Monthly Archives: December 2017

U.S. Fights Mention of ‘Climate Change’ in New Nafta

The U.S. is fighting against any mention of “climate change” in a potential new environmental chapter of the North American Free Trade Agreement, according to two people familiar with talks.


The latest Nafta talks were set to wrap Friday in Washington with no new agreement to finalize individual subjects or chapters. While mention of climate change in a trade agreement would be largely symbolic, Canadian Prime Minister Justin Trudeau has pushed for the inclusion of such “progressive” elements to help boost public support for trade.

 In a list of Nafta negotiating objectives, the U.S. called for the countries to bring environmental provisions, along with labor, from side agreements into the core of the deal. Still, it’s privately pushing against the inclusion of the phrase “climate change” in that chapter, and against any mention of multilateral cooperation on the environment, the two people said, speaking on condition of anonymity as negotiations continue.

Canada and Mexico favor recognizing the challenge of climate change in the agreement, the people said. Canada is also pushing for stronger environmental standards within Nafta.

 The U.S. negotiation position follows similar holdouts at the Group of 20 and Group of Seven nations’ meetings earlier this year where the U.S. balked at climate change pledges. President Donald Trump has also announced he would withdraw from the Paris Agreement on climate change while moving to roll back other environmental protections.


The office of U.S. Trade Representative Robert Lighthizer declined to comment. A White House representative didn’t immediately respond to requests for comment Friday.

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Trump Is Playing a Fascinating Game With NAFTA Negotiations

Corporate America might regret calling the president’s bluff.


Doug Jones’s improbable victory Tuesday night has set Republicans at each other’s throats, amid the growing impression that their reign in Washington will soon collapse. But it’s worth remembering the dubious narrative that Democrats would be the ones at loggerheads under Trump. The 10 Senate Democrats up for reelection in 2018 in states Trump won would break with the party and infuriate the resistance, while Trump rung up populist victories on bipartisan priorities like infrastructure. That was really a theory out there.

Of course, the populist rhetoric was revealed as a sham, the infrastructure bill still doesn’t exist, and Trump has so relentlessly poisoned the well that Democrats have held together, almost unilaterally, on every major issue. But far from the spotlight, one Trump appointee didn’t get the memo that he was supposed to sell out entirely to business interests. The situation hasn’t resolved itself enough to get Democrats to collaborate with Trump. But the corporate lobbyists are the ones getting nervous.

That’s the fascinating backdrop to negotiations over NAFTA, the decades-old trade agreement with Canada and Mexico. Talks are being held this week in Washington. Trump rode criticism of NAFTA as a job-killing machine to victory in the industrial Midwest. He then watched as companies like Carrier went ahead and outsourced jobs anyway. But Trump’s trade representative, Robert Lighthizer, is breaking with decades of orthodoxy in challenging the trade status quo, hewing as much toward labor’s vision of a good agreement as toward what business prefers.

Just before yesterday’s national day of action on NAFTA, Lori Wallach of Public Citizen’s Global Trade Watch put the negotiations into three buckets. In the first were Lighthizer proposals that mirrored long-standing demands of NAFTA critics.

This includes a way for countries to opt out of the destructive investor-state dispute settlement (ISDS) scheme, where companies can sue governments for lost expected profits from changed regulations. The US proposal wouldn’t eliminate ISDS, but would let countries leave the system, and would throw out the worst aspects of the process. Lighthizer also wants to strengthen “Buy America” procurement mandates; increase the “rule of origin” for automobiles, so 85 percent of a car is made in NAFTA countries and half in the United States; and initiate a mandatory sunset and review of NAFTA every five years.

The second bucket includes things where Lighthizer has made promises without actual substance, like on stronger labor and environmental standards. Now, the Trump administration doesn’t support stronger labor and environmental standards in the United States, let alone in a trade agreement. So far, Lighthizer has only proposed the language from the Trans-Pacific Partnership, which is wholly inadequate. But he has reportedly listened to the AFL-CIO’s concepts for how to improve those rules. Lighthizer does seem to recognize that US manufacturers cannot compete with Mexico if fake unions conspire with business to hold down wages. After NAFTA, real wages in Mexico actually fell, and they are today as low as one-twentieth of their US counterparts.

The third bucket features a series of corporate sellouts, where industries have won concessions from Lighthizer. The damaging TPP chapter on intellectual property has been introduced, which would increase prices on medications by lengthening patent exclusivity, and aggressively enforce copyright of music and movie content. (If this is enacted, borrowing a friend’s CD could be a trade violation.) The tech industry is trying to maintain its dominance by writing into NAFTA that virtually no limits can be placed on data, whether for privacy or security reasons. And the financial-services industry wants to force deregulation by setting limits on rules through the agreement.

So it’s a mixed bag. But the interesting part of this is how the outside actors are responding. In the day of action, NAFTA opponents pressured the Trump administration to get the best possible deal. “The renegotiation of NAFTA must stop providing incentives for corporations to outsource American jobs to Mexico,” said Senator Bernie Sanders at a rally Wednesday. The key point is that opponents are assuming a negotiation and trying to get the best possible deal.

The corporate lobby, on the other hand, is trying to shut down the process, imploring Canada and Mexico to refuse to engage. “Their theory is that ultimately the administration will back off on what they’re revising, and they will get what they want: adding TPP to NAFTA,” said Lori Wallach. Indeed, Canada and Mexico have dismissed the five-year sunset clause and treated other US proposals as too stupid to even address. Mexico offered a couple counter-proposals last month, suggesting that the stone wall is starting to crack. But Lighthizer said after that round of talks that “we have seen no evidence that Canada or Mexico are willing to seriously engage on provisions that will lead to a rebalanced agreement. Absent rebalancing, we will not reach a satisfactory result.”

That’s code for pulling out of NAFTA. The corporate types seem to think that’s impossible, and certainly there would be legal challenges to a unilateral pullout. But Wallach cited the NAFTA text, which says that, “during any period in which a country ceases to be a NAFTA country,” the implementing provisions “shall cease to have effect.” Indeed, Trump would likely get credit from his base by terminating NAFTA, and hasn’t shown much interest in the law hindering his decisions. “He has the cards,” Wallach said.

So what’s stopping Trump? Lighthizer knows that, while ending NAFTA would remove some incentives to outsource, the only way to revitalize US manufacturing is by negotiating a superior deal. “If Trump really wants to deliver on his promises, he needs to do a new agreement that gets the benefits of trade without outsourcing,” Wallach said.

That’s what makes the positions of the major players so odd. The allegedly “protectionist” Trump administration and NAFTA critics want a new trade agreement. The corporate types, by giving NAFTA partners bad advice, are effectively pushing to eliminate the deal. The tipping point probably comes with the next high-level round of talks in Canada in January. If the stonewalling continues, Trump will likely give the six months’ notice required prior to withdrawal. So the corporate paragons of free trade are the ones paving the way to a NAFTA exit.

Among other things, that would really damage Canada and Mexico, given their trade surpluses and reliance on the United States as a trade partner. Mexico is scrambling, looking to sign an EU trade agreement to soften the blow. But the US market is critical to their future. Will they let auto executives drag them into a disastrous outcome?

The situation is fluid, and there are still enough corporate goodies in the deal for liberal trade reformers to fight for improvements. But it’s the corporate lobby, which loves the status quo of paying two bucks an hour for Mexican labor and spilling toxics wherever it pleases, that is threatening the agreement. Let’s never hear again about who the real “obstructionists” are to free trade

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Lawmakers and 70+ Advocacy Groups Call on North American Leaders to #ReplaceNAFTA

While this year’s final renegotiation talks for the North American Free Trade Agreement (NAFTA) continued behind closed doors on Wednesday, members of more than 70 advocacy groups and multiple lawmakers hosted an event on Capitol Hill and launched a social media campaign as part of the #ReplaceNAFTA Day of Action.


“Americans have had enough with trade deals that make it easier to outsource jobs to wherever workers are the most exploited and environmental regulations are the weakest,” said Arthur Stamoulis, executive director of the Citizens Trade Campaign, one of the groups that helped organize the event in D.C.

“It’s time to replace NAFTA with a new agreement that prioritizes the creation of good-paying jobs, the protection of human rights, and increased wages for all working people,” he said.

Activists with labor, environmental, faith, consumer, family farm, and other advocacy groups came together to demand that through the renegotiation, the United States, Mexico, and Canada—the three nations party to the agreement—end NAFTA’s outsourcing incentives and craft “labor and environmental provisions that are based on fundamental international standards and include swift and certain enforcement,” Stamoulis said.

However, corporations oppose cutting the treaty’s job outsourcing incentives, and also reject U.S. proposals to incorporate a Buy American waiver—which would limit Chinese content in NAFTA goods—and to add a five-year review.

“The corporate lobby is urging Mexico and Canada not to engage on U.S. proposals to improve NAFTA, which increases the prospects that talks deadlock and President [Donald] Trump withdraws,” warned Lori Wallach, director of Public Citizen’s Global Trade Watch. If the president decides to withdraw and NAFTA completely collapses, foreign policy and trade experts fear the move would jeopardize tourism, agriculture, automotive, and national security interests.

Although Trump the candidate touted trade policies that would benefit American workers and bragged about how he would “drain the swamp” if elected, his willingness to cater to industries’ wishes and stock the government with lobbyists and corporate insiders during his first year as president has raised concerns that he will prioritize the corporate agenda in NAFTA talks.

“People will not stand by and let Donald Trump trade away their jobs, wages, climate, air, and water to the highest corporate bidder,” said Ben Beachy, director of the Sierra Club’s Responsible Trade Program.

“When Donald Trump campaigned for president, he promised that he was going to stop corporations from shifting American jobs to Mexico,” said Sen. Bernie Sanders (I-Vt.), who spoke at the event alongside Reps. Keith Ellison (D-Minn.) and Rosa DeLauro (D-Conn.). Addressing the president directly, Sanders added: “For once in your life, keep your promises.”

“We cannot let corporate special interests write the rules once again and rig this trade agreement against workers,” DeLauro warned.

“This is an opportunity to learn from what hasn’t worked and come up with an approach to trade that serves the common good,” Ellison said. “We have to stand strong for a trade policy that lifts up workers, safeguards human rights, and protects the environment, not one that simply hands more power and profit to massive corporations.”

Several activists and groups that helped organize the D.C. event and support renegotiating the treaty turned to Twitter on Wednesday to document their demands:

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Trump and GOP Tax Cut Is Handing Corporations Like Ford a Giant Incentive to Move Offshore

Giant corporations got what they wanted out of Republicans on taxes, now they’re lobbying the Trump administration hard to retain their NAFTA privileges.


Ford hit Michigan and its auto workers with some crappy holiday news. Instead of building a $700 million electric vehicle factory in Michigan as promised in January, Ford will construct the plant in Mexico.

Ford reneged on its promise to Michigan workers just days after the Senate passed a tax plan intended to end levies on corporate profits made at factories offshore – in places like Mexico. News of the letdown also arrived just days before new negotiations on a revised North American Free Trade Agreement (NAFTA) are to begin in Washington, D.C.

Ford and other giant corporations got what they wanted out of Republicans on taxes, dramatically lower levies on domestic profits and total elimination on foreign profits. That makes Mexico an even more attractive manufacturing site for them than NAFTA did. So now they’re lobbying the Trump administration hard to retain the privileges that NAFTA bestowed on them. If they win that argument, they’ll have secured double incentives to offshore.

Trump administration officials don’t sound like they’re buying the corporate line, however. And they shouldn’t. NAFTA has cost Americans nearly a million jobs as thousands of factories migrated to Mexico. As he campaigned, President Trump promised untold numbers of factory workers and their families across the nation’s industrial belt that he would fix or end NAFTA to keep jobs and industry in America. He needs to keep that promise.

That means elimination of the Investor State Dispute Settlement (ISDS) scam that allows corporations to sue governments in secret courts presided over by corporate lawyers when legislatures pass laws corporations don’t like. That means standing strong on the Trump administration demands that the new pact expire in five years if it’s not working and that a substantial portion of automobiles – including Fords – be made in the USA to attain duty-free status. It means strong protection for workers’ right to organize and collectively bargain. It means substantially raising the Mexican minimum wage, which now stands at $4.70. That’s for a day, not an hour.

What it really means is prioritizing the needs of workers over the demands of corporations, something that was not done the first time around by NAFTA negotiators. As it stands now, NAFTA places all of the jeopardy on the shoulders of workers and communities while substantially eliminating normal business risks for corporations.

The jeopardy NAFTA created for workers is that its corporate-friendly provisions prompt employers to close American factories that sustain both workers and communities and move them to Mexico. This exodus of American manufacturing to Mexico has continued apace this year, even as the Trump administration began renegotiating NAFTA, probably because corporations assume they’ll get everything they want in the end. They have, after all, always done so in the past because they are, after all, massive political campaign donors and lobby firm patrons, while hourly workers are not.

Bloomberg reported in October, for example, that firms whose function it is to help corporations move factories from the United States to Mexico had a boom year in 2017, with one reporting it had done more offshoring this year than in any during the previous three decades.

Mexico is alluring because of its dirt-cheap wage rates, the paucity of environmental enforcement and the ISDS scam that lets corporations sue the government if Mexico would regulate in a way some CEO claims would crimp his profits.

The ISDS along with NAFTA’s unlimited lifespan reduce risk for corporations. Normal business decisions in capitalist systems involve some jeopardy. A chemical company could, for example, invest in developing a new pesticide, but then lose when the government bans the product after determining it kills babies as well as bugs.

NAFTA provides corporations with investment protection because it ensures they’ll get their profits even if a government changes regulations. ISDS enables corporations to sue to recoup money the corporations supposedly would have made if the government hadn’t issued new laws or regulations. The corporate-run court can order a country’s citizens to pay tens of millions to the corporation.

Some say this government-financed investment insurance corrupts capitalism. Among the significant people who have is U.S. Trade Representative Robert Lighthizer. He said corporations are insisting the government absolve CEOs of political risk. CEOs are using ISDS as a guarantee rather than buying risk insurance or factoring political risk into economic decisions about whether to move.

Lighthizer said businessmen have literally told him the administration cannot change ISDS because corporations wouldn’t have invested in Mexico without it. “I’m thinking,” he said, “‘Well, then, why is it a good policy of the United States government to encourage investment in Mexico?’”

These are the same corporate honchos who object to a five-year sunset clause for a new NAFTA, he said. They want a free eternal warranty on the provisions of a deal they describe as the world’s greatest. Lighthizer’s response is that if the deal is so great, why would the government choose to end it after five years? What are they really worried about?

The worry may be that those CEOs know NAFTA is great for their bottom line but not for the workers who elected Donald Trump President.

They know NAFTA was drafted by CEOs for CEOs. Its priorities were determined by corporate bigwigs behind doors closed to the public. Corporations designed it at the expense of workers and ordinary citizens, Joseph Stiglitz, the Nobel Prize winning economist, said in an op-ed in the Guardian newspaper this week.

It often seems, he wrote, “that workers, who have seen their wages fall and jobs disappear, are just collateral damage – innocent but unavoidable victims in the inexorable march of economic progress. But there is another interpretation of what has happened: one of the objectives of globalization was to weaken workers’ bargaining power. What corporations wanted was cheaper labor, however they could get it.”

U.S. corporations like Ford got it by writing a trade deal that gave them market-distorting profit protections, then abandoning their dedicated American workers and moving to Mexico where they could pay $4.70 a day and pollute unfettered.

President Trump has threatened to withdraw from NAFTA if his negotiators can’t get new reasonable terms that protect American manufacturing and American workers.

That is right. It’s appropriate that corporations like Ford sustain the actual risk of offshoring rather than workers bearing it all.

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NAFTA Negotiations: Eliminate ISDS for food and water security

As the 6th round of NAFTA negotiations begin this week in Washington D.C, the controversy over exactly what a new agreement might involve (if there is one at all) continues to generate debate. In a blog prior to the 5th round of negotiations in Mexico City, Sophia Murphy, IATP’s Senior Advisor on Trade suggested a third track that considers some elements of current position taken by Canada. Taking a page from Canada’s position to trade and protect, and acknowledging the cost of any change, the third track supports trade that protects those “least able to absorb the shock bearing all the cost of adjustment, whether it is going to be a new NAFTA or no NAFTA.”


An important part of that third track must include getting rid of one of the most controversial dispute settlement mechanisms in NAFTA called investor-state dispute settlement mechanism (a provision Canada and Mexico unfortunately still support). While dispute settlement has emerged as a sticking point, it is far from certain how the negotiations will proceed. The U.S. has reportedly proposed that countries be allowed to “opt in” (or not) to that mechanism. If this really is a serious proposal, it would be a big step toward civil society demands to eliminate it. Leading up to the 4th round of negotiations in mid-October, US groups had delivered over 400,000 petitions asking to eliminate the investor-state dispute settlement (ISDS) system. The petitions were gathered by civil society organizations ranging from farm organizations, environmentalists and trade unions to women’s organizations and church groups.

What is at stake in ISDS?

As my new report shows, ISDS gives foreign investors the right to demand compensation for environmental, public interest and other laws that undermine their anticipated profits. Cases are decided by unaccountable panels of trade lawyers, who might have conflicts of interest. This provision, initially put in place to ensure investors’ rights are protected against nationalizations or expropriations, has evolved to become a tool for corporations to tie up governments in long and expensive legal cases, with chilling effects on public interest rules around the world.

The issue has become quite controversial globally too, since ISDS is now part of most multilateral or bilateral investment agreements. In fact this was the topic of a side event (organized by IISD and Columbia Institute for Sustainable Development) on October 12, in Rome, at the 44th session of the UN Committee on World Food Security (CFS 44). This was especially relevant given the multi-agency report on the State of Food and Agriculture (SOFA) discussed at the CFS plenary earlier in the week. According to the report, the number of the chronically malnourished people started increasing again in 2016, going up to 815 million (from 777 in 2015), after declining steadily since the food crisis ten years ago, and this increase is happening in situations of conflicts including war zones.

The contexts and backgrounds of these conflicts vary, and those resulting from resource grabbing (that is land and water grabbing), often facilitated through foreign investments, is one of them. Sometimes people are displaced from their lands outright; at other times, it is only later on that communities find that their water sources are either depleted or polluted, affecting their drinking water and cooking water, let alone their irrigation water. Specifically focusing on ISDS, several presenters drew attention to the fact that the number of ISDS cases have grown exponentially in the last decades. Clearly, disputes arising from agricultural related investments directly affect food and nutrition security of the impacted communities; but so do investments in other sectors (extractive industries for example). The panelists emphasized how investment contracts need to ensure that governments retain their ability to work in public interest.

In my own presentation at the panel, I shared findings from IATP’s recent research on ISDS and right to water. This paper explores how progress along one track, such as the recognition of the right to water, can sometimes mean very little when faced with developments in another track—such as ISDS in a trade & investment regime. It is as if these two governance regimes exist in parallel worlds.  For example, over the last two decades governments in every region has been making concerted efforts to improve peoples’ access to drinking water and sanitation. This has meant enacting new laws, making new regulations and, in a few cases, also enshrining it as a constitutional right. In addition, globally, the states came together at the United Nations to recognize water as a fundamental human right. In this same period, there has been an increase in the number of investor claims filed through ISDS against States initiating public interest measures to address water pollution or to reduce water tariffs.

Once investors file a case through ISDS, the respondent States need to spend hundreds of millions of dollars to defend their case, and in payment to the investor if they lose, in addition to taking care of the domestic concerns arising from the fallout of these investments. States’ counter claims related to violation of the economic social and cultural right are rarely considered by a tribunal. Even in a  recent case, the first time when the tribunal award considered the host state’s counter claim related to violation of the human right to water, the tribunal ruled that for the human right obligation to exist and “to become relevant in the framework of the BIT, it should either be part of another treaty (not applicable here) or it should represent a general principle of international law.” In short, these tribunals, made up of unaccountable trade lawyers, are unlikely to rule in favor of states seeking to uphold their human rights obligations or any other public responsibilities as long as the ISDS system in place.

ISDS has no place while the world is trying to achieve  sustainable development goals around food and nutrition security, health, and water security, amongst others. The NAFTA renegotiation is a great opportunity for all three countries to agree to get rid of ISDS in the North American context as a first step. Canada’s proposals in the context of NAFTA to uphold labor and environmental standards in all three countries provide important moral leadership, but its calls to ‘trade and protect’, remains empty as long as it does not propose to eliminate the investor-state dispute settlement system. The three countries should chart a path forward without ISDS, one that takes us closer to that third track.

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NAFTA 2.0 and the outlook for food trade in 2018

Prospects for the international trade of perishable food products in 2018 are uncertain as changes to key trade agreements are being considered. President Trump made trade a major issue during the 2016 campaign, citing that many of the nation’s trade agreements were “bad deals.” Among the targets were the North American Free Trade Agreement (NAFTA) and the Trans-Pacific Partnership (TPP). Trump has already followed through on his promises to withdraw from the TPP and initiate the renegotiation of NAFTA.



NAFTA 2.0 – what’s at stake

The future of NAFTA will have a large impact on trade of perishable food, creating uncertainty for companies importing and exporting food in North America. Overall, NAFTA represents one of the largest free trade zones in the world, accounting for $1.1 trillion in trade between Canada, Mexico and the United States in 2016 alone.

Food and agricultural products play an important role in the cross-border trade between the three countries. Agricultural exports from the United States to Canada and Mexico have increased from $8.9 billion in 1993 to $38 billion in 2015. Almost 60% of all Canadian food imports come from the United States, while over 60% of Mexican food imports come from the United States. Many of these products are refrigerated and frozen foods. The Top 5 categories of U.S. food exports to Canada are prepared foods, fresh and processed vegetables, fresh and processed fruit, pork and beef. The Top 5 U.S. food exports to Mexico are corn, soybeans, pork, dairy products and prepared foods.

NAFTA renegotiation process and status

Prior to President Trump initiating the renegotiation process, he considered announcing the U.S. withdrawal from the agreement. Formal negotiations began on Aug. 16, with meetings scheduled every 2-3 weeks through the first part of 2018. The rounds of negotiations will rotate between the three countries with the hope of completing the process in early 2018.

Mexico is scheduled to have a presidential election in 2018, placing pressure on the current Mexican administration to complete work as soon as possible. The U.S. mid-term elections in 2018 also add to the urgency for quick resolution. Canada however is not facing the same type of time pressures to complete negotiations.

As of the beginning of November, negotiators have met for four rounds of negotiations, with a fifth round scheduled for mid-November. Progress has been made on less controversial topics, including issues related to small and medium-sized enterprises and competition policy. Yet, much work lies ahead for the negotiators, and agricultural policies are among some the most challenging issues yet to be resolved.

For example, the United States has indicated its desire to provide protection for seasonal producer growers that face stiff competition from Mexican imports. In response, Mexico is considering proposals that would protect against large volumes of U.S. pork imports by imposing limits or quotas. The United States has also raised issues regarding the Canadian government’s protection of its dairy and poultry industries, which remain a high priority for Canada. These efforts to protect domestic producers will make resolving policies regarding food and agriculture more difficult.

In addition, the United States has presented a controversial proposal to include a “sunset clause” into the agreement. The provision would require all three parties to agree to an extension of NAFTA after five years, or the agreement would automatically expire. The sunset proposal has been met with strong opposition by both Mexico and Canada.

Concurrent with the rounds of negotiations, President Trump continues to threaten the potential withdrawal from NAFTA if Canada and Mexico are unwilling to meet some of the U.S. demands for change.

Withdrawing from NAFTA would take six months, and Trump may believe that the added leverage of withdrawal would lead to more effective negotiations during the 6-month withdrawal period.

Much uncertainty remains with the future of NAFTA 2.0 negotiations. Policies surrounding food and agriculture will be at the center of the debate, as the three countries try to reach an agreement, and the stakes will be high for the refrigerated and frozen foods industries in the United States, Canada and Mexico.

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NAFTA promotes U.S. manufacturing in the food and agriculture sector

The North American Free Trade Agreement (NAFTA) is important to the frozen food and beverage industry and the 670,000 jobs the sector supports throughout the United States. Frozen food makers depend on a reliable, safe and state-of-the-art logistics and supply chain network to efficiently and competitively make and distribute food that the world enjoys every day.


The frozen food industry prides itself on a history of innovation to provide convenient access to safe, nutritious food. We are part of the diverse U.S. food and agricultural industry that’s capable of feeding the world and collectively supports more manufacturing jobs than any other U.S. manufacturing sector — more than 21 million jobs from coast-to-coast.

NAFTA provides the broader American food and agriculture industry with export opportunities for growth. In fact, under NAFTA, American food and agriculture exports to Mexico and Canada grew by 450 percent. In 2016 alone, the U.S. exported nearly $43 billion worth of food and agriculture goods to Mexico and Canada, making our NAFTA partners the largest export consumers of U.S. agriculture.

American Frozen Food Institute (AFFI) member companies have also seen first-hand how increased trade and market access can benefit U.S. food makers. Without NAFTA, the impact to our industry would exceed $25 million in export tariffs alone. Without NAFTA, U.S. manufacturers of agricultural products would suffer.

NAFTA has allowed frozen food and beverage makers to source high-quality and safe ingredients that are not grown or widely available in the United States. Some imports, like strawberries and broccoli, from Mexico are necessary to meet year-round demand and to supplement our growing seasons for a full portfolio of fruits and vegetables not always available in the United States. Likewise, exports of frozen potatoes into Mexico help meet their consumption demand.

Each new trade agreement provides significant market access opportunities for the foods we make, including immediate duty-free access for many frozen foods and greatly improved tariff treatment for other foods. We want to continue the great advances the U.S. food and agriculture industry have made under NAFTA to spur growth in the economy.

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The U.S.-Mexico Wage Gap Is Actually Widening Under Nafta

What’s the opposite of a growth miracle? Whatever the term, it applies in spades to Mexico in the Nafta era.


Poor countries are expected to grow faster than rich ones, and they need to. Trade agreements are supposed to help. Yet by almost any benchmark — certainly the ones trumpeted by the deal’s architects a quarter-century ago — the Mexican economy’s performance has been dismal.

 Growth of 2.5 percent a year since 1994 is less than half the developing-world average. It’s pretty much the same as the U.S. and Canada. But even that’s misleading. Because Mexico’s population expands much faster, the economic pie has to be divided among more and more people. So the average Mexican earns less today, relative to U.S. and Canadian peers, than before Nafta.

“The main idea was to promote convergence in wages and standards of living,’’ said Gerardo Esquivel, an economics professor at the Colegio de Mexico. “That has not been achieved.’’ And what meager growth there’s been, says Esquivel, has mostly gone to “the upper part of the distribution.’’

For an emerging market, Mexico has an impressive collection of billionaires, including the world’s sixth-richest man. Its poverty rate, meanwhile, is still around early-1990s levels — more than half the population, encompassing a permanent class of the underemployed. Crime and corruption are rampant.

All this poses a problem for the U.S., especially now that Donald Trump’s in charge. Mexico’s glacial economy means there’s still a lively incentive for the things Trump hates: the flow of underpaid Mexican labor northwards, and American factories the other way. No wonder, as his trade team trudges through round after round of renegotiation, that the U.S. president is still threatening to blow up the pact altogether.

It’s a much more urgent matter for Mexicans. And they’ll have a chance to do something about it in presidential elections next year. The early frontrunner, leftist Andres Manuel Lopez Obrador, says he’ll usher in a new economic model. What role Nafta would play in that, if any, remains vague.

In Mexico’s policy circles, there’s little inclination to blame Nafta. Some point out that, while the economy clearly hasn’t boomed, it’s at least avoided the busts that sunk several Latin neighbors in the last two decades. Others say the trade pact couldn’t be expected to solve deep-seated problems on its own.

“To hold Nafta responsible for overall growth in Mexico is putting too much weight into Nafta,” central bank Governor Agustin Carstens said in an interviewon Monday. “It’s a very important element,” he said. “But Mexico needs to take care of many different assignments in other areas to make the Mexican economy more productive and really exploit our full capacities to grow.”

Still, there’s broad consensus among economists that the promises made by Presidents Carlos Salinas and Bill Clinton at the dawn of Nafta haven’t been fulfilled. Rapidly expanding trade with the world’s biggest economy hasn’t been a panacea. Or even, some say, a paracetamol.

“Mexico’s basic mistake was to assume that integrating into the world economy, and the U.S. market in particular, would suffice,’’ said Dani Rodrik, an economics professor at Harvard University. “Other aspects of development strategy were ignored.’’

‘Four Tires’

Here, every analyst has a different list. Ruben Ojeda, an official at Mexico’s Finance Ministry in the 1980s, starts with the economy’s basic levers. He says policy makers, burned by a traumatic devaluation during the so-called Tequila Crisis at the end of Nafta’s first year, kept the monetary settings too tight long afterward — fixated on inflation (the central bank’s sole mandate) instead of growth.

Ojeda, now a director at investment firm View Capital Advisors in Dallas, also says that Mexico didn’t learn a key lesson from the most successful emerging economies: industries need to be nurtured and protected before they’re exposed to competition.

Mexico’s car industry, for example, got plenty of government support pre-Nafta, so “it worked very well once it was liberalized,” he said. Other sectors didn’t enjoy that advantage, “and they essentially disappeared.”

What about the workers at those successful auto factories, though? Their stagnant wages are making waves at the Nafta talks. In Mexico City this month, Jerry Dias, head of the Canadian union Unifor, pointed out that employees at U.S. and Canadian car plants can buy the vehicles they produce with five months’ wages. “A Mexican worker in five months can only buy four tires and a steering wheel,” he said. “It’s an absolute disgrace.”

It’s not just labor making that case, north and south of the Rio Grande. Trump and his commerce secretary, Wilbur Ross, have complained about it too – channeling frustrations that helped the U.S. president to sweep the Rust Belt on his road to the White House.

Getting Mexicans a pay rise has become an unlikely priority for his trade team – and for some Mexican business groups too. One of them, Coparmex, has been lobbying for a higher minimum wage, saying too many workers struggle to afford even basic goods. The rate will rise 10 percent to 88 pesos ($4.74) a day next month, but that’s only about half the increase called for by Coparmex, let alone the much bigger jump that would be needed to regain pre-Nafta purchasing power.

For the critics, low pay isn’t an accident. It’s a policy, and one that illustrates a wider point: Nafta’s Mexican cheerleaders thought that all the demand needed to achieve economic liftoff would come from abroad. They neglected drivers of growth on the home front. Esquivel lists them: “Higher labor income, higher investment by private firms which don’t get access to credit, and better spending by the government.”

“We don’t have any of those three elements,” he said. “It’s actually surprising that we grow even the little that we grow.”

‘Left in Suspense’

And four-fifths of the external demand comes from a single country — now governed by Trump. If evidence of economic failure in the Nafta years has accumulated slowly, awareness of the political risks exploded on U.S. election day last year. Economy Minister Ildefonso Guajardo acknowledges the point.

“We slept on our laurels,” Guajardo, who heads Mexico’s Nafta negotiating team, said in July. “We need to diversify, so that next time there’s an election in Washington, the Mexican economy isn’t left in suspense.”

Revving up the domestic engine is a favorite theme of Lopez Obrador, known as Amlo. Another is sharing the pie more fairly. Mexico has the most unequal income distribution among the 35 OECD members. Carlos Slim, one of the winners from Mexico’s flagship privatization program, and three other billionaires hold wealth equal to about 8.5 percent of GDP, more than double the mid-1990s level, according to research by Esquivel, who’s worked as an external consultant for Lopez Obrador’s campaign.

“This kind of inequality is a boon to Amlo,” said Nicholas Watson at risk-analyst Teneo Intelligence.

Mexican Samsung?

Fiscal policy is the classical tool for fixing such imbalances. Mexico barely uses it. Government revenue is the lowest in the OECD — and because Mexico also runs one of the most balanced budgets, another cautious legacy of the Tequila Crisis, spending is constrained too.

That’s helped win investment-grade credit ratings across the board. It’s also meant a failure to invest in skills, especially in science and engineering, that would help workers add value, says Manuel Molano, deputy director of the Mexican Competitiveness Institute.

South Korea “invested heavily in the education sector, and the design parts of technology,” he said. “Where’s the next Mexican Samsung? There is none.”

Korea’s a tough benchmark, but less stellar economies have also outgrown Mexico in the Nafta years: Turkey, which has a similar trade setup with its own giant neighbor, the EU; Egypt, which has suffered regime-change twice this decade; even Iran, almost completely frozen out of global commerce.

And Mexico’s own performance in the quarter-century before Nafta was significantly better. On a per-capita basis, it grew almost twice as fast, though some slowdown is normal as countries reach the middle-income bracket.

Some causes of the Mexican malaise aren’t strictly economic. Crime has surged, and is listed as a top concern of executives surveyed by the World Economic Forum. A brutal drug war has dragged on for more than a decade; even in its early years, policy makers estimated a hit to output of about 1 percentage point a year.

Almost every analyst cites corruption, and a judicial system that’s failed to tackle it. In 2015 alone, state governments misappropriated about $1.4 billion of federal funds, according to auditors.

That money could have been used to help develop Mexico’s poorer south, said Jonathan Heath, an economist at the Mexican Institute of Financial Executives. The region’s farmers haven’t benefited as factories sprang up along the U.S. border in the north. Under Nafta, “traditional agriculture was left to die,” said Ojeda.

It was in southern Mexico that the most dramatic challenge to Nafta emerged — on the day the trade pact took effect. In January 1994, Zapatista rebels and their masked leader, Subcomandante Marcos, launched a violent revolt.

The utopian ideas of the guerrillas have failed elsewhere in Latin America. Their uprising was rapidly crushed. Their vision of a Nafta-era Mexico, with entrenched inequality, impoverished farmers and increased dependence on the U.S., has proved harder to dispel.

Taken From

Bring Indigenous representatives into NAFTA talks, says chief

Indigenous representatives ought to have a seat at the table for the NAFTA negotiations, Regional Chief Isadore Day of the Chiefs of Ontario told a conference in Ottawa today.

Isadore Day;

Ontario Regional Chief Isadore Day ateends a news conference at the Ontario Legislature in Toronto on Wednesday, September 9. 2015. Wonky weather conditions are prompting aboriginal leaders to raise concerns about the impact of climate change on winter roads, which serve as lifelines for food, fuel and other necessities in several northern communities. Day said the reliability of the northern winter road network is in jeopardy in his province.THE CANADIAN PRESS/Aaron Vincent Elkaim


Day was addressing the Institute on Governance’s Nation to Nation conference, joined by policymakers and Indigenous leaders such as former Assembly of First Nations National Chief Ovide Mercredi, Senator Gwen Boniface and former prime minister Joe Clark.

While Day acknowledged that AFN National Chief Perry Bellegarde has been asked to advise on NAFTA negotiations, he called on the government to step up Indigenous involvement in the trade talks.

“I never want to be relegated to an adviser, as somebody who carries a treaty,” said Day during a panel called A Way Forward in Perspective at the conference.

Day told iPolitics that Indigenous partnership in NAFTA negotiations could increase global consciousness of Indigenous people as treaty-holding trade partners with the Canadian government.

“Right now, the U.S. government simply doesn’t recognize us. I think if we were to actually have a much more substantive, concrete and visible partnership in Canada on the issue of trade, then other countries would recognize us as such,” said Day. “We need to elevate our recognition within any trade discussions as those that have the original treaties in this country.”

Day said that this would not only add Indigenous perspectives on issues like the environment and gender equality, but would also forge the path for international intra-nation trade.

“I believe it might further push these intra-nation trade opportunities like the Anishinaabe with the Potawatomi and the Cherokee with the Cree,” said Day. “These are trade relationships that have existed since time immemorial … on this continent.

“I think there’s a lot to be said about the Indigenous nations on this continent having those formal opportunities to say there’s a free trade space where, say, Canada and the U.S. recognize Indigenous nations … are entering into a deal on wood fibre.”

Day said he’s optimistic about the prospects for Indigenous involvement in trade talks, given the current government’s commitment to a nation-to-nation relationship with Indigenous people.

“If the government is saying these things, then we must never miss the opportunity to say, ‘No, I don’t want to be an adviser on NAFTA. I want us to be fully recognized.’”

“I think NAFTA shouldn’t be the only trade discussion we are involved in as Indigenous people. I think as First Nations and as Indigenous people in this country, if we are part of (trade deals), then we are certainly going to start changing the outcome of the quality of life for our people.”

TPP Renamed To ‘Comprehensive and Progressive Trans-Pacific Partnership’, Still Not Progressive

On November 11th, the TPP-11 countries announced reaching an agreement on reforms that have been negotiated since the United States exited the deal.

The most evident one is its new name which is meant to appease world-wide criticism as one of the worst trade deals for the people ever negotiated. They now want to call it the ‘Comprehensive and Progressive Trans-Pacific Partnership’ or CPTPP.

NAFTA-North_American_Free_Trade_Agreement-1We are well aware of how world leaders are intentionally trying to avoid easy to remember acronyms due to the brand-busting campaigns that have caused the global opposition to corporate trade deals. Re-branding it as a progressive deal cannot hide what remains behind the deal, such as the ISDS.

An official announcement declared that “Ministers are pleased to announce that they have agreed on the core elements of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.” This reformed deal eliminated 20 sections of the original TPP text, including provisions related to pharmaceutical products, patent protection, copyright and intellectual property. However, the agreement is still far from progressive and far from being signed as Canada is insisting it will not be pressured into a deal that is not good for Canadians.

An analysis of the deal by the Electronic Frontier Foundation (EFF) welcomes the suspension of the Intellectual Property provisions, which were amongst the most dangerous of the provisions in the original TPP deal. However, it warns that suspensions are a commonplace tactic to reinstate contentious aspects of trade agreements. Furthermore, the deal continues to limit user rights in other sections of the deal and maintains the Investor-State Dispute Settlement, a threat to democracy across the globe.

At the end of the day, the EFF concludes that “The only way we can trust that the TPP agreement will reflect users’ interests is if the reopened negotiations are inclusive, transparent, balanced and create avenues for meaningful consultation and participation from stakeholders. The decision to exclude some of the most dangerous threats to the public’s rights to free expression, access to knowledge, and privacy online is a big win for users, if indeed the TPP countries follow through with that decision as now seems likely. However, the TPP was, and remains, a bad model for Internet regulation.”


Taken from Flush the TPP website