Less than an hour after Democrats introduced of two articles of impeachment against President Donald Trump, accusing him of high crimes and misdemeanors, House Speaker Nancy Pelosi and Ways and Means Committee Chair Richard Neal announced that they would soon schedule a vote on the U.S.-Mexico-Canada Agreement, USMCA – that, if ratified, would replace the widely criticized North American Free Trade Agreement, or NAFTA.
Negotiations had been ongoing for more than a year after President Trump had secured agreements from the Canadian and Mexican governments on an initial draft treaty. Democrats emphasized their efforts to improve the deal from the initial document that included a lucrative giveaway to giant pharmaceutical companies, and obstacles to selling less expensive generic drugs.
If Congress passes NAFTA 2.0, Trump can claim a major victory on an issue he prioritized in his 2016 campaign. For their part, Democrats can boast about holding out for tougher enforcement of labor and environmental standards, which were supported by the nation’s largest labor federation the AFL-CIO. Between The Lines’ Scott Harris spoke with Lori Wallach, director of Public Citizen’s Global Trade Watch, who assesses the major issues that were the subject of negotiations in the successor to NAFTA, in an interview conducted one day before the White House – congressional agreement to schedule a vote was announced.
LORI WALLACH: So, the original negotiations start in 2017 and by the end of 2018, they had signed a new deal that Trump renamed the U.S. Mexico Canada Agreement, USMCA. And that deal that Trump signed was in some key ways worse than the original NAFTA. Most importantly, Trump let Big Pharma rig that new deal with new monopoly protections.
On the upside, the outrageous Investor State Dispute Settlement system was largely removed. ISDS between the U.S. and Canada was totally eliminated. And as far as what that meant for the U.S., that’s about 95 percent of the entire U.S. exposure to ISDS attacks, as most of our trade agreements with countries that invest here don’t have ISDS, so that was a huge improvement. And then with respect to Mexico, ISDS was replaced and NAFTA was whacked down to a very narrow set of rights that basically took away all the rights that had been used to win those bad cases that happened.
So that was a huge victory for progressives and the public interest. And there was other important improvements. A big one was getting rid of terms that had been in NAFTA that required countries that once they started exporting natural resources, they were guaranteed to have to keep selling and exporting to the other countries at a proportional rate. So even if you wanted to say, stop Canadian tar sands’ very polluting climate disastrous extraction method, you would still owe the U.S. that percentage of that oil that had been coming under the previous policy. So that was taken out.
What’s called a rule of origin, which has to do with how much of the content of a good has to be made in North America – that was improved for automobiles and some other sectors. Under the original NAFTA, 62 percent had to be North American and the rest could have come 38 percent from another part of the world and now it’s 75 percent North American. So that’s an improvement.
There were some other improvements like that, but the thing that was really extremely hopeful, but only half baked – so that would be a step in the right direction, but not worth anything yet. It’s a part of the renegotiation, a new annex on labor rights and that new annex requires Mexico to reform its labor laws to get rid of what are called protection contracts. Those are contracts that fake – really companies, but they call themselves unions – sign with the company typically before the first worker is hired. Mexico’s constitution says most workplaces have to have a union. So these fake unions go and sign a deal with the boss that protects the boss, locks in low wages. The workers never vote on it. They don’t even know they have these contracts and then when the workers finally go on strike, they are all fired or arrested because they have violated this contract they never signed. And that’s one of the main tools for keeping wages low in Mexico.
So this annex that was in the deal signed in 2018 said that all 400,000 of those fake contracts had to be replaced within four years. The problem was the enforcement was totally lacking. So if it’s just on paper, you don’t have anything. And the environmental rules were basically like the TPP (Trans Pacific Partnership Agreement) not worth anything. So there was part that was worse, part that was better and part that was half-baked. And then since a year, the Democrats, especially once it took the majority had been saying, “Hey, we’ve got to stop NAFTA’s damage.” So we probably wouldn’t be making a deal that looks anything like this deal if we were starting from a blank slate. There are other things in there that are problematic, but the question became, is there enough fix that can be achieved to stop some of NAFTA’s damage. And that’s what the whole last year of fighting has been about.
BETWEEN THE LINES: Donald Trump has proposed this new revised NAFTA 2.0 which is the USMCA at the same time that the Democratic House is impeaching him for crimes against the Constitution. What’s your sense of where things should go?
LORI WALLACH: My sense of it all along has been that NAFTA’s ongoing damage is so severe to people and the planet that if we can fix some of NAFTA’s ongoing damage, if we can make real policy changes on that old agreement, that could actually make people’s lives better, then as much as we may despise Donald Trump, and as much as he may deserve to be impeached, you still have to ethically, morally try and harvest those policy improvements that would improve people’s live.
For more information, visit Public Citizen’s Global Trade watch at citizen.org/trade.
