NAFTA Talks on Verge of Collapse: ‘Good’ Say US, Canadian, and Mexican Activists
May 17, 2018
NAFTA is in urgent need of revision, to make it a treaty for greater equity between the countries, but the current secrecy and speed of the negotiations will not lead to a better treaty, say three NAFTA activists and analysts from Canada, Mexico, and the US
SHARMINI PERIES: It’s the Real News. And I’m Sharmini Peries, coming to you from Baltimore.
In recent months, the U.S. has placed enormous pressure on Canada and Mexico to deliver a new North American Free Trade Agreement. They want it done fast. The negotiations were accelerated to a rapid pace of 24/7. Further, these negotiations are taking place in secrecy. The public nor its advocates have access to the NAFTA text under discussion, although these decisions are going to affect all of our lives; what we eat, what we breathe, and so forth. So it is impossible to know for sure what is exactly in these negotiations that are being discussed behind closed doors.
So in protest, a coalition of more than a thousand organizations, made up of labor, environmental, family farm, consumer, civil rights, faith, small business, and public health and community groups have all sent a message calling to an end to these negotiations, and demanding that any further negotiations on the North American Free Trade Agreement must prioritize working families, public health, and the environmental consequences of these kinds of agreements. All of that should be put forth prior to corporate profits.
On to talk about all of this with me is a panel of guests. From Washington, D.C. We have Manuel Perez Rocha, an associate fellow of the Institute for Policy Studies. From Mexico is Alejandro Villamar Calderon, who is a member of the Mexican Action Network on Free Trade. And Mike Palacek, who is the national president of the Canadian Union of Postal Workers. Welcome, gentlemen.
MANUEL PEREZ ROCHA: Thank you.
MIKE PALACEK: Good afternoon.
SHARMINI PERIES: All right, gentleman. As I mentioned in the introduction, there has been tremendous pressure on NAFTA’s negotiators to conclude the negotiations before May 17, which appears to be almost impossible, given where they are at in terms of the negotiations. Let me give each of you one minute to respond to the concerns you might have about these talks.
MANUEL PEREZ ROCHA: Organizations have called for the immediate suspension of the NAFTA talks, even when at a certain point, when Donald Trump threw the negotiations onto Mexico and Canada, at some point social and civil organizations of North America welcomed the opportunity to open up the agreement, open up discussions, meaningful discussions, and to try to make NAFTA an instrument of equality, instead of inequality, which it was designed to be. But after so many months of disrespect from the United States government, and particularly from the Trump presidency to the Mexican and Canadian governments, we think it’s time to suspend the negotiations.
But not only because of that. Also because of the secrecy, and the big cloud of secrecy with which the negotiations have been concluded. Large sectors of, you know, unions, environmentalists, NGOs, institutes like mine, the Institute for Policy Studies, have been completely sidelined from the negotiations. So we are actually in the dark. We don’t know exactly where the negotiations are at this very point.
SHARMINI PERIES: All right, Alejandro Villamar Calderon, let me go to you in terms of what your key concerns are.
ALEJANDRO VILLAMAR CALDERON: In Mexico we have a very [inaudible] With the U.S. and Canadian civil society organisations. It is, as Manuel say, it’s impossible to accept trade deal, so important a deal, which is negotiated in secrecy. It is against the basic principles of democracy. It is the heart of the public policy. It is a great concern for, not for the big groups. For the more simple people, for the farmers, for the campesinos, for the indigenous. The NAFTA content have many threats for the campesinos’ economy. Is the reason why millions of Mexicans look to cross the border to work in the United States, or even now in Canada.
For us in this moment, one key point is not the route of a region in the automotive sector. One other part of this problem is the salaries of, the workers’ salaries. The proposal which is open is about the salaries of the automotive workers. But behind these is the demand in which Canadian and U.S. organization, and Mexican, are agreed. It’s need to pressure for more high salaries for the Mexican workers. It’s not accepted that the competition or competivity of Mexico is at the price of hunger salaries for Mexicans. Need to change. All these situations. This issue is key for our internal market, but it’s also a key issue for good relations with the neighbors.
SHARMINI PERIES: All right. Mike Palacek, let me give you an opportunity to get in here and identify what you think the key issues are as far as the Canadians are concerned.
MIKE PALACEK: Well, let’s, let’s be clear here. NAFTA is not and never was anything good for working class people. This was a trade agreement that’s designed to protect corporations, that’s designed to facilitate resource extraction industries, and that’s designed to push down wages. So that’s what needs to change in this agreement. And of course there are all kinds of problematic things in it now, like the Chapter 11 investor state provisions that actually allow a corporation to sue a country if they don’t like the laws that have been passed to to protect the environment, or some such. That’s something that obviously has to change. And right now today, with the biggest challenge humanity is facing being climate change, I don’t know how you can agree to any sort of economic agreement, a trade agreement or otherwise, that doesn’t contain a comprehensive plan to address climate change.
So given the current state that this agreement is being negotiated in, in secret, and given the people that are at the table, the odds of getting an agreement that actually reflects those things are almost zero at this point. And that’s why we were happy to join the call of civil society organizations to suspend the talks.
SHARMINI PERIES: All right, let’s take now one of these issues at a time. First let’s take up, Manuel, and I’ll direct this question to you. Why are these negotiations being done in secret? And we know from other agreements that were in negotiation, TTIP and, and others, that secrecy has a lot to do with who’s sitting around the table. Manuel, can you address that point?
MANUEL PEREZ ROCHA: They are secretive because basically the agreements are done by, and they are for, corporations. When I say they’re done by it’s because corporations participate in the negotiations. They are sitting in what is called the side room, and they talk to the negotiators. So actually, the negotiators are kind of their employees negotiating for them. In the case of the TPP, we know that about six hundred corporate representatives participated in the negotiations.
So this is why they are so secretive. They don’t want to have the unions, they don’t want to have the NGOs, they don’t want to have the farmers’ organizations bothering or pestering in this. Because these are clearly, clearly deals done to facilitate, as the other panelists have said, to facilitate profit making. This is what they’re for.
SHARMINI PERIES: And Mike, let me go to you. You guys have been very active in Canada in terms of the postal workers. Are you at the table? Or do you have the same opportunity to influence the conversation that’s going on there?
MIKE PALACEK: Well, no, we’re certainly not at the table. And perhaps that’s, that’s part of the issue. But as I’ve said, there are a number of major problems with NAFTA as it stands, and the likelihood of those changing in these negotiations are not that great. But let’s be clear, a bad deal is far worse than no deal at all.
SHARMINI PERIES: Now, an organization like yours, Canada has a very strong postal workers union. It’s one of the few countries where, you know, it hasn’t been privatized to the extent that it has been in other countries like the United States. Was there any consultation that took place with the postal workers?
MIKE PALACEK: Participating in meetings with the rest of the labor movement through the Canadian Labor Congress, and discussing some of the things that are happening at the table. Of course, we have concerns about the fact that this is being negotiated in secret, about the fact that they won’t release the provisions that have already been agreed upon, apparently. So there are concerns about what’s being discussed and whether or not we even know what’s being discussed.
SHARMINI PERIES: Alejandro, you have some concerns about this deal that is affecting the local economies in Mexico.
ALEJANDRO VILLAMAR CALDERON: At this moment, we think it’s very important to stop the dumping of many food imports from U.S. The Mexican market is flooding of U.S. products, food products, which is dumping by the U.S. state. This is a big obstacle for national production. We don’t talk now about the exports. We are talking about the production of Mexican food for the Mexicans, not only for the neighbors. This is true, it’s not included in the, in the text. It’s not included, or it’s included for the other side, the GMOs and the biotech, which is also what other additional threat for the Mexican field, for the Mexican campesinos economy.
The other, it’s the big problem, is that they demand, they don’t adopt the truly binding environmental standards. Not only climate change. It’s in general environmental standards. The paradox is in the United States the process is to down [lower] many of the standards, environmental standards in this moment by the Trump administration. Then what will be the results of these negotiations? It’s clearly that is not a guarantee for the interests of the Mexican and the interests of the American and Canadian citizens.
SHARMINI PERIES: All right. Now, both Mike-. Well, actually, all three of you mentioned the issue of wages. Mike, you said in particular that this is an effort to drive down the wages. Explain what you mean by that, and what Alejandro is also saying here in terms of what this does to the worker in Mexico.
MIKE PALACEK: Well, I think the whole opening up of the trade was designed to allow the movement and portability of jobs in such a way to open the labor market to more cost pressures, and push down wages. And frankly, that’s been the result. That’s what we’ve seen over the course of NAFTA. Real wages have been stagnant for a generation. We need to rethink this agreement. It has to have dramatic changes. But at the same time, negotiations of NAFTA are an opportunity to really rethink our whole economy, because that’s what needs to happen to address climate change as an issue. I don’t see any of that coming up at the table.
SHARMINI PERIES: All right, let’s talk about climate change here. This is a driving factor for many, many, many workers. There’s multiple issues involved. Some, of course, argue that manufacturing the cars that are not fuel efficient and that addresses climate change and emissions is a problem. So let me actually start off here with you, Manuel. Describe for us what the problems are that we have been experiencing currently under the NAFTA agreement, and whether in the renegotiations were the environmental conditions, are even on the agenda.
MANUEL PEREZ ROCHA: Well, just to put an example, NAFTA has provoked a decimation of the Mexican countryside. But also not only the Mexican countryside from the agricultural point of view, but also from the environmental view. About 30 percent, a third of the territory of Mexico is already concessioned to mining companies, mostly from Canada, but many from the U.S. as well. So we are experiencing a very devastating situation in Mexico.
And when we have a Chapter 11, and the ISDS provision, it’s very, very difficult for Mexican, not only the national government, but local governments to prevent the destruction of the Mexican environment, Because companies could take Mexico to foreign tribunals. In fact, Mexico has already paid more than $200 million in international tribunals to companies for regulations, for [inaudible] regulations. The Metalclad case is a very important one. But Mexico is actually being sued for more than $1 million for regulations, for regulating in the public interest.
So we see these very, very strong investment provisions in NAFTA that are completely binding, and that have very strong enforcement mechanisms. And on the other hand, very weak, very weak environmental language. The environmental side agreement has practically served for nothing. It’s toothless. Just like the labor side agreement, by the way.
SHARMINI PERIES: Manuel, elaborate on the case you just cited. What is that about? Just give people some context here.
MANUEL PEREZ ROCHA: Metalclad is a case just when NAFTA came into being in which a locality in the state of San Luis Potosi prevented the creation of a toxic waste dump by which this company, Metalclad from California, would dump asbestos taken out from buildings in California into the undercurrent water, watersheds of this locality in San Luis. So the people from that locality stood up, and the municipal government withdrew their permission to that company, Metalclad, to operate such waste disposal facility. Therefore, Metalclad, under Chapter 11 of NAFTA, sued Mexico, the Mexican government, with $60 million, and they won $60 million. So Mexico had to pay $60 million to Metalclad in compensation, as it’s supposed to be called, in compensation for that, not only for the investment that it made, not only for what it lost in the operation, but for the future losses, for the profit that they didn’t make.
So this is a very perverse system by which companies can, companies do blackmail governments and hold them to provoke a chill effect in public regulations.
SHARMINI PERIES: One of the major concerns that Canadian civil society organizations working on NAFTA policy have is really the environmental conditions that you already outlined earlier. Give us some sense of what the key issues are, and what they would actually like to see in the NAFTA agreement in terms of environmental protections.
MIKE PALACEK: Well, I think the reality that’s facing us is that we have to do things differently, and we have to find a way to transition away from fossil fuels as soon as possible. That’s what the science is telling us, and very bad things will happen if we don’t do that. Now, it’s certainly not ideal that we have an administration right now in the United States that doesn’t, or claims that climate change doesn’t exist. In the other two countries, of course, we have governments that recognize climate change, but aren’t taking the action that’s needed to actually address the issue, even if they do talk a good game about it.
So we don’t see that that, there is a sense of urgency around that issue. Certainly at NAFTA. But if you’re talking about negotiating a major trade agreement with your major trading partners, you cannot put yourself into that straitjacket without having that lens on things, and without having a real plan to move forward to meet the challenges of climate change.
SHARMINI PERIES: All right. Now, before we leave, this is a preliminary discussion which we can, I think, continue. But over a thousand organizations from the U.S., Mexico, and Canada have come together with specific demands on how NAFTA ought to be reformed. And so let me give you a minute to address what some of those are that we should be looking out for, and also fighting for. And let me start with you, Alejandro, there, first.
ALEJANDRO VILLAMAR CALDERON: Well, the parallel chapter, NAFTA’s parallel chapter of, on environment, it’s only green. Don’t have binding compromises for the enterprise. Then the violation of the local and national laws, it’s, it’s very clear. Then we need to, and we demand to reform all of this. To include all the international agreements and convention to protect environment. And to enforce the national environmental standards. But also to change the, the advantage for transnational companies in the Chapter 11.
In the other side, we demand that the energy chapter don’t, destroy the solar energy capacity of, for example, for Mexico to, to create a national energy industry. Because under the NAFTA’s rules now, currently, the energy integration is ruling by the interests of the multinational oil and energy companies. And they don’t concern about the climate change. They continue to promote the fracking industry, which is very toxic, very destructive. It’s against the international convention. And we need to transform NAFTA. We need to transform the structure and the nature.
At this moment, the secret negotiations look like they maintained the same status for the reason we demand more report on the secret text. We demand to change the nature to attend the voices of the civil society from the, from the three countries. And to comply with the international rights.
SHARMINI PERIES: All right. Manuel, let me give you an opportunity to address this issue as well. What are the demands that we should be making on NAFTA, and how should it be reformed?
MANUEL PEREZ ROCHA: Yeah, we have a real wish list from every angle. And I think NAFTA shouldn’t be reformed, it should be transformed. What we need is another model of integration in North America. One model, which is not based on, basically, labor exploitation. I think that is the basis of NAFTA, labor exploitation.
And just to give an idea, we know that there are some talks about labor issues in Mexico, and wages. But it’s most probably, I say most probably because they’re done in secrecy, most probably only about the automotive sector, the sector, the car sector. And that is a sector which employs only 0.7 percent of the total workforce in Mexico. Actually, the global supply chains, [inaudible] from Mexico, and our colleague has analyzed. Only 2.4 percent of the Mexican workforce, the total workforce, are employed in the global supply chains. So it is a myth that NAFTA, it’s a job creator in Mexico. It’s actually a job destroyer. It takes small sectors of the economy to exploit them. Small sectors of the labor force, to exploit it as much as it can.
So what we need is a new model, in which Mexico stops suppressing labor rights in order to give transnational North American corporations so much privilege and so much opportunity for interfere in trade, and enhance their profit making as much as possible.
SHARMINI PERIES: All right. Mike, let me have you answer the same question. And also, do you agree with Manuel there that we should just get rid of NAFTA altogether, and not reform it, but transform and perhaps talk about different trade relations with these three countries?
MIKE PALACEK: Well, as I said, a bad deal is far worse than no deal. The odds of actually seeing this agreement fixed in this round of negotiations are almost zero. So absolutely no deal would be better than what’s likely to come out of this. That being said, I agree we need a whole new model, and we need to look at, look at things differently. We need to break out of the neoliberal thinking that’s been, you know, dominating policymakers across the world for a number of decades that tells us, you know, we can’t have improved social services. We can’t have decent wages. We can’t have proper protections for the environment. None of that is true. I think we need to re-evaluate some fundamental things about how we do business.
SHARMINI PERIES: All right. I’ve been speaking with Mike Pelecek, who is with the national president, he’s the national president of the Canadian Union of Postal Workers. I’ve also been speaking from Mexico with Alejandro Villamar Calderon. I thank you so much for joining us. And also I’ve been speaking with Manuel Perez Rocha, associate fellow of the Institute for Policy Studies. I thank you all for joining us today.
And thank you for joining us here on the Real News Network.