Transcript NAFTA at 13 Oversold, Flawed & Failing Public Lecture Sponsored by ActCity Ottawa, Oct 24, 2007 By Janet M Eaton, PhD, Academic, Activist Researcher, Globalization and Free.

NAFTA at 13 Oversold, Flawed & Failing
Public Lecture
Sponsored by ActCity
Ottawa, Oct 24, 2007
By Janet M Eaton, PhD,
Academic, Activist
Researcher, Globalization
and Free Trade Critic
[email protected]
Lessons from NAFTA: Building
a New Fair Trade Agenda
Institute for Agriculture & Trade Policy
http://open.iatp.org/phplist/iatpnews.php?id=1694
Introduction to the Power Point
The NAFTA –Plus SPP, which expands
NAFTA within a broader ‘security
trumps all’ framework is being instituted
and implemented by neo-liberal
proponents who champion NAFTA as a
success.. The successes espoused by
proponents, when examined through a
critical lens, provide a different picture.
This power point lays out evidence that
NAFTA was oversold, based on flawed
neo-liberal assumptions and that it has
failed to deliver on many of its original
promises.
- Janet M Eaton, PhD
Janet M Eaton, PhD
Introduction to the Power Point
In Canada, US and Mexico NAFTA
resistance is rapidly escalating and
opposition parties, elected
representatives, citizens, NGO’s, think
tanks and many policy centres are
calling for NAFTA to be re-negotiated
and replaced by fair trade agreements
or at a minimum to address offensive
sections on water, energy, Ch 11,
tribunals, etc. 1
--- Janet M Eaton, PhD
_____________________________________________
1. See Reference Slide 121 NAFTA Resistance Growing Calls
for Renegotiation and Oversight Slide Show by Janet M
Eaton http://www.stopthehogs.com/pdf/naftaresistance.pdf.
Janet M Eaton, PhD
NAFTA – Flawed, Failing, &
Finding Alternatives – Outline
1. Introduction : A flawed and failing NAFTA should
not be basis for SPP, NAFTA plus, continental
integration
2. NAFTA Context Historical and Economic
Globalization
3. NAFTA – Defined
4. NAFTA - Oversold
5. NAFTA – Flawed assumptions
6. NAFTA –Failed Promises
a) General
Lessons from NAFTA: a
New Fair Trade Agenda
b) Canada
c) United States
d) Mexico
Reference to related power points
Institute for Agriculture & Trade
Policy
http://open.iatp.org/phplist/iatpn
ews.php?id=1694
1. NAFTA – Oversold, Flawed,& Failing is
Basis of the NAFTA-Plus SPP
If you read any Canadian newspaper, you’ve been treated to the same
refrain: NAFTA has been good for Canada. It has led to economic growth
and jobs for Canadians. And given that it’s been so wonderful for Canada,
the Security and Prosperity Partnership of North America (SPP) could only
make things better, right?
... The truth is that NAFTA has been responsible for growing poverty, the
creation of a new underclass called the “working poor,” and the
concentration of wealth in the hands of fewer and fewer people.
--Jean-Yves LeFort is The Council of Canadians’ Trade Campaigner.
_______________________________________________________________
Free Trade’s Big Lie: NAFTA has failed to create quality jobs or close the income gap. - special 12page supplement featuring for Integrate This Forum March 31- April 1, 2007 Ottawa
http://www.canadians.org/integratethis/backgrounders/index.html
1. NAFTA – Oversold, Flawed,& Failing is
Basis of the NAFTA-Plus SPP
Every time you point out that NAFTA hasn’t
delivered the economic benefits that were
promised, the defenders of NAFTA say that’s
because there’s a little fly in the ointment, there’s a
little problem, there’s still a little friction, pointing
now to things like rules of origin’ …or pointing to
other non- tariff barriers that are inhibiting the
perfect Free Trade we want to see. Jim Stanford *
____________________________
* Interviewed in Hoodwinked: The Myth of Free Trade. 2006.
Producers Linda West & Bill Dunn
http://www.westdunn.ca/hoodwinked/
Jim Stanford , Economist
CAW, writer for globe & Mail
1. NAFTA – Oversold, Flawed,& Failing is
Basis of the NAFTA-Plus SPP
So now we’ve got proposals for socalled deeper integration:
• A customs union
• Eliminating rules of origin
• Common external trade policies
• Even common security and
immigration policies where we kind
of draw a line around North America
• Then you’ll get those benefits
we’ve been waiting for and still
haven’t seen. –Jim Stanford *
___________________________
* Interviewed in Hoodwinked: The Myth of Free Trade. 2006.
Producers Linda West & Bill Dunn
http://www.westdunn.ca/hoodwinked/
Jim Stanford , Economist
CAW, writer for globe & Mail
1. NAFTA – Oversold, Flawed,& Failing is
Basis of the NAFTA-Plus SPP
The first set of agreements FTA and NAFTA did
not fulfill their proponent’s promises. The
government has never undertaken an honest
examination of the costs and benefits of NAFTA
The proponents just gloss over the inconvenient
facts:
NAFTA they say has greatly increased exports
and investment; Canada’s trade surplus is up;
unemployment is down; Inflation is low; wages
are flat; business is experiencing record profits;
growth is steady. Therefore NAFTA has been a
success. What is there to re-examine? Let’s just
move forward and build on what we’ve achieved.
But Did NAFTA deliver the goods in terms of
bettering the lives of Canadian citizens?
____________________________________
– Living With Uncle. Canada –US Relations in an Age of
Empire. 2006. Ch 1 2006
1. NAFTA – Oversold, Flawed,& Failing is
Basis of the NAFTA-Plus SPP
Former International Trade Minister Roy McLaren in his OP-Ed
Piece in the Globe and Mail May 2005 stated:
Forget dreams for a bold new custom’s union –let’s fix the one we
have. Canada should continue to work for full realization of
NAFTA, including it’s environmental and labour side agreements,
and its dispute –settlement procedures…Let’s not be sidetracked
by such unrealizable chimera as a “grand bargain” somehow
emerging as NAFTA heads into its second decade.”
____________________________________________
The Three Amigos have work to do . Globe and Mail May 30, 2005
http://www.theglobeandmail.com/servlet/ArticleNews/TPStory/LAC/20050530/CONAFTA
30/TPComment/TopStories)
2. NAFTA Historical Context of
Continental Integration
By 1867- Sir John A- won an election on nation
building platform that included tariffs to protect
Canadian manufacturing , the construction of a
transcontinental railway and settlement of the
west –MacDonald’s national policy as it was
called and his aversion to continentalism
influenced conservative party thinking until
1988 –but the lobbyists never rested – money
and influence were used to peddle a number of
ideas under different names free trade,
commercial union , annexation , reciprocity,
and harmonization – But each time when
brought to an election Canadians turned it
down and this is why we have a country !!
___________________________________
Laurier Lapierre narrating Hoodwinked: The Myth of Free
Trade. 2006. Producers Linda West & Bill Dunn
2. NAFTA Historical Context of
Continental Integration
Military invasions/ Annexation/ Reciprocity/ Free Trade
Military Invasions: 4 attempts
War of 1812 Final attempt to take Canada by force ;
Annexation - 1840s
During 1840s their was a cry for annexation
as American interests advanced westward.
Manifest Destiny - 1840
When neither law nor History favours your action
you’d better invoke god or providence to bolster your actions.
Reciprocity: Wilfrid Laurier 1911 defeated
“Reciprocity” free trade deal with the United States
defeated the Liberals under Laurier in 1911
2. NAFTA Historical Context of
Continental Integration
St. Patrick's Day, 1985: Prime Minister Brian
Mulroney and President Ronald Reagan sing
"When Irish Eyes Are Smiling" together to
cap off the "Shamrock Summit", a 24-hour
meeting in Quebec City that opened the door
to future free trade talks between the
countries. Commentator Eric Kierans
observed that "The general impression you
get, is that our prime minister invited his
boss home for dinner." Canadian historian
Jack Granatstein said that this "public
display of sucking up to Reagan may have
been the single most demeaning moment in
the entire political history of Canada's
relations with the United States.”
__________________________________
http://www.vivelecanada.ca/staticpages/index.php/2
0060830133702539
2. NAFTA Historical Context of
Continental Integration
Free Trade Era:
• 1965- trade liberalization stems from the U.S.- Canada Auto Pact
• 1988 CUSFTA or FTA – The Canada US Free Trade Agreement (CUSFTA or
FTA) goes into effect.
• 1994 NAFTA – The North American Free Trade Agreement and the two
agreements on labour and the environment go into effect, replacing CUSFTA.
Towards a North American Community
• 2004 North American Partnership Agreement US
• 2005 SPP – Security and Prosperity Partnership of North
America (Agreed on by Bush, Martin, Fox March 23, 2005)
• NACC – North American Competitiveness Council
March, 2006 ( Agreed to by Bush, Harper, Calderon)
2. NAFTA Economic Globalization Context
Historical Perspective – 1970s 1980s
•
Structural Economic Shifts
•
Emergence of Free Market Economic
Globalization as liberal economic ideas
perceived to have failed
•
Friedrich Hayek and Milton Friedman
– influential economists favouring free
market capitalism
•
British PM Margaret Thatcher – There
is no Alternative (TINA)
•
US President Ronald Reagan and Can.
PM Brian Mulroney –Free Trade
Cheerleaders in US and Canada
2. NAFTA Economic Globalization Context
Global corporate economic model:
•
Free Trade
•
Privatization
•
De-regulation
•
Smaller Government
Global /Regional Trade Structures/Instruments
•
GATT/ WTO - GATS
•
World Bank
•
IMF
•
NAFTA Secretariat
2. NAFTA Economic Globalization Context
“Until 1973, Friedman's radical doctrine (of neoliberal free market economics) stayed in his
classroom, but all that changed on an earlier
September 11. Following General Augusto
Pinochet's bloody ascent to power, he had a real
life laboratory as advisor to the new Chilean
dictator. His prescription came to be known as
the "Chicago School" revolution of rapid-fire
economic transformation he called "shock
treatment," now known as "shock therapy."
-------------------------------------------------------Naomi Klein's "The Shock Doctrine" - Stephen Lendman Book
Review, Sept 19, 2007. Atlantic Free Press.
http://www.atlanticfreepress.com/content/view/2436/81/
Milton Friedman, Chicago
School of Economics
2. NAFTA Economic Globalization Context
Millions know its lessons -it's central tenets are
structurally adjusted mass-privatizations,
government deregulation, unrestricted free
market access for foreign corporations, and
deep cuts in social spending with repressive
laws, harsh crackdowns and torture along for
the ride to reinforce the core tenet Reaganites
call "trickle down" and Brits call "Thatcherism."
-------------------------------------------------------Naomi Klein's "The Shock Doctrine" - Stephen Lendman Book
Review, Sept 19, 2007. Atlantic Free Press.
http://www.atlanticfreepress.com/content/view/2436/81/
Milton Friedman, Chicago
School of Economics
2. NAFTA Economic Globalization Context
Global /Regional Trade Instruments
•
•
GATT/ WTO - GATS
NAFTA Secretariat
“Together these instruments are engineering a
power shift of stunning proportions, moving real
economic and political power away from national,
state, and local governments and communities
toward unprecedented centralization of power for
global corporations, bankers, and the global
bureaucracies they helped to create at the
expense of national sovereignty, community control
, democracy , diversity and the natural world !”
_____________________________________
John Cavanaugh & Jerry Mander (Eds). 2004. Alternatives to Economic
Globalization: A better World is Possible. San Francisco, BK Publishers Inc.
2. NAFTA Economic Globalization Context
The main concerns with this model include:
1. THE RULE OF THE MARKET / FREE TRADE . Liberating "free" enterprise or
private enterprise from any bonds imposed by the government (the state) no matter how
much social damage this causes. Greater openness to international trade and investment, as
in NAFTA. Reducing wages by de-unionizing workers and eliminating workers' rights that
had been won over many years of struggle. No more price controls. All in all, total freedom
of movement for capital, goods and services. Assumption: "an unregulated market is the
best way to increase economic growth, which will ultimately benefit everyone."
2. CUTTING PUBLIC EXPENDITURE for social services like education and health care.
Reducing the safety-net for the poor, and even maintenance of roads, bridges, water supply
in the name of reducing government's role while not opposing government subsidies and
tax benefits for business.
_________________________________________________________
http://www.corpwatch.org/article.php?id=376
2. NAFTA Economic Globalization Context
The main concerns with this model include:
3.
DEREGULATION. Reduction of government regulation of everything that could
diminish profits, including protecting the environment and safety on the job.
4.
PRIVATIZATION. Selling of state-owned enterprises, goods and services to private
investors. This includes banks, key industries, railroads, highways, electricity, schools,
hospitals and even fresh water. Although usually done in the name of greater efficiency,
which is often needed, privatization has mainly had the effect of concentrating wealth
even more in a few hands and making the public pay even more for its needs.
5. ELIMINATING THE CONCEPT OF "THE PUBLIC GOOD" or "COMMUNITY"
and replacing it with "individual responsibility”, pressuring the poorest people in a
society to find solutions to their lack of health care, education and social security all by
themselves -- then blaming them, if they fail, as "lazy.“
_________________________________________________________
http://www.corpwatch.org/article.php?id=376
2. NAFTA Economic Globalization Context
Signs of Failure
Corporate Driven Globalization is:
• collapsing (J.R.Saul, 2005)
• in a shambles (J Stiglitz, 2006)
• is receding (Walden Bello, 2007)
• is in at the end of its ‘Golden Era’
(Mander & Cavanaugh, 2006)
2. NAFTA Economic Globalization Context
Signs of Failure
John Ralston Saul, the noted Canadian
political philosopher writes in The
Collapse of Globalism & in Harper’s Article
The End of Globalism which preceded the
book:
• Grand economic theories such as
globalism are short lived.
• Globalization is now collapsing.
• Grand ideologies rarely disappear
overnight. Those in positions of power will
hang on to old ways.
_________________________________
John Ralston Saul. 2004. The End of Globalism. Harper’s
http://afr.com/articles/2004/02/19/1077072774981.html
2. NAFTA Economic Globalization Context
Signs of Failure
Fifteen years ago, we were told to expect the emergence of a
transnational capitalist elite that would manage the world
economy. Indeed, globalization became the "grand strategy"
which envisioned the U.S. elite being the primus inter pares -first among equals -- of a global coalition leading the way to
the new, benign world order. Today, this project lies in
shambles. The IMF is practically defunct. .., more and more of
the advanced developing countries are refusing to borrow
from it or are paying ahead of schedule, with some declaring
their intention never to borrow again. These include Thailand,
Indonesia, Brazil, and Argentina. --- Joseph Stiglitz former Chief
Economist and Senior Vice-President of the World Bank , Professor Emeritus,
Nobel Laureate , author of Making Globalization Work, 2006.
______________________________________
* Stiglitz’ book Globalization and Its Discontents (W.W. Norton June 2001) has
been translated into 35 languages and has sold more than one million copies
worldwide. His newest book, Making Globalization Work, was published by W W
Norton and Penguin/ Allen Lane in September 2006.
2. NAFTA Economic Globalization Context
Signs of Failure
Sold to the world as a panacea for all
problems, economic globalization
has not lived up to its advertizing:
•
It has not lifted the poor; it has
instead brought record disparities in
income and wealth between rich and
poor nations, and within nations.
•
It has destroyed local communities
and pushed farmers off their
traditional lands
•
It has accelerated the greatest
environmental breakdown in history.
--John Cavanaugh & Jerry Mander (Eds). 2004. Alternatives to
Economic Globalization: A better World is Possible. San
Francisco, BK Publishers Inc.
2. NAFTA Economic Globalization Context
Signs of Failure
The failures of the neo-liberal project
find their context in the underlying
economic model which demands:
1. Unlimited economic growth
2. A never ending expanding supply of
inexpensive resources
3. Steady supply of cheap labour
4. Compliant governments to
collaborate -- John Cavanaugh & Jerry
Mander
______________________________________
John Cavanaugh & Jerry Mander (Eds). 2004. Alternatives to
Economic Globalization: A better World is Possible. San Francisco,
BK Publishers Inc.
2. NAFTA Economic Globalization Context
Signs of Failure
Three Landmark events punctuated the end
of the “Golden Era” of Corporate –driven
economic globalization. -- Mander &
Cavanaugh, 2004
1. Collapse of the WTO talks –Cancun (2003)
2. Breakdown of FTAA negotiations Miami
Free Trade Area of the Americas (2003)
3. Overwhelming global reaction and
resistance to the US invasion fo Iraq (2001)
2. Globalization - Signs of Collapse
“ You have to realize that what they're trying to do is
to roll back the Enlightenment, roll back the moral
philosophy and social values of classical political
economy and its culmination in Progressive Era
legislation, as well as the New Deal institutions.
They're not trying to make the economy more equal,
and they're not trying to share power. Their greed is (as
Aristotle noted) infinite. So what you find to be a
violation of traditional values is a re-assertion of preindustrial, feudal values. The economy is being set
back on the road to debt peonage. The Road to Serfdom
is not government sponsorship of economic progress
and rising living standards; it's the dismantling of
government, the dissolution of regulatory agencies, to
create a new feudal-type elite.”
--- Professor Michael Hudson *
----------------------------------------------------------------* President of The Institute for the Study of Long-Term Economic
Trends (ISLET), a Wall Street Financial Analyst, Distinguished
Research Professor of Economics at the University of Missouri,
Kansas City and author of Super-Imperialism: The Economic
Strategy of American Empire (1972 and 2003)
http://www.counterpunch.org/whitney08292008.html
Prof. Michael Hudson
2. Globalization - Signs of Collapse

A plethora of recent books
and research warn that the
present corporate globalized
fossil fuel economy propped
up by the militarism is leading
to:
1.
Collapse of Corp. Globalization
Collapse of oil (peak oil)
Collapse of US economy
Collapse of the American Empire
Climate Change –global warming
Collapse of ecosystems
Collapse of civilization!
2.
3.
4.
5.
6.
7.
3. NAFTA What is it ? Free Trade Area
The degree of economic integration can be
categorized as six stages:
1. Preferential trading area
2. Free trade area * (NAFTA)
3. Customs union (SPP moving towards)
4. Common market (partially under NAFTA)
5. Economic and monetary union (Amero floated)
6. Complete economic integration
As economic integration increases, the barriers
of trade between markets diminishes. The most
integrated economy today, between
independent nations, is the European Union
and its euro zone.
__________________________________________
http://en.wikipedia.org/wiki/Economic_integration Basics of the theory written
by Hungarian Economist Béla Balassa in the 1960s.
European Union most
integrated economy
today
3. NAFTA What is it ?
1.
Free Trade Area - The lowest level of integration is a free trade area
which involves only the removal of tariffs and quotas among the
parties.
2.
Custom’s Union -. The participant countries set up common external
trade policy. If a common external tariff is added, then a customs
union has been created
3.
The next level, a common market, requires free movement of people
and capital as well as goods and services. It is this stage where
institutional development becomes critical.
4.
The stage of economic union requires a high degree of coordination
or even unification of policies. This sets the foundation for political
union.
Blurring the lines – see next slide
Continental Integration – North American Union
____________________________________________________________
5.
Government of Canada. Stages of Economic Integration:
http://dsp-psd.pwgsc.gc.ca/Collection-R/LoPBdP/inbrief/prb0249-e.htm
3. NAFTA What is it ?
5.
Blurring the lines - Because countries are free to negotiate economic
integration agreements as they see fit, in practice, formal agreements
rarely fall neatly into one of the four stages discussed above. This
can lead to some confusion of terminology and also confusion as to
the state of economic integration in some parts of the world. In the
case of Canada, for example, the country is part of a free trade area
with the United States and Mexico. However, the North American Free
Trade Agreement also includes provisions that partially liberate the
flow of labour and capital in the region – an element of a common
market
__________________________________________________________________
Government of Canada. Stages of Economic Integration:
Continental Integration – North American Union
http://dsp-psd.pwgsc.gc.ca/Collection-R/LoPBdP/inbrief/prb0249-e.htm
3. NAFTA –What is it ?
What is the NAFTA ( North American Free Trade Agreement )?
•
In January 1994, the United States, Mexico and Canada entered
into the North American Free Trade Agreement (NAFTA), creating
the largest free trade area and richest market in the world. The
NAFTA is the most comprehensive regional trade agreement ever
negotiated by the United States and is scheduled to be fully
implemented by the year 2008. 1.
•
By strengthening the rules and procedures governing trade and
investment throughout the continent, NAFTA has proved to be a
solid foundation for building Canada’s future prosperity. 2
___________________________________________________
1.
http://www.library.unt.edu/gpo/oca/nafta.htm
2.
http://www.dfait-maeci.gc.ca/nafta-alena/over-en.asp
3. NAFTA –What is it ?
The objectives of NAFTA: Article 102: Objectives
1. The objectives of this Agreement, as elaborated more specifically through its
principles and rules, including national treatment, most-favored-nation
treatment and transparency are to:
(a) eliminate barriers to trade in, and facilitate the cross border movement of,
goods and services between the territories of the Parties;
(b) promote conditions of fair competition in the free trade area;
(c) increase substantially investment opportunities in their territories;
(d) provide adequate and effective protection and enforcement of intellectual
property rights in each Party's territory;
(e) create effective procedures for the implementation and application of this
Agreement, and for its joint administration and the resolution of disputes;
(f) establish a framework for further trilateral, regional and multilateral
cooperation to expand and enhance the benefits of this Agreement.
( i.e serve as a foundation for deeper integration –JME )
______________________________________________________________
Canada and the North American Free Trade Agreement
http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/nafta-alena/index.aspx
3. NAFTA –What is it ?
•
The United States and Canada conduct the world’s largest bilateral
trade relationship, with total merchandise trade (exports and imports)
exceeding $499.3 billion in 2005.
•
While Canada is an important trading partner for the United States,
the United States is the dominant trade partner for Canada, and trade
is a dominant feature of the Canadian economy.
•
The United States and Canada also have significant stakes in each
other’s economy through foreign direct investment.
•
Both countries are members of the World Trade Organization (WTO)
and both are partners with Mexico in the NAFTA.
_______________________________________________
CRS Report for Congress Received through the CRS Web, Order Code RL33087
United States-Canada Trade and Economic Relationship: Prospects and Challenges
Updated March 29,2006
3. NAFTA –What is it ?
According to University of
Toronto political economist
Stephen Clarkson, NAFTA
provided the “constitutional”
framework for locking in
neoliberal policies, and
accelerating continental
economic integration
_______________________
Stephen Clarkson 2003. Paradigm Shift or Paradigm
Twist? The Impact of the Bush Doctrine on
Canada.
http://www.yorku.ca/cerlac/deep_papers/ClarksonBanda.PDF
3. NAFTA –What is it ?
“The great 1988 free trade debate
…resulted in
the passage of the Canada-US Free Trade
Agreement (FTA). It was a watershed event that …
enhanced the power of capital relative to workers
and communities, and limited the power of
government to regulate and shape the market. It
thus ensured that integration would not only
accelerate, but do so within a neoliberal policy
mold. This has made it more difficult for
progressive-minded governments to advance
their policy agendas, and more difficult to
advance just society goals, let alone hold onto
existing social achievements. Five years later, the
FTA—deepened and extended to Mexico—was
converted and expanded to the North American
Free Trade Agreement (NAFTA).”
_____________________________
Bruce Campbell. Introduction. Living With Uncle. Canada –US
Relations in an Age of Empire. 2006.
3. NAFTA –What is it ?
Trade treaties like NAFTA, GATT, and
proposed FTAA set rules favoring
corporations resulting in:
• Well paying unionized US manufacturing
jobs shifting to low-wage countries
• Lower wages and living standards
everywhere
• Weakened worker rights in all nations
• Environmental damage domestically and in
other countries
• Cuts in social safety nets
____________________________
Source: The Growing Divide: Inequality and the Roots of
Economic Insecurity, p. 19, United for a Fair Economy, May
2000.
3. NAFTA –What is it ?
NAFTA opponents - including labor, environmental, consumer and
religious groups - argued that NAFTA would launch a race-to-the-bottom
in wages, destroy hundreds of thousands of good U.S. jobs, undermine
democratic control of domestic policy-making and threaten health,
environmental and food safety standards.
NAFTA promoters - including many of the world’s largest corporations promised it would create hundreds of thousands of new high-wage US
jobs, raise living standards in the U.S., Mexico and Canada, improve
environmental conditions and transform Mexico from a poor developing
country into a booming new market for U.S. exports.
____________________________________________________
Public Citizen Global Trade Watch NAFTA http://www.citizen.org/trade/nafta/
3. NAFTA –What is it ?
Why such divergent views? NAFTA was a radical experiment -NAFTA
contained 900 pages of one-size-fits-all rules to which each nation was
required to conform all of its domestic laws - regardless of whether voters
and their democratically-elected representatives had previously rejected
the very same policies in Congress, state legislatures or city councils…
Now, over a decade later, the time for conjecture and promises is over: the
data are in and they clearly show the damage NAFTA has wrought for
millions of people in the U.S., Mexico and Canada. Thankfully, the failed
NAFTA model - a watered down version of which is also contained in
the World Trade Organization (WTO) - is merely one among many options.
___________________________________________________
Global Trade Watch NAFTA http://www.citizen.org/trade/nafta/
4. NAFTA - Was Oversold !
“NAFTA’s champions
…oversold their case. It was
never plausible, for instance, to
expect NAFTA would be a net
creator of jobs”
-----------------------------The Economist, Jan 3rd, 2004
http://www.economist.com/printedition/cover_ind
ex.cfm?year=2004&quarter=1&edition=US
4. NAFTA - Was Oversold !
“FROM the start, the North American Free-Trade
Agreement was bitterly controversial in all three of
the countries taking part—the United States,
Canada and Mexico. Its terms, which went into
effect on January 1st 1994, were argued over line
by line: … More than this, the agreement was
attacked as bad in principle. Everybody
recognized that NAFTA was an extraordinarily bold
attempt to accelerate economic integration—or, as
critics put it, an experiment in reckless
globalization. As such, they said, it would destroy
jobs, make the poor worse off and start an
environmental race to the bottom.
-----------------------------Free trade on trial. The Economist. Jan 3, 2004
http://www.economist.com/world/displaystory.cfm?story_i
d=2312920
“Equally, advocates of the
agreement made some bold
claims about the good it would
bring. Far from destroying jobs,
it would create lots of new and
better ones; incomes would
rise and the poor would benefit
proportionately; growth would
accelerate and, to the extent
that this posed environmental
challenges, extra resources
would be available to meet
them. …”
4. NAFTA -Was Oversold !
• “The Democrats who, in the 1990s, gave America the Uruguay round,
the North American Free-Trade Agreement (NAFTA) and permanent mostfavoured-nation trading status for China have changed. Alas, none of the
leading candidates, and precious few Democrats of any stripe, would
now call themselves free-traders.
• Even Hillary Clinton, the most centrist of the leading Democratic
contenders, … has found it politic to project herself as a trade skeptic.
• The two leading candidates to her left have gone further. John Edwards
and Barack Obama have both denounced NAFTA and called for its
renegotiation. None of the three supported moves to extend the
president's “fast-track” trade negotiation authority, which expired last
month.”
___________________________________
The Democrats. The cross of gold. The Economist. Jul 19th 2007
http://www.economist.com/opinion/displaystory.cfm?story_id=9516433
(AP Photo/Charles
Rex Arbogast)
http://www.msnbc
.msn.com/id/2016
7927/displaymode
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4. NAFTA -Was Oversold !
“Free Trade with Mexico- if you
asked me in 2000 I was then ready to
conclude that NAFTA was a major
success…
“I was a true believer in NAFTA--the
North American Free Trade
Agreement. Now my faith is not
gone but shaken.” -- Brad DeLong, (neoliberal) economist and creator of one of the
net’s most popular weblogs on economics, at
www.j-bradford-delong.net.
____________________________
http://www.clas.berkeley.edu:7001/Events/fall20
06/10-16-06-delong/index.html
Prof. Brad DeLong "Afta Thoughts on
NAFTA” October 16, 2006
http://www.clas.berkeley.edu:7001/Events/fall20
06/10-16-06-delong/index.html
4. NAFTA -Was Oversold !
“Having witnessed Mexico’s slow
growth over the past 15 years, we
can no longer repeat the old mantra
that the neoliberal road of NAFTA
and associated reforms is clearly and
obviously the right one. Would some
other, alternative, non-neoliberal
development strategy have been
better for Mexico in the late 1990s
and early 2000s? Would it have been
better to have urged President Carlos
Salinas de Gortari to focus his efforts
on investments in education and
infrastructure and on trying to clean
up corruption rather than on free
trade? Perhaps.”
_________________________
http://www.clas.berkeley.edu:7001/Events/fall20
06/10-16-06-delong/index.html
Prof. Brad DeLong "Afta Thoughts on
NAFTA” October 16, 2006
http://www.clas.berkeley.edu:7001/Event
s/fall2006/10-16-06-delong/index.html
4. NAFTA -Was Oversold !
•
While 79% of Canadian exports go to the us,
that is not 79% of GDP which is often confounded in
interpretation of the statistics.1
•
Foreign trade is responsible for about 45 percent of the
nation's gross domestic product (GDP).2
•
If 79% of trade is with US, exports to US represent about
36% of our economy
• Much trade is still interprovincial
__________________________________
1. Linda West, Producer of Hoodwinked: The Myth of Free Trade. Personal Communication
August 23, 2007
2. http://www.nationsencyclopedia.com/economies/Americas/Canada-OVERVIEW-OFECONOMY.html
5. NAFTA’s Flawed Assumptions
Some of NAFTA’s Flaws:
a) Not free trade
b) Asymmetry in the relationship
c) Ch 11 Investor State mechansism
d) Ch 6 on Energy flawed
e) Water was not excluded
f) Dispute Resolution
g)
The SPP is based on multiple flaws !
5. NAFTA’s Flawed Assumptions
Dalton Camp, David Orchard,
Shadria Drury, Paul Obermeyer,
John Turner, Linda West , Jim
Stanton, expose NAFTA flaws
in Hoodwinked : The Myth of
Free Trade. 2006. Producers
Linda West & Bill Dunn
http://www.westdunn.ca/hoodwinked/
Linda West
5. NAFTA’s Flaws (a) not free trade
“I was and am a free trader- my argument
with the deal was that it was not free trade
• It didn’t control subsidies on either side of
the border
• It didn’t include anti - trust actions
• It didn’t include countervail
• It didn’t restrict what Congress calls
presidential discretion
• It rather left both sides with all the levers it
needed to interfere with free tradeIt wasn’t a free trade agreement !”
-- Former PM John Turner in Hoodwinked
___________________________________
Hoodwinked: The Myth of Free Trade. 2006. Producers
Linda West & Bill Dunn http://www.westdunn.ca/hoodwinked/
Former Canadian Liberal
Prime Minister John Turner
5. NAFTA’s Flaws (a) not free trade
“We’ve had more harassment than before
the Free Trade Agreements (FTAs) - –
we’ve agreed to allow them to use all of
their trade laws against Canada whenever
they wish – so we are worse off than
before when we traded under the GATT –
umbrella - now morphed into the WTO. We
were much better off because they
couldn’t use their trade remedy laws
against us with impunity as they can now.
– David Orchard
__________________________________
Hoodwinked: The Myth of Free Trade. 2006. Producers Linda
West & Bill Dunn http://www.westdunn.ca/hoodwinked/
David Orchard, farmer,
author, politician
5. NAFTA’s Flaws (a) not free trade
Author and activist David Korten sums up
Adam Smith’s thinking on free trade:
“His vision of an efficient market was one
composed of small owner-managed
enterprises located in the communities
where the owners resided. Such owners
would share in the community’s values
and have a personal stake in its future. It
is a market that has little in common with
a globalized economy dominated by
massive corporations without local or
national allegiance, managed by
professionals who are removed from real
owners by layers of investment
institutions and holding companies.”
_________________________________
NI Guide to Globalization.2002, Wayne Ellwood
David Korten, business
specialist, author, change agent
5. NAFTA’s Flaws –(b) Asymmetry
WTO law includes the GATT and it
trumps all national laws, including
US trade law, and can only be
amended by the signatories to the
agreement i.e now about 130. The
US cannot amend it unilaterally.
Now under NAFTA almost directly
the opposite – all Canadian goods
exported to the United States are
subject to US trade law –not GATT
law. And the US under NAFTA has
the unilateral right to amend the law
without our agreement and they've
done it on at least three occasions.1
--Mel Clarke
_______________________________
1. Transcript from Interview with Janet M
Eaton, Ottawa, August 2007.
Mel Clark, former Senior Trade
Negotiator, Can Government
5. NAFTA’s Flaws –(b) Asymmetry
Now what that does is open
the door to unilateralism –
the Americans have a right
under NAFTA to act
unilaterally –
You really have to wonder
what the heck was in
Mulroney's (their) mind when
he (they) did this.1 -- Mel
Clarke
_____________________
1. Transcript from Interview with Janet M
Eaton, August 2007
Mel Clarke, former Senior Trade
negotiator, Can. Government
5. NAFTA’s Flaws (b) Asymmetry
John Turner: “When the first text became
available some American senators came up to
Ottawa. Senior senator Benson .. and his five
colleagues had lunch with liberal caucus
members. Benson who was Chair of the US
senate committee on trade and finance said
‘you’ve read it carefully- I want to tell you and
your colleagues that the US senate will never, I
repeat, never yield its jurisdiction over trade’
“ I said some of my more moderate colleagues
and certainly some business colleagues say
Turner ‘why don’t you allow the agreement to
be signed?’ – and then we can negotiate later”.
Sen. Benson said: ‘ Mr. Turner I don’t think that
would be a good idea- I want to tell you quite
frankly it’s take it or leave it ‘ ”
___________________________________
John Turner interview in Hoodwinked: The Myth of Free Trade. 2006.
Producers Linda West & Bill Dunn www.westdunn.ca/hoodwinked/
Former Canadian Liberal
Prime Minister John Turner
4. NAFTA’s Flaws –(b) Asymmetry
In his 1981 book Life with Uncle John
Holms wrote:
“The effort of governments in
agreements reached with the US was
to control and discipline that force
(continentalism) not to encourage it.
… The rules, commitments or even
institutions established between
Canada and the US while designed to
reduce conflict, are not necessarily
designed to bring us closer together
… Their purpose rather, is to regulate
forces which , unless a Canadian
place is staked out would inevitably
erode our sovereignty and identify.”
_______________________________________
Bruce Campbell. Introduction. Living with Uncle.
Canada-US Relations in an Age of Empire . CCPA
and James Lorimer & Co. Ltd 2005
5. NAFTA’s Flaws –(b) Asymmetry
“The US- Canada relationship revolves
around the themes of integration and
asymmetry:
(a) integration from successive trade
liberalization from US-Canada auto
pact in 1965 to NAFTA and
(b) asymmetry resulting from Canadian
dependence on the US market and
from the disparate size of the two
economies.”
___________________________
CRS Report for Congress. October 13, 2006 by Ian F
Ferguson. US-Canada Trade & Economic
Relationship: Prospects & Challenges
5. NAFTA Flaws (c) Ch11 Undemocratic
“NAFTA Ch 11 Investor State
Mechanism is deeply flawed and
undemocratic serving corporate
agenda and power. NAFTA Ch 11
allows investors to hold
governments at all levels hostage
when it comes to legislating in the
public interest.”
_________________________________
Bruce Campbell.. Chapter 1 the North American Deep
Integration Agenda in Living With Uncle Canada-US Relations
in an Age of Empire CCPA and James Lorimer & Co .Ltd 2005
Bruce Campbell, Ex
Dir Canadian Centre
for Policy Alternatives
5. NAFTA Flaws (c) Ch11 One-sided
1)
2)
3)
4)
NAFTA contained a number of unique provisions designed to
provide special protections for investors in order to encourage
foreign direct investment e.g. in Chapter 11 of the agreement,
which concerned investment. Chapter 11 specifically outlaws a
number of performance requirements, including
exporting a given percentage of goods;
achieving a given level of domestic content;
transferring technology; and
other limits on the use of foreign exchange (NAFTA Secretariat
2003, article 1106).
_________________________________________________________
Briefing Paper the Economic Policy Institute http://epinet.org
THE HIGH PRICE OF ‘FREE’ TRADE NAFTA’s failure has cost the United States
jobs across the nation http://www.epi.org/briefingpapers/147/epi_bp147.pdf
5. NAFTA Flaws (c) Ch11 One-sided
These types of measures were used by both Mexico and
Canada to encourage development of their domestic
economies, and to maximize the benefits they obtained from
foreign direct investment (FDI).
In addition, NAFTA included unprecedented guarantees to
protect the value of corporate investments and even the rights
to earn profits in the future arising out of changes in
government regulations or policy.
________________________________________________________
_
Brief ing Paper the Economic Policy Institute http://epinet.org
THE HIGH PRICE OF ‘FREE’ TRADE NAFTA’s failure has cost the United States
jobs across the nation http://www.epi.org/briefingpapers/147/epi_bp147.pdf
5. NAFTA Flaws (c) Ch11 & the Public Good
Professor emeritus, university chancellor and
award winning researcher Alex MIchalos in a
recent book Trade Barriers to the Public Good
explores the thesis that the pursuit of
commercial trade over every other value can
destroy opportunities for achieving the broader
public good. In support of that thesis he
undertook an exhaustive examination of
NAFTA and related AIT Canadian agreement on
Internal Trade cases on the MMT and showed
how the investment dispute settlement
procedures serve as instruments of destruction.
____________________________________
Summarized from Introduction to Alex Michalos. 2008 s Trade Barriers to
the Public Good: Free Trade and Environmental Protection. Canada:
McGill-Queens University Press
5. NAFTA Flaws (c) Ch11 & the Public Good
His research and analysis revealed that ‘as slow
and ponderous as the legislative process is, it
does a better job than the NAFTA and AIT
dispute settlement processes of protecting the
interests of the broader public over narrower
private interests. 1
“Trade Barriers to the Public Good illustrates
why and how constitutionally protected
democratic rights are undermined by trade deals
such as the one involving MMT and, failing
termination of NAFTA and AIT - the author's
recommends precise changes in dispute
settlement rules that are needed to protect
individuals and the environment.”2
_______________________________
1. Introduction Alex Michalos. 2008. Trade Barriers to the
Public Good: Free Trade and Environmental Protection.
Canada: McGill-Queens University Press
2. http://mqup.mcgill.ca/book.php?bookid=2209
5. NAFTA Flaws (c) Ch11 & State Law
“The new free trade agreements are rescaling governance
in ways that have critical implications for subnational
governments. The nation state is not simply being
hollowed out; rather, a new governance nexus is forming
— of nation states, multinational corporations and
international agreements — which explicitly excludes
subnational and local government voice. This article
describes the new governance features of the North
American Free Trade Agreement (NAFTA) and illustrates
how they work out at the national, subnational and local
scales using cases from the United States and Mexico.
NAFTA provides the template for other free trade
agreements including the Free Trade Area of the Americas
(FTAA) and a growing number of bilateral agreements. “
______________________________________________
1 Abtract Gerbasi and Warner. Rescaling and reforming the state under
NAFTA: implications for subnational authority. International Journal
of Urban and Regional Research Volume 28 Issue 4, Pages 858 –
873 Published Online: 7 Dec 2004.
www3.interscience.wiley.com/journal/118779133/abstract?CRETRY=
1&SRETRY=0
5. NAFTA Flaws (c) Ch11 & State Law
“We show how NAFTA's governance structure is
undermining sub-national and local government authority in
legislative and judicial arenas. Designed to advance
privatization of public services, these agreements
undermine the very ability of local governments to use
markets for public goods by defining traditional state and
local governance mechanisms as 'non-tariff barriers to
trade'. Contradictions between private profit and public
interest appear at the sub-national level but their resolution
is engaged at the global level between private investors and
the nation state. Recognition of this rescaling requires
attention to the reforming state and its implications for subnational authority and democratic representation and
voice”.1
______________________________________________
1 Abstract Gerbasi and Warner. Rescaling and reforming the state under
NAFTA: implications for subnational authority. International Journal
of Urban and Regional Research Volume 28 Issue 4, Pages 858 – 873
Published Online: 7 Dec 2004.
www3.interscience.wiley.com/journal/118779133/abstract?CRETRY=1&SRETRY=
0
US State Level Legislative Oversight
of FTAs / NAFTA
Maine, New Hampshire, Vermont,
Pennsylvania and a few other States in
the US have State level legislation
establishing ‘commissions’ charged with
overseeing the impacts of free trade
agreements on State sovereignty.
Massachusetts is currently in process of
moving the Globalization Impact Bill, Bill
H.374 (recently renumbered H 4705 ),
through their legislature.
______________________________________
http://www.newenglandalliance.org/sn_display1.php?ro
w_ID=28
http://www.newenglandalliance.org/sn_display1.php?ro
w_ID=21
Why A “Globalization Impact Bill”?
Toward Passage of H.374 in 2008: From NAFTA to the
Burma Bill, and now SPP, global corporate rule poses a
continuous threat to local democracy
5. NAFTA Flaws (c) Ch11 & State Law
Environmental Regulations threatened by NAFTA etc:
Sen. Jaclyn Cilley, D-Barrington and Chair of the
NH Citizen’s Trade Commission points to an
ongoing dispute over a proposal by USA Springs,
which wants to build a large water bottling plant in
Nottingham. The company has a permit from the
state Department of Environmental Services to
extract up to 307,000 gallons of groundwater a day
for bottling and sell to customers in the United
States and overseas. According to Cilley … the
environmental regulations could fall under the
jurisdiction of trade tribunals established by the
North American Free Trade Agreement and other
regional trade pacts or by the World Trade
Organization. The regulations could be judged as
unlawful restrictions under the free trade
agreements, she said.
New Hampshire State
Househttp://www.centralvt.com/web/sthouse/index.html
____________________________________________
http://www.allbusiness.com/government/government-bodiesoffices-law-courts/6780103-1.html
Sen. Jaclyn Cilley, D-Barrington
Chair of NH Commission
5. NAFTA Flaws (c) Ch11 & State Law
Zoning Laws:
“ It's not clear whether municipal zoning
ordinances might be ruled an unfair
restriction of trade if they have an adverse
impact on a foreign-owned company” said
Alpert, Vice–Chair of New Hampshire’s
Citizen Trade Policy Commission
Procurement:
New Hampshire State House
He also noted that an agreement signed by
Craig Benson during his term as governor
committed the state to abide by CAFTA rules
in its procurement policy. That could prevent
the state from favoring New Hampshire
products in its purchases.
_________________________________________
http://www.allbusiness.com/government/government-bodiesoffices-law-courts/6780103-1.html
Arnie Alpert, Commission
Vice-Chair
5. NAFTA Flaws (c) Ch11 & State Law
"These far-reaching trade agreements are
quite different from past trade agreements,"
said Barrington resident Denise Hart, a
commission member who is also on the
Board of Directors of a nonprofit group
called Save Our Groundwater. "In the past,
they used to set tariffs. Now trade
agreements are reaching their fingers into
every aspect of state economies. We're just
awakening to the impact they have on state
and local laws."
http://www.allbusiness.com/government/government-bodiesoffices-law-courts/6780103-1.html
5. NAFTA Flaws (c) Ch11 Challenges
As of January 1 2008, there have been 49 investor-state
claims:
18 against Canada,
14 against the U.S. and
17 against Mexico.
Nearly half of these claims have involved investor challenges
to how governments protect the environment or manage
natural resources
________________________________________________________
1. Canadian Centre for Policy Alternatives. 2008. NAFTA Challenges Grow
www.policyalternatives.ca/
5. NAFTA Flaws (c) Ch11 Challenges
The number of challenges launched by foreign investors against
Canada under NAFTA’s controversial investment rules continues to
grow. A recent CCPA study looked at the six new NAFTA cases filed
against Canada over the last two years and found the targeting of
environmental protection and natural resource management
regulations particularly disturbing. These included:
• A challenge by multinational oil giant Exxon-Mobil to
Newfoundland’s local economic development policies.
• A challenge over the province of Ontario’s decision to halt a
controversial project to dispose of Toronto’s landfill in a man-made
lake. 1
•
There has been a recent challenge over a Canadian Environmental
Assessment Agency Panel decision to not grant permission for a
mega-quarry in Digby –Neck, Nova Scotia. 2
_____________________________________________________________
1. Canadian Centre for Policy Alternatives. 2008. NAFTA Challenges Grow
www.policyalternatives.ca/ 2.NAFTA Challenge blatant attempt to intimidate.
http://www.sierraclub.ca/atlantic/programs/economies/digbyquarry/press.htm
5. NAFTAs Flaws (c) Ch11 Unconstitutional
“Investor-State Regime Violates Section 7 of the (Canadian) Charter.
Section 7 is ‘intrinsically concerned with the well-being of the living
person.’ In contrast to the U.S. Constitution, section 7 does not
guarantee ‘corporate-commercial economic rights’ of the type
protected under NAFTA Chapter 11…..
Further, where an investor challenges a government measure as
amounting to direct or indirect expropriation, there is no provision in
Chapter 11 that enables the government to justify the measure based
on its paramount Charter obligation to protect the right to life and
security of the person.”
____________________________________
– Bruce Porter, NAPO, Charter Committee on Poverty Issues as reported by Marc Lee. Is
NAFTA’S CH 11 Constitutional ? Progressive Economic Forum
5. NAFTA Flaws Ch 11 & Environment
According to Professor David Boyd (2003),
foremost Canadian environmental law expert
and author of Unnatural Law: Rethinking
Canadian Environmental Law and Policy, the
most detrimental part of NAFTA threatening
Canadian environmental law is Chapter 11.
Boyd also argues that Chapter 11 offers
protection from domestic environmental
legislation and regulation while providing an
unprecedented method for resolving disputes
… a process that runs counter to
international law where governments
historically were given access to dispute
resolution mechanisms.
5. NAFTA Flaws (c) Ch11 Net Effect
The net effect is that the whole process
produces a mutual ratcheting downward
of environmental , labor, or health
standards in all countries . It’s a kind of
‘cross –deregulation’ a way that
corporations can get their own
governments to destroy laws in other
countries just as they pressure for
deregulation domestically.
______________________________________
Debi Barker and Jerry Mander p. 36 Mander and
Cavanaugh [Eds] . Alternatives to Economic
Globalization. 2005.
5. NAFTA Flaws Ch11 Renegotiate
A determined government could challenge NAFTA constraints in
order to regain some policy space. At the top of the list should be
getting rid of Chapter 11 — which acts as an impediment to
regulation in the public interest and makes privatization
potentially a one-way street …. But, changes to trade
arrangements must be part and parcel of a broader alternative
economic strategy
______________________________________A
Presentation to the CCPA 25th Anniversary Conference “Living with Uncle: CanadaUS Relations in a Time of Empire” May 27, 2005 Canadian Workers, the Canadian
Corporate Elite and the American Empire: Contradictions of Deep Integration and a
Note on Alternatives by Andrew Jackson,, CLC
http://canadianlabour.ca/updir/Canadian_Workers_and_the_American_Empire-1.pdf
5. NAFTA Flaws (d) Ch 6 Energy
Gordon Laxer, of Parkland
Institute on Right
5. NAFTA Flaws (d) Ch 6 Energy
Gordon Laxer Parkland Institute
suggests options for getting out of
the energy clause of NAFTA
1. Reforms to NAFTA
2. Negotiate a ‘Mexican’ type
exemption from the proportionality
clause
3. Withdraw from NAFTA altogether
4. Develop a new Canada First Energy
Policy
5. NAFTA Flaws (d) Ch 6 Energy
Gordon Laxer, director of the Parkland
Institute, University of Alberta says
that under NAFTA rules, Canada
cannot reduce its energy exports to
the United States. The U.S. is the
most energy wasteful nation on Earth.
and Canada is sacrificing its
environment to feed America’s
addiction to oil. ”
________________________________________________
http://aquadoc.typepad.com/waterwired/2007/10/canada-losingw.html
Gordon Laxer on right
5. NAFTA Flaws (d) Ch 6 Energy
“The Canada-US FTA and NAFTA
dramatically affected citizens’ democratic
control over non-renewable and declining
petroleum resources, along with other kinds
of energy. These trade regimes, tied to the
lack of an energy plan or an industrial
strategy, have caused: a) dramatic price
increases, b) dwindling reserves, and c)
loss of investment in value added
processing in Canada.
In the context of shrinking reserves and
growing extraction, security of Canada’s
future energy supply is critical. And yet our
provincial and federal governments, have
not created an energy security strategy.”
__________________________________
Diana Gibson and David Thompson. Chapter 5 Canada’s
Oil and Gas- Security , Sustainability and Prosperity in
Life. Living with Uncle. Canada-US Relations in an Age
of Empire. CCPA and James Lorimer Co. Ltd 2005
Diana Gibson,
Parkland Institute
5. NAFTA Flaws (d) Ch 6 Energy
According to Gibson, since the
implementation of the proportional
sharing clause in NAFTA – which
ensures that Canada can never reduce
the proportion of energy that we export
to the U.S., even in times of domestic
crisis – Canada has become a
“resource hinterland for the U.S.”
Gibson sees this as a form of
“colonization by stealth,” pointing to
the fact that Canada has lost its 25-year
supply of oil and gas, and foreign
ownership has skyrocketed in Alberta’s
oil patch. “Canada is now exporting
more than half of our oil and gas,
which we weren’t doing prior to NAFTA
and the FTA,” she said.
_________________________
Integrate This Teach-In Ottawa March 2007.
http://www.canadians.org/integratethis/report/partIII-2.html
Diana Gibson,
Parkland Institute
5. NAFTA Flaws (d) Ch 6 Energy
What’s worse, according to Gibson, is that
production has increased dramatically in recent
years and is set to go even higher, since the Bush
administration expressed a desire for a “fivefold
expansion” in the tar sands – a predicted increase
from 1 million barrels of oil per day to over 5 million.
And Canada has the lowest taxes in the world on oil
at only 23 cents per barrel.
“I think we need to look to Northern European
countries like Norway … which has solid majority
public ownership of their energy. They save all of
their energy revenues to invest in their future. They
have strong policies around foreign access. And
they get 96 per cent royalties off of their energy and
the industry is still lined up at the door to get in
there. There hasn’t been some sort of capital strike
against Norway … Canada is completely out of step
with the rest of the world in energy sovereignty.”
_______________________
Integrate This Teach-In Ottawa March 2007.
http://www.canadians.org/integratethis/report/partIII-2.html
Diana Gibson,
Parkland Institute
Calls to Renegotiate NAFTA –
Canadian re Ch 6 Energy Clause
We recommend that Canada demand a
Mexican-style exemption on
proportionality. The timing to get this
turned favourable after Barrack Obama
pledged in February to renegotiate
NAFTA. ….. Getting out of proportionality
must be Canada’s number one goal in
such talks. And we must be willing, as
Obama himself pledged, to “use the
hammer of a potential opt-out (of NAFTA)
as leverage to ensure we actually get ... ”
what we demand. Making sure all
Canadians get through the long, cold
winters overrides other considerations.
As the Americans said after 9/11, “security
trumps trade.” – Laxer & Dillon, 2008. Over A
Barrel: Exiting from NAFTA’s Proportionality Clause
_________________________________________________
http://www.ualberta.ca/PARKLAND/research/studies/OverA
Barrel.pdf
Over a Barrel: Exiting from
NAFTA’s Proportionality Clause
By Gordon Laxer and John Dillon
Parkland Institute / CCPA • May 2008
5. NAFTA Flaws (e) Water not
carved out of NAFTA
“ During the Free Trade negotiations in the 1980s we failed to
include an exemption for freshwater. When NAFTA was
negotiated in the early 1990s, we again passed up the
opportunity to include an exemption for freshwater, even though
there were exemptions for raw logs and unprocessed fish. Not
only did we not get an exemption for freshwater, but according
to leading legal experts like David Boyd, several of the NAFTA
provisions actual limit our ability to control future exports and to
protect our aquatic ecosystems.” -- Ralph Pentland, Canadian water
policy expert
_____________________________________________
Canadian Water Sovereignty - Ralph Pentland Speaking Notes GPC Montebello SPP
Counter Summit, Ottawa, Aug 20,2007
http://www.greenparty.ca/en/policy/documents/deeper_look_spp/ralph_pentland
5. NAFTA Flaws (e) Water not
carved out of NAFTA
# Trade agreements could open the floodgates. The North
American Free Trade Agreement (NAFTA) defines
water as a “service” and an “investment,” leaving
Canadian water vulnerable to thirsty foreign investors.
Once Canada allows water to be diverted outside our
borders for large scale industrial purposes, foreign
investors must be given the same “national treatment”
as Canadian companies.
# Canada has no ban on bulk water exports. There is a
voluntary provincial ban on bulk exports, but any
province could break it any time, and it would not
withstand a NAFTA challenge. In recent years, British
Columbia, Ontario, Quebec and Newfoundland have all
considered licensing schemes for bulk water exports.
__________________________________________________
Canada’s water under pressure: Five reasons to oppose bulk water exports
http://www.canadians.org/water/issues/policy/exports_factsheet.html
5. NAFTA Flaws (f) dispute resolution
According to Bruce Campbell of the CCPA
Chapter 19 has not provided the security
of market access anticipated. The panel
review process is deeply flawed. US trade
laws continue to apply to Canadian
exports, and US can amend its laws
without Canadian consent. Ch 19 process
is lengthier , costlier, and less likely to
bring satisfactory compensation
_____________________________________
Bruce Cambell. 2005. Introduction. Living with Uncle.
Canada-US Relations in an Age of Empire. CCPA 2005
5. NAFTA Flaws (f) dispute resolution
While most trade is conducted smoothly, several disputes remain
contentious. Disputes concerning a) softwood lumber, b) wheat and
the c) disposition of antidumping duties (the Byrd Amendment) have
been addressed by dispute settlement bodies at the WTO and NAFTA.
In addition, U.S. regulatory proceedings restricted the importation of
d) Canadian beef (now lifted), and e) United States has placed Canada
on its Special 301 watch list over intellectual property rights
enforcement.
_____________________________________________
CRS Report for Congress. October 13, 2006 by Ian F Ferguson. US-Canada Trade & Economic
Relationship: Prospects & Challenges
3. NAFTA – g) Flaws Polarization
Stephanie Golob of Baruch College, New York,
confirms that one of the problems with NAFTA is that
the agreement dealt solely with business interests, but
did not promote a socially integrated system between
the three countries that would spread the benefits to
everyone.
Canadian political scientist, Laura MacDonald of
Carleton University notes ‘the fact that the NAFTA era
has been accompanied by ongoing polarization
between rich and poor in the United States and Mexico
(and, to a lesser extent in Canada) means that North
American integration lacks a significant political
constituency beyond the ranks of the rich.’
_________________________________________
John Foster . 2008. Beyond NAFTA: The Security and Prosperity Partnership
of North America
http://www.canadians.org/DI/documents/NAFTA_SPP_Foster.pdf
Berthiaume, L. ‘There’s Nothing Quick or Easy About NAFTA’.
www.embassymag.ca. Ottawa, ON, 13 June 2007.
Stephanie Golob of
Baruch College, NYk
Laura MacDonald,
Carleton University
6. NAFTA – Failed promises
Outline slides 86- 136
6. FAILURES in NORTH AMERICA – in general
 Environment – NAFTA trumps environment & Envir. Sidebar

Labour NAFTA trumps Labour FA Labour Sidebar
6 a) FAILURES in CANADA
6 b) FAILURES in U.S.
6 c) FAILURES in MEXICO
6. NAFTA – a) Failed promises in general
“The evidence makes it clear that under free
trade, the losers are the Canadians, Mexicans
and Americans who are struggling to contend
with low wages and insecure working
conditions – if they are lucky enough to find a
job. NAFTA has made corporate investors very
rich, so it’s no surprise that they are the ones
pushing for deeper integration with the U.S. and
Mexico through the Security and Prosperity
Partnership. They are the … clear winners
under the NAFTA model, so they want to make
free trade irreversible and broaden its scope.
In 1994, Canadians took a leap of faith based on
false promises. In 2007, we know better. “
____________________________________
Free Trade’s Big Lie: NAFTA has failed to create quality jobs
or close the income gap by Jean-Yves LeFort
http://www.canadians.org/publications/CP/2007/spring/trade.h
tml
6. NAFTA – a) Failed promises in general
“Indeed NA trade liberalization probably
constitutes one of the most ‘simulated’ policy
initiatives in economic history. The consecutive
continental trade talks have spawned a cottage
industry of quantitative economic models, each
exploring various routes and trans- mission
mechanisms by which free trade should work its
economic magic. ‘
“Economist’s quantitative models seemed to
put hard numbers on the predicted benefits that
economists have traditionally expected to result
from freer trade. Fifteen years later, however,
there remains lingering disappointment (in all
three countries) regarding the real-world record
of continental free trade in delivering those
promised gains.”
____________________________________
Jim Stanford quoted in Ch 1. Living with Uncle. Canada-US
Relations in an Age of Empire. 2005
Jim Stanford , Economist
CAW, writer for Globe & Mail
6. NAFTA – a) Failed Promises in general
Bruce Campbell, Executive Director of the CCPA says:
1. FTA/NAFTA has Failed - Anticipated benefits have not been fulfilled:
a) not the expected productivity gains, b) not the preferred access gains
c) not the investment gains d) not the income gains.
2. NAFTA is institutionally dysfunctional –with an inactive commission
and a miniscule secretariat .
3. NAFTA has been superseded in many areas by the WTO agreements, in
areas such as IP, standards setting, agriculture, service rules.
Differences between the two agreements in these areas are now minor.
________________________________________________
Bruce Campbell. Chapter 1 the North American Deep Integration Agenda in Living With Uncle.
Toronto: James Lorimer & Co.Ltd 2005
6. NAFTA – a) Failed Promises in general
The impact of nearly 10 years of NAFTA (and 15 years of the bilateral
FTA) has been clearly negative when measured against the only
standard that counts ultimately when evaluating public policy: has it
bettered the lives of those affected by it? Not only has NAFTA failed
to deliver the goods it promised to the Canadian people, but it has
also significantly eroded Canada’s sovereignty— the capacity of
government to carry out its democratic mandate. -- Bruce Campbell,
CCPA says:
________________________________________________
Bruce Campbell. From deep integration to reclaiming sovereignty Managing Canada-U.S.
economic relations under NAFTA CCPA 2003
https://www.policyalternatives.ca/documents/National_Office_Pubs/deepintegration.pdf
6. NAFTA a) Failed promises in general
Lessons from NAFTA: Building a
New Fair Trade Agenda Oct 22
2007 - Oct 23 2007
Minneapolis, Minnesota
Fourteen years after its ratification, the
North American Free Trade Agreement
(NAFTA) has radically changed life for
people in Canada, Mexico and the United
States. It has a) caused negative impacts
for family farmers and consumers, b)
reversed important environmental and
labor protections, and c) played a key
role in increased immigration to the U.S.
____________________________
http://open.iatp.org/phplist/iatpnews.php?id=1694
Lessons from NAFTA: Building a
New Fair Trade Agenda
6. NAFTA Failures Environment
NAFTA Ch 11 & Environment
According to Professor David Boyd (2003),
foremost Canadian environmental law expert
and author of Unnatural Law: Rethinking
Canadian Environmental Law and Policy, the
most detrimental part of NAFTA threatening
Canadian environmental law is Chapter 11.
Boyd also argues that Chapter 11 offers
protection from domestic environmental
legislation and regulation while providing an
unprecedented method for resolving disputes
… a process [that] runs counter to
international law where governments
historically were given access to dispute
resolution mechanisms.
______________________________________________________________________
David R. Boyd . Unnatural Law: Rethinking Canada’s
Environmental Law and Policy . UBC Press, 2003.
6. NAFTA Failures Environment
A Commission on Environmental Cooperation (CEC) study
assessing environmental effects of free trade stated:
• Indicators such as GHG emissions, loss of biodiversity,
and loss of primary forests and habitats did not display the
kind of turning point that was found for NO2 and SO2
emissions. Instead there appeared to be a continuous rise
in GHG emissions or habitat degradation as GDP per capita
continues to rise.
• Also NAFTA has been shown to lead to marginal increases
in aggregate carbon monoxide air pollution
http://www.cec.org/files/PDF/ECO
NOMY/FreeTrade-en-fin.pdf
6. NAFTA Failures Environment
• The CEC’s work showed that environmental impacts
become more significant when disaggregated and
measured by economic sector, environmental medium or
geographic location.
• Also evidence shows a robust and direct tradeenvironment link in the transportation sector relating to a)
increased air pollution from freight transportation b) invasive
species from entry of alien invasive species from expansion
of transportation pathways particularly from marine
transportation .
http://www.cec.org/files/PDF/E
CONOMY/FreeTrade-en-fin.pdf
6. NAFTA Failures Environment
Evidence governments have hobbled
implementation of environmental sidebar
of NAFTA :
Stephen Clarkson refers to successes of
the CEC in supporting ecologist’s goals but
notes that this success prompted the three
member states to hobble the nominally
successful supranational and institutional
body. He also suggests that this failure of
reality to meet expectations was deepened
by the revelations of chapter 11’s true
potential to empower foreign corporations
and castrate democratic government
________________________
Sierra Club of Canada comments on the EIS of Whites Point Quarry & Marine Terminal Project
http://www.sierraclub.ca/atlantic/programs/economies/digbyquarry/CEAA_Submission.pdf
_
6. NAFTA Failures – Labour
The Wall Street Journal
reported that under the
agreement “not a single worker
was ever reinstated, not a
single employer was ever
sanctioned, and no union was
ever recognized.”
___________________________
Free Trade’s Big Lie: NAFTA has failed .. - supplement featuring for
Integrate This Forum March 31- April 1, 2007 Ottawa
http://www.canadians.org/integratethis/backgrounders/index.html
6. NAFTA Failures - Labour
The much-celebrated “NAFTA labour side
agreement”, an after-the-fact peace offering
that was supposed to appease the U.S. labour
movement, has proven too weak to enforce
labour rights in Mexico. 1
The labor side agreement to the North
American Free Trade Agreement (NAFTA) was
supposed to offer protection to workers.
Instead, the side agreement guaranteed only
that labor rights would be swept to the side, if
not trampled under foot.. 2
_______________________________
1. Free Trade’s Big Lie: NAFTA has failed .. - supplement featuring for Integrate This
Forum March 31- April 1, 2007 Ottawa
http://www.canadians.org/integratethis/backgrounders/index.html
2. http://www.ueinternational.org/WorldTrade/nafta.html
UE /Jobs with Justice staff
6. NAFTA – Failed promises
Outline slides 86- 136
6. FAILURES in NORTH AMERICA – in general
 Environment – NAFTA trumps environment & Envir. Sidebar

Labour NAFTA trumps Labour FA Labour Sidebar
6 a) FAILURES in CANADA*
6 b) FAILURES in U.S.
6 c) FAILURES in MEXICO
6. NAFTA b) Failures Canada
“When political and business leaders
sold Canadians on the merits of
NAFTA, they promised
1. trade would boom,
2. our economy would grow,
3. more jobs would be created and
4. our standard of living would skyrocket.
1
5. We’d move beyond natural resource economy
2
____________________________
Free Trade’s Big Lie: NAFTA has failed to create quality jobs or
close the income gap by Jean-Yves LeFort
http://www.canadians.org/publications/CP/2007/spring/trade.html
BBruce Campbell.. Chapter 1 the North American Deep Integration Agenda in
Living With Uncle. Toronto: James Lorimer & Co.Ltd 2005
6. NAFTA’s Failures Canada
Peter Julian speaking at the Integrate
This Forum, Ottawa, Mar 31-April 1, 2007
began the discussion by announcing
that NAFTA had failed. He said that the
notion that NAFTA has brought more
prosperity, employment and exports to
Canada is actually a myth.
“Since the signing in 1989 of the
Canada-U.S. Free Trade Agreement that
later morphed into NAFTA …what we
have seen is not unprecedented
prosperity for all Canadians, but
unprecedented prosperity for corporate
lawyers and CEOs.”
_________________________________
http://www.canadians.org/integratethis/report/partIII3.html
Peter Julian speaking at the
Integrate This Forum,
Ottawa, Mar 31-April 1, 2007
6. NAFTA’s Failures Canada
The road of the FTA/NAFTA era has been one of
• stagnant real wages;
• increased income insecurity for many working families;
• more stress at work; and
• declining union protection, esp in the most integrated and exposed
sectors, such as manufacturing.
• One of the most notable features of the past fifteen years has been a
sharp increase in earnings inequality, driven by a major shift of income
to the top 1 %. The share of the top 1% of tax-filers earning at least
$170,000 per year jumped from 9% to 14% of total income over the
1990s. Labour’s share of national income is today at its lowest level in
the post-war era, while corporate profits are at a record high. In short ,
any gains from deepening integration with the US have gone massively
to capital and the elites and have not been shared with working people.
_________________________________________
Andrew Jackson. Chapter 9 Canadian Workers and Contradictions of Deep integration.
Living with Uncle. CCPA and Lorimer Co. Ltd. 2005
6. NAFTA’s Failures Canada – Fair Wages
Promise: the income benefits of NAFTA would be
widely shared among Canadians.
….average wages have stagnated while profit
income as a share of the income pie has
increased to record levels. .. after decades of
declining inequality, the bottom 20 per cent of
Canadian families saw their incomes fall by 7.6
per cent in the NAFTA era, while the top 20 per
cent saw their incomes rise by 16.8 per cent.
______________________________________
Bruce Campbell.. Chapter 1 the North American Deep
Integration Agenda in Living With Uncle. CCPA and James
Lorimer & Co. Ltd 2005
6. NAFTA’s Failures Canada – Fair Wages
Promise: the income benefits of NAFTA would be widely
shared among Canadians
In Canada, the middle class has taken the biggest hit. Wage
growth has been almost flat since 1989 – it grew at a paltry rate
of 0.63 per cent per year. NAFTA defenders point to the creation
of “millions” of new jobs since the agreement was implemented,
but a 2004 study by the Canadian Centre for Policy Alternatives
(CCPA) questions the quality and stability of those jobs.
According to the CCPA, 560,000 jobs were created in 2002, but
40 per cent were part-time and 17 per cent represented selfemployed persons.
The CCPA’s study reinforces an argument that the labour
movement has been making for years: free trade eliminates
unionized, steady, well-paid jobs and replaces them with
temporary, non-unionized and largely part-time “McJobs.” 1
_________________________________________________
1. Free Trade’s Big Lie: NAFTA has failed to create quality jobs or close the income
gap by Jean-Yves LeFort
http://www.canadians.org/publications/CP/2007/spring/trade.html
6. NAFTA’s Failures Canada – Fair Wages
Speaking at the Integrate This Forum,
Ottawa, April 2007, Peter Julian pointed
out that since 1989, the poorest of
Canadian families have lost over one
month of income per year, their income
having declined by an average of 9 per
cent. … working class and middle
income Canadians lost the equivalent
of about two weeks of income in the
same period. Meanwhile, the wealthiest
of Canadians have seen their real
income skyrocket by nearly 20 per
cent, representing a “complete rejigging of our economic system.”
____________________________
http://www.canadians.org/integratethis/report/partII
I-3.html
Peter Julian speaking at the
Integrate This Forum, Ottawa,
Mar 31-April 1, 2007
6. NAFTA’s Failures Canada - Exports
Promise: Increased Canadian Exports
A September 2006 study by the Economic Policy Institute (EPI) found
that Canadian exports to the U.S. peaked in 2000 and started falling in
2001 and 2002. They have since risen again, but only because of a
commodities boom particularly related to the minerals, forestry and
energy industries.
In other words, if it weren’t for natural resources, especially oil, our
exports to the U.S. would be falling steadily. Furthermore, a federal
Industry Department study quoted by EPI reveals that 90 per cent of
the export surge in the 1990s was a result of the low Canadian dollar.
_________________________________________________
Free Trade’s Big Lie: NAFTA has failed to create quality jobs or close the income gap by Jean-Yves LeFort
http://www.canadians.org/publications/CP/2007/spring/trade.html
6. NAFTA’s Failures Canada - Imports
Promise: Increased imports:
NAFTA was supposed to give us privileged
access to the US market, but our share of US
imports has not increased. And in many
sectors has fallen.. 1
__________________________________________
1 Bruce Campbell. Chapter 1 the North American Deep Integration
Agenda in Living With Uncle. CCPA and: James Lorimer & Co.Ltd
2005.
6. NAFTA’s Failures Canada - Productivity
Promise: NAFTA-led integration would
increase productivity and close the
productivity gap with the US .
NAFTA gains were predicted by
computer models. NAFTA has not
closed the productivity gap - the gap
has in fact widened. !!
_______________________________________________
Living With Uncle. Canada – US Relations in an Age of Empire. Ch 1
CCPA and James Lorimer Co Ltd. 2005.
6. NAFTA’s Failures Canada -Productivity
REPHRASE !!
Posted by Jim Stanford under productivity.July 21st, 2008
StatsCan released a new analytical study today on the
decline of Canadian labour productivity relative to the
U.S., up to 2003.
http://www.statcan.ca/Daily/English/080721/d080721a.htm
Main findings are not surprising: Canadian business sector
productivity has slipped relative to U.S. productivity (to
87% by 2003). (We know it’s fallen significantly further
than that since — Canadian labour productivity has
hardly grown at all since 2003, and by nothing since 2006,
while U.S. productivity is growing at something close to
2% per year). The StatsCan numbers are less dramatic
than information published by Andrw Sharpe’s Centre for
the Study of Living Standards, according to whom
Canadian productivity in the business sector had fallen to
74% of U.S. levels by 2006.
6. NAFTA’s Failures Canada- Poverty
Promise: Diminish Poverty
2006 Report Card on Child and Family Poverty in Canada. Despite
strong economic growth and job creation, there is a steady increase in
the proportion of children living in families who are working full time full
year but unable to lift themselves out of poverty.
__________________________________________
http://www.campaign2000.ca/rc/rc06/06_C2000NationalReportCard.pdf
6. NAFTA’s Failures Canada- Poverty
POVERTY : 2006 Report Card on Child and Family Poverty in Canada
Many low income families have some employment income, yet are not
working full time. Low wages, poor working conditions, and the challenge
of finding full time work with benefits are key factors behind the struggle for
families who are working yet in poverty. One in every four jobs in Canada
pays less than $10/hour, and two in every five jobs
are precarious - part-time, temporary, contract or self-employed
__________________________________________
http://www.campaign2000.ca/rc/rc06/06_C2000NationalReportCard.pdf
6. NAFTA’s Failure Canada - still a
Natural Resource Based Economy
Promise – Beyond Natural Resource Economy: NAFTA
was supposed to help us escape the resource export
trap that has been our history – hewers of wood and
drawers of water- and move us toward a more
diversified high valued-added economy. If anything,
we are now even more dependent on resource –
based exports. Our key capital goods sectors
(manufacturing , equipment, electrical, and electronic
goods) remain very weak, account for most of the
productivity lag, and have persistent trade deficits.
And we’ve given up policy tools that could help
overcome this weakness. We are more than ever a
“hewer of wood and drawer of water” in the
international division of labour— albeit (so far) a
wealthy one.
_____________________________________________B
Bruce Campbell.. Chapter 1 the North American Deep Integration
Agenda in Living With Uncle. Toronto: James Lorimer & Co.Ltd 2005
Bruce Campbell, Ex.
Dir. CCPA
6. NAFTA’s Failure Canada- still a
Natural Resource Based Economy
Promise – Beyond Natural Resource Economy:
Jim Stanford , Economist Canadian
Autoworkers Union, and writer for the Globe &
Mail stated: …”When we signed and
implemented the FTA in 1989 – we traded them
secure access to our energy with a deal that
had never been seen in the world before ‘ a
proportional sharing agreement’ This is a
fundamental structural shift in Free Trade. We
were to specialize as an energy warehouse for
the continental economy. So for the first time in
a generation more than half of our total
merchandize exports once again consisted of
raw materials and natural resources - so
historically we’ve gone back in time and once
again we are a hewer of wood, a drawer of
water and a pumper of oil.”
_________________________________
Hoodwinked: Myth of Free Trade Transcript of Video
Jim Stanford , Economist
CAW, writer for globe & Mail
6. NAFTA’s Failures in the U.S.
Remarkably, many of NAFTA’s most passionate boosters in
Congress and among economists never read the agreement. They
made their pie-in-the-sky promises of NAFTA benefits based on
trade theory and ideological prejudice for anything with the term
“free trade” attached to it.
Now, over a decade later, the time for conjecture and promises is
over: the data are in and they clearly show the damage NAFTA has
wrought for millions of people in the U.S., Mexico and Canada.
___________________________________________________
Global Trade Watch NAFTA http://www.citizen.org/trade/nafta/
6. NAFTA’s Failures in the U.S.
In the United States,
there is a growing
awareness that NAFTA
has contributed to the
destruction of one in four
U.S. manufacturing jobs
and prompted a decline in
real wages.
___________________
http://www.rabble.ca/news_full_story.s
html?x=68794
Then Senators Clinton & Obama
Photo Credit
http://www.stltoday.com/stltoday/news/stori
es.nsf/politics/story/427CA875FE6EBC18862
57445000E3DE2?OpenDocument
6. NAFTA’s Failures in the U.S.
Since the North American Free Trade Agreement (NAFTA) was signed in
1993, the rise in the U.S. trade deficit with Canada and Mexico through
2002 has caused the displacement of production that supported 879,280
U.S. jobs. Most of those lost jobs were high-wage positions in
manufacturing industries. The loss of these jobs is just the most visible tip
of NAFTA’s impact on the U.S. economy. In fact, NAFTA has also
contributed to rising income inequality, suppressed real wages for
production workers, weakened workers’ collective bargaining powers and
ability to organize unions, and reduced fringe benefits.
__________________________________
Brief ing Paper the Economic Policy Institute http://epinet.org
THE HIGH PRICE OF ‘FREE’ TRADE NAFTA’s failure has cost the United States jobs across the
nation http://www.epi.org/briefingpapers/147/epi_bp147.pdf
6. NAFTA’s Failures in the U.S.
Promoters of the proposed Dominican Republic/Central American
Free Trade Agreement (CAFTA) have asserted that it will provide
significant benefits to the agricultural sector. Similar promises
were made by U.S. trade and agricultural officials in the debate
over the North American Free Trade Agreement in 1992 and 1993.
Unfortunately, the results never lived up to the promises.
If there is a lesson to be learned from NAFTA's failures, it is that
today's claims of great CAFTA benefits should be taken with a
grain of salt.
http://www.epi.org/content.cfm/webfeatures_snapshots_20050608
6. NAFTA’s Failures in the U.S.
Sarah Anderson and John Cavanaugh argue
that to calm American’s job related fears,
proponents of NAFTA relied on the claim that
NAFTA would be a big net job creator
because it would result in large US trade
surpluses. Yet just the opposite occurred.
Even though US exports to Canada and
Mexico increased somewhat , the combined
US trade deficit with Mexico and Canada has
increased about tenfold since NAFTA went
into effect.
They note that millions of US manufacturing
jobs have been lost during the past decade
due to trade deficits within NAFTA and with
China since it became a member of the WTO.
_____________________________
Sarah Anderson & John Cavanagh p 46 Alternatives to
Economic Globalization [Eds Mander & Cavanagh] 2003
6. NAFTA’s Failures in the U.S.
The second false claim made by supporters
of the current approach to globalization is
that US workers who lose jobs in
manufacturing have little to fear because of
low overall unemployment rates and new
better opportunities in the service sector.
However, according to the Dept. of Labour
one third of workers who were displaced
during 1999-2001 had not found jobs by
2002 and of those who were reemployed ,
more than half had to take a pay cut.
Virtually all new jobs created during the
1990s were service sector jobs which on
average pay 20% less than manufacturing
jobs.
_____________________________
Sarah Anderson & John Cavanagh p 46 Alternatives to
Economic Globalization [Eds Mander & Cavanagh] 2003
6. NAFTA’s Failures in the U.S.
“In the US , the long –run weakness
of manufacturing and the
persistence of large trade deficits
(including large and sustained
bilateral deficits with both of its
NAFTA patterns) have sparked
popular concern about the impacts
of globalization generally, and
NAFTA in particular on US jobs and
incomes.”
___________________________________
Living with Uncle – Ch 1 after Jim S
6. NAFTA’s Failures in Mexico
6. NAFTA’s Failures in Mexico
The FDI-dependent, export-oriented manufacturing model of development
in Mexico is vulnerable to financial instability and loss of competitiveness.
• The integration strategy has generated a form of development in which
the domestic economy is largely cut off from growth in the export sector.
• Environmental performance has worsened …
• The strategy performed very poorly in terms of job growth and
exacerbated, rather than reduced, wage inequality.
_______________________________________________
Fletcher School of Law and Diplomacy at Tufts University. Global Development and Environment
Institute. Sustainable Industrial Development? The Performance of Mexico’s FDI-led Integration
Strategy by Kevin P. Gallagher and Lyuba Zarsky February, 2004.www.ase.tufts.edu/gdae
6. NAFTA’s Failures in Mexico
…the overwhelming majority of
Mexicans are no more productive in a
domestic market income sense than
their counterparts of 15 years ago,
although some segments of the
population have benefited. Exporters
(but not necessarily workers in export
industries) have gotten rich.
Intellectually, this is a great puzzle for
US economists.
Prof. Brad DeLong "Afta Thoughts on
NAFTA” October 16, 2006
http://www.clas.berkeley.edu:7001/Event
s/fall2006/10-16-06-delong/index.html
6. NAFTA’s Failures in Mexico
…. success at what neoliberal
policymakers like me thought would
be the key links for Mexican
development has had disappointing
results. Success at creating a stable,
property-respecting domestic
environment has not delivered the
rapid increases in productivity and
working-class wages that neo-liberals
like me would have confidently
predicted when NAFTA was ratified.
Prof. Brad DeLong "Afta Thoughts on
NAFTA” October 16, 2006
http://www.clas.berkeley.edu:7001/Events/f
all2006/10-16-06-delong/index.html
6. NAFTA’s Failures in México
Mexico's weak economic growth
can't absorb the one million young
people who enter the workforce
every year, so the flow of
undocumented workers to the
United States has ballooned from
an estimated 200,000 a year in 1994
to more than 300,000 a year today,
according to Mexico's National
Institute of Statistics.
______________________________
Ten years after NAFTA, both sides are still divided . 2003
Miami Herald
http://www.geocities.com/ericsquire/articles/ftaa/mh031110d
.htm
6. NAFTA’s Failures Mexico - Wages
According to Public Citizen's Global Trade Watch, a national
consumer group, industrial wages in Mexico in 2004 had declined
by 25 percent and undocumented migration from the country has
doubled since NAFTA's ratification.
______________________________________
Latino group blasts US trade accord. Boston Globe July 2004
http://www.citizen.org/documents/LULACGlobe.pdf
http://www.citizen.org/trade/
6. NAFTA’s Failures in Mexico-Wages
“Despite a flood of
investment in the
manufacturing sector
along the Mexican
border with the U.S., the
real value of the
minimum wage has
dropped in Mexico by 18
per cent.”
___________________
Free Trade’s Big Lie: NAFTA has failed to create quality jobs or
close the income gap. Can. Perspectives Supplement Spring 07
http://www.canadians.org/publications/CP/2007/spring/trade.html
6. NAFTA’s Failures in Mexico - Jobs
A 2003 study by the Carnegie
Endowment for International
Peace points out that while
the manufacturing sector in
Mexico created 500,000 jobs
between 1994 and 2000, the
agricultural sector, where
one-fifth of Mexicans still
work, has lost 1.3 million jobs
since 1994.”
_______________________
Integrate This. 2006. The Big Lie
Free Trade’s Big Lie: NAFTA has failed to create quality jobs or
close the income gap. Can. Perspectives Supplement Spring 07
http://www.canadians.org/publications/CP/2007/spring/trade.html
6. NAFTA’s Failures in Mexico - Jobs
Sweatshops have been playing a critical role to the expanding wealth
of multinational corporations that have benefited from free trade
agreements like NAFTA and CAFTA to employ hundreds of thousands
of women, men and children in poor countries to produce a range of
cheap products for consumers in wealthier nations.
Maquiladoras alias “sweatshops” or factories have a reputation for
exploiting workers with extremely low pay, toxicity in the workplace,
systematic abuse like sexual harassment and mandatory pregnancy
testing and/or arbitrary methods of disciplining workers.
_________________________
http://www.womenontheborder.org/
Mexico
6. NAFTA’s Failures in Mexico - Poverty
The idea that free trade would make
Mexico rich was the biggest fallacy of all.
Under NAFTA, the number of Mexicans
living in poverty has actually increased.
According to a May 2001 World Bank
study, Mexicans living in poverty
represent 58.4 per cent of the population.
That’s almost 8 per cent higher than in
1994..
_________________________________
Free Trade’s Big Lie: NAFTA has failed to create quality
jobs or close the income gap by Jean-Yves LeFort
http://www.canadians.org/publications/CP/2007/spring/t
rade.html
Mexico
Maquiladora worker, shanty
town, low wages
6. NAFTA’s Failures in Mexico - Ag
For decades, the National
Company of Popular
Subsistence (CONASUPO)
played a fundamental role in
regulating the country's markets
by storing, importing, and
distributing the grain. With
NAFTA, however, this came to
an end.
_____________________________
A peasant woman carrying cobs takes part in a
protest earlier this year (2007) in Mexico City
against an increase in the price of corn. (Photo:
Luis Acosta / AFP-Getty Images)
Mexico: The New Tortilla War.
Luis Hernández NavarroInternational Relations
Center (I.R.C.) Americans Program. June 3, 2007
http://www.worldpress.org/Americas/2812.cfm
6. NAFTA’s Failures in Mexico - Ag
The long-term reasons for corn and tortilla price run-ups have roots in neoliberal economic policies, including a) the dismantling of the farm and food
security system embodied in CONASUPO, b) the industrialization of tortilla
manufacture and the c) consequent concentration of market control and d) and
in NAFTA trade policies.
Conasupo played a central role in food security in Mexico for decades. This
government agency provided credit and technical assistance for small farmers,
distributed corn to some remote and needy rural communities and provided
food subsidies for 1.2 million urban low-income families. .. Beginning in the
1980s, the Mexican government dismantled Conasupo, as part of the neoliberal economic commitment to minimize government intervention in the
marketplace. By 1998, Conasupo's .. role in maintaining a national food reserve
ended; food subsidies ended and price controls on tortillas were gradually
lifted, ending in 1999. Tortilla prices rose more than 150% from 1997-2002, and
have continued to increase.
______________________________________
Tortilla Crisis Rooted in Corporate Globalization. August 12, 2007
http://www.americas.org/item_31031
6. NAFTA’s Failures in Mexico - Ag
According to the IATP a closer look at agriculture helps us understand just what
is so problematic with the NAFTA model.
“To prepare for NAFTA, the Mexican government dismantled its domestic support
for agriculture, including land allocation laws, the grain reserve, programs for
rural sector development, and tariffs on basic foods such as certain varieties of
corn, beans, and dairy products. Decreased spending on agriculture in Mexico
and tariff cuts combined with U.S. exports being dumped at below the cost of
production … has been devastating for small farmers and contributed to
unemployment and migration from the countryside. Over two million people have
been forced off their land in Mexico since NAFTA, many migrating to urban
centers within Mexico and the United States.”
_____________________________________
NAFTA Takes the Political Spotlight: It’s about time
http://www.iatp.org/iatp/commentaries.cfm?refID=102007
6. NAFTA’s Failures in Mexico - Ag
Impacts of NAFTA on Agriculture:1
A. Inequalities are being heightened - legal, economic, technological, productive,
social and environmental
B. Food and nutritional security and sovereignty are being further
threatened by increased import-dependency
C. Producers are being cut out of the marketplace and displaced
from their lands as new economic actors move in
D. Migration, rural depopulation , human rights abuses
E. Farm support budgets and market access decisions are leading
to the concentration of national and transnational rural capital.
F. Agricultural markets are being distorted as the disappearance of tariffs under
NAFTA allows for predatory trade practices.
G. Biodiversity is being adversely affected as the transnational corporations misuse
the genetic engineering knowledge
H. The traditional knowledge base is being usurped by private sector patenting under
intellectual property provisions.
________________________________________
1. Statement from the Mexican Forum on Evaluation and Proposals for the Renegotiation of the Agricultural
Chapter of the North American Free Trade Agreement (NAFTA)**
http://www.commonfrontiers.ca/Single_Page_Docs/Current_Activity_Updates/Aug06_06_Mexican_Forum.html
6. NAFTA’s Failures in Mexico - Ag
Farmers' organizations insist that the consequences of
the agreement are beyond dispute.
• two million agricultural jobs lost,
• two million hectares left uncultivated, and
• eight million Mexican farm workers forced to
emigrate to the US
---- Victor Suárez, president of the National
Association of Rural Producers.
________________________________________________________
NAFTA Will Change A Country's Landscape by Anne Vigna .: Le Monde diplomatique
April 9, 2008. http://www.zcommunications.org/znet/viewArticle/17108
6. NAFTA’s Failures in Mexico - Ag
Mexican Agriculture after 14 Years of NAFTA
Importing food, exporting farmers ...
• Every hour, Mexico receives $1.5 million worth of food imports
• In that same one-hour period, 30 farmers leave Mexico for the US
• 40% of Mexicans' food is imported
• Over 1.5 million rural jobs were lost in 12 years
______________________________________
Laura Carlsen, NAFTA Free Trade Myths Lead to Farm Failure in Mexico, Americas Program
Policy Report, Washington DC, December 2007. http://americas.irc-online.org/am/4794
6. NAFTA’s Failures in Mexico - Ag
A dying countryside...
• Agriculture's share of GDP dropped from 10% to 3.4% between 1981
and 2006
• Rural population dropped from 40% to 30% in that period
• 388 municipalities have become ghost towns due to out-migration
• Genetically modified corn has contaminated native strains
• Corn production for ethanol threatens to reduce corn for human
consumption and raise consumer prices for Mexico's main staple food
• Arable land is increasingly dedicated to illegal drug production
• Erosion renders useless thousands of acres of productive land a year
______________________________________
Laura Carlsen, NAFTA Free Trade Myths Lead to Farm Failure in Mexico, Americasrogram Policy
Report, Washington DC, December 2007. http://americas.irc-online.org/am/4794
NAFTA at 13 – Oversold, Flawed & Failing
Lessons from NAFTA
NAFTA and free trade agreements in general do not
hold out much hope for a just and sustainable world.
NAFTA was based on a number of flawed ‘free market’
assumptions. The evidence continues to grow from
think tanks, academics, centres, Institutes, political
economic analyses that NAFTA, like the free market
model in general, has not lived up to its promises.
In Canada, US and Mexico NAFTA resistance is rapidly
escalating and opposition parties, elected
representatives, citizens, NGO’s, think tanks and many
policy centres are calling for NAFTA to be re-negotiated
and replaced by fair trade agreements or at a minimum
to address offensive sections on water, energy, Ch 11,
tribunals, etc. 1 --- Janet M Eaton, PhD
________________________________________________
1. See Reference Slide 138 “NAFTA Resistance Growing Calls for
Renegotiation and Oversight Slide Show “ by Janet M Eaton
http://www.stopthehogs.com/pdf/nafta-resistance.pdf
Lessons from NAFTA: A
New Fair Trade Agenda
Related Power Point Presentations
Globalization, NAFTA & the Security and
Prosperity Partnership (SPP) of North
America: Backgrounder and Issues
Prepared by
Janet M Eaton, PhD
for an address at the
State House MA in
support of Bill H374,
the Globalization
Impact Bill
March 18, 2008
[email protected]
State House, Boston
http://www.newenglandalliance.org/sn_display1.php?row_ID=27
Related Power Point Presentations
NAFTA Growing Resistance & Calls
for Renegotiation & Oversight
A power point presentation
by
Janet M Eaton, PhD,
academic, researcher,
activist and free trade critic
New Fair Trade Agenda
NAFTA protests
June 6, 2008
Please forward for general
use in increasing
awareness & encouraging
political action !
US State Trade Oversight
http://www.stopthehogs.com/pdf/nafta-resistance.pdf
Dems Raise
NAFTA
Related Power Point Presentations
Threats to Our Water:
NAFTA, SPP, Super- Corridors, Atlantica
Threats
to
North American
Threats
to Our
Our Water:
Water:
Free Trade Agreement
NO WAY !
By Janet M Eaton, PhD
Created October 2006, Updated May 16, 2007
www.sierraclub.org/cac/water/
NAFTA at 13 – Oversold, Flawed & Failing
Public Lecture
Sponsored by ActCity
Ottawa, Oct 24, 2007
with recent updates
By Janet M Eaton, PhD,
Part-time Academic,
Researcher, Activist,
Globalization Critic
[email protected]
Lessons from NAFTA: Building
a New Fair Trade Agenda
Institute for Agriculture & Trade Policy
http://open.iatp.org/phplist/iatpnews.php?id=1694