NUPGE rejects new NAFTA

“No one should be fooled by these minor and largely insignificant improvements.” — Larry Brown, NUPGE President

Ottawa (19 Dec. 2019) — On December 10, the Trudeau government signed a tentative agreement with Mexico and the U.S. for a new North American governance, investor rights, and trade agreement — the Canada-U.S.-Mexico Agreement (CUSMA) — previously known by its former acronym NAFTA. The National Union of Public and General Employees (NUPGE) is reaffirming its opposition to this deeply flawed and dangerous economic regime.

Amendments to NAFTA offer no substantive changes

“No one should be fooled by these minor and largely insignificant improvements,” said Larry Brown, NUPGE President. “One year ago we expressed our opposition to the new NAFTA agreement because it enshrined a number of provisions that will undermine regulatory protection in the public interest, harm workers, imperil Canada’s food production system, and exacerbate global climate change.”

Brown added: “The new amendments to NAFTA offer no substantive changes. The agreement still entrenches the same tired, discredited model of neoliberalism that extends, expands, and cements the very rights, privileges, and powers of private investors that have resulted in factory closures, wage stagnation, precarious work, outrageous and vicious wealth inequality, and a global climate catastrophe that threatens our very existence.”

Substandard and largely ineffective protections for workers

Proponents of the revised NAFTA will argue that the labour chapter is improved. But even with the changes, the labour chapter is so flawed that labour unions must oppose it. Supporters will give 2 reasons why they claim workers should support the agreement: because it mentions labour standards, and because they claim these standards can be enforced. Both claims are erroneous.

First, there are no binding common standards guaranteeing the rights or bargaining power of all workers that all the countries must ratify. The standards that are mentioned are voluntary and largely aspirational, and therefore inadequate and ineffective. The agreement mentions the International Labour Organization's  (ILO) Declaration on the Rights at Work, but it does not mention the ILO's more robust 8 fundamental Conventions. But more importantly, none of the countries are required to ratify these or any other fundamental human rights as a precondition to tariff-free trade. Instead, the agreement stipulates that each country "shall adopt...and maintain" these standards  "in its statutes and regulations and practices," and it is up to each country "to enforce its labour laws." In other words, each country can voluntarily determine its own labour standards, and "measures it considers appropriate," and forms of work discrimination "it considers appropriate." Since the labour standards are voluntary, there are no penalties mentioned in the labour chapter to guarantee compliance. There are no sanctions stipulated in the text in the event that one of the parties refuses to recognize any of the standards mentioned, or if a country passes regressive labour legislation undermining labour rights.

Second, the agreement only mentions these labour standards for workers in sectors subject to trade and investment.  There are no labour standards mentioned and no meaningful protection for public sector workers or any other workers in sectors that do not produce goods or that do not supply services that are traded or that are not subject to foreign investment. This is simply unacceptable. There is a growing recognition that trade agreements should recognize worker rights as universal human rights enjoyed by all workers, and such recognition should not be circumscribed by trade or investment.

Third, proponents of the agreement will claim that the new labour chapter will protect workers with an enforcement mechanism through state-to-state dispute resolution. But given the limitations just mentioned, the promise of enforceability is highly dubious. A truly enforceable agreement would not require any link between rights violations and trade and investment. It would also provide for an independent secretariat to proactively investigate and prosecute complaints and rights abuses. Such rights should be based at a minimum on the ILO fundamental conventions and all parties should be required to ratify and implement these conventions as a precondition to tariff-free trade. And any enforcement mechanism should require authorities to investigate and adjudicate complaints from workers and their representatives, and  provide for binding and meaningful penalties for non-compliance.

Fourth, the critical point missing in the debate about the labour chapter, or any other aspect of the CUSMA that presumes to affirm certain rights or obligations, is that they are undermined and overridden by all the other obligations and commitments of the agreement to which all the parties must conform. This fundamental legal principle has been made repeatedly by trade dispute panels in their rulings on other trade agreements. It would be naive to assume that CUSMA will be different.

Threat to public services, and public safety

Under CUSMA, with its "negative list," "standstill," and "ratchet" mechanisms, and with its restrictive regulatory provisions, governments will be prohibited from implementing new regulations, or public services, or reversing the privatization of public services. Despite government assurances to the contrary, CUSMA  will allow private foreign investors the right to determine domestic policy-making by rolling back, delaying, or stopping altogether domestic regulations from even being adopted in the first place. The agreement might even pose a threat to public safety.

Nothing about the climate crisis

The proponents of new NAFTA will point to a new protocol agreed on December 10 that addresses "Environmental and Conservation Agreements,” which lists 6 multilateral environmental agreements.

But the ridiculous and morally outrageous omission to this list is that the article does not even mention The Paris Agreement, or Canada’s obligations to reduce GHG emissions under that agreement. Nor does the document mention at all the words ‘climate change’ nor does it acknowledge anthropogenic global warming.

The fact that the greatest crisis facing humanity is not mentioned at all among a list of environmental agreements is astonishing. But is not an error – it is deliberate. It deliberately fails to include binding common climate standards that stop and reverse the climate crisis. And it deliberately fails to include meaningful limits on air and water pollution.

No stopping capital flight or factory closures

The new NAFTA will not fix the long-term problems with NAFTA that have caused so much grief: we will still lose factories to anti-union states, and we will still face wage stagnation caused by direct competition with countries that have lower wages, both the U.S. and Mexico. In this respect, the new NAFTA won't create jobs, and it will still allow companies like General Motors and others to send our jobs to Mexico. The new agreement completely fails to prohibit capital flight, or address the fundamental cross-border inequalities that have decimated Canada's manufacturing sector since the original Canada—United States Free Trade Agreement was passed over 30 years ago. 

Accelerate and entrench wealth inequality

There is a growing body of credible evidence that these so-called trade agreements have very little to do with trade, and have more to do with corporate governance, regressive tax regimes, and investor rights and remedies, with very negligible impacts on overall Gross Domestic Product. There is growing evidence that the wealth inequality that results from these agreements is not an accident but a deliberate outcome. These agreements are designed to entrench and legalize regressive distributive effects and wealth inequality. These agreements maximize the right to profit for investors and corporations at the expense of all the other economic stakeholders.

To labour allies and progressives: reject this agreement, and free trade is not trade

For all these reasons, and many more, we urge our allies in the labour movement and civil society to reject this agreement.

We are also sending a message to our political representatives, who might identify themselves as progressive: the piecemeal reaction to this investor-rights agenda and its right-wing disrupters is not enough. We need to begin a conversation about fundamentally transforming the rules governing global trade so that it benefits the majority of citizens, workers, and the planet.

We need to talk seriously about rejecting these so-called free trade deals and start calling into question the idea that “trade” = “free trade.” The Canadian government is perpetuating this false analogy. The government bought into the hysteria that NAFTA was the only way we could trade with the U.S., that any agreement — even a flawed one — was absolutely necessary. But this logic is itself deeply flawed. We had a good trading relationship with the U.S. long before NAFTA, and we can have the same without CUSMA.

A message to our critics

Some say that any deal is better than nothing. But a close examination of the new NAFTA suggests otherwise: not having a deal would be better than this.

Our critics will no doubt attempt to mischaracterize and caricature our opposition to this dangerous investor-rights agreement. They will claim that we are against trade, or that we will not be satisfied unless we see a perfect agreement.

But we are not demanding a trade agreement that’s perfect. We are demanding a system of international trade that will not undermine the rights and bargaining power of workers. That will not erode democracy by delivering special rights, privileges, and protections to private investors. That will not endanger public safety. That will not render irreversible the privatization of public services. That will not accelerate wealth inequality. And that will not exacerbate the climate crisis.