It’s Not a Template But Rather Establishes the New Floor for Future Trade Agreements
Note: On Tuesday December 10, the United States, Mexico and Canada signed a Protocol of Amendment revising the text of the U.S.-Mexico-Canada Agreement (USMCA) that Donald Trump signed last year. Legislation to implement that deal was submitted to Congress on December 13. Lori Wallach, director of Public Citizen’s Global Trade Watch, issued the following assessment of the “revised revised” North American Free Trade Agreement (NAFTA) and its implementing legislation:
After congressional Democrats, unions and consumer groups forced renegotiation of Trump’s 2018 NAFTA 2.0 to remove Big Pharma giveaways and improve labor and environmental terms, the final revised deal is better than the original NAFTA and could stop some of NAFTA’s ongoing damage, although it still includes problematic terms. The alternative is status quo NAFTA, not a more improved deal.
The NAFTA 2.0 Trump signed in 2018 betrayed his promise to working people to fix NAFTA: It included new Big Pharma giveaways that lock in high drug prices, making it worse than the original, and its labor and environmental terms were too weak to counteract NAFTA’s outsourcing of jobs and pollution.
Even with the improvements that Trump was forced to make to his NAFTA 2.0 deal, the new NAFTA won’t bring back hundreds of thousands of manufacturing jobs, as Trump nonsensically claims. Nothing makes that clearer than U.S. auto manufacturers’ announcements post-NAFTA-renegotiation that they plan to expand production in Mexico – from Ford’s decision to make its new Mustang electric SUV in Mexico to GM closing U.S. auto plants while expanding production in Mexico.
Over time, the labor standards and enhanced enforcement terms in the new NAFTA may help raise wages in Mexico, and this may also reduce U.S. corporations’ incentives to outsource more U.S. jobs to Mexico to pay workers less. To date, the U.S. government has certified almost one million jobs lost to NAFTA, with corporations outsourcing more jobs to Mexico weekly to pay workers less.
One clear and important win for consumers, workers and the environment is the gutting of NAFTA’s Investor-State Dispute Settlement (ISDS) regime. Corporations have extracted almost $400 million from North American taxpayers after ISDS attacks on environmental and health policies before tribunals of three corporate lawyers. The 2018 NAFTA revision largely eliminated extreme ISDS privileges for foreign investors, which will foreclose many future attacks on domestic public interest policies. This shift in U.S. policy also sends a signal worldwide to the many countries also eager to exit the illegitimate ISDS regime.
The new NAFTA shows that to be politically viable, trade pacts can no longer include extreme corporate investor privileges or new monopoly protections for Big Pharma that have been featured in past U.S. trade deals, and that they must have enforceable labor and environmental standards. This is a significant shift after decades of U.S. trade pacts that expanded corporate rights and Big Pharma monopoly protections.
However, fixing the existing NAFTA to try to reduce its ongoing damage is not the same as negotiating a truly progressive trade agreement from scratch, which would additionally require climate provisions, stronger labor and environmental terms, and truly enforceable currency disciplines, and not include limits on consumer protections for food and product safety and labeling, the service sector, online platforms, and more.
The new NAFTA is not the template for future agreements, but establishes the floor from which we will continue to advocate for a new, transformational trade and globalization model that puts people and the planet first.