NAFTA 2.0 Enshrines Deregulation for all of North America
Trump’s re-negotiated NAFTA, now called the USMCA, pushes food safety and other forms of deregulation to new extremes, making it more difficult to undo the damage even after Trump leaves office, says Patrick Woodall of Food and Water Watch
GREG WILPERT: It’s The Real News Network and I’m Greg Wilpert, joining you from Baltimore. President Trump announced the renegotiated NAFTA deal with Mexico and Canada on Monday.
DONALD TRUMP: These measures will support many hundreds of thousands of American jobs. This is also a historic win for American manufacturers and American auto workers who have been treated so badly. We’ve lost so many jobs over the years under NAFTA.
GREG WILPERT: The new agreement, now named the U.S.-Mexico-Canada agreement or USMCA, seems to be a mixed bag of things that both corporate America wanted and that unions support. For example, on the issue of auto manufacturing, the USMCA requires a higher percentage of domestically produced parts in order to qualify for zero tariffs when exported. Also, on wages, it requires workers to be paid an average of sixteen dollars per hour in order to be exempt from tariffs. However, on copyright issues, the deal strengthens the hand of corporations by forcing countries to adopt U.S. copyright protections, which will have an effect on keeping drug prices higher than they otherwise would be.
Joining me now to examine the effect of NAFTA 2.0, or the USMCA, on the environment and on food safety, is Patrick Woodall. Patrick is the Research Director for the group Food and Water Watch. Thanks for joining us today, Patrick.
PATRICK WOODALL: It’s great to be here, Greg. Thank you.
GREG WILPERT: So what is your take and your organization’s take on this new agreement? What effect do you expect to have on issues that your organization works on on the environment and food safety?
PATRICK WOODALL: Sure. I mean, I think it’s widely recognized that NAFTA was a raw deal for workers and communities and the environment. And this new iteration of NAFTA really just delivers that kind of corporate, deregulatory wish list. It’s going to enshrine the worst elements of Trump’s push to roll back regulations into a trade agreement that is going to outlast his administration.
So even as we try and repair the damage at EPA and other federal agencies, these trade rules that favor deregulation are going to make it very difficult to restore the protections for the environment, for food safety and for many other areas that are absolutely critical. So we’re extremely concerned about this. This is actually … there are some pieces around the edges, and you identified some of them, that are hopeful improvements on issues. But the reality is that most of what’s in this deal is just taking the worst elements of the Trans-Pacific Partnership and superimposing it on a 30-year-old deal that we know doesn’t work.
GREG WILPERT: Can you give us some examples of how this deregulation process would work? I mean, in what ways does it deregulate and what areas does it deregulate?
PATRICK WOODALL: So it does sort of two things. One is that it would set a higher standard for establishing rules and protections. And it also would make it easier for other countries to challenge U.S. rules as illegal trade barriers. Much of this is under the rubric of sound science. And this is kind of the Scott Pruitt EPA attack on regulations, where they contended that some science wasn’t strong enough to prove that we needed to have protections. So I’ll give you an example. The Obama administration was planning to ban an insecticide because it had really negative effects on cognitive health, particularly for kids, and Pruitt rolled that back because he didn’t say the science was strong enough to justify protecting kids from essentially brain damage.
The language in the new NAFTA really enshrines this kind of language, which would make it easier to challenge U.S. rules as illegal trade barriers. It even has totally new tools that are binding and enforceable that would, for example, allow companies to demand that regulations be withdrawn or repealed or modified, weakened basically, if the cost were overly burdensome. And it creates these kind of new avenues of attack on food safety and on environmental protection, on workplace safety. And other consumer protections would be put into this deal and would last for decades. So even as we clean up the mess that Trump has left in Washington, we would still have to live under the rules that are in this deal. And that’s why we’re opposing the deal and we urge Congress to vote no on it.
GREG WILPERT: So one area, though, and I don’t know exactly if this contradicts what you’re saying or if this a different area, but one area that progressive groups have – or some, actually – have hailed as an improvement is that it weakens the dispute settlement process. That is, that basically the countries don’t have the same mechanism to challenge disputes in an international arbitration process.
PATRICK WOODALL: I think what you’re referring to are the special investor provisions that existed under the new NAFTA, which allowed separate kind of disputes that allowed companies to challenge regulations as hindering their profits. And it’s true, those have been largely pruned back in the new deal, and a lot of people are very happy about it. It’s important to remember that although it’s generally limited those investor rights that are expansive, it does maintain them for certain things. And one of them is the oil and gas industry would still be able to use those rights, especially related to oil and gas leases with the Mexican government.
So in many cases, these would be pulled back and that certainly is better. But there are still a lot of ways that they are held in place, including for oil and gas, who are amongst the most aggressive litigators under this investment regime. So that’s somewhat of a step forward. And the other state to state disputes, the actual measures under the new NAFTA are stronger. It gives better tools to challenge rules and regulations as illegal trade barriers under the new NAFTA than under the previous existing NAFTA.
And these are largely sort of amplified versions of the pro-deregulation language that was in the Trans-Pacific Partnership. And it affects things like, as I said, the environment and food safety and worker protection, workplace safety issues, a whole bunch of consumer banking safety and pharmaceutical safety, a whole bunch of things like that. So we’re very concerned about those elements, which are, we think, just giveaways and provide new avenues of attack against really important safeguards that everyone needs to make sure that the food they eat is safe and the air they breathe is safe and the water they drink is safe.
GREG WILPERT: The group Public Citizen, that has been working on NAFTA for a long time, has argued that the old NAFTA encouraged countries to export natural resources that they normally seek to conserve and that under the new agreement, the USMCA, these provisions have been eliminated. Wouldn’t you say that that would be a step in the right direction, or how do you evaluate that?
PATRICK WOODALL: So I think they’re referring to some measurements, particularly around whether Canada was required to export oil and gas resources. And that is an improvement on those provisions. But I think generally, and this is why the oil and gas industry have said they’re super happy about this new NAFTA, they’re really glad that it is existing – it gives them zero percent tariffs to export refined and unrefined oil and gas into Mexico and Canada. It maintains the special investment provisions. And so they are 100 percent behind it. I think we know that the oil and gas industry are aiming for a more export-oriented world, and that’s really designed to kind of push out the fracked gas that they have and drive demand for more fracking and more drilling in more places here in America and in Mexico and Canada as well.
GREG WILPERT: So finally, I want to turn to something that is perhaps less related to the environment. But what do you make of the provision requiring higher wages and a higher percentage of domestically produced parts and auto manufacturing that exists in this new agreement?
PATRICK WOODALL: So I think that is a step in the right direction. I mean obviously, it requires that more of a car be manufactured within the three countries and it requires that 40 percent of the work be produced by people making 16 dollars an hour. That’s a very positive step forward. I think that really, the devil is going to be in the details for many of the labor provisions. The text is still in draft form, and so the jury is still out on a lot of these provisions. There is a hope that Mexico would implement a lot of worker protections that they said they would adopt.
And those include things like getting rid of these protection contracts, which are essentially corporate-backed, non-independent unions that millions of workers work under in Mexico and may not even know that they’re signatories of those contracts. So getting rid of those things. But the real question is when or if Mexico is going to implement these protections. And vitally important on this is whether or not the extent to which these are enforceable provisions, whether the labor provisions and the environment provisions are binding and enforceable under the new NAFTA in the same way that pharmaceutical patents are binding and enforceable under NAFTA.
So I think the key question is whether we can enforce these terms under the agreement to make sure that the worker and the labor provisions and the environmental provisions are on the same level as the business provisions. And so far, that has not been the case in prior trade deals and it’s still not the case in what was released this week. There is some hope there as these provisions are continued to be worked on, they could be improved. But whether or not the labor provisions are binding and enforceable, it’s going to be a key standard to evaluate this at the end of the day.
GREG WILPERT: Well I think what you also said about Mexico is very interesting, especially because of course, there’s a new government there that won’t begin taking office until January 1. Andres Manuel Lopez Obrador, who is considered a center-left politician, has a big majority in Congress. And so, perhaps if these things get passed after he takes office, then they might change if the new agreement passes beforehand. And they probably won’t. So we have to wait and see how that works out. But unfortunately, we’re going to have to leave it there for now. I was speaking to Patrick Woodall, Research Director for the group Food and Water Watch. Thanks again, Patrick, for having joined us today.
PATRICK WOODALL: Thanks so much, Greg. Great to be here.
GREG WILPERT: And thank you for joining The Real News Network.