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  • Eyes on Trade is a blog by the staff of Public Citizen's Global Trade Watch (GTW) division. GTW aims to promote democracy by challenging corporate globalization, arguing that the current globalization model is neither a random inevitability nor "free trade." Eyes on Trade is a space for interested parties to share information about globalization and trade issues, and in particular for us to share our watchdogging insights with you! GTW director Lori Wallach's initial post explains it all.

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February 27, 2018

In Memory of Zahara Heckscher

Zahara_HeckscherAll of us at Public Citizen lift up in loving memory our dear friend and peaceful warrior Zahara Heckscher, who passed away on February 24 at the age of 53, after her years-long battle with breast cancer. 

Among her many talents as a writer, poet, teacher and facilitator, Zahara was a fierce, creative and committed activist. As she valiantly battled advanced breast cancer, she became determined to fight for all patients to have access to the cutting-edge cancer medicines that extended her life. 

When she learned that prescription drug companies were using the Trans-Pacific Partnership (TPP) negotiations to lock in extended monopolies that threatened access to affordable medicines, Zahara became a passionate trade justice advocate on behalf of cancer patients around the world. 

She galvanized testimony from people living with cancer and HIV/AIDS from the United States and other TPP countries to protest what she dubbed the “TPP death sentence clause” — a provision that would require governments to grant monopoly periods for biologic medicines used to treat cancer and other serious illnesses and thus deny patients access to more affordable generic and biosimilar medicines.  

The battle over biologics and access to cancer treatment was responsible for dragging out TPP talks for years. In October 2015, she carried those patients’ stories with her to the final round of TPP negotiations in Atlanta to demand that the TPP negotiators drop the “death sentence clause”. She was arrested as she attempted to enter the negotiations, holding an IV-pole, calling on the U.S. Trade Representative (USTR) to drop its insistence on demanding the extended monopoly period for biologic medicines. 

The video of her arrest was shared widely on social media, and her subsequent media interviews on Democracy Now, The Big Picture and others contributed to the national conversation about the dangers of the TPP for health. Due in part to the advocacy of public health advocates like Zahara, the pharmaceutical industry and USTR failed to convince the other TPP nations to accept the full twelve-year monopoly they had been demanding, but the final TPP did include a five-year period.

Zahara insisted that cancer patients cannot wait even one additional year for access to medicines that can keep them alive, so she turned her efforts to stopping Congress from ratifying the TPP.

On World Cancer Day in February 2016, she and fellow cancer survivor Hannah were arrested blocking the entrance to PhRMA, the pharmaceutical industry’s lobby that had pushed the TPP death sentence clause, to warn the public and Congress about TPP’s dangers for access to cancer medicines.  Together, Zahara and Hannah then co-founded Cancer Families for Affordable Medicines, creating public education and advocacy materials for cancer patients and their loved ones to support access to medicines by convincing their members of Congress to vote no on the TPP. 

As the pressure on Congress to pass the TPP mounted in the summer of 2016, Zahara took her message directly to Capitol Hill, getting arrested a third time at the office of Congressman Polis, and traveling to speak in-district to undecided members of Congress to demonstrate what was at stake in the TPP for cancer patients and their loved ones. Despite the fact that TPP passage was a top priority of the White House, Republican congressional leadership and Chamber of Commerce, the district-by-district activism by people like Zahara ensured that the TPP could not achieve majority support in Congress.

In the last year, Zahara’s waning physical strength did not stop her from continuing her trade justice activism. Concerned by reports that the Trump administration was pushing for the same “death sentence clause” in its renegotiations of the North America Free Trade Agreement (NAFTA), just last month, Zahara made an educational video to urge people to take action to ensure that NAFTA renegotiations not further undermine access to essential medicines.

Until the very end, Zahara used every tool at her disposal — from her razor-sharp intellect to her poetic spirit to even the cancer itself — to bless the world and to change it for the better. Her strategic and creative trade justice activism was just one small piece of her multi-faceted legacy. She was an inspiration. We will miss her dearly.

February 23, 2018

Mexico City NAFTA Renegotiation Round: If No Progress on Major U.S. NAFTA Reform Proposals, What is Path Forward?

WASHINGTON, D.C. – As the seventh round of North American Free Trade Agreement (NAFTA) renegotiation talks begin in Mexico City this weekend, Lori Wallach, director of Public Citizen’s Global Trade Watch, commented:

“A NAFTA replacement deal that would enjoy bipartisan congressional support is entirely possible because U.S. negotiators have stood up to the interests trying to thwart real change and have resolutely pushed proposals to cut NAFTA’s job outsourcing incentives and the ISDS tribunals where corporations can attack our laws and to add stronger rules of origin and an accountability-injecting sunset clause.

With time running short, the question is whether some of these U.S. proposals to restructure NAFTA can be agreed upon in Mexico City and progress made on adding strong labor and environmental standards with swift and certain enforcement to stop companies from moving U.S. jobs to Mexico to pay workers poverty wages and dump toxins and then import those products back for sale here.”

The State of Play as the 7th Round of NAFTA Renegotiations Talks Begin

Two major related questions loom over the seventh round of NAFTA renegotiations that will be begin this weekend: the timeline and whether the three countries can make progress on the elements of a deal that will be necessary for it to get through the U.S. Congress.

The extended end-of-March deadline that the NAFTA countries set for completing a deal is fast approaching, as is the July 1 Mexican presidential election.

The U.S. corporate lobby has battled against the proposals that U.S. Trade Representative (USTR) tabled at the October NAFTA round to restructure NAFTA’s investment, procurement and rules of origin terms and to add higher rules of origin and a review and sunset provision. Not surprisingly, given these changes are necessary both to deliver on President Trump’s campaign promises on NAFTA and to achieve a deal that can get through Congress, the administration has not budged on these proposals.

For most of 2017, both Mexico and Canada simply refused to engage on the main U.S. demands, which was the corporate lobby’s advice. In late December Mexico shifted course, perhaps recognizing that ignoring priority U.S. NAFTA reform proposals actually would not make them go away.

Now with the window of opportunity closing to get a deal before Mexico’s election season kicks into high gear, will agreement be reached in Mexico City on any of the core U.S. reforms? Doing so could pave the way to the sorts of grand bargains that get trade deals done. And given that the United States launched the renegotiations with specific goals in mind, if the changes needed to deliver on those goals remain deadlocked, what is the path forward to any deal - much less one that achieves the bipartisan support needed to ensure passage?

Not surprisingly, the administration is seeking a deal that counters NAFTA’s job outsourcing trend and appeals to the Democratic-swing voters in Midwestern states that sent Trump to the White House – and the unions to which many of them belong. And, certainly this administration does not want to repeat the Obama administration’s strategic blunder of agreeing to a deal that cannot achieve majority support in Congress despite months of intense lobbying a la the Trans-Pacific Partnership.

Agreement on the U.S. proposal on NAFTA’s controversial investment chapter and its Investment-State Dispute Settlement (ISDS) system could be the key to unlocking the impasse. ISDS is unpopular in Congress, not only with Democrats but with a sizeable bloc of GOP committed to opposing any pact that includes ISDS. Progressive and conservative organizations and unions have long held the same view.

ISDS has become a third rail issue because it both promotes job outsourcing and undermines what conservatives call sovereignty and progressives call democratic governance.

The substantive investor protections ISDS enforces operate like no-cost risk insurance and combined with access to a pro-investor dispute resolution regime outside domestic courts, eliminate many of the usual risks and costs that make corporations think twice about moving production to a low-wage developing country like Mexico. More than 930,000 specific U.S. jobs have been certified by the U.S. Labor Department as lost to NAFTA outsourcing and import floods under just one narrow program called Trade Adjustment Assistance (TAA).

Meanwhile, the GOP-majority, the National Conference of State Legislatures, the National Association of Attorneys Generals, the National Association of Countries and the League of Cities all oppose ISDS as a threat to sovereignty. No doubt. The regime grants new rights unavailable in U.S. law or courts to thousands of foreign corporations to sue the U.S. government before a panel of three private-sector lawyers. These lawyers can award the corporations unlimited sums to be paid by American taxpayers, including for the loss of expected future profits. These foreign corporations need only convince the lawyers that a U.S. law or safety regulation or court ruling violates their NAFTA rights. Their decisions are not subject to appeal and the amount awarded has no limit.

Even conservative U.S. Supreme Court Chief Justice John Roberts has weighed in on the ISDS sovereignty threat in his dissent in BG Group PLC v. Republic of Argentina. In that 2014 case, the majority ruled in favor of the enforceability under U.S. law of an ISDS tribunal’s ruling. Roberts decried the notion of a country allowing an extra-judicial international tribunal to “… review its public policies and effectively annul the authoritative acts of its legislature, executive and judiciary … a Contracting Party grants to private adjudicators not necessarily of its own choosing, who can meet literally anywhere in the world, a power it typically reserves to its own courts, if it grants it at all: the power to sit in judgment on its sovereign acts.”

Unless the Unites States joins the growing number of countries extracting themselves from ISD agreements, it’s just a matter of time before the United States loses a case. The number of cases being filed and the types of laws, government decisions and court rulings being attacked through ISDS is expanding. There were 50 total ISDS cases from the 1950s to 2000. In recent years, more than 50 cases are filed annually. Almost half a billion dollars has been paid out so far by Canadian and Mexican taxpayers just under NAFTA and $36 billion in additional known claims is now pending under NAFTA. (Because a lot of these cases result in governments changing laws or paying off foreign corporations before the cases get to the stage where they get listed publicly, many cases remain unknown.) And increasing large developed countries are facing ISDS attacks, with Germany paying out tens of millions thanks to two cases. 

The intensive focus of the corporate lobby on saving ISDS in NAFTA has verified that these investor privileges and protections that facilitate outsourcing, not any actual trade terms, are what the corporate lobby most values about NAFTA. Yet, for all the claims and hype about ISDS somehow being necessary for U.S. investors’ success, the reality is that if they are worried about investing in Mexico, they can buy risk insurance so it’s their skin in the game not the U.S. Treasury’s. And, if firms investing in oil, gas or mining concessions in Canada or Mexico want ISDS-style protections, they can include in their concessions contracts with those governments’ terms sending disputes to the same UN and World Bank arbitration venues that NAFTA uses. That would provide U.S. firms the same protections in Mexico or Canada that NAFTA now provides them, but it would not empower Mexican or Canadian investors – or Japanese or Chinese firms incorporated in Mexico or Canada – with investments in the United States to use ISDS to attack U.S. policies.

February 07, 2018

New Trade Deficit Tracker

Public Citizen’s Global Trade Watch launches new Trade Deficit Tracker. Contrary to candidate Donald Trump’s pledge to speedily reduce the U.S. trade deficit, in Trump’s first year in office the goods trade deficit is larger than any time since 2008 and up 5 percent overall even in inflation-controlled terms from last year, with a significant jump in the China trade deficit and a 8 percent increase in the North American Free Trade Agreement deficit. Trump has not exercised his available executive authority to fulfill campaign pledges to limit imports, including those from firms that outsource jobs; label China a currency manipulator; revoke trade agreement waivers on “Buy America” procurement policies that outsource U.S. tax dollars to purchase imports for government use; or limit government contracts to firms that outsource jobs.

The overall 2017 U.S. goods trade deficit in inflation-controlled terms was $796 billion in 2017, up 5.4 percent or $40.9 billion from 2016, which was led by a U.S.-China goods deficit of $375 billion in 2017, up 5.5 percent and $19.5 billion from 2016. The 2017 U.S-NAFTA goods trade deficit was up 7.8 percent or $13.8 billion from 2016.

To document the significant increase in U.S. trade deficits under the Trump administration, Public Citizen’s Global Trade Watch has launched a new tracker. The tracker visualizes and tracks significant developments related to U.S. trade deficits with NAFTA partners (Canada and Mexico), and China respectively. Click here or on the image below to visit the tracker.

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www.citizen.org/our-work/globalization-and-trade/trumps-trade-deficit

February 06, 2018

Trade Deficit Up 5 Percent in Trump’s First Year, Raising Stakes for Quick NAFTA Replacement Deal that Stops Outsourcing, China Trade Action

With Trade Policy Unchanged in Trump’s First Year, Outcomes He Attacked Continue

WASHINGTON, D.C. – Contrary to candidate Donald Trump’s pledge to speedily reduce the U.S. trade deficit, in Trump’s first year in office the goods trade deficit is larger than any time since 2008 and up 5 percent overall even in inflation-controlled terms from last year, with a significant jump in the China trade deficit and an 8 percent increase in the North American Free Trade Agreement deficit. Trump has not exercised his available executive authority to fulfill campaign pledges to limit imports, including those from firms that outsource jobs; label China a currency manipulator; revoke trade agreement waivers on “Buy America” procurement policies that outsource U.S. tax dollars to purchase imports for government use; or limit government contracts to firms that outsource jobs.

“Right now, the same trade policy that Trump attacked ferociously and promised to speedily replace is still in place,” said Lori Wallach. “The first-year Trump jump in the U.S. trade deficit adds urgency to the administration actually securing a NAFTA replacement deal that ends NAFTA’s job outsourcing incentives and implementing a new China trade policy.”

The overall 2017 U.S. goods trade deficit in inflation-controlled terms was $796 billion in 2017, up 5.4 percent or $40.9 billion from 2016, which was led by a U.S.-China goods deficit of $375 billion in 2017, up 5.5 percent and $19.5 billion from 2016. The 2017 U.S-NAFTA goods trade deficit was up 7.8 percent or $13.8 billion from 2016.

“It’s not surprising that the deficit is up, because in year one there has been a wide gulf between Trump’s fiery trade rhetoric and action. So the same failed trade policy Trump attacked as a candidate is still in place, outsourcing continues and promised actions remains undone,” Wallach said. “The Trump administration has made some good proposals to transform NAFTA, but the corporate lobby is so intent on blocking those changes that it has delayed – and could – derail the whole process. And so far, the administration has not implemented the comprehensive new approach to our China trade policy that is needed.”

China Trade: Trump reversed his pledge to take action on his first day on currency issues and has achieved little since to expand U.S. exports to China or limit Chinese imports here. Nor has he followed through on promised actions to limit Chinese steel and aluminum imports using section 232 of the Trade Expansion Act of 1962. Also outstanding is action on a Section 301 petition on China the administration initiated in mid-2016.

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U.S.–NAFTA Trade: Between 2011 and 2016, the U.S. goods trade deficit with NAFTA nations declined 11.6 percent, or $23.2 billion (excluding re-exports). This decline has been consistent except for a small 2.9 percent increase in 2014. The U.S. NAFTA goods trade deficit is now mostly manufactured and agricultural goods. Fossil fuels have declined as a share of the total deficit from 82 percent in 1993 before NAFTA to 16 percent in 2016.

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