Missing from U.S. & Mexican NAFTA Plans: People & the Planet

The renegotiation of the North American Free Trade Agreement—NAFTA—has been an international topic of discussion and conjecture for many months. That conversation will shift from speculation to substance when negotiators from Mexico, Canada and the U.S. sit down for the first round of negotiations on August 16. The only concrete indicators we have to assess what the U.S. and Mexico will prioritize in the talks are the summary documents they each recently released. Unfortunately, both documents inadequately address environmental, labor, or climate change concerns. The U.S. objectives fail to address the major shortcomings of previous trade agreements like the Trans Pacific Partnership (TPP), and are a far cry from a “much better agreement for Americans” that President Trump has promised it would be. The Mexican priorities only mention environmental issues, and highlight the exploitation of fossil fuels as a 21st century economic opportunity. Topics such as rules of origin, intellectual property, and import tariffs play leading roles—and certainly are all important topics that need to be updated. Yet the renegotiation of NAFTA should set a much higher bar in terms of objectives to protect people, the planet, and workers than what we see in these documents.

Flag of the North American Free Trade Agreement

Keepscases via Wikimedia

Here is a brief look at the two countries’ priorities specifically regarding environmental issues, and three of our main concerns with what those priorities do –and do not– include.

1. The Investor-State Dispute Settlement Mechanism should be eliminated.

A major problem with the existing NAFTA is the Investor-State Dispute Settlement (ISDS), the system created in that NAFTA that provides for companies to attack environmental and public health protections. This system allows multinational companies to bypass our courts and go to private tribunals to demand money from taxpayers for policies that affect their bottom lines. Corporations have used NAFTA to challenge bans on toxic chemicals, decisions of environmental review panels, and protections for our climate. They have extracted more than $370 million from governments in these cases, and pending NAFTA claims total more than $50 billion.

The new NAFTA should eliminate the ISDS. Instead, the Trump Administration’s negotiating objectives are identical to what was in the final TPP. NRDC was among many organizations opposed to the ISDS provisions in the TPP, as they created the ability for companies to challenge environmental, public health, and other safeguards through these private tribunals. It is noteworthy that Trump himself rejected the TPP upon taking office. Instead, these objectives demonstrate that the administration will side with the corporate sector over workers and communities by allowing companies to continue to trample the environment and pay them to do so with tax dollars.

Mexico’s priorities for NAFTA also fail to eliminate the ISDS. They offer only vague language to “modernize all the dispute settlement mechanisms” in NAFTA, including ISDS, to make them “more agile, transparent and effective.” This provides no assurance whatsoever to citizens that the towns they live in, the water they drink, or the air they breathe will be protected from corporations by the agreement.

2. Climate change is entirely absent.

Climate change is the global challenge of our time that impacts all other issues—security, the economy, geopolitics, and—yes—trade. Just over a year ago, then-President Obama, Mexican President Peña Nieto, and Canadian Prime Minister Justin Trudeau announced a number of trilateral goals to combat climate change. Renegotiating NAFTA is a clear opportunity to continue to encourage climate change solutions among the three countries across a broad array of sectors, while creating jobs and growing the economy.

Sadly, the current U.S. administration has missed this opportunity. The complete omission of climate change from the U.S. objectives is not at all surprising, given that the president is planning to recklessly withdraw the U.S. from the Paris Climate Agreement.

It is perhaps even more disappointing that Mexico’s list of priorities also does not include climate change. Mexico is seen globally as a leader on climate change policy, and the Peña Nieto administration has repeatedly signaled its intent to reduce greenhouse gas emissions and help its people adapt to the worst impact of the warming climate. This is an area on which the Mexican—and hopefully Canadian—negotiators can pressure the U.S. administration to reconsider its stance. Yet, the Mexican plans for NAFTA ignore the issue and miss a critical opportunity.

3. Environmental and labor standards need to be specific, strong, and enforced.

The U.S. aims to include both the environmental and labor sections within the core text of the agreement. This is indeed an improvement over the current NAFTA, where they are relegated to non-binding side agreements. Yet, the specific wording used in these sections reveals that the administration does not plan to do much else to protect workers, communities and the natural resources upon which we all depend. Many of the environmental points seem to be copied from the TPP, which received heavy criticism from environmental and scientific experts as not being strong enough. Years of experience has proven that simply including these provisions in the core of the agreement does not lead to strong enforcement. The U.S. has failed to bring a trade case against any country (as allowed under recent trade agreements) for failing to meet environmental obligations, despite clear violations. Strong words without enforcement does not lead to real change on the ground.

Similarly, Mexico’s list of priorities incorporates environmental concerns in a very general way in the second of its four points, “Moving towards inclusive and responsible regional trade,” where it also mentions labor and gender issues. The plan is to “strengthen cooperation and dialogue among the NAFTA countries on issues of trade and environment, and look to improve border infrastructure.” This language is non-committal and vague, and therefore does not provide any sort of real direction.

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These shortcomings are all the more disappointing given the multiple opportunities both administrations have organized to hear better options. The Mexican government received public comments from February 1 – July 26, 2017, and kept “constant dialogue” with the productive sectors in the country. The U.S. Trade Representative solicited input in public hearings, “dozens of meetings,” and a public comment period. Sadly, the result of all that input is a set of objectives that entirely ignore climate change, set a low bar for environmental and labor issues, and continue to favor multilateral companies over communities.

Hopefully, negotiators will aim for much better when the first round of talks take place August 17-20 in Washington DC. 

About the Authors

Amanda Maxwell

Interim Managing Director, International Program

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