NAFTA talks at a standstill

WASHINGTON, D.C., U.S. — The fourth round of negotiations aimed at revitalizing the North American Free Trade Agreement ended without fanfare and with only limited results on Oct. 17.

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If anything, the future of the agreement was in greater doubt as the Trump administration tabled proposals sharply opposed by the governments of Mexico and Canada, and with the president repeatedly affirming his willingness to end U.S. participation in NAFTA if U.S. demands weren’t met.

A joint statement from representatives of the three nations noted a “significant conceptual gap” over revision to the 23-year-old agreement, but said some common ground had been reached in the less controversial parts of the negotiation.

U.S. Trade Representative Robert Lighthizer noted the talks had “substantively completed discussions on the competition chapter” as well as agreement in principle on customs, trade facilitation, digital trade, regulatory practices, and NAFTA annexes related to specific sectors.

But Lighthizer noted that, in the United States’ view, “the agreement has become very lopsided and needs to be rebalanced.”

“We have a $500 billion trade deficit,” he said. “For us, deficits do matter.”

Canadian Foreign Minister Chrystia Freeland said some of the “America first” language proposals from the United States would disrupt supply chains and violate commitments made previously by trading nations through the World Trade Organization. Freeland said she hopes for “fresh creative perspective” when talks resume.

“We knew this process would be difficult,” said Ildefonso Guajardo, Mexico’s economic minister. “We must realize we have limits. None of us wants to leave this process empty-handed.”

The next round of negotiations will begin Nov. 17 in Mexico City. Altogether, there were to be seven rounds aimed at completing the NAFTA revisions for approval by the governments by the end of the year. But given there has been so little progress to date, at least on the most controversial issues, it was expected talks may extend into 2018, if they are not ended altogether.

U.S. negotiators tabled most of their new proposals just ahead of the fourth round of negotiations. One U.S. proposal would require that 50% of the value of all cars, trucks and large engines produced in the NAFTA countries and benefiting from the pact’s provisions be derived from components manufactured in the United States. Additionally, the Trump administration would raise NAFTA’s regional automotive content requirements to 85% from the current 65%.

Another U.S. proposal sought to limit or even eliminate independent panels that resolve disputes on trade and investments under NAFTA.

Also, the United States proposed a sunset clause that would see NAFTA expire after five years unless the three governments agree to extend it on a regular basis.

The proposals were opposed not only by Mexico and Canada but by the U.S. Chamber of Commerce and other U.S. business and agricultural organizations.

On Oct. 13, John Murphy, senior vice-president of international policy at the U.S. Chamber of Commerce, said the administration’s proposals had “no identifiable constituency backing them” and had sparked “a remarkable degree of unity in their rejection.”

In response to the Chamber’s sharp criticisms, Emily Davis, spokeswoman for the U.S. Trade Representative, said, “The president has been clear that NAFTA has been a disaster for many Americans, and achieving his objectives requires substantial change. These changes of course will be opposed by entrenched Washington lobbyists and trade associations. We have always understood that draining the swamp would be controversial in Washington.”

Apparently at the 11th hour of the fourth round of negotiations, the United States put forward yet another problematic proposal that aimed to end Canada’s internal dairy supply management system by eliminating tariffs on supply-managed dairy products over 10 years.

The International Dairy Foods Association earlier indicated its No. 1 priority was maintaining the U.S. dairy industry’s export market in Mexico. At the same time, the IDFA has pushed for negotiators to address problems with Canada’s use of new milk pricing policies it said undercut skim milk powder prices on the world market.

“Securing NAFTA provisions that curb these actions is the most important way we can ensure that new Canadian market access is meaningful for U.S. dairy companies and that U.S. dairy products can compete fairly in third-country markets,” said Michael Dykes, president and chief executive officer of the IDFA.

Leaders of the U.S. Grains Council, U.S. Soybean Export Council, National Sorghum Producers, National Renderers Association and the National Corn Growers Association met with  representatives of the Mexican livestock industry that are part of the Consejo Nacional Agropecuario (National Agricultural Council in Mexico) last week in Washington. They issued a joint statement at the close of the fourth round of negotiations affirming their commitment to a strong trading relationship under NAFTA.

“NAFTA has provided the trade policy basis for the most efficient and effective interregional grain and livestock value chain in the world,” the groups said. “Our organizations are committed to work together — as we have for more than 30 years — to ensure the success of the industries on both sides of the border.”

Grains and soy trade between Mexico and the United States in 2016 was valued at more than $6.6 billion dollars with more than 90% of these ingredients consumed by the Mexican livestock industry.

The groups said Mexico and the United States should be seen as an integrated supply chain for livestock production.

“In order to continue building on the successful relationships fostered by NAFTA, we jointly support efforts to achieve further regional economic integration and preserve and expand upon the existing benefits of our mutual cooperation,” the groups asserted. “We encourage our negotiators to continue their participation in good faith and produce an agreement that builds upon our ongoing success. We stand ready to give them any help in this endeavor in every way possible.”

 

From World Grain News

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NAFTA Renegotiation: What’s at stake for food, farmers and the land?

The re-negotiation of the North American Free Trade Agreement (NAFTA) between the U.S., Mexico and Canada began on August 16, and there is much at stake for farmers and rural communities in all three countries.

cornPile_j_regan_webDespite promised gains for farmers, NAFTA’s benefits over the last 23 years have gone primarily to multinational agribusiness firms. NAFTA is about much more than trade. It set rules on investment, farm exports, food safety, access to seeds, and markets. NAFTA, combined with the formation of the World Trade Organization (WTO) and the 1996 Farm Bill, led the charge to greater consolidation among agribusiness firms, the loss of many small and mid-sized farms and independent ranchers, the rapid growth of confined animal feeding operations (CAFOs) and further corporate control of animal production through often unfair, restrictive contracts with producers. The Trump administration’s negotiating objectives reflect relatively small tweaks to NAFTA, while adopting deregulatory elements of the defeated Trans-Pacific Partnership (TPP).

Family farm groups have called for the existing NAFTA to be scrapped and propose a fundamentally new agreement with a goal of improving the lives of family farmers and rural communities in all three countries.

What is NAFTA?

The North American Free Trade Agreement (NAFTA) was agreed to by the U.S., Mexico and Canada in 1992, ratified by the U.S. Congress in 1993, and became enforceable in 1994. The Agreement has 22 chapters, grouped into eight sections.1 Those sections cover trade rules on a variety of goods, including textiles, agriculture and food safety, and energy; technical standards for traded goods; government procurement; protection for investors and trade in services; intellectual property; notification of new laws and how to handle trade disputes.

NAFTA was the first of its kind in several ways: the first trade agreement among countries at very different levels of economic development; the first to include controversial private arbitration panels that allow foreign corporations to sue governments to challenge actions that impede their potential future profits; and the first trade agreement to include side agreements on labor and environment. It was the template for the U.S.-Central America Free Trade Agreement (CAFTA), the U.S.-Korea Free Trade Agreement, and the defeated Trans-Pacific Partnership (TPP), among others, as well as dozens of other agreements negotiated by Canada and Mexico. Each of the trade deals that followed included additional elements that strengthened corporations’ ability to move production and investments in all participating countries.

What promises were made to farmers?

During the NAFTA debate in the early 1990s, U.S. farmers and ranchers were promised that they would export their way to prosperity but that didn’t happen. A U.S. Department of Agriculture fact sheet at the time pledged that NAFTA would “boost incomes in Mexico and increase demand for a greater volume and variety of food and feed products” from U.S. farmers.2 The USDA fact sheet vowed that U.S. farmers would gain from “higher agricultural export prices” among other benefits. An International Trade Commission analysis advising Congress in 1993 downplayed the impact NAFTA would have on agriculture, predicting only “a minimal effect on overall U.S. agricultural production and employment,” aside from some increases in grain and meat exports, and a slight increase in fruit and vegetable imports.3 The same ITC report predicted that U.S. Midwest soy and corn farmers would benefit from increased exports to Mexico.

The General Accounting Office (now Government Accountability Office) concluded that NAFTA would “reduce unauthorized Mexican migration to the United States in the long run…”4 President Bill Clinton made a similar argument at the time stating: “By raising the incomes of Mexicans, which this (NAFTA) will do, they’ll be able to buy more of our products and there will be much less pressure on them to come to this country in the form of illegal immigration.”5 Conservative think tanks like the Peterson Institute for International Economics joined in the NAFTA cheerleading through opinion pieces in the media that exclaimed “Everybody Wins,” and predicted strong long-term growth in Mexico’s per capita income with associated declines in immigration to the U.S.6

These false promises, supported by a compliant media, gave Congressional backers the fuel they needed to narrowly pass NAFTA in 1993. Whether economic gains for farmers or reduced migration from Mexico, NAFTA’s promises of prosperity have proven to be empty ones.

What parts of NAFTA relate to food and agriculture?

Phasing out of tariffs

NAFTA’s Chapter 3 on National Treatment and Market Access set a schedule to phase out tariffs on most agricultural goods traded among the three countries, finally coming into full force in 2008. Tariffs on some goods, such as imports of corn and soybeans to Mexico, were phased out over 15 years—although Mexico accelerated that timetable under pressure from the U.S.7 (Previously, Mexico had charged an average tariff of 11 percent on imports of agricultural goods.) U.S. agricultural tariffs were for the most part already low. Many Mexican farm goods entered the U.S. duty-free prior to NAFTA under the Generalized System of Preferences, which gives tariff preferences to developing countries. Tariffs on U.S.-Canada trade for most agricultural goods had already been eliminated under the U.S.-Canada Free Trade Agreement, which formally came into force in 1989.8

Some exceptions to the free flow of agricultural goods were established under NAFTA. Canada retained the right to maintain its dairy, poultry and egg supply management programs, which support fair prices for Canadian producers and consumers. These programs include some limits on imports and high tariffs for those products. NAFTA also includes a side agreement that expands the volume of Mexican sugar imports into the U.S., while still protecting the U.S. sugar program, which also functions essentially as a supply management program.

Food safety

The Agriculture and Sanitary and Phytosanitary (SPS) Chapter of NAFTA (Chapter 7) sets broad rules for domestic support, eliminates export subsidies, and establishes a mechanism to handle trade disputes. The second part of the chapter focuses on food safety rules, and ensuring that those rules will not act as a barrier to trade. Equivalency agreements between the three countries streamlined inspections of foods crossing borders, and put pressure on inspectors and food safety agencies to facilitate trade. NAFTA also established an ongoing food safety standards committee to settle disputes between the three countries.

Special rights for foreign corporations

NAFTA was the first free trade agreement to establish special legal rights for foreign corporations. NAFTA’s Chapter 11 established the Investor State Dispute Settlement (ISDS), which grants foreign investors the right to sue local or national governments over measures that affect their real or potential profits on existing or planned investments.9 This ground-breaking corporate privilege provision has been replicated in nearly every ensuing U.S. trade deal. There have been only a few agricultural ISDS disputes under NAFTA. Cargill, Archer Daniels Midland and Corn Products International have all successfully sued Mexico and won multimillion dollar settlements, for the country’s tariffs on high fructose corn syrup.

Intellectual property

NAFTA’s Chapter 17 was the first free trade chapter to include meaningful rules on intellectual property rights (IPR) for seeds and other biological resources. NAFTA built upon on-going international negotiations that ultimately created the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement in the WTO. The NAFTA IPR chapter references the International Convention for the Protection of New Varieties of Plants 1978 (UPOV Convention 1978), and the International Convention for the Protection of New Varieties of Plants 1991 (UPOV Convention 1991)—which place restrictions on farmers’ and researchers’ rights to save and share seeds.10 While all NAFTA parties were expected to either be part of these Conventions, or join the Conventions soon after, Mexico never did join UPOV 1991—an issue that re-surfaced during the TPP negotiations, and will likely be raised again during NAFTA renegotiations. During the negotiation of Chapter 17, IATP was part of a coalition that criticized the legal and economic disruption by patent holders of traditional agricultural practices, such as the planting of saved seeds and cross-breeding of shared seeds.11

What is the relationship between NAFTA, the World Trade Organization and the Farm Bill?

The rules set in NAFTA (1994), the WTO (1995) and the 1996 Farm Bill are mutually reinforcing. The WTO set a foundation of international trade rules for more than 160 countries. The WTO’s Agreement on Agriculture set international trade rules on agriculture policy, including the types of farm programs that are allowed (non-trade distorting), tariff levels on agricultural goods and how those tariffs may be applied. If NAFTA were eliminated, the trade rules set at the WTO would be the fallback.

The 1996 Farm Bill passed by Congress was designed to comply with trade rules agreed to in NAFTA and the WTO. It stripped away the final remnants of U.S. supply management programs (with sugar the exception), which had intentionally limited production for the purpose of ensuring fair prices to farmers. The 1996 bill was given a slick market-friendly name, “Freedom to Farm” and its elimination of supply management was sold to farmers as necessary for expanding U.S. export markets. That expanded access, the bill’s supporters claimed, would itself ensure fair prices to farmers. This did not turn out to be the case. “Freedom to Farm has really positioned the U.S. very well to take advantage of the opportunities in the world market,” said a Cargill executive shortly after the bill was passed.12

Shortly following the passage of the 1996 Farm Bill, U.S. farm prices predictably plunged following the expanded production—and tens of millions of dollars of emergency payments were needed to prevent many farmers from losing their farms.13 Those low prices, coupled with NAFTA’s and the WTO’s requirements to lower tariffs, facilitated the rapid growth of agricultural export dumping (exporting below the cost of production) by U.S. agribusiness over the next decade.14 Many Mexican farmers who were particularly hard hit by a flood of U.S. corn exports eventually emigrated to the U.S. to work on farms and in meat packing plants. In 2002, the Farm Bill took steps to convert the emergency payments for farmers into commodity program farm subsidies. These programs, further adapted in ensuing Farm Bills, support farmers when prices drop due to over-production, and continue today in the form of revenue-insurance programs.

What are the outcomes of NAFTA?

Because NAFTA entered into force around the same time as the formation of the WTO and the 1996 Farm Bill—not to mention the series of free trade agreements that followed—it is difficult to tie precise outcomes in the agriculture sector to NAFTA. But the trends in agriculture post-NAFTA very clearly show the loss of small and medium sized farms, the rapid expansion of CAFOs and contract production in the meat and poultry sector, and the growing power of multinational agribusiness firms across the North American market. Below we explore outcomes and trends in agriculture and food following the passage of NAFTA.

Agricultural trade

NAFTA has dramatically contributed to the integration of North American agricultural markets, according to the USDA.15 Integration is when formerly separate markets have combined to form a single market. Final food products, like beef, experience integrated markets as well as raw materials like animal feed.

Agriculture trade among the three countries has expanded considerably, though the U.S. agricultural trade balance with NAFTA partners has fallen with both partners, according to an analysis of government data by the University of Tennessee’s Agricultural Policy Analysis Center (APAC). APAC found that from 1997 through 2014, U.S. overall agricultural trade balance with Canada was a negative $30.4 billion and with Mexico a negative $9.6 billion.16

The top U.S. agricultural exports to Mexico are animal products, grains, oilseeds and sugar, which together made up 79 percent of exports in 2015. Mexico is the top market for U.S. pork, chicken and corn. U.S. corn exports to Mexico more than quadrupled in volume compared to the decade prior to NAFTA.17 Mexico bought about 28 percent of all corn exported from the U.S., $2.5 billion worth, in 2015-16.18

Mexican exports of fruits and vegetables and some animal products to the U.S. also expanded under NAFTA. In the year before NAFTA, the U.S. was largely a net fruit and vegetable exporter, and now is a net importer by a wide margin. Mexico’s annual exports of fruit and vegetables to the U.S. more than tripled by 2013. Mexico and Canada are the largest foreign suppliers of U.S. fruits and vegetables.19

Read the full article on the Institute for Agriculture and Trade policy website here

Labour rights need to be at the core of any amended NAFTA deal

Labour and environment were part of side deals in the original NAFTA, with language that watered down their impact.

Anti-NAFTA1-660x400Memories being what they are — fragile — one has to reach into the newspaper archive to reclaim the tempest mood, some 24 years ago, when the not-yet-ratified North American Free Trade Agreement had American voters storm tossed.

Would presidential hopeful Bill Clinton endorse the agreement, negotiated by President George Bush, despite the glaring absences in the Mexico-Canada-U.S. marriage?

Clinton was a rising-tide-lifts-all-boats globalist Kool-Aid drinker — skol! — but he was a pragmatist too and so, in October 1992, he came out in support of the deal, with a qualifier: negotiators would have to cut side agreements on labour and the environment. I see this as killing two birds with one stone, winning the support of Congress (Clinton became president in January 1993), while not messing with the core agreement.

Students of the free trade pact may recall that one of the loudest anti-NAFTA voices was Democratic House majority leader Dick Gephardt, who repeatedly and so eloquently argued that environmental controls, protection for workers and an international dispute resolution covering the right to strike and collective bargaining were essential.

Gephardt made a couple of trips to Tijuana to assess matters for himself. He returned with a first-hand understanding of buck-an-hour jobs and industrial waste flowing freely through the places where children play and cattle graze.

It took a year to work up the so-called environmental and labour protection provisions of NAFTA. Who among us can recall the council of Canadians — Doris Anderson, Farley Mowat, Pierre Berton and many more — who protested these “side-bar deals,” rightly pointing out that the labour provisions failed to even cover basic union rights? See: collective bargaining.

The final language of the labour provision had more weasely words than those mission statements so beloved by transnational corporations who very much like what they term “nimble cost structures.” The parties were “committed to promote” a few “guiding principles” governing “broad areas of concern.” Dialogue was “encouraged.”

Dick Gephardt voted against NAFTA, and that was a blow. So did House Majority Whip David E. Bonior of Michigan. “It will cost jobs,” Bonior said. “It will drive down our standard of living. It will lock in place a Mexican system that exploits its own people and denies them the most basic political and economic rights.”

Still, the deal passed quite breezily.

And then a flood of manufacturing jobs rushed to low wage sites in Mexico. The workers there had rare hope of forming true, as opposed to sham or “phantom,” unions.

No wonder Foreign Affairs Minister Chrystia Freeland felt compelled to acknowledge this week that, as she put it, “There are reasons why Canadian workers might have some skepticism about trade agreements.” She continued: “Canadian workers have legitimate anxieties about the ways in which international trade can lead to a race to the bottom in labour standards.”

She noted that she was “quite optimistic” about the chances of improving the labour chapter in the current NAFTA talks, which resume in Washington on Oct. 11.

If I’ve got my timing right, Freeland’s comments arrived just about the time workers at Rexnord Corp.’s bearings plant in Indianapolis exited their place of work for the last time. The company had announced months before that it would be transferring operations, and more than 300 jobs, to Monterrey. Local reports pegged the average wage at the Indianapolis plant at $25 (U.S.) an hour, adding that by moving south of the border the company aimed to realize $15.5 million in savings — or a wage reduction to $8 an hour.

Indianapolis, we remember, is home to the Carrier air conditioning/furnace company which announced the outsourcing of jobs to Mexico, which drew the ire of Donald Trump, which resulted in tax breaks and incentives being doled out to the company. In July, more than 300 workers were nevertheless let go, with another 300 due to exit before Christmas. The president appears to be vexed by this turn of events, no doubt wondering if he got his money’s worth.

How will Mexico engage on this in the next round?

Mexico’s negotiators have some cover with the country’s newly enacted constitutional reform amending its labour justice system. That won’t work for long. There can’t be any patience any longer for denying core principles in the core agreement enshrining fundamental labour rights, rights that should have been enshrined a quarter century ago.

 

Mexico warns that abandoning NAFTA could end broader cooperation with US

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The threat from the foreign minister, Luis Videgaray, came as Donald Trump once again threatened to tear up the three-country trade treaty between the US, Canada and Mexico ahead of a fourth round of Nafta negotiations.

Mexico and the US work closely on issues such as border security, combatting drug cartels and efforts to stop migrants reaching the US border, but relations between the two neighbors have grown increasingly tense since Trump launched his election campaign on a wave of anti-Mexican sentiment.

Speaking in a senate hearing on Tuesday, Videgaray stressed that Mexico “wants an agreement” on Nafta – but also warned that Mexican officials were ready to walk away from negotiations or even withdraw entirely from the deal.

“We always have to be ready to get up from the table. This is a logical posture in any negotiation. It’s also a principle of dignity and sovereignty,” Videgaray said. “Mexico is much bigger than Nafta and we have to be ready for any scenario in the negotiations.”

He added that the end of Nafta “won’t be the end of the world”.

Videgaray’s comments departed sharply from Mexico’s previous strategy of trying to avoid antagonizing Trump. Officials have gone out of their way to ignore the US president’s repeated insults and his promise that Mexico will pay for the construction of a border wall.

Analysts said that Mexico’s apparent patience with Trump’s rhetoric suggested it was trying to keep the treaty at any cost – and for understandable reasons: more than $1m a minute in merchandise crosses the US-Mexico border.

Mexican business also bet big on Nafta, which was enacted in 1994 and turned Mexico into an outward-looking and manufacturing-oriented economy, with 80% of its exports heading to the US market.

Closer economic ties have been mirrored by closer cooperation on law enforcement and migration: traditionally wary of its northern neighbor, Mexico has over the past 15 years allowed much closer US involvement in its efforts to fight criminal groups.

Under pressure from Washington, Mexico launched an aggressive campaign against illegal migrants in 2014, and has detained and deported thousands of people fleeing violence and corruption in Central America.

But Videgaray’s statements in the senate suggested sentiments in Mexico were turning tougher and patience running out with Trump, whose Twitter attacks and Nafta threats have tormented the Mexican economy and sent the peso plunging.

Mexican officials have traditionally kept trade negotiations separate from talks on security issues, but Videgaray appeared to be playing hardball, said Brenda Estefan, former security attaché at the Mexican embassy in Washington.

“Videgaray is stressing now that the entire bilateral relationship is on the table,” she said. “With the whole bilateral relationship on the table, Mexico has more leverage – it makes it more costly for the US to walk away.”

The escalation in rhetoric followed the publication of an interview with Trump in Forbes magazine, in which the US president mused openly of ending Nafta.

“I happen to think Nafta will have to be terminated if we’re going make it good. Otherwise, I believe you can’t negotiate a good deal,” Trump said.

“[The Trans-Pacific Partnership] would have been a large-scale version of Nafta. It would have been a disaster,” he added. “I like bilateral deals.”

Business leaders meeting in Mexico City on Monday at a US Chamber of Commerce gathering warned that US negotiators had introduced several “poison pills” to sabotage the Nafta negotiations, including a sunset clause and the elimination of dispute resolution mechanisms.

Speaking in Mexico City, Thomas Donohue, the president of the US Chamber of Commerce in Mexico, warned that the “existential threat” to Nafta endangered regional security, Reuters reported.

Videgaray also described several deal breakers being brought to the negotiating table, such as “administered trade, restrictions, tariffs, barriers, which perverts the kind of agreement that it is, and this doesn’t suit Mexico”.

“What we cannot lose is that a free trade agreement stops being a free trade agreement,” he said.

Read the article on The Guardian here.

Trudeau fights to save NAFTA deal, but Trump offers little hope

Canadian Prime Minister Justin Trudeau visited the White House on Wednesday seeking a new “fairer trade” deal among the United States, Canada and Mexico amid growing alarm from business leaders that President Trump is leaning toward jettisoning the North American Free Trade Agreement in favor of bilateral accords.

Botsford171011Trump20725In a news briefing at the Canadian Embassy, Trudeau insisted that maintaining the trade deal between the United States, Canada and Mexico would “produce better outcomes for the citizens of all three countries,” enabling North American businesses to compete more effectively in the global market.

Coming up with ways to achieve “fairer trade” was “the president’s focus, and it’s certainly my focus,” Trudeau said.

However, Trump continued to disparage the 23-year-old accord and promote the idea of bilateral trade deals. “We’ll see what happens,” Trump told reporters in the Oval Office after being asked whether NAFTA was dead. “We have a tough negotiation, and it’s something you will know in the not too distant future.”

The two leaders met as the fourth round of NAFTA negotiations began just outside Washington, with trade experts, businesses, labor and lawmakers from all three countries warning of a possible breakdown in the talks.

While Trudeau reaffirmed that he continued to believe in ­NAFTA, Trump said that he was willing to strike bilateral trade deals with Canada or Mexico if the negotiations failed.

“Absolutely it’s possible we won’t be able to reach a deal with one or the other, but in the meantime we’ll make a deal with one,” Trump said in the Oval Office, seated next to Trudeau. “I think it’s going to work out well for both countries and Mexico.”

The sense of urgency about the talks has been building after earlier rounds in Mexico City and Ottawa. On Monday, U.S. Chamber of Commerce President Tom Donohue, speaking in Mexico City, said it was time to “ring the alarm bells” on NAFTA. He said that abandoning the agreement would pose an “existential threat” to the continent’s national and economic security.

Labor and environmental groups were taking aim at the talks, which have remained closed to the public. Ben Beachy, trade expert at the Sierra Club, said that “it is completely unacceptable that two months into NAFTA’s renegotiation” the sessions remained closed.

In his Oval Office comments, Trump added that “we have to protect our workers, and in all fairness, the prime minister wants to protect Canada and his people also. So we’ll see what happens with NAFTA.”

The president reiterated that “I’ve been opposed to NAFTA for a long time in terms of the fairness of NAFTA. I said we’ll renegotiate.” He said, “I think Justin understands that if we can’t make a deal, it will be terminated and that will be fine. They’re going to do well. We’re going to do well. But maybe that won’t be necessary. But it has to be fair to both countries.”

Earlier Wednesday, during meetings with members of the House Ways and Means Committee, the Canadian prime minister stressed that he did not want negotiations to collapse.

“He made it clear they don’t want to pull out. They want a successful renegotiation,” said Rep. Sander M. Levin (D-Mich.), a member of the committee. Levin said Trudeau shared his concern about labor conditions and wages, saying he did not want the treaty to speed “a race to the bottom.”

But Trudeau also told committee members that he was worried about “poison pills,” proposals the United States might make that were designed to kill, not repair, the NAFTA agreement.

The Trump administration’s decision to impose 219 percent tariffs on Canadian aircraft — designed to block a Bombardier sale to Delta Air Lines that might otherwise go to Boeing — also inflamed tensions with Canada. Delta chief executive Ed Bastian said on an earnings call that Boeing’s case was weak and that he did not expect to pay the tariff, though he added that Delta’s 75-plane order could be delayed.

Trudeau said he “highlighted” the dispute in his talks Wednesday. Switching to French, he added that “this was not an easy conversation but an important conversation.” He said Canada’s military might seek alternatives to Boeing for future fighter-jet purchases.

Read the whole article on the Washington Post: here

 

CHALLENGING CORPORATE POWER IN TRADE DEALS

Does Your Member of Congress Reject the Expansion of Corporate Power in Our Trade Deals?

congress_wide-9ab36a85f99af5c6ba124eed26b3951b79076c41-s1000-c85The North American Free Trade Agreement (NAFTA) gave vast new powers for corporations that make it easier to offshore jobs and attack the environmental and heath laws on which we all rely. Deals like NAFTA give multinational corporations the power to sue the U.S. government in front of a tribunal of three corporate lawyers.

These lawyers can order U.S. taxpayers to pay the corporations unlimited sums of money, including for the loss of expected future profits. The multinational corporations only need to convince the lawyers that a law protecting public health or the environment violates their special NAFTA rights. The corporate lawyers’ decisions are not subject to appeal. This corporate power grab is formally called Investor-State Dispute Settlement (ISDS). ISDS is also rife with conflicts of interest. One day a corporate lawyer can sit on a tribunal deciding cases, and the next day they can attack our laws on behalf of a corporation. Not only do corporations get a special system of “justice” outside our courts, but it’s totally rigged in their favor.

There is one clear way to judge whether a trade agreement is designed to benefit people or if it has been hijacked by special interests to expand corporate power: Does the deal include ISDS? If ISDS is included, no matter what else is in the deal, the trade agreement obviously puts corporations before people and the planet. GET YOUR MEMBER OF CONGRESS ON THE RECORD These corporate powers are at the heart of NAFTA and were the foundation of the TransPacific Partnership (TPP).

Yet many members of Congress still haven’t taken a position on ISDS. This toolkit will help you educate your members of Congress about the expansion of corporate power through the ISDS system and find out where they stand. We recommend that you focus your energy on advocacy with your Representative, though in some cases it may make sense to focus on your Senators. Contact@ISDScorporateattacks.org for guidance.

Why this matters

Any trade policy that puts working people and the planet first must not empower corporations to attack our laws in shady tribunals and make off with unlimited amounts of taxpayer money. The ISDS system is a power grab that puts corporations before people.

What’s in this toolkit

  • How to Plan a Visit to Your Representative’s Office
  • How to Hold Your Member of Congress Accountable in Public
  • Sample Letter for Your Member of Congress
  • Petition to Your Member of Congress
  • How to Write a Letter-to-the-Editor

Download the toolkit here

Learn About Trade ‘Dumping’

Investopedia explains the process of ‘Dumping’ as it relates to trade- and you can watch it explained in a video here.

anti-dumping-4-728What is ‘Dumping’

Dumping, in reference to international trade, is the export by a country or company of a product at a price that is lower in the foreign market than the price charged in the domestic market. As dumping usually involves substantial export volumes of the product, it often has the effect of endangering the financial viability of manufacturers or producers of the product in the importing nation.

BREAKING DOWN ‘Dumping’

Considered a form of price discrimination, dumping occurs when a manufacturer lowers the price of a good entering a foreign market than it charges domestic customers. The identification of trade dumping can be performed simply by comparing the sales price of a good in its market of origin and the price listed in an importing market. Trade dumping is considered intentional in nature in that the primary purpose is to gain an advantage within the market that imports the goods.

Advantages of Trade Dumping

The primary advantage of trade dumping is the ability to permeate the market with product prices often seen as unfair. The exporting country may offer the producer a subsidy to counterbalance the losses that may be incurred, especially when the products are sold at a price below the costs associated with production.

Disadvantages of Trade Dumping

Trading dumping can be costly to maintain over time. This is due in part to the lower sale price being offered on the good as well as the costs involved in subsidizing the activity, if applicable. Additionally, trade partners who wish to restrict this form of market activity may increase restrictions on the good in question, which either makes it more expensive to export into the affected country or limits the quantity of the good the importing country will accept.

International Attitude on Dumping

While the World Trade Organization (WTO) reserves judgment on whether dumping is unfair competition, most nations profess to be against the practice. Dumping is legal under WTO rules unless the foreign country can reliably show the negative effects of the exporting firm on the domestic producers. To counter dumping, most nations use tariffs and quotas to protect their domestic industry from the negative effects of predatory pricing.

The majority of trade agreements include restrictions regarding trade dumping. Violations of such agreements may be difficult to prove and can be cost prohibitive to fully enforce. If two countries do not have a trade agreement in place, then there is no specific ban on trade dumping governing the trades between the aforementioned countries.

Example of Dumping Tariffs in International Trade

In 2016, the International Trade Association stated that, based on investigations completed by the Department of Commerce and the International Trade Commission (ITC), the antidumping duty associated with tissue products from the People’s Republic of China would remain in effect. This was deemed necessary due to the likelihood that previously experienced dumping would occur again if the tariff was removed.

For more on this and other investment/trade terminology 
The EU REWRITES ITS ANTI-DUMPING RULES: The European Union agreed on Tuesday to new anti-dumping methodology that will determine duties based on whether a country has “significant distortions” in its input prices rather than single out non-market economies. The changes will help to appease China, which has argued since late last year that the terms of its accession to the WTO in 2001 state that it can no longer be treated as a non-market economy.

“This is not about any country in particular, simply about making sure that we have the means to take action against unfair competition and the dumping of products in the EU market that leads to the destruction of jobs,” European Commission President Jean-Claude Juncker said in a statement.

EU officials also stressed that the legislation, which is expected to enter into force before the end of the year, was formulated in a “country-neutral way” and in compliance with the EU’s WTO obligations.

The move could affect the U.S., which has refused to change its methodology and still calculates duties as if China is still a non-market economy, which Beijing insists is no longer true. China launched a WTO case against both the EU and the U.S. in December over the duties. Lighthizer warned in June that the pending case is “without question” the most serious litigation the WTO is currently considering and that a ruling in Beijing’s favor would be “cataclysmic.”

 

NAFTA Negotiations Round 4 Protests

Round 4 of NAFTA negotiations is coming up and people have been upping the ante with demands.

unnamedMore than 100 prominent Canadian, Quebecois and Indigenous Artists asked the Canadian government to protect culture in trade negotiations. Elizabeth Warren joined Canada’s demand to strengthen worker rights in the United States by introducing a bill to repeal ‘right-to-work’ laws in the Senate. Experts say that chapters on Women’s Rights and Indigenous Peoples may sound really progressive but will make no difference if they don’t come with rigorous enforcement mechanisms.

Trade for People and Planet will also be making noise! Round 4 of NAFTA negotiations at the Sheraton Pentagon City of Arlington will be met by a protest demanding transparency, democracy, and strong labor and environmental standards for any replacement of NAFTA. If you are in the DMV area join the protest on October 11th at noon! For more information visit the Facebook event

If you can’t make the #NoNAFTA2 Protest, join our #NoNAFTA2 Twitter Storm. We are creating Twitter Storms during every round of negotiations with the goal of shaping the conversation about trade and fairness. Next storm will be Friday, October 13th. Click on the tweets below to help promote the Twitter Storm:

The Storm continues! Join the #NoNAFTA2 Twitter Storm this Friday from 7-8pm ET! #NoISDS

Let’s welcome the Secret #NAFTA Express with a round of protests! #NoNAFTA2 Twitter Storm this Friday 7-8pm ET

Unite for Global Justice,
Trade for People and Planet Team

Trade for People and Planet on the web
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Twitter, @FlushTheTPP

Learn about Trade’ Dumping’

Investopedia explains the process of ‘Dumping’ as it relates to trade- and you can watch it explained in a video here.

anti-dumping-4-728What is ‘Dumping’

Dumping, in reference to international trade, is the export by a country or company of a product at a price that is lower in the foreign market than the price charged in the domestic market. As dumping usually involves substantial export volumes of the product, it often has the effect of endangering the financial viability of manufacturers or producers of the product in the importing nation.

BREAKING DOWN ‘Dumping’

Considered a form of price discrimination, dumping occurs when a manufacturer lowers the price of a good entering a foreign market than it charges domestic customers. The identification of trade dumping can be performed simply by comparing the sales price of a good in its market of origin and the price listed in an importing market. Trade dumping is considered intentional in nature in that the primary purpose is to gain an advantage within the market that imports the goods.

Advantages of Trade Dumping

The primary advantage of trade dumping is the ability to permeate the market with product prices often seen as unfair. The exporting country may offer the producer a subsidy to counterbalance the losses that may be incurred, especially when the products are sold at a price below the costs associated with production.

Disadvantages of Trade Dumping

Trading dumping can be costly to maintain over time. This is due in part to the lower sale price being offered on the good as well as the costs involved in subsidizing the activity, if applicable. Additionally, trade partners who wish to restrict this form of market activity may increase restrictions on the good in question, which either makes it more expensive to export into the affected country or limits the quantity of the good the importing country will accept.

International Attitude on Dumping

While the World Trade Organization (WTO) reserves judgment on whether dumping is unfair competition, most nations profess to be against the practice. Dumping is legal under WTO rules unless the foreign country can reliably show the negative effects of the exporting firm on the domestic producers. To counter dumping, most nations use tariffs and quotas to protect their domestic industry from the negative effects of predatory pricing.

The majority of trade agreements include restrictions regarding trade dumping. Violations of such agreements may be difficult to prove and can be cost prohibitive to fully enforce. If two countries do not have a trade agreement in place, then there is no specific ban on trade dumping governing the trades between the aforementioned countries.

Example of Dumping Tariffs in International Trade

In 2016, the International Trade Association stated that, based on investigations completed by the Department of Commerce and the International Trade Commission (ITC), the antidumping duty associated with tissue products from the People’s Republic of China would remain in effect. This was deemed necessary due to the likelihood that previously experienced dumping would occur again if the tariff was removed.

For more on this and other investment/trade terminology 

The EU REWRITES ITS ANTI-DUMPING RULES: The European Union agreed on Tuesday to new anti-dumping methodology that will determine duties based on whether a country has “significant distortions” in its input prices rather than single out non-market economies. The changes will help to appease China, which has argued since late last year that the terms of its accession to the WTO in 2001 state that it can no longer be treated as a non-market economy.

“This is not about any country in particular, simply about making sure that we have the means to take action against unfair competition and the dumping of products in the EU market that leads to the destruction of jobs,” European Commission President Jean-Claude Juncker said in a statement.

EU officials also stressed that the legislation, which is expected to enter into force before the end of the year, was formulated in a “country-neutral way” and in compliance with the EU’s WTO obligations.

The move could affect the U.S., which has refused to change its methodology and still calculates duties as if China is still a non-market economy, which Beijing insists is no longer true. China launched a WTO case against both the EU and the U.S. in December over the duties. Lighthizer warned in June that the pending case is “without question” the most serious litigation the WTO is currently considering and that a ruling in Beijing’s favor would be “cataclysmic.”

 

Don’t Punish the Dreamers—Punish the Corporations Driving Forced Migration

The perpetrators of the “crime” are those who wrote the trade treaties and the economic reforms that made forced migration the only means for families to survive.

baconThe “dreamers,” young recipients of the Deferred Action for Childhood Arrivals (DACA) program—are the true children of the North American Free Trade Agreement (NAFTA). More than anyone, they have paid the price for the agreement. Yet they are the ones punished by the administration of President Donald Trump, as it takes away their legal status, ability to work and right to live in this country without fear of arrest or deportation. At the same time, those responsible for the fact they grew up in the United States walk away unpunished—and even better off.

I’m not talking about their parents. It’s common for liberal politicians—and even Trump himself, on occasion—to say these young people shouldn’t be punished for the “crimes” of their parents, who brought their children with them when they crossed the border without papers. But parents aren’t criminals any more than their children are. They chose survival over hunger, and sought to keep their families together and give them a future.

The perpetrators of the “crime” are those who wrote the trade treaties and the economic reforms that made forced migration the only means for families to survive. The “crime” was NAFTA.

In a just world, U.S. trade negotiators would rewrite the treaty to repair the damage done to communities on both sides of the border, especially in Mexico. They would ensure that those forced to migrate—dreamers and other immigrants—have legal residence where they now live.  They would change the rules of the relationship between the United States and Mexico, so that the income and lives of working people and the poor aren’t sacrificed to produce profit opportunities for big corporations. And their new agreement would punish those corporations responsible for the vast increase in poverty following NAFTA’s passage.

While the Trump administration and a Republican Congress are certainly not going to negotiate any changes like these, the first step in making change possible is telling the truth.Nowhere is this more important than in relation to NAFTA and immigration policy. It’s impossible to understand the outrageous injustice of deporting the dreamers without acknowledging the reasons why they live in the United States to begin with.

The treaty had an enormous impact on Mexico, producing a wave of forced migration of millions of people. The World Bank in 2005 found that the extreme rural poverty rate of 35 percent from 1992 to 1994, prior to NAFTA, jumped to 55 percent from 1996 to 1998, after NAFTA took effect.  By 2010, 53 million Mexicans were living in poverty, and about 20 percent live in extreme poverty, almost all in rural areas.

People were migrating from Mexico to the United States long before NAFTA, but the treaty put migration on steroids. In 1990, 4.4 million Mexican migrants had come to the United States. A decade later, that population more than doubled to 9.75 million, and in 2008 it peaked at 12.67 million. About 9 percent of all Mexicans now live in the United States. About 5.7 million were able to get some kind of visa, but another 7 million couldn’t.

In the first year of NAFTA, one million Mexicans lost their jobs, by the government’s count.Jeff Faux, founding director of the Economic Policy Institute, told In These Times that “the peso crash of December, 1994, was directly connected to NAFTA.”

The treaty then forced yellow corn grown by Mexican farmers without subsidies to compete in Mexico’s own market with corn from huge U.S. producers, subsidized by the U.S. farm bill. Corn imports rose from around 2 million to more than 10 million tons from 1992 to 2008. Mexico imported 30,000 tons of pork in 1995, and by 2010, this number jumped to 811, 000 tons. As a result, pork prices dropped 56 percent, and Mexico lost over 120,000 jobs in pork production.

NAFTA prohibited price supports, without which hundreds of thousands of small farmers found it impossible to sell corn or other farm products for what it cost to produce them. The CONASUPO system—in which the Mexican government bought corn at subsidized prices, turned it into tortillas and sold them in state-franchised grocery stores at subsidized low prices—was abolished. The price of corn to farmers fell by 66 percent, and the price of tortillas jumped by 279 percent in NAFTA’s first decade.

In Dreams Deported, published by the UCLA Labor Center, dreamers describe their memories of forced migration, retold in their families. Vicky’s family in Mexico “was too poor to pay for her mother’s medication and Vicky couldn’t find a job to support her parents.” Renata Teodoro remembers, “My father had been working in the United States for many years, and we survived on the money he sent us.”

Rufino Dominguez, former director of the Oaxacan Institute for Attention to Migrants, saidin 2014,  “NAFTA forced the price of corn so low that it’s not economically possible to plant a crop anymore. We come to the U.S. to work because we can’t get a price for our product at home.  There’s no alternative.” About 2.5 million rural Mexican farmers and farmworkers were driven out of work or off their land.

Urban workers felt NAFTA’s impact as well. The average Mexican wage was 23 percent of the U.S. manufacturing wage in 1975. By 2002, it was less than an eighth. In the 20 years after NAFTA went into effect, the buying power of Mexican wages dropped, and the minimum wage fell by 24 percent. A U.S. autoworker earns $21.50 an hour, and a Mexican autoworker $3. A gallon of milk costs more in Mexico than it does in the United States. It takes a Mexican autoworker over an hour’s work to buy a pound of hamburger, while a worker in Detroit can buy it after 10 minutes. But Mexican workers in the GM plant making the Sonic, Silverado, and Sierra produce the same number of cars per hour that the workers do in U.S. plants. The difference means profit for GM, poverty for Mexican workers and the migration of those who can’t survive.

Congress was warned that NAFTA might increase poverty and fuel migration. When the deal passed the Immigration Reform and Control Act (IRCA) in 1986, Congress set up a Commission for the Study of International Migration and Cooperative Economic Development to study immigration’s causes. Its 1990 report recommends negotiating a free trade agreement between the United States, Mexico and Canada.  But it cautioned, “It takes many years—even generations—for sustained growth to achieve the desired effect.” Meanwhile, the study warned of years of “transitional costs in human suffering.” Nevertheless, the negotiations that led to NAFTA started within months.

In a statement giving its current position on the trade talks, the AFL-CIO argued that “all workers, regardless of sector, have the right to receive wages sufficient for them to afford … a decent standard of living,” and to prohibit export of products made by companies paying less. Progressive Mexican unions and community organizations support this principle, because it would give workers and farmers a future at home, where they live.

Gaspar Rivera-Salgado, a leader of the Binational Front of Indigenous Organizations, which fights for immigrants’ rights in the United States, told In These Times, “We need the ability to stay home with jobs and incomes that can support families—the right to not migrate.” But without changing U.S. trade policy and ending pro-corporate economic reforms, millions of displaced people will continue to migrate, no matter how many walls are built on the border. If people bring their children with them, that’s no more than any of us would do to avoid the breakup of our families.

Defending the dreamers and the rights of all migrants in the United States is intimately connected with changing the policies that uproot communities and force families into the dangerous journey through the desert and across this country’s southern border. Tearing down the wall instead of building a new one, and closing the detention centers instead of filling them with dreamers, is as much a part of renegotiating NAFTA as ensuring that Archer Daniels Midland and Cargill never again drive farmers off their land, or forcing General Motors to pay a wage that won’t send workers home to hungry families.

 

David Bacon

By David Bacon. A writer, photojournalist, and former union organizer. He is the author of Illegal People: How Globalization Creates Migration and Criminalizes Immigrants (2008), Communities Without Borders (2006), and The Children of NAFTA: Labor Wars on the US/Mexico Border (2004). In his latest project, Living Under the Trees, Bacon is photographing and interviewing indigenous Mexican migrants working in California’s fields.