The Revised NAFTA, One Year Later

Public Citizen News / July-August 2021

This article appeared in the July/August 2021 edition of Public Citizen News. Download the full edition here.

One year ago this July 1, following a lengthy campaign by unions, civil society groups, and congressional Democrats to win key improvements, the revised North American Free Trade Agreement (NAFTA), also known as the U.S.-Mexico-Canada Agreement (USMCA), went into effect.

Unlike its predecessor, the USMCA requires each of its signatory countries to respect workers’ rights, and it contains mechanisms to demand so. Additionally, it gutted the disastrous Investor-State Dispute Settlement (ISDS) system. But recently filed USMCA labor enforcement complaints and a new corporate ISDS demand for $15 billion for cancellation of the infamous Keystone XL Pipeline serve as firm reminders that advocacy efforts will be essential if the revised NAFTA is to improve lives and working conditions in North America.

The End of Fast Track … for Now

July 1 also marked the expiration of the Fast Track Trade Authority that Congress delegated in 2015 by a narrow margin after a heated battle. The Fast Track process, renamed Trade Promotion Authority (TPA) in 2002 to try to evade growing congressional and public opposition to the broad Nixon-era delegation of Congress’ exclusive constitutional trade authority, was critical in railroading through Congress extremely controversial trade agreements, such as the original NAFTA.

Fast Track empowers a president to unilaterally pick negotiating partners, set terms of pacts, sign and enter into them, write implementing bills without congressional involvement, and jam such legislation through Congress within a set number of days without any amendments and limited debate. A 2013 Public Citizen book revealed six forms of trade authority Congress created to work with the executive branch on trade pacts since the nation’s founding and how Fast Track helped to empower corporate interests to rig trade pacts with retrograde non-trade policies, such as the expansive intellectual property monopolies now at issue in the COVID-19 vaccine shortage crisis. Longtime Public Citizen supporters will recall that for decades we have demanded the replacement of Fast Track with an inclusive process to yield broadly supported pacts that could pass Congress without requiring a ban on amendments and debate.

“Fast Track was a terrible idea when Nixon cooked it up in the 1970s to handcuff Congress on trade and has been instrumental in ramming a series of job-killing, Big Pharma monopoly-boosting, unsafe-import-flooding, corporate-power-expanding policies through Congress,” said Lori Wallach, director of Public Citizen’s Global Trade Watch division. “Fast Track should have been relegated to the museum of terrible-policies-that-harmed-Americans decades ago: Nothing makes that clearer than the extreme process becoming an impediment to renegotiating NAFTA in 2018 such that breaking Fast Track in 2019 not only did not scare away trade partners but is the main reason supermajorities in Congress ultimately passed the USMCA.”

One of the key takeaways of the USMCA’s one-year anniversary is that Fast Track is a myth. Handcuffing Congress is not necessary to pass good trade deals that enjoy broad support because their terms might actually benefit working people and the environment.

The NAFTA renegotiation process showed that Fast Track is actually counterproductive. The initial text of the revised NAFTA that then-President Donald Trump signed in 2018 was negotiated under Fast Track rules, with privileged corporate access and limited input from Congress, the public, or labor and environmental experts. The resulting deal added new monopoly protections for Big Pharma to lock in high medicine prices, and its labor and environmental terms would not have counteracted NAFTA’s ongoing outsourcing of jobs and pollution and downward pressure on wages.

Responding to civic society outrage, congressional Democrats made clear that they would not pass that deal, Fast Track or not. They leveraged their majority to demand changes, which then were negotiated with Mexico and Canada outside the Fast Track process. The main corporate argument—that U.S. trade partners would not negotiate without Fast Track—was exposed for the lie it always has been.

Indeed, when Democrats in Congress forced the Trump administration to break Fast Track and empower Congress to have a more appropriate policymaking role, terms that actually represent a broad set of interests and could work for working people and consumers were added. Big Pharma giveaways were removed. The result was passage of the ‘revised revised’ deal by supermajorities so large the extreme Fast Track process was not needed to limit debate in the U.S. Senate.

Indeed, the final USMCA, though not the model for future pacts, has significant improvements from which we can build. This includes rollbacks of Big Pharma monopolies and extreme foreign investor rights and the ISDS extrajudicial regime. It also has improved labor provisions and enforcement tools, including the labor Rapid Response Mechanism (RRM), which is a targeted, facility-specific enforcement mechanism unique to the USMCA that is devised to protect workers’ right to organize.

Will Workers See Real Improvements?

The AFL-CIO, the Service Employees International Union (SEIU), the Sindicato Nacional Independiente de Trabajadores de Industrias y de Servicios Movimiento 20/32 (SNITIS), and Public Citizen filed the first USMCA RRM case, which became the basis of a formal complaint filed with Mexico by the U.S. government. It is now being assessed by Mexican authorities, which must either fix the problems identified or face sanctions within a set amount of time under the RRM system.

It remains to be seen if the hard-won labor rights advances in the USMCA result in significantly improved conditions for workers in Mexico, but as we await the first case’s resolution, the end of Fast Track is certainly something to celebrate.

A New Threat on the Horizon

As Public Citizen News goes to print, the company behind the notorious Keystone XL pipeline launched a new attack against the U.S. under the USMCA’s “legacy” ISDS terms. The company, TC Energy, claims it is due $15 billion in U.S. taxpayer money because the U.S. government rejected the proposed 875-mile pipeline that would have transported 830,000 barrels of highly polluting crude oil across indigenous communities and more than a thousand rivers, streams, and wetlands. Stay tuned as Public Citizen resumes the battle against this baseless money grab and the ISDS regime itself.