Trump launches NAFTA renegotiations
June 13 2017
On May 18, U.S. President Donald Trump sent a letter to Congress announcing his intention to renegotiate NAFTA, starting a 90-day waiting period before North American trade negotiators can formally sit down to figure out what a new deal should look like. Policy-makers and big business groups in all three countries have called for a “modernization” of the 23-year-old agreement, though Trump has threatened to walk away from the table, and even tear up NAFTA, if an America-first solution cannot be found. On June 5, the Canadian government launched a public consultation on the matter, presumably to inform its negotiating position, but clearly all three countries hope to have a NAFTA-plus framework in place before the talks officially begin later this summer.
NAFTA transformed the economic and social landscape of North America. That much we can agree on. But views diverge significantly on whether or not the transformation has been for the better. The elite consensus is that NAFTA has greatly benefited Canada and its partners, since a major increase in cross-border trade produced millions of jobs. Implied here is that without NAFTA, supply chains would rupture, trade would collapse, jobs would disappear. There is substantial evidence this isn’t the case.
NAFTA has also played an important role in the growth of job insecurity and precarious work; in the dramatic increase in income and wealth inequality; in wage stagnation and the hollowing out of the middle class; in the weakening of public services and shrinking of Canada’s social safety net. NAFTA is not solely responsible for these changes, but it was a key strand in a web of mutually reinforcing policies that have facilitated the “structural adjustment” of the Canadian state in line with the demands of the “new global reality.”
Some former government insiders saw it coming. The late Mel Clark, Canada’s former deputy negotiator for the GATT (the forerunner of the World Trade Organization), warned that NAFTA was most importantly an investment agreement, reflecting the ascendance of the forces driving the corporate globalization project. The deal’s key provisions protect and enhance the private property rights of internationally mobile corporations, impose constraints on policy flexibility, allow corporations to directly sue governments, and lock these and sibling policies prior to NAFTA in a treaty to prevent future governments from backsliding.
Bruce Campbell is the former director of the Canadian Centre for Policy Alternatives (CCPA). The CCPA will be submitting comments to the government’s public consultation on a NAFTA renegotiation, which you will be able to find at www.policyalternatives.ca.