleet nor its driver licensing and safety rules met the requirements of U.S. law. Mexico challenged the U.S. policy before a NAFTA tribunal and in 2001, the NAFTA tribunal ordered the United States to open its borders to NAFTA cross-border trucking services.
The Bush administration has repeatedly tried to implement this NAFTA tribunal order, providing Exhibit A of how "trade" agreements can flatten basic safety policy. The latest Bush administration move is a "slippery slope" strategy: it involves cherry picking 100 Mexican trucking firms with the best safety records whose fleets would gain immediate access to all roads in the United States, large and small. The idea with this bogus "pilot program" is to demonstrate that Mexico-domiciled trucks are safe and thus pave the way for access for all Mexico-domiciled trucks in the future.
The Bush plan also violates a 2001 Congressional mandate requiring these trucks and drivers meet U.S. safety standards regarding hours of service, driver training and licensing and vehicle safety. Already people have been killed by NAFTA trucks plying the previously-approved 20-mile commercial zone in the border area.
Question: WHAT IS THE SPP AND WILL IT LEAD TO A NORTH AMERICAN UNION?
Answer: Unlike NAFTA, which is a legally-binding instrument – enforceable outside the U.S. justice system in secret foreign trade tribunals - the Security and Prosperity Partnership (SPP) is a much less formal instrument. The actual text of the SPP does not set new binding rules, but rather establishes a framework for a series of closed door meetings between the NAFTA governments and big business which may or may not result in legally binding texts down the road.
While much has been written lately about the SPP and the prospects of it morphing into a North American Union effectively "erasing our borders with Canada and Mexico," we recommend keeping eyes on the real culprit − NAFTA. While SPP – and its regular closed-door meetings – is worth monitoring to ensure no new problems are being hatched, there is much to be done now to alter NAFTA, withdraw from it or sunset it altogether as a failed experiment.
Much of what is attributed to the SPP is actually just implementation of existing NAFTA obligations. For instance, a large aspect of what sparks public concern about the SPP is what has been euphemistically dubbed "harmonization." This pleasant-sounding term refers to the lowering of the three nations' pesticide safety, environmental, food safety, transportation safety and other policies that protect our health and safety. However, that regulatory race to the bottom has in fact already been fully authorized in the NAFTA text. Dozens of NAFTA technical working groups that predate SPP by a decade are the real driving force behind the SPP's standards "harmonization" agenda. The vast majority of these working groups are meeting behind closed doors with no consumer or citizen input. With the exception of the Environmental Protection Agency, the U.S. government does not even make minimal information about these working groups publicly available.
That said, the SPP agenda does pose real threats to our neighbors in Canada and Mexico. For instance, the SPP establishes a worrisome energy agenda. That agenda boils down to Canada and Mexico agreeing to give U.S. oil companies an even tighter grip of both countries' resources in return for vague assurances that the U.S. won't shut the border to imports. However, that scheme is actually based on what are called the "proportional sharing" rules of NAFTA's energy services text.
The ways in which SPP extends beyond NAFTA's existing mandate is its attempts to set a North American "security" policy that would extend many of the civil liberty roll backs we have experienced at home under the USA Patriot Act to Canada and Mexico.
While we do not think that the SPP will lead to a North American Union, a real issue with SPP is the opportunity it creates for hatching bad plans – by bringing together in regular closed-door meetings away from public scrutiny the heads of North America's largest corporations and three governments, whose agendas have consistently proven to be in conflict with their nations' public interest.
QUESTION: WHAT IS CONGRESS DOING TO SAVE OUR SOVEREIGNTY?
Answer: Many aspects of our current trade policies – from NAFTA trucks to weakened food safety rules – put public safety and our national sovereignty at risk. Rather than putting the brakes on the Bush administration's obsession with the damaging NAFTA model, Congress is now heading towards votes to expand NAFTA to Peru and Panama – and maybe even Colombia and South Korea. Members of Congress need to pay careful attention to these issues when considering expanding what has proven to be such a damaging model.