NAFTA : failed trade policy comes back to where it began
Karen Hansen-Kuhn, IATP (Institute for Agriculture and Trade Policy)
December 19, 2016
The year 2016 was largely marked by the subject of free trade agreements. From the CETA to the TTIP passing through the TPP, a mishmash of acronyms among which the future of trade is to be played out, in particular for sectors as strategic and crucial as food and agriculture.
A recent article, reproduced below1, by the Institute for Agriculture and Trade Policy (IATP), a very active American think tank covering issues on agriculture and food security discusses what may be considered the typical trade agreement, The North American Free Trade Agreement (NAFTA) signed between the United States, Canada and Mexico in 1993. The article demonstrates that, 23 years later, the reasons for current opposition to the Transpacific Partnership (TPP) remain the same: non-transparent negotiations, predominance of the interests of companies over those of society, the failure to take account of inequalities in terms of development levels and social and economic models. It can also be stated that 23 years later, the convergence of trade did not lead to any real political integration among the three countries, with as a consequence competing policies and the levelling down of social and economic models.
Momagri Editorial Board
Some dates get burned in our memories. One date that pops up for me each year is November 17, the day the U.S. Congress approved the North American Free Trade Agreement (NAFTA) back in 1993. Now, 23 years later, NAFTA is as controversial as ever. After a long battle in which civil society groups from all three countries worked together to draw public attention to the potential negative impacts and, even then, to propose alternative approaches to trade, the pact was narrowly approved in a late night vote.
Just days before the vote, all signs pointed to NAFTA’s defeat. But then, the power of back room deals to build a bridge in one district, to fund a study center in another (as well as assurances of side deals on things like tomato imports or cross-border trucking) overtook the opposition to the trade pact. Public Citizen later published an accounting of those deals, and the fact that many of the promises were never kept. Even before we knew the true cost of NAFTA—both in the questionable use of public funds and in the well-documented economic and environmental devastation that was to come in all three countries—it was a bitter defeat.
NAFTA was groundbreaking in many ways. It was the first major trade agreement involving countries at disparate levels of development. It extended far beyond the lowering of tariffs to address rules on energy, investment, intellectual property rights and other issues that empowered transnational corporations to shift production among the countries at will, drastically weakening the bargaining power of unions, farmers and small businesses. It introduced the investor-state dispute settlement (ISDS) provision that has allowed companies to sue governments over public interest laws, including the Keystone Pipeline challenge by TransCanada. It became the template for future trade deals with Central America, Peru, Colombia and others, and for the Trans-Pacific Partnership (TPP).
While civil society groups in the three countries had been working together to confront structural adjustment programs (neoliberal programs of deregulation, devaluation and privatization pushed by the World Bank and International Monetary Fund), this collaboration on the specific terms of a trade agreement, and the fact that it spanned both sectors and borders, was new and important.
Earlier this week, many of the members of Congress who led the opposition to the Trans-Pacific Partnership held a press conference to celebrate its defeat (at least for now). This resulted from years of efforts by Congressional leaders like Rep. Rosa DeLauro and massive campaigns led by unions, environmental groups, family farmers and others. Many of them returned to NAFTA. Rep. Marcy Kaptur spoke of the decades of work that led to this point. She should know. She participated in one of the first congressional delegations to Mexico on NAFTA, organized by the National Family Farm Coalition, and has continued to press the case in Congress and with colleagues in the three countries. She noted that, “The recent election results call on us all to recraft NAFTA and other agreements that are in place and to develop new models for fair trade.”
Of course, she’s not the first one to make that argument, but that’s kind of the point. NAFTA hurt manufacturing workers in the U.S. and family farmers in Mexico and there is nothing inevitable about it. We don’t need to be stuck with these rules forever.
There are other approaches to trade policy, starting with an open negotiation process that includes workers, farmers, and environmentalists, among others. Detailed negotiating objectives and draft negotiating texts should be published online before and after negotiating sessions so that civil society groups and legislators know exactly what is on the table. Without opening the process to the light of day, it is really inconceivable that we’d get results that are any different from the existing bad deals.
That press conference on November 15 was a much more hopeful moment than the dreadful NAFTA vote on November 17 so many years ago. It’s important to celebrate some wins, and to dig in to consider the hard and invigorating work moving forward to hold on to those gains and to insist on trade rules that rebalance not just trade deficits, but the deficits of fairness, sustainability and bargaining power that NAFTA left in its wake.