NAFTA at 13 Oversold, Flawed & Failing

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 Lessons from NAFTA: Building a New Fair Trade Agenda Institute for Agriculture & Trade Policy

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 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 General Canada United States Mexico Reference to related power points Lessons from NAFTA: a New Fair Trade Agenda Institute for Agriculture & Trade Policy

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 12-page supplement featuring for Integrate This Forum March 31- April 1, 2007 Ottawa

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 Producers Linda West & Bill Dunn Jim Stanford , Economist CAW, writer for globe & Mail

So now we’ve got proposals for so-called 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 Producers Linda West & Bill Dunn Jim Stanford , Economist CAW, writer for globe & Mail

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 Ch

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

2. NAFTA Historical Context of Continental Integration
By 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 Producers Linda West & Bill Dunn

Military invasions/ Annexation/ Reciprocity/ Free Trade Military Invasions: 4 attempts War of 1812 Final attempt to take Canada by force ; Annexation s During 1840s their was a cry for annexation as American interests advanced westward. Manifest Destiny 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

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.” __________________________________

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, ( 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

Global corporate economic model: Free Trade Privatization De-regulation Smaller Government Global /Regional Trade Structures/Instruments GATT/ WTO - GATS World Bank IMF NAFTA Secretariat

“Until 1973, Friedman's radical doctrine (of neo-liberal 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, Atlantic Free Press. Milton Friedman, Chicago School of Economics

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, Atlantic Free Press. Milton Friedman, Chicago School of Economics

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) Alternatives to Economic Globalization: A better World is Possible. San Francisco, BK Publishers Inc.

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. _________________________________________________________

The main concerns with this model include: DEREGULATION. Reduction of government regulation of everything that could diminish profits, including protecting the environment and safety on the job. 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. 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.“ _________________________________________________________

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)

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 The End of Globalism. Harper’s

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.

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) Alternatives to Economic Globalization: A better World is Possible. San Francisco, BK Publishers Inc.

The failures of the neo-liberal project find their context in the underlying economic model which demands: Unlimited economic growth A never ending expanding supply of inexpensive resources Steady supply of cheap labour Compliant governments to collaborate John Cavanaugh & Jerry Mander ______________________________________ John Cavanaugh & Jerry Mander (Eds) Alternatives to Economic Globalization: A better World is Possible. San Francisco, BK Publishers Inc.

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) 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 pre- industrial, 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) 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: 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!

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. __________________________________________ Basics of the theory written by Hungarian Economist Béla Balassa in the 1960s. European Union most integrated economy today

3. NAFTA What is it ? 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. 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 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. 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 ____________________________________________________________ Government of Canada. Stages of Economic Integration: Continental Integration – North American Union

3. NAFTA What is it ? Continental Integration – North American Union
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

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 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 ___________________________________________________

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

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 Paradigm Shift or Paradigm Twist? The Impact of the Bush Doctrine on Canada. Banda.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

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

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

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

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, “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 most-favoured-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 (AP Photo/Charles Rex Arbogast)

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, (neo-liberal) economist and creator of one of the net’s most popular weblogs on economics, at ____________________________ Prof. Brad DeLong "Afta Thoughts on NAFTA” October 16,

Prof. Brad DeLong "Afta Thoughts on NAFTA” October 16, 2006
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.” _________________________ Prof. Brad DeLong "Afta Thoughts on NAFTA” October 16, 2006

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.

5. NAFTA’s Flawed Assumptions
Some of NAFTA’s Flaws: Not free trade Asymmetry in the relationship 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 Producers Linda West & Bill Dunn 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 trade- It wasn’t a free trade agreement !” -- Former PM John Turner in Hoodwinked ___________________________________ Hoodwinked: The Myth of Free Trade Producers Linda West & Bill Dunn Former Canadian Liberal Prime Minister John Turner

“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 Producers Linda West & Bill Dunn David Orchard, farmer, author, politician

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

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 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 Producers Linda West & Bill Dunn Former Canadian Liberal Prime Minister John Turner

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

“The US- Canada relationship revolves around the themes of integration and asymmetry: integration from successive trade liberalization from US-Canada auto pact in 1965 to NAFTA and 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
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 THE HIGH PRICE OF ‘FREE’ TRADE NAFTA’s failure has cost the United States jobs across the nation

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 THE HIGH PRICE OF ‘FREE’ TRADE NAFTA’s failure has cost the United States jobs across the nation

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 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 Trade Barriers to the Public Good: Free Trade and Environmental Protection. Canada: McGill-Queens University Press 2.

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 www3.interscience.wiley.com/journal/ /abstract?CRETRY=1&SRETRY=0

“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 www3.interscience.wiley.com/journal/ /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. ______________________________________ 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

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:// Sen. Jaclyn Cilley, D-Barrington Chair of NH Commission

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: 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. _________________________________________ New Hampshire State House Arnie Alpert, Commission Vice-Chair

"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."

5. NAFTA Flaws (c) Ch11 Challenges
As of January , 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 NAFTA Challenges Grow

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 NAFTA Challenges Grow 2.NAFTA Challenge blatant attempt to intimidate.

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

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: Canada-US 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

5. NAFTA Flaws (d) Ch 6 Energy
Gordon Laxer, of Parkland Institute on Right

Gordon Laxer Parkland Institute suggests options for getting out of the energy clause of NAFTA Reforms to NAFTA Negotiate a ‘Mexican’ type exemption from the proportionality clause Withdraw from NAFTA altogether Develop a new Canada First Energy Policy

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. ” ________________________________________________ Gordon Laxer on right

“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

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. Diana Gibson, Parkland Institute

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. 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, Over A Barrel: Exiting from NAFTA’s Proportionality Clause _________________________________________________ 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

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

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 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 Beyond NAFTA: The Security and Prosperity Partnership of North America Berthiaume, L. ‘There’s Nothing Quick or Easy About NAFTA’. Ottawa, ON, 13 June 2007. Stephanie Golob of Baruch College, NYk Laura MacDonald, Carleton University

6. NAFTA – Failed promises
Outline slides 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

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

6. NAFTA a) Failed promises in general
Lessons from NAFTA: Building a New Fair Trade Agenda Oct Oct 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. ____________________________ 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.

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

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 trade- environment 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 .

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 _

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, Ottawa

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, Ottawa 2. UE /Jobs with Justice staff

6. NAFTA – Failed promises
Outline slides 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 trade would boom, our economy would grow, more jobs would be created and our standard of living would skyrocket. 1 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 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.” _________________________________ 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

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 self-employed 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

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 re-jigging of our economic system.” ____________________________ 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 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

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 __________________________________________ 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

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. 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. __________________________________________

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 __________________________________________

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. _____________________________________________BBruce 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

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. ___________________ Then Senators Clinton & Obama Photo Credit

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 THE HIGH PRICE OF ‘FREE’ TRADE NAFTA’s failure has cost the United States jobs across the nation

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 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.

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

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 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

“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

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,

…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

…. 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,

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 Miami Herald

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

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

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 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

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. _________________________ 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 _________________________________ Free Trade’s Big Lie: NAFTA has failed to create quality jobs or close the income gap by Jean-Yves LeFort 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. _____________________________ Mexico: The New Tortilla War. Luis Hernández NavarroInternational Relations Center (I.R.C.) Americans Program. June 3, 2007 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)

The long-term reasons for corn and tortilla price run-ups have roots in neo-liberal 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 neo-liberal 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 Tortilla prices rose more than 150% from , and have continued to increase. ______________________________________ Tortilla Crisis Rooted in Corporate Globalization. August 12, 2007

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

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)**

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,

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

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

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 Janet M Eaton, PhD ________________________________________________ 1. See Reference Slide 138 “NAFTA Resistance Growing Calls for Renegotiation and Oversight Slide Show “ by Janet M Eaton Lessons from NAFTA: A New Fair Trade Agenda

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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 Lessons from NAFTA: Building a New Fair Trade Agenda Institute for Agriculture & Trade Policy

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