Delta Variant Shows, Unless Biden Administration Starts Leading Global COVID Vaccine Effort, Pandemic Will Never End

[Reposted from PC News]

By Mike Keeley

The delta variant-fueled COVID-19 wave that is slamming communities nationwide and flooding ICUs is a glimpse of the endless pandemic to come unless the Biden administration secures a waiver to significantly boost production of vaccines, tests, and treatments; requires firms to share vaccine recipes; and helps to fund a major increase in COVID-19 medicine production worldwide.

A recent report by Public Citizen’s Global Trade Watch (GTW) debunked Big Pharma claims that drug corporations’ current vaccine production plan would quickly satisfy global demand. Nine months into 2021, current vaccine producers have delivered only five billion doses of the 12 billion they promised to make this year, while 14-15 billion doses were needed before rich countries started booster shots.

Less than 3% of people in low-income countries have had at least one dose, according to the World Health Organization (WHO), and those countries may wait until 2024 for mass immunization, if it happens at all, according to the Economist Intelligence Unit.

This scarcity is not only unjust and guarantees needless deaths and economic pain, but increases the chances of vaccine-resistant variants emerging that put the whole world back to square one on immunization.

The global shortage of vaccines can be traced to monopolies that empower a few vaccine makers to control if, how much, and where vaccine doses are produced. The World Trade Organization (WTO) requires 159 countries to enforce patent and other so-called intellectual property barriers to greater medicine production.

Regular Public Citizen News readers will recall that the Biden administration made history in May when it reversed the Trump administration’s position and supported temporarily waiving the WTO pharmaceutical monopoly terms to save lives amidst the COVID-19 crisis. American support for the “TRIPS Waiver” greatly elevated the issue and influenced some allies to follow suit.

However, since then little progress has been made thanks to a handful of wealthy countries opposing the waiver, especially Germany and the European Union on its behalf.

Following the U.S. announcement of support, GTW joined with a coalition of U.S. and international civil society organizations to pressure German Chancellor Angela Merkel to stop blocking the more than 130 countries that want the waiver. As Merkel traveled to Washington, D.C., in July for her final White House visit, she was met with dozens of protests organized by Public Citizen, Citizens Trade Campaign (CTC), and allied organizations focused on more than a dozen German consulates nationwide.

20210715_Merkel_Die_In_0116

Protesters arranged body bags outside the White House during a protest calling on German Chancellor Angela Merkel to stop blocking an emergency waiver of intellectual property rules needed to increase global production of COVID-19 vaccines and treatments that would help save millions of lives Thursday, July 15, 2021 in Washington. The action in support of the “TRIPS waiver” was one of more than a dozen demonstrations in the U.S. capitol and at German consulates across the nation timed with Merkel’s visit to the United States this Thursday. While President Biden and a majority of the world’s governments support a TRIPS waiver, Germany continues to obstruct it. (Eric Kayne/AP Images for Citizen Trade Campaign)

The Chancellor was directly challenged by GTW protestors—including one inside a large Merkel puppet—as she arrived for an honorary degree at Johns Hopkins that students petitioned against, given her opposition to the waiver. CTC, GTW, and allies mobilized a huge banner on helium balloons depicting the White House in the background. Body bags were also laid outside the White House the day of the Biden-Merkel meeting, generating more press. Heads of major U.S. organizations wrote to Biden and spoke at a press conference organized by GTW to publicly urge him to exert U.S. leadership at the summit and resolve the German opposition.

Public pressure put the TRIPS waiver on the agenda for the summit, but Biden apparently did not expend the political capital necessary to convince the Chancellor to move. Nor has the administration exhibited the leadership at the WTO. 

Waiver proponents had called for progress by the end of July, but with none in sight, the WTO disbanded for a six-week vacation against the WTO Director-General’s guidance. “The WTO is showing itself to not just be useless in the fight against COVID, but an actual hindrance,” said GTW Director Lori Wallach. “The WTO’s shameful inaction on the COVID waiver could be the final undoing of an organization that already was suffering a major legitimacy crisis and on its last legs.”

According to Oxford University, more than 3.3 million people worldwide have died from COVID-19 since India and South Africa first proposed the WTO waiver in October 2020. Meanwhile, White House coronavirus czar Jeff Zients appears to have no plan to end the pandemic. GTW and almost 30 partner organizations – including Be A Hero, Amnesty International USA, and Avaaz – are joining forces in a petition to Zients demanding that he:

  • Actively cooperate with waiver proponent-nations to produce a draft WTO TRIPS waiver text and use all means to press the European Union and others to end their opposition;
  • Leverage the U.S. government’s past public investments and all legal authorities to make vaccine firms transfer technology; and
  • Launch and fund a global manufacturing plan to increase and democratize vaccine production in hubs worldwide.

Biden is reportedly planning a COVID-19 summit in conjunction with the United Nations General Assembly in September. According to Wallach, “President Biden’s global COVID summit will only be a success if he uses it to exert global leadership to get the WTO TRIPS waiver done and secure commitments from other countries to help fund the necessary scale-up in developing countries’ production of COVID vaccines to end the pandemic.” More than 130 countries support the WTO waiver, and opponents are facing increasing political pressure and moral outrage. Chancellor Merkel’s upcoming retirement creates opportunities for our German allies to end their country’s obstruction of the waiver and thus end the EU’s opposition. But while there is hope, there is also peril. All eyes are now on the Nov. 30 WTO ministerial, a date far beyond when a waiver should have been enacted. And Big Pharma and other interests are pushing to transform a meaningful waiver into a meaningless WTO political declaration.

Public Citizen will keep up the pressure to force the Biden administration to show leadership and secure a comprehensive waiver as fast as possible to end the pandemic.

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Tuesday Press Conference: MoCs, Civil Society and Labor Leaders Urge Biden To Launch Global Plan to End Pandemic at Next Week’s UN Summit

For Immediate Release: Sept. 9, 2021
Contact: Derrick Robinson, drobinson@citizen.org

MEDIA ADVISORY

 South African Government Official Will Provide Update on WTO Vaccine Waiver as Delta Variant Devastation Foreshadows Devastation of Endless Pandemic 

WHAT: Ahead of the U.N. General Assembly (UNGA) heads of state summit, Member of the U.S. Congress and heads of labor, faith and health organizations will spotlight in a Public Citizen Zoom press conference why President Joe Biden’s leadership is essential to ending the pandemic.

In the months since Biden’s historic support for a waiver of World Trade Organization (WTO) monopoly barriers to greater COVID vaccine production, little progress has been made. And White House COVID Czar Jeffrey Zients has yet to unveil a global plan as the Delta variant detected in India where vaccines are scarce is now raging worldwide. UNGA and Biden’s  global COVID-19 summit will be successful if the president uses them to get the WTO waiver done, require vaccine recipes be shared via  broad tech transfer to speed expansion of COVID medicine supplies, and move funding for much expanded global production.

WHO: U.S. Rep. Jan Schakowsky (D-Ill.) 

U.S. Rep. Rosa DeLauro (D-Conn.)

Zane Dangor, Republic of South Africa, Special Advisor to the Foreign Minister           

Dr. Joia Mukherjee MD, MPH, Partners In Health, Chief Medical Officer

Father Charles Chilufya SJ, Jesuit Representative for Africa and Madagascar

Sara Nelson, AFA-CWA, President

Moderated by Lori Wallach, Public Citizen’s Global Trade Watch

WHEN: Tuesday, Sept. 14 at 9:30 am EST [GMT-4]

HOW: Press can register here.

BACKGROUND: On May 5, people around the globe cheered when President Biden announced the U.S. would support a temporary waiver of WTO intellectual property barriers to boost production of the COVID-19 vaccines needed to save lives and end the pandemic. But months later, Big Pharma monopolies remain, now exacerbated by even higher vaccine prices. Current production capacity cannot supply enough COVID-19 vaccines for the world. The poorest countries may wait until 2024 for mass immunization, if it happens at all, per the Economist Intelligence Unit. To date, 75% of vaccines have been administered in just 10 countries, and only 1% of people in low-income countries have received at least one dose, according to World Health Organization statistics.

The U.N. Global Assembly of world leaders comes at a time when the critical shortfall of vaccines, diagnostics and treatments in low- and middle-income nations is enabling more deadly and possibly vaccine-resistant variants to develop and spread domestically and abroad. The delta variant first detected overseas is burning through the U.S., and scientists warn of even deadlier variants as the pandemic drags on. Unless the UNGA results in significant breakthroughs to the WTO waiver, tech transfer and global production funding that ensure that people worldwide can access vaccines and treatments, there can be no end to the public health or economic crises anywhere.

###

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Rethinking Trade - Season 1 Episode 38: Labor Day Special: An Historic Vote in a Mexican Auto Plant

On August 19th, workers at the massive General Motors plant in Silao, Mexico participated in an historic vote that ousted the corrupt and undemocratic protection union that had long controlled labor relations there. The effort to win such a vote was made possible by the labor rules and Rapid Response enforcement mechanism of the USMCA trade deal.

In this Labor Day special, we sit down with Public Citizen’s Global Trade Watch Research Director Daniel Rangel and long-time labor organizer Jeff Hermanson, who has been supporting the General Motors campaign through the AFL-CIO’s Solidarity Center. We discuss the situation at Silao, its significance in the context of trade policy and what it says about the prospect for workers to utilize the USMCA to fight for labor rights in North America.

Music: Groove Grove by Kevin MacLeod.

Link: https://incompetech.filmmusic.io/song/3831-groove-grove.

License: http://creativecommons.org/licenses/by/4.0/

Transcribed by Sally King

Ryan 
Welcome back to Rethinking Trade where we don't just talk about trade policy, we fight to change it. I'm Ryan and I'm joined once again by our in-house trade expert, Lori Wallach. It's Labor Day we're doing a Labor Day special episode about a quite historic union vote at a General Motors plant in Silao, Mexico. Joining Lori and I is Public Citizen's Global Trade Watch Research Director Daniel Rangel. As well as Jeff Hermanson, former Mexico director of the Solidarity Center and a longtime labor organizer. Jeff has been pretty involved in supporting the efforts at the General Motors plant in Silao. Jeff, why don't you just start by telling us what just happened at the Silao plant. And then we're going to talk about how significant this is for the Mexican labor movement but also for the prospects of the revised NAFTA, the USMCA's labor protections, and enforcement mechanisms.

Jeff Hermanson 
The General Motors plant employs 6,400 workers. They have a collective bargaining agreement that's known as a protection contract with the CTM (Confederation of Mexican Workers), the largest union in Mexico. And under the labor law reform in Mexico and the USMCA, every contract has to be legitimated by a secret ballot vote of the workers for the first time. And the workers voted it down. And that's a big deal.

Lori Wallach 
There was a really exciting development, one that involves a lot of different streams of organizing and policy change. One, I think the key thing was the Rapid Response Mechanism (RRM) of the revised North American Free Trade Agreement, which is officially called the US Mexico Canada agreement, the USMCA. That agreement going into place required the labor law changes, Jeff, that you mentioned in Mexico and also created this mechanism, Rapid Response Mechanism that for the first time allows company-specific cases to be filed to directly enforce against an individual company, the new labor rights that were required, basic core ones right to organize rights in the revised NAFTA. And there's a lot riding on whether or not that mechanism can work. It definitely is an important new tool. And at the same time, it's, you know, first trial runs. So the US government under US Trade Representative Katherine Tai self-filed one of these rapid response cases against GM, with respect to the outrageous basically malfeasance that occurred during the first effort to have a vote on this contract. I'm wondering, Jeff, if you could explain to us a little bit of the context of this, because, you know, folks are probably not that familiar with the idea of a protection contract. And also, the obligation under the new NAFTA is that every one of these old contracts, a lot of them, which were really, you know, protecting the boss, not protecting labor rights have to be revoted. And so this came to a head in the context of that process. And I'm gonna ask you, Jeff, to take it away and give us some context of how we got to this and why this is so important.

Jeff Hermanson 
So in Mexico, there are very few non-union workplaces. But 90% of the contracts are considered protection contracts, that means that they're put in place by the employer and an union before workers are hired in many cases, without worker knowledge in many cases. But even if there is some worker knowledge as there is in the General Motors situation for the purpose is to protect the employer from any legitimate union representation. And in this case, for example, for the 12 years that this union held this contract, there was not a single assembly, not a single vote on leadership, not a single ratification of contracts, and very little help from the union on any individual grievances. So because every one of these contracts is now going to have to be voted by the first of May, 2023. Because of the importance of the plant the size of the plant. The eyes of the Mexican government and the US government were on this vote. And in April when the first vote was held, it was a two-day vote. The first day of the vote went forward, the ballots boxes were put in the union office for safekeeping, supposedly, but when they came the next day to start the second day of voting, they found that the ballot boxes had been broken into, and ballots destroyed. And they had done a count of the vote up to the end of the first day. And the vote was leaning towards rejecting the contract, 45 to 55. A surprise to everyone. The workers and the secret ballot had voted this contract down, however, because of the irregularities, as they're called the Secretary of Labor suspended the second day of voting did an investigation, and issued a finding that yes, serious irregularities had occurred. The same day that finding came out, the US Trade Representative filed a complaint under the terms of the labor chapter of the USMCA calling upon the Mexican government to take steps to remedy the situation. Labor Secretary in Mexico ordered a second vote, which was supposed to take place within 30 days of her order, the 30 days came and went, the CTM just didn't run the election. And so then an agreement was reached between the US Trade Representative and the Mexican Secretary of Labor, that a rerun election had to be held by August 20. And if it wasn't held, the contract would be invalidated. So that puts some real sanctions into the agreement. And it also required observers. And the bottom line is when they voted again, they voted the same way: 45% Yes / 55% No. And they rejected the contract.

Daniel Rangel 
Thank you, Jeff, for chairing this. I think that what our listeners are wondering now is what will come next? What's the process for workers to get through in your representation at GM- Silao.

Jeff Hermanson 
So now we're in a situation where this contract will be invalidated. I mean, there's a period in which the CTM can object to the election. And throughout that period, the contract stays in effect, we hope that that 20 day period will result in the contract being eliminated. And the workers then have the opportunity to form their own union, they've already applied for the registration and gotten registration of an independent union. And now they're campaigning to get enough support to apply to negotiate a contract.

Lori Wallach 
So what do you think was the relevance of the Rapid Response complaint for the outcome because this is like a pretty stunning outcome after decades of workers getting screwed by protection unions in Mexico was a brave thing to vote the way they did the fact that the vote actually got redone in a fair way, as you know, knockdown, drag-out stunning, given the context. Does the USMCA and the USTR self-initiated case had anything to do with that? Or is it all about internal organizing, which I know we want to hear about the amazing work that the workers did also to represent themselves? But was the RRM part of the story?

Jeff Hermanson 
Absolutely, this second vote probably never would have occurred without that complaint, because as I said, the Secretary of Labor ordered to election rerun in 30 days, and the union just didn't do it. They said, "No, we don't have to do it, we have until the first of May of 2023 to do it." Without that complaint, the second rerun probably wouldn't have occurred.

Lori Wallach 
You figured they were thinking about the sanctions and the RRM, that we're going to hit the company and the government was going to look bad, and they were all seeing that chewing on their ankles?

Jeff Hermanson 
The government in Mexico really does not want sanctions to be applied. They do not want, you know, investors to see that sanctions could be applied to them. So basically, they were ready to do just about anything that the USTR asked to get past this complaint. And what they did was order a rerun election under conditions in which the workers could vote freely, secretly, without coercion, and vote their conscience. And that's what they did. You know, and it really is an amazing testimony to the courage of these workers. Because in the past, this never would have happened in the past the CTM would have brought in, you know, 100 thugs to intimidate the workers. I mean, we've seen this so many times, there would have been no secret ballot, you know, it would have been an open vote in front of everybody. And, you know, I never would have happened. So this is a turning point in the history of the Mexican labor movement, in my opinion.

Daniel Rangel 
This case appeared on the radar of many people with these outrageous episodes of the representatives destroying to ballots of the workers that were voting no against the contract. But this fight and struggle of many workers started many years ago, right? Could you give us a little bit of the background of what was going on in that plant? And what were the main drivers for workers at the GM-Silao plant to both know for this contract?

Jeff Hermanson 
I think you know that it's true that there has been dissent within this company for years, but dissent that was repressed, the dissent that resulted in workers being fired dissent that really, you know, could not come into the open without retaliation from the company. And so as a result, the main voice of the workers was a group of fired workers, eight fired workers formed a group called Generando Movimiento (generating movement) using the initials GM, you know, they were a presence on social media, they were a presence with their personal connections to folks in the plant. And it's quite obvious that they had some real impact because we've seen other legitimation votes recently in auto plants that were one-sided in favor of the Union. Because there was no such movement in the plant because workers were intimidated. In this case, we saw the CTM, holding captive audience meetings with the help of the company, before the first vote, in which they were telling workers that if they voted the contract down, they'd lose their benefits, which is a lie. We saw threats and intimidation of workers, we saw the idea floated that if the yes vote won, that they would raffle off 10 brand-new GM vehicles, of course, workers know in Mexico that a lot of promises are made in election campaigns that are never fulfilled, and this is one of them. But you know, it was a situation in which the workers themselves had built enough of a support network in that plant that people felt safe to vote their conscience. And that's really an amazing thing.

Daniel Rangel 
Before you finish. Let me ask you this, how was this news and this historic vote received? And how is this gonna change the landscape for the relationships between employers and workers in Mexico?

Jeff Hermanson 
I expect this sends a message to employers and unions, you know, it received tremendous press coverage in Mexico. This was one of the top stories for a few days after the vote. And there are employers right now thinking, "What am I going to do when my contract is up for a vote?" In many of these cases, the workers don't even know there's a contract. So we think that a lot of these contracts will fade into history, when the deadline, first of May 2023 rolls around, most of these contracts will not have been legitimated and they will no longer be in force. Those that are voted on, we're going to see, we're going to see more defeats of protection contracts.

Daniel Rangel 
And why are you so certain that workers are going to vote down these contracts?

Jeff Hermanson 
You know, these contracts are protection contracts for a reason. And the reason is to keep wages low. And wages in the General Motors plant are half what the wages are in the Volkswagen plant in Pueblo where they have had an independent union, negotiating real wage increases for the past 25 years. And you know, the differences are very obvious. There are three independent unions in the assembly plants in Mexico, one in Volkswagen, one in Nissan, and one in Audi. And all three of them have at least 1/3 higher wages than in the GM plant. And some of them have double the wages. That's a big deal. It's a big difference. People can see that. Workers are fed up. They were fed up with the CTM in this plant, they're fed up with protection contracts in many plants throughout Mexico.

Lori Wallach 
Well, that begs the next and sort of final question, which is what needs to happen now for actually the workers at the Silau plant to get an independent union? They still have to get a new union. And GM has to recognize that new union and then they need a new collective bargaining agreement. So are there challenges between saying no to the old and getting the new that could actually change worker's lives? What are the prospects there?

Jeff Hermanson 
There definitely are challenges. Other protection unions are circling around the GM plant and talking about how they're going to represent these workers. But the workers themselves have formed an independent union, national independent union of workers of the auto industry. They have received their registration papers from the federal authorities and they are seeking right now to sign up, you know, they have to sign up 30% of the workers in order to demand collective bargaining, we expect there will be real competition for support. I mean, we can't forget that the CTM did get 45% of the vote, we expect that they will try to negotiate a new contract. If the independent union gets a 30% signup, there'll be an election between any union that can provide a 30% showing of interest, essentially, they'll be on the ballot. So we might see a competitive election between an independent union and the CTM union or another protection union.

Lori Wallach 
And the very fact they have the opportunity to have that vote and have an independent union challenging the corrupt CTM protection union is a pretty amazing development. Dear listeners, to put this in perspective, this is historic. And I think the thing thinking forward about these challenges and all is for all of us to think about what work we need to do as activists, as organizers, as policymakers listening to this interview to actually translate this opportunity, these instruments into the reality that workers throughout North America have been fighting for together since the NAFTA itself was hatched in the early 90s, to actually have a mechanism for workers to improve their lot and the transnational companies have been playing workers off of each other, taking their high wage union jobs in the US to Mexico to pay people $2-3 an hour, making sure there are no real unions. How do we translate this opportunity, this moment through action through the RRM cases through solidarity into real change? And that is what is before us. And Jeff, I don't know if you have some specific ideas about that?

Jeff Hermanson 
You know, the recommendation of the Independent Mexico Labor Experts Board has been for massive funding of US and Mexican union binational organizing efforts. I'm very much in favor of such a program. I mean, this is what needs to happen. We need to train a generation of professional trade union organizers. We need to help them create industrial unions that are independent of government and employers that are democratic, and that actually represent the interests of workers. And that can be done with the cooperation of US, Canadian and Mexican unions, this is possible now for the first time in my career. I see this as a real possibility.

Ryan 
Rethinking Trade is produced by Public Citizen's Global Trade Watch. To learn more you can visit rethinktrade.org. You can also visit tradewatch.org. Stay tuned for more and thank you for listening.

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Rethinking Trade - Season 1 Episode 37: Hyperglobalization, COVID and Failed Supply Chains: Now What?

In our very first episode, we looked at how corporate-led globalization has fueled shortages in our medical supply-chains and limited our ability to fight COVID-19 Today, we catch everyone up on the latest, discussing two Biden-Harris Administration initiatives aimed at addressing this mess -- a targeted supply chain-review and an executive order on Buy American procurement rules. We also make sense of the latest U.S. trade data, which suggests a record trade deficit in 2021. Yup, that's probably another COVID symptom…

Music: Groove Grove by Kevin MacLeod.

Link: https://incompetech.filmmusic.io/song/3831-groove-grove.

License: http://creativecommons.org/licenses/by/4.0/

Transcribed by Sally King

Ryan 

Welcome back to rethinking trade where we don't just talk about trade policy, we fight to change it. I'm Ryan, and I'm joined once again by our in-house trade expert, Lori Wallach. Lori, and one of our very first episodes, we talked about how decades of hyperglobalisation have undermined our resilience against the COVID-19 crisis, and how the government has to actively intervene in the economy to rebuild a domestic manufacturing base. Today, we wanted to update listeners on what has been and hasn't been happening since that time. Let's start with an overview of the big picture. What does the pandemic look like today from a trade policy perspective?

Lori Wallach 
So, on the one hand, the expected shift towards more domestic supply chains in response to what proved from COVID, to be enormous vulnerabilities in this country, but around the world created by hyperglobalisation. And these very thin, brittle globalized supply chains. This has not happened as quickly as one might hope and expect. In part, the corporations, the big multinationals, the Amazons and other mega retailers, who've made a lot of money on that race to the bottom hyperglobalized system of sweat labor, supply chains, and just-in-time production, are very keen to maintain that system, which prioritizes their profits, and what they will consider efficiencies, no redundancy, over reliance, reliability of supply and deliverability of critical goods. And so they're pushing back. And also, we've had that system being pushed for the last 25 years of the World Trade Organization, the NAFTA Free Trade Agreement model. So it's a steamline are heading in the wrong direction, it takes a long time to turn. The evidence of that is that we have seen increased imports from China into the US, of the medical supplies we've needed from personal protective equipment, PPE to different kinds of medicines that we've needed to deal with the COVID crisis. We have seen a lot of spending domestically, as people are stuck at home and not spending more on restaurants and travel on kitchen goods, you know, fancy ovens and other things, a bunch of which are imported. So our trade deficit has gone up. Interestingly, the WTO has reported that's contrary to the cheerleaders of the corporate globalization model, there haven't been a lot of enduring trade barriers. So countries didn't use emergency tools to shut down trade and force domestic sourcing. The WTO just issued a report that many of the trade restrictions that emergency restrictions that have been put in place during the height of COVID, have been lifted. And that actually, if anything, there's been more removal of trade barriers and attempt to get the important goods that the production of which is over-concentrated in a few locations. And on the other hand, there have been some very inspiring moves by the Biden administration, which include a supply chain review in some key sectors and also a Buy American executive order. Now, we also saw during the Trump administration, some similar announcements and executive orders. And the proof is always in the pudding. The Trump administration didn't follow through, they had a lot of power and opportunities to do things just unilaterally without Congress. They didn't take them. The bind administration has taken some specific steps, and we're gonna have to watch carefully to see if they actually follow through on all of it.

Ryan 
Those specific steps are what my questions are based on the first big item I wanted to tackle you just mentioned, which is the supply chain review being conducted by the administration. What does this review entail? Like what is it what's its purpose? And what is the status of it?

Lori Wallach 
In the spring, the body Harris administration announced they would do 100 Day Review to figure out the weaknesses in and plans to strengthen certain critical supply chains. And they pick three sectors. And they pick three important sectors: critical medicines, critical minerals, the production and processing of, so for instance, the minerals used in making cell phones and the communications equipment, and then also semiconductors, and then also the supply chain for batteries, electric batteries, which is to say, the sort of advanced batteries that are used for electric cars. And then June 8, they published a report, it was perhaps the first time since Alexander Hamilton, that the US laid out a detailed industrial policy in writing. And I'm only slightly exaggerating, the report itself was incredibly inspiring. It's laid bare, the deep flaws in the current system, in a way that I would say, as someone who's observed these issues for 30 years, one could hardly have ever predicted would come out of the US government, and was quite smart in laying out the ways in which the old regime failed. And I know that wasn't easy, because some of the agencies and for that matter, even President Biden had supported the past policies that led to these problems. So in that regard, it was incredibly impressive and helpful because the only way you get a different outcome is when you start to admit that the status quo didn't work. And it takes you know, it takes bravery if you were part of hoping those old policies would work and pushing them. And some of the proposed changes of how to fix the problem, were also really inspiring and were spot on. And were things you would never expect to come out of any US administration. And by the way, weren't the kind of things that the Trump administration dug into not neither in detail of thinking it through and figuring out the solutions as compared to a bunch of superficial rhetoric that also are not compatible with the status quo big business model. So now the proof is going to be in the pudding about whether those kind of changes actually get made. And if they were changes proposed across the board, using existing authorities, things that the executive branch could do in their own capacity with respect to strengthening the Buy America policies, and Buy American policies, which has to do with the government using government procurement resources to shape the market. It included changes in the tax code, it included uses of the defense production act, for the government to create demand and incentives for changes. And it's really if implemented, could make some big differences. And now we need to see if it gets implemented.

Ryan
Another big item and you just mentioned this is the modifications the administration is made to Buy American rules. We've covered this at length in previous episodes. So listeners can go back and get even deeper into this topic. But maybe you could give us a quick introduction to what these policies are, and then talk more about what is being done and what hasn't yet been done in relation to the Buy American rules in the context of the pandemic especially.

Lori Wallach 
So again, here, the good news is the administration's executive order on Buy American and Buy America was quite broad. It covered all the programs, it covered a lot of the needed territory, and proposes to increase the domestic content rule for what qualifies is Buy American, which right now is just 55% of the value of a good needs to be American made, which is pretty pathetic. But unfortunately, it didn't really close the biggest loophole. And that is even that 55% rule is waived entirely with respect to any government procurement over a certain threshold value. That's about $180,000, which for the federal government means most of the contracts, most of them are bigger than $180,000. Because under our trade agreements Buy American is waived for 60 countries that have trade agreement, procurement agreements that basically guarantee that these foreign countries, companies and products get treated as if they were made in the US for Buy American is called the Trade Agreements Act waiver. And it is the exception that eats the rule. And the way that works is not only to goods from Hong Kong, which now is China and from Mexico and Japan and Korea in all of Europe, not only are those treated, Taiwan, treated as if they were from the US, and the government gives equal credit, equal purchasing priority to those goods, but almost worse, any good over that threshold, the domestic content rule is waived whether or not that country has a trade agreement. So that means that all that has to happen is the last step in processing has to happen in America. And there are companies have gotten that so skilled in doing this, that they basically like can construct the better part of a whole building, with all of its walls poured the plumbing in there, the electrical in there, different pieces of you know, built-in furniture in there, they ship those on barges. And then as long as like the whole building is put together all that content, all that value, that is considered meeting the Buy American rule for all of those goods that are in that building or with respect to Buy America. That is the final assembly is happening here now Buy America is stricter than Buy American. So I don't want to simplify this. I want everyone who wants to know the details to go to a website at tradewatch.org and go to the procurement section, and we have a memo that lays out all of these issues and where the gaps and flaws are. But the thing to know is that the executive order like Trump's executive order, I'm Buy American doesn't close this huge loophole. And that's a problem. The President did say that they would as a candidate, that they would be closing these loopholes. And in some of his initial statements, they said that they would and now the executive order doesn't. What the executive order does do is ask for a bunch of data. And there's a hearing this very week about what the flaws are and the current data keeping, because it's so sloppy, we don't really know what is really domestic versus what is just assembled here without domestic content versus what is from one of the 60 countries versus what is domestic content and assembled here. So it's really hard to know what's really going on. And as a result, the data makes it look like there's less of a problem than we know that there is. So with respect to the Buy American and Buy America rules, that executive order is one big piece. The other big piece is the infrastructure bill. So the house infrastructure bill explicitly didn't prioritize that trade agreement waiver, but the Senate version does. And now there's a lot of pressure to just use the Senate version, because the vote was so narrow there, and it almost didn't pass at all, the Senate version does expand Buy America. That's the construction money, and it has it go to a lot more programs and my going down to the states. And that's great. And it strengthens the rules with respect to us made iron and steel. And that's great. But it doesn't really fix the Buy America problem. And it doesn't fix the waiver there. So there's a lot more work to be done there. And there is, you know, enormous opportunity in the existing statute where the President just like President Biden can do this. Now President Trump could have and didn't, can use existing authority to simply waive that trade agreement exception, the President can just take that away. And that would certainly be something that would be smart. And if you again, go to our website, tradewatch.org, you can see letters from very senior members of the House and Senate urging him to do that very thing, President Biden.

Ryan
So my final question also involves reports and data and things you can find on the Public Citizen website, which is the fact that, so a lot of these measures that we've been discussing haven't been fully enacted yet. And so the trade data, the deficit report still shows a rising US trade deficit in manufactured goods. So the reason analysis on the website on the Public Citizen website, suggested 2021, could actually be a record high. Can you talk about the Census Bureau's trade data report? And some of the things you found those meaningful in it what's in the analysis that we published?

Lori Wallach 
Here's the thing for folks to know, it looks like the 2021 annual trade deficit could top $1 trillion for the first time in US history. And that's just horrific and astonishing. However, that says something different than what you'd normally expect, which is to say what that says most and this is where our analysis points out, is that the US has had an economic recovery from the COVID recession that is faster and broader than most other countries. So we're actually our consumers have started to buy stuff, our demand has increased. At the same time, Ryan, as you just pointed out, these initiatives by the Biden administration, which is you know, been in office for seven months now have not had an opportunity to go into effect. So to the extent that the US has had an economic recovery and people want to buy stuff, the supply chains still are largely those old ones. So there aren't, you know, yet great opportunities. If the supply chain review brings those names supply chains home, if the Buy American and Buy America improvements actually happened with a waiver closed, and as a result, there's more domestic government demand for goods. And as a result, there's more investment. And as a result, there more opportunities for folks to be able to buy American made everything, then that change hasn't happened yet, even though the demand is picked up. So as a result, what we see is our imports are way up, because we want to buy stuff, but we don't have it domestically made yet. And you know, please at the Biden administration falls through so that in a couple of years, that data doesn't look like that. At the same time in the rest of the world, there still is much more of a recession going on. So our exports stayed down, there isn't demand for our stuff. And because we have demand here, our imports go up. And so we have a pretty whopping trade deficit. The COVID phenomenon, and the economic implications of it really are overshadowing what otherwise we could see in the trade data. Because for instance, there's another indicator about manufacturing, it's a study that is done that, you know, every month looks at sort of the projections for supply chain and manufacturing. And that and domestically, and that is that that number is up that's that's doing fairly well. So normally, you wouldn't see that number go up in the trade deficit go up at the same time. But that is that is the COVID effect. I think we're all incredibly impatient to see the horrors of the COVID lessons about hyperglobalisation quickly translate into more domestic investment, more domestic manufacturing, more resilience, more reliability. For all of us more good manufacturing jobs, the proof is going to be in the pudding over time, and the Biden administration is going to have a fight in its hands with all these corporations that want to do the same old, same old, you know, "China's too expensive, let's make it in Vietnam," kind of agenda of manufacturing. And I think they're going to stick to their guns only if we really all are pushing to make that happen. Because the counter push is going to be enormous. And there is a lot of inertia of this old system. But I think what we see in what the Biden administration's supply chain reviews and what they Buy America order is showing, is there a lot of people in there now, unlike any pastime, high level Biden administration officials, who deeply understand the problem, and really do you want to change and as frustrating as it may be, that's not going as fast as we want, are there parts of it that aren't done. It behooves us all to basically make common cause with those allies, and really push hard to try and help those folks in the inside who want to make these changes because it's a unique opportunity. It's the first time in 30 years of my doing this work that that possibility even exists, and so we need to make it work for us.

Ryan 
You can check the description of this podcast for links to both of the reports that we discussed in the episode. Rethinking Trade is produced by Public Citizen's Global Trade Watch. To learn more you can visit rethinktrade.org. You can also visit tradewatch.org. Stay tuned for more and thank you for listening.

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Rethinking Trade - Season 1 Episode 36: U.S. Inaction is Enabling COVID-19 Variants to Spread

The world celebrated when President Biden announced the U.S. would support a temporary waiver of World Trade Organization “TRIPS” intellectual property barriers to boost global production of COVID-19 vaccines. But months later, Big Pharma’s monopolies remain. 

The administration has failed to deliver on the waiver or to get vaccine makers to share their recipes. That means dire shortages of vaccines continue and with the vast majority of people worldwide exposed, COVID is on a murderous, variant-spawning rampage.

Now the delta variant first detected overseas is burning through the U.S. Public health experts are warning that lockdowns and perhaps other measures, like postponing in-person learning, may be necessary. The U.S. must act now to end the pandemic. Every moment of further inaction enables COVID-19 variants to develop and spread.

Take Action: rethinktrade.org.

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Music: Groove Grove by Kevin MacLeod.

Link: https://incompetech.filmmusic.io/song/3831-groove-grove.

License: http://creativecommons.org/licenses/by/4.0/

Transcribed by Sally King

Ryan
Welcome back to Rethinking Trade where we don't just talk about trade policy, we fight to change it. I'm Ryan and I'm joined once again by our in-house trade expert, Lori Wallach. Lori, on May 5, the Biden administration announced its support for waiving TRIPS intellectual property barriers for COVID-19 vaccines at the World Trade Organization. As we've detailed in previous episodes, a waiver proposed by South Africa and India would help facilitate more production of COVID-19 vaccines, tests and treatments around the world. By reversing the Trump administration's block against the waiver, the administration created momentum for it to be adopted at the WTO. But today, three months later, the deal is not done. And with the Delta variant spreading rapidly, pressure is mounting on the administration to do more to make the waiver a reality. What is the current situation with the TRIPS waiver? And why are groups urging more to be done,

Lori Wallach
Just to remind folks TRIPS stands for the agreement and trade-related aspects of intellectual property. It's an agreement enforced by the WTO that all of the WTO is members, 160 countries are obliged to give Big Pharmaceutical companies monopoly control. So for instance, right now, a handful of companies are deciding if and when vaccines are made, there's a dire shortage as a result, a few companies have the powers over how many tests are made and treatments that are critical to saving the lives of people with COVID. So this waiver is urgent, and not a dang thing has happened. And that is where it is. So two things are going very wrong. One, on the one hand, the binder administration on May 5 did a historic thing and switching sides, having the US be on the right side of history and joined 130 other countries calling for this temporary waiver of these intellectual property barriers in the face of this unprecedented 100 years health crisis to try and save lives, it was exactly the right thing to do. But since then, the US has not really shown the kind of leadership that in the past has been shown at the WTO or other international negotiations, when there really is the US on a mission to get it done. Now, it's tricky, because the WTO is a place where if big developed countries too heavy-handed, it can backfire. But there is sort of a Goldilocks position not too hard, not too soft, just right. And we're not there yet with the US is leadership to try and get the deal done. On the other hand, the European Union has come in like gangbusters to mess the damn thing up. So Germany is leading has pushed the European Union, which operates the WTO is a block to oppose a waiver. And they have been strategically obstructionist. They have been merciless, they have been impossible. And instead of the US basically meeting fire with fire, the US has been fairly passive. And so the situation now is more or less Germany with the UK and Switzerland kind of hiding behind the German government, which has ginned up the whole European Union is blocking 130 plus countries that see this urgent waiver as necessary, not sufficient, there's more, but necessary to start to scale up the needed production of vaccines, tests and treatments. So what's happening now is basically Germany needs to get the hell out of the way, at this point, it is becoming a Germany versus humanity problem. This is not good history, this is not good luck. They just need to get out of the way. And then you've got the US, which needs to step up and help lead with some of the countries like South Africa and India that have this initiative in the first instance, towards getting a deal because three months of so-called negotiations have led to nowhere since the US switch sides and the US showed amazing leadership and getting some of the other small but powerful bloc of countries to stop blocking. So Japan came inside and Mexico and Canada, they're a bunch of countries that were doing the wrong thing and the US got that fixed, but they still have not been able to deliver the deal. And President Biden and USTR Tai were spot-on. The number one priority needs to be to save lives. And right now it's not just lives overseas, as important as it is that tens of millions of people could die needlessly. To put this in perspective, of the 4 billion and change vaccines that have been produced and used 85% of them have been used by just 10 countries. So if you're in the US and you're hearing this, you're getting scared about Delta, but you've had some months of having a sense of security of having some sense of the vision of what could be normal. There are dozens of countries that haven't a single shot available, and most of Africa's below 10% immunized is not supposed to be getting a full set of shots under the current production capacity until maybe 2024. Which, you know, just to be very narrow-minded. What do you think the Delta variant in any other variant is going to be coming from but from where the Coronavirus is raging? It is killing people and it is cooking up at some point a vaccine-resistant variants. So when people say no one's safe until everyone's safe, they just a slug. So we just need to get the TRIPS waiver done like two months ago as the critical first steps that we can get more vaccines, tests and treatments made around the world and end the damn pandemic,

Ryan
You were just talking about the Delta variant. We've talked about the threat of variants in the past. And that's been one of the things we've been saying about the TRIPS waiver that it would help prevent them from emerging and spreading in the first place. Now we're seeing the reality. The Delta variant is obviously threatening to bring about a new round of mask mandates and lockdowns in the US and elsewhere. Can you talk a bit more about the issue of variants and the TRIPS waiver?

Lori Wallach
So here's the deal. Variants emerge naturally out of viruses, but they need a place to be created. So the virus has to be replicating, that's when you get variants. That's where you get mutations. And if there are vast numbers of people who are infected, if there are raging outbreaks, it doesn't just kill tens of millions of people who do not need to be losing their lives at this point, because there is a vaccine, even if the vaccine, like with the Delta variant can't stop an infection, it's proving to keep people from being hospitalized or from dying. Most of the world is now in the face of huge third-wave, raging outbreaks, and just not being covered here. So the horrors that we saw in India, that's right now in Indonesia, that has been in Peru and Nepal and Pakistan, it is all over Africa. People are dying, and they have no vaccine, they have no treatments, and they're totally unprotected. And in the midst of all of that, death, destruction, economic wreckage, new variants are also breeding. And the reason why is the virus is trying to make itself better, stronger, more likely to spread and continue on. So these Greek letters, now we've heard about lambda, they are four significant variants that have basically been developed because there have been outbreaks where the virus can mutate. And then the new version can spread. And as we saw with Delta, if it's much more infectious, it just takes over. And so we practically greedily thinking just about that handful of countries have vaccines, we the privileged to have vaccines have equal interests as the person who doesn't have them in the entire world getting vaccinated. Because as long as there are raging outbreaks anywhere, there are going to be variants until there's a variant that literally gets all the way around the vaccine makes you really ill, kills people at the same numbers, and then we're going to be on global lockdown again and back to scratch. So whether you're motivated by the self-interest of not getting back to that situation, or you are horrified by the prospect of all these needless deaths, or it's a combination, it is in everyone's interests in the battle of vaccines versus variance, to get enough vaccines to wipe out the hot spots where massive new variants will develop and spread worldwide.

Ryan
And I haven't met many people who are not upset when they hear about this stuff, what needs to happen now, you know, what can get us out of this mess?

Lori Wallach
So at this point, I think the only thing that is going to change the circumstances is if people in the developed countries who've been privileged to have the vaccines and who now are the seat of Europe blocking the waiver, and the US not leading strongly enough to get the waiver. People in the rich countries need to reactivate the campaigning that, for instance, in the United States led to this amazing outcome of having the US for the first time in history, put people's health and global health ahead of Big Pharma. People did that. The President obviously has a strong moral compass in his Catholic social justice, faith-based value of caring for people's lives around the world. That is for sure with the president. But amongst many different things that were clamoring for attention, many crises, it was public attention and demand that helped make this wave or something, then in May, with all the other things demanding a president's time the President supported, and we're just gonna have to gear up another campaign at the same level, because a lot of other things are sucking up a lot of the oxygen in the room. And people in the White House, people across the country need to basically have this rise back up. And then sadly, I think the Delta variant is part of how that's going to happen anyway. But you know, as we're thinking about what can make a difference, the answer is not, "Oh, we all should get a booster." The answer is we need to get that third shot that we will be taking unless you're super immune-compromised super all there's some real reason you need it, that needs to go into an arm and someone in one of those countries where there no vaccines, and then we need to make a ton more vaccines. That's the bottom line. There are three ways this can happen. This is not rocket science. This is a question of people power. Step one. on leash the intellectual property, get the barriers out of the way. That is the waiver of the WTO rules. Simply get rid of these barriers temporarily so that it is allowed around the world to make more of the vaccines, treatments and tests. Number two technology transfer. What does that mean? It means the difference between someone giving me the piece of paper and saying legally, okay, here's the IP waiver. Here's a list of ingredients and you have the right now to take my information that previously was under monopoly control, and you can do it too. But he was cooked anything with the recipe knows listening gradients isn't sufficient you need the how you do it, what is the order of it, what you stir with what where does the egg beater come in? And so the technology transfer is that part of the recipe, where it says here is how you make, for instance, these mRNA vaccines, which actually are the easiest to scale up, because they don't require the enormous specialized like vats that you need to brew certain kinds of virus-based viral injections. units in your chemistry, you need clean manufacturing could be in a computer chip factory, it could be in another pharmaceutical factory, but you need the technology. So that's a matter of being able to do that as Moderna's chief scientists said is getting lines up in three to four months, not taking a year to reverse engineer how the hell you put the ingredients together. So number one TRIPS waiver, liberate the intellectual property. Number two, to speed up the production technology transfer. And by the way, the US government paid a lot of money to Moderna to Pfizer, to J&J. And there is, particularly with Moderna, even government patents in the vaccine. So there is leverage the Biden administration needs to exercise it is basically to say, guys, we'll even compensate you for some of this, but you just have to share the know-how. And then number three is just a good old cash money to basically scale up the manufacturing. And what is clear is this has to happen in hubs around the world, we don't have the capacity and make it out here and ship it there. Besides the fact, we all know how that will go. As soon as there is a real scare here, no one is going to be willing to send the stuff made here or there. So yeah, we need to increase production here both for more capacity for our own use. And then we can make some more and send some more. But there needs to be production capacity around the world. And the good news is and every part of the world there are companies that could do it. Some people say at this moment, there are 2 billion doses not being made were the IP liberated and the technology transferred, that could be online in the matter of months. But even more production needs to be set up. And so for instance, Public Citizen did a study, and for $25 billion, 8 billion more doses could be constructed by either retrofitting existing facilities, or adding new lines to existing clean manufacturing facilities, which again, that's all you need for mRNA. You don't need the huge vats, etc. and that work is going to take cash both for the construction, but actually the thing that's the most expensive is just the inputs. So as Professor Joe Stiglitz, the Nobel Prize winning economist says if you can get the IP barriers out of the way, the market can solve for a lot of this. So if you need more inputs to make mRNA vaccines, you need more lipids, you need more glass vials, as soon as you liberate the IP and get the technology transferred so actually, there is a demand for all that stuff. The market will solve for making more but but it's going to take money. So wave the IP transfer, the technology, manufacturing that is funded and distributed around the world. That is how we get the hell out of this disaster. That is the only way we're going to stop this pandemic. And the way to make that happen is only going to be people power. Pharma has no interest in this. The pharmaceutical companies are right now have a monopoly on these vaccines. They're not just thinking about their greedy boosters for $150 a shot, which Pfizer's literally said that's what they're going to do; not the 20 bucks a shot, that they're now charging for pandemic pricing vaccines. It's not just the vaccines where they hope to make the $150 booster shot, which is what Pfizer is on the record said they're going to do and replace $150 shot with for the $20 pandemic pricing original vaccine. It's also because these handful of companies want to corner the market, have a monopoly on this platform of mRNA with respect to cancer cures and AIDS cures and, and malaria, and the greed of thinking about these future profits over the prospect of tens of millions of people dying and never getting out of this cycle, this vicious cycle, which is profitable for Pharma to have a new variant that needs new boots so that they can then sell to the rich people. But that that is like that has no future for our world. So the one-two-three stops, people power is going to make it happen. And the very first thing I recommend is join all these organizations nationwide, that have sort of hit that basta point where it's like enough already, the Biden administration needs to step it up. And in the US there's a big petition drive and their visits with members of Congress has a lot of activity going on. And in Europe, led by the Germans same things going on basta, we've had it! The EU needs to get the hell out of the way starting with Germany and that transatlantic people power given the leadership's already come from the developing countries and their governments. That's how we're going to get this done.

Ryan
And if you check the summary of this podcast, there are links to some of the actions that Lori just described. Rethinking Trade is produced by Public Citizen's Global Trade Watch. To learn more you can visit rethinktrade.org. You can also visit tradewatch.org. Stay tuned for more and thank you for listening.

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XL Pipeline Absurd $15 Billion NAFTA ISDS Claim  

By Noa Levin, Daniel Rangel

TransCanada Energy (TC Energy) announced on July 2, 2021 that it would be filing a legacy North American Free Trade Agreement (NAFTA) claim under the Investor State Dispute Settlement (ISDS) system, seeking US$15 billion in compensation for the Biden administration’s revocation of the Keystone XL pipeline permit. While the United States-Mexico-Canada Agreement (USMCA), which replaced NAFTA, gutted ISDS between the United States and Canada, the parties agreed to allow a three-year post-termination period for “legacy” claims arising from investments that predate the entry into force of the USMCA. This is the basis for TC Energy’s claim.

A review of TC Energy’s annual fiscal reports reveals that $15 billion is an arbitrarily large damage claim, completely unrelated to the value of investments made or the actual hit that the company is assuming from the project’s cancellation.

TC Energy claimed in their 2020 Annual report that the carrying value of the Keystone XL plant, property, and equipment was US$2.2 billion, and the carrying value of associated projects was US$0.2 billion (a combined carrying value of US$2.4 billion).[1] This carrying value, which represents the asset’s worth (measured by taking its cost and factoring in any depreciation), underscores that the Keystone project was valued at only US$2.4 billion prior to its cancellation. In 2016, when TC Energy launched its first ISDS case against the United States, the corporation  claimed that it had spent US$3.1 billion on the project. It is apparent then that the company did not undertake any substantial further investment after then-President Trump issued a new permit in 2017.

Now, this does not mean that the actual “damage” caused to the Canadian firm ascends to US$2.4 billion. The project might have been cancelled, but TC Energy could sell or repurpose many of the assets initially devoted to the pipeline to reduce the financial burden. As a matter of fact, it seems that this is what has been happening since. In its First Quarterly report of 2021, TC Energy reported that the cancellation of the Keystone XL pipeline led to an after-tax asset impairment of US$1.8 billion.[2] In other words, the cancellation of the project resulted in a financial hit of US$1.8 billion for investors.

This is considerably smaller than the $15 billion demanded through ISDS. Yet, this number must be reduced further because TC Energy did not finance the pipeline alone; a significant amount of funds came from outside investors, most notably the Government of Alberta, which invested approximately US$1 billion in the project.[3] Excluding these external investments, TC Energy reported a personal financial exposure (loss) of US$0.8 billion.[4]

So, while it is demanding $15 billion in compensation from U.S. taxpayers, TC Energy actually took a financial hit of US$0.8 billion from the cancellation of the Keystone XL pipeline.

In a nutshell, TC Energy expects to get 15 times more money, coming from taxpayers’ pockets, than the asset losses it experienced from the revocation of a permit, that was already denied twice. Rather, the $15 billion reflects what the corporation in some way gauges to be its expected future profits. Or, to put it another way, $15 billion is the corporation’s projected return on an investment that generated widespread opposition across potentially impacted communities in the United States.

Are more reasons needed to swiftly and definitively end ISDS? 

 

[1] In Canadian dollars, these values are $2.8 billion, $0.2 billion, and $3 billion respectively, using the December 31, 2020 exchange rate of 0.7875 USD for 1 Canadian dollar.

[2] Or 2.2 billion Canadian dollars, using the March 31, 2021 exchange rate of 0.79601 USD for 1 Canadian dollar.

[3] $1.3 billion Canadian dollars, using the March 31, 2021 exchange rate.

[4] $1.0 billion Canadian dollars, using the March 31, 2021 exchange rate.

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Rethinking Trade - Season 1 Episode 35: NAFTA Keystone XL Pipeline $15B ISDS Attack

Within hours of taking office, President Biden revoked the permit for the controversial Keystone XL pipeline. The project, which would worsen the climate crisis, also posed major health and safety risks to indigenous people whose land it crossed. Now the Canadian corporation that wanted to build the pipeline is using a NAFTA Investor-State Dispute System (ISDS) tribunal to demand $15 billion from U.S. taxpayers.

ISDS allows multinational corporations to sue governments before a panel of three corporate lawyers, who can award unlimited sums to be paid by taxpayers, including for the loss of expected future profits. A years-long civil society and labor campaign got the original ISDS rules whacked out of the revised NAFTA. But that fix is phased-in over three years. This means legacy cases like TC Energy’s can be launched until 2023.

In this episode, we look at the Keystone XL NAFTA ISDS case, the new rules governing investor rights in North America, and the future of the ISDS regime.

Learn more at rethinktrade.org.

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Music: Groove Grove by Kevin MacLeod. 

Link: https://incompetech.filmmusic.io/song/3831-groove-grove

License: http://creativecommons.org/licenses/by/4.0/

Transcribed by Sally King

 

Ryan 

Welcome back to Rethinking Trade where we don't just talk about trade policy, we fight to change it. I'm Ryan and I'm joined once again by our in-house trade expert, Lori Wallach. Lori, earlier this month, a Canadian company called TC Energy filed a claim for $15 billion in compensation from the US government for allegedly violating the terms of the North American Free Trade Agreement's Investor State Dispute Settlement system by revoking the permits for the infamous Keystone XL pipeline. Now in our last episode, we looked at the revised NAFTA, now the USMCA, one year after it went into effect. One of the big victories in the fight around the USMCA was the gutting of ISDS. But before we get deeper into what ISDS is, how it works and how a case is being launched, even after the USMC went into effect, can you just tell us about what this case looks like and what it could mean for the US and for US taxpayers.

Lori Wallach 

So as you said, this corporation is demanding $15 billion with a "b" in US taxpayers money to compensate them for the denial of their special rights as foreign investors under NAFTA, because they are claiming that the future expected profits that would accrue from this XL pipeline had it gone forward, with some up to $15 billion, and that they have a right as a foreign investor to be able to complete this project. And if any US government action stops it, we taxpayers have to compensate them. That is the infamous Investor State Dispute Settlement system, which grants rights to foreign corporations to sue the US Mexican or Canadian government. Before a panel of three corporate lawyers. The lawyers can award the corporations on limited songs to be paid by American taxpayers or Canadian taxpayers or Mexican taxpayers, including for the loss of their expected future profits. And he's from corporations only need to convince the lawyers that a law or a safety regulation or in this case, a permit for a dangerous pipeline violates their NAFTA rights. The decisions are not subject to appeal, and the amount awarded has no limit. And this part of NAFTA was largely eliminated with respect to Canada, it was simply ended. And with respect to Mexico, the worst features were eliminated. However, those new rules phased in over three years. So this is what is called a legacy case, we are one year into the new phase and two more years to go. So this case can still go forward.

Ryan 

And for the listeners, we covered a lot about ISDS. In our 10th episode of the podcast, when there were lawsuits being threatened to keep factories open during the early days of the pandemic, I would encourage you to go back and listen to that episode. But Lori, let's get a little deeper into the ISDS system. And then also let's talk about how it was gutted from the old NAFTA, we can talk a bit about the campaign. And then you already introduced us to the legacy cases. But maybe you could explain a little bit more about what a legacy case is and what the phasing looks like.

Lori Wallach 

So legacy case just means that a corporation still has a certain number of years as the investor state Dispute Settlement system phases out of NAFTA, to be able to still bring cases and it's three years one year down. So legacy cases, basically using the old NAFTA provisions before they phase out. And the process basically, as a corporation gives notice from an intent to file what is officially in arbitration. Only the corporations can start these cases governments can't sue the corporations for bad behavior. The rights are only for investors to attack governments and their regulations. And once an investor starts a case, if it's within the three-year phase-out, even after ISDS phases out the case goes forward. So it is a very pernicious facet of NAFTA. And it's a from our perspective, too long of a transition and getting rid of those terms. There are questions about the standing for this case and there will be legal fights about whether or not particular rights were denied. The problem is the decisions get made. by three ad hoc, appointed just for the case billing by the hour corporate lawyers, and these mainly men make their money by serving on these tribunals. And only the corporations can start the cases. So there's a deep financial incentive to rule for the corporations because the corporation's get to pick one of the judges, the three of them, the corporation picks one, the government picks one, and then those two have a third. So it's a club where you're likely get picked by the corporation and the corporation's one that starts the cases if you rule for corporations. So very few of the people, the corporate lawyers who specialize in these kinds of cases, and by the way, they built like $800 an hour. So even if they're going to eventually dismiss a case, it's in their interest for it to go for a long time, which is why on average, even in the cases, they're dismissed, governments pay between five and $8 million in legal fees, that's when they win. So it's a real scam. And it can't go away fast enough.

Ryan 

For many countries. I mean, for the US, the US can afford to enter the legal process around this lawsuit. But for many countries, much poorer countries, even the threat of one of these cases, might as well be one of the cases, right, like companies can often get what they want, simply by suggesting that they could launch a case.

Lori Wallach 

ISDS works as a threat because historically, so many of the tribunals and the corporate lawyers rule in favor of the governments. And for a lot of particularly developing countries, if they figure they're going to have to pay any way. They don't want to spend the extra millions fighting the case along the way. They'd just rather try and settle it pay off the corporation roll back the long question. And it's now developing countries that do that there's an infamous case where Canada reversed an environmental regulation banning a toxic substance. So that us Corporation, the Ethyl Corporation would end their lawsuits and part of the settlement was that Canada had to publish in newspapers around the world that this chemical is perfectly safe, and as well as long to be sold again in Canada. So it's a rough form of corporate bargaining, where the sword of Damocles is basically hung of the prospect of not just a lot of money and damages to have to be paid off by taxpayers, but years of litigation and millions of dollars in legal fees. It is, you know, a really outrageous and pernicious system.

Ryan 

And so there's two big things at play regarding ISDS in North America, specifically in the USMCA and the first of those legacy cases, which you described earlier. The second is the carve-out in the USMCA that maintains ISDS rules for a narrow but fairly important sector of industries. Can you talk about this carve out and what we need to be on the lookout for.

Lori Wallach 

So the carve out is an exclusion to the termination of the old NAFTA investor state. And it applies the old ISDS rules to contracts that currently seven us oil and gas companies have it's 13 contracts that were made under the old NAFTA that are specifically with one particular Mexican government agency that has to do with oil and gas exploration. And the rule is, as long as Mexico keeps Investor State Dispute Settlement, the old times with other countries whose firms have those kinds of contracts, then this carve out allows the US companies to have access to the same extreme corporate rights that their competitor other foreign investors in Mexico's oil and gas sector have. And it was, you know, that one of the, you know, really disappointing things that ended up marring what would have otherwise been incredible victory and ISDS. So when activists look at this rollback of ISDS, which NAFTA was the first agreement into which ISDS first trade agreement into which ISDS was inserted. So to have the United States which has been a great proponent, shoving ISDS in other countries and being a big benefactor and defendor have it, to have the United States say we're ending it with this country, and we're cutting it back enormously with this other country, symbolically around the world and powers a lot of other countries who are trying to exit this outrageous regime. But the sour aftertaste was that this carve-out meant with respect to those contracts and those companies indefinitely until Mexico actually decides to get out of ISDS which would be a very smart thing, then these us firms keep the legacy of the old NAFTA,

Ryan 

Sort of, as you were just alluding to Lori, there was a lot of hope when the USMCA was passed regarding the future of ISDS, not just within the context of the USMCA, but throughout the world. Obviously, NAFTA was not the only deal. It was the first, but not the only to have ISDS rules. What are some of the big fights ahead and confronting and continuing to dismantle ISDS globally?

Lori Wallach 

So a lot of very important developing countries have shown leadership and getting out of ISDS. South Africa started the trend. And then Indonesia joined in, Brazil has never had ISDS agreements. Bolivia and Ecuador both got out heartbreakingly now the right-wing government Ecuador is trying to get back in a lot of countries looked to those countries in the renegotiated its agreements to get rid of most of the pernicious elements. So when the US joined in as a main proponent, benefactor and defender of ISDS, and also a developed country, it was a super important impact worldwide where lots of countries want to get out of their investor agreements and/or if not get out of them altogether to roll them back to something more like the Mexico model. That is in the USMCA which, you know, like the India revised model requires a corporation to use up all of its domestic enforcement options before I can even contemplate going to a panel and then only allows direct exposure creation compensation as compared to all the fancy, silly made up rights, the corporation is jammed into deals like NAFTA and others. And so I think that with the Trump administration, which is you know, basically Donald Trump, a wholly owned corporate subsidiary, with right-wing tendencies, in addition, to make clear that even they thought ISDS was a bridge too far made it such that with a democrat Biden saying his trade agreements wouldn't have ISDS it's now become really the US position, that that old regime is no longer acceptable, tolerable, and that's good for us, that's good for the countries with whom the US would have trade agreements, but also opens up space for the many countries around the world that are smaller countries or developing countries to basically take the cover of the US taking that action with NAFTA.

Ryan 

Rethinking Trade is produced by Public Citizen's Global Trade Watch. To learn more you can visit rethinktrade.org. You can also visit tradewatch.org. Stay tuned for more and thank you for listening.

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Rethinking Trade - Season 1 Episode 34: The USMCA, A Year in Review

On July 1, 2020, following a lengthy campaign by unions, civil society groups and congressional Democrats to win key improvements, the revised North American Free Trade Agreement, or United States Mexico Canada Agreement (USMCA), went into effect.

Unlike the original NAFTA, the USMCA requires its signatory countries to respect workers’ rights. And it has a special Rapid Response Labor Enforcement Mechanism. The revised deal largely gutted the disastrous Investor-State Dispute Settlement (ISDS) system. But recently-filed labor enforcement complaints and a “legacy” ISDS case with the corporation behind the XL pipeline demanding $15 billion from U.S. taxpayers provide a stark warning that if and how the USMCA improves life and work in North America will depend on activism in all three nations.

See Public Citizen’s analysis of the delayed phase-in of Mexico’s new labor justice system here: http://bitly.ws/dRnT

Music: Groove Grove by Kevin MacLeod. Link: https://incompetech.filmmusic.io/song/3831-groove-grove. License: http://creativecommons.org/licenses/by/4.0/

Transcribed by Sally King

 

Ryan 

Welcome back to rethinking trade where we don't just talk about trade policy, we fight to change it. I'm Ryan and I'm joined once again by our in house trade expert, Lori Wallach. In our recent episodes, we've been speaking a lot about COVID-19 and the world trade organizations intellectual property barriers, but today we're going to talk about the revised North American Free Trade Agreement, or the USMCA because it went into effect exactly one year ago. In addition to having Lori with us today, we're also joined by global trade watches Research Director, Daniel Rangel. Daniel has been leading a lot of our work around USMCA related labor and workers rights issues, specifically around the implementation of the new labor rights obligations in Mexico. Daniel is one of the lawyers who filed one of the first labor violations cases. Lori, why don't you start us off with a general overview of the labor rules that activists fought for during the Replace NAFTA campaign. And then Daniel, let's talk about the trade next case and the report you recently authored regarding labor reforms and implementation in Mexico.

Lori Wallach 

So one of the biggest changes between the original NAFTA and the revised deal was that Democrats in Congress forced Donald Trump to renegotiate his renegotiated NAFTA, to add a thing called the rapid response labor enforcement mechanism. And what that did is it allowed for actions to be started through petitions by unions or activists that the governments have to respond to that allow enforcement against a particular company with respect to certain specific violations. And the violations relate to obligations each country was required to implement, to, for instance, guarantee basic fundamental union rights to organize to collectively bargain to be able to have, for instance, Mexico's implementation required being able to have votes on your union contract and see it in advance or being able to elect your own officers of your union to make sure they actually represent you. And what this was focused on was the combination of the original NAFTA, having no real labor standards, there was a side agreement, it wasn't enforceable in any way. And the standards themselves were enforce your own laws. So Mexico's laws and the books were pretty good. The problem was they had been enforced for literally decades, such that what were called protection unions, were the vast mass majority of unions in Mexico and in protection union is one that protects the boss. So it's a union that basically the workers don't vote for. They don't elect that union or its officers, it signs contracts with the bosses that are intended to qualify for Mexican labor law requirements that you have a union contract, but the workers never approve it. Some of them don't even know there is a union. And then these so called unions make a lot of money off of getting deductions from the workers wages, to basically be partners with the bosses in keeping wages down. And that horrible collusion, which was just basically reinforced by NAFTA and all the investment protections that helped big US multinationals move down to Mexico to use that kind of exploited labor. That combination is a big part of why, you know, 25 years after NAFTA not only had Mexican wages not risen as NAFTA as original boosters promised, but in fact, they were slightly down, and certainly they were considerably lower than manufacturing wages in China. That was one of the things that had to be tackled, that was both horribly unfair to work as in Mexico, we're making world class products for global companies, and also as a contributing factor to over a million US jobs having been certified as having been offshored to Mexico under NAFTA. So the deal was stronger labor standards guaranteed of independent unions, and for the first time, some real enforcement, but what you have on paper you never know if you have in reality and that is why one year after that all went to a fact the real question, is it changing people's lives.

Ryan 

One of the situations that Lorijust described one of the specific examples of it is something if you listen to our show you've heard about before, which is the case at the Tridonex plant in Matamoros and You know, the situation regarding the labor lawyer who's been representing the independent union there, Susana preeto. Daniel, tell us about what has been happening at the Tridonex factory and also the case that you have lead regarding the violations of labor rights at the Tridonex factory.

Daniel 

Sure. Thank you for having me, Ryan. So basically, this all started in early 2019, when the President of Mexico and then Manuel Lopez Obrador decided to rise the wages across Mexico a 20% increase of the minimum wage. And when the workers in the northern part of Mexico wanted to have that increase for the wages, that was a right that they want decades ago, because that was a provision that was already in much of the collective bargaining agreements that were prevalent in Tamaulipas, when they decided that they want to ask for this increase. They faced repression and violence, not only from companies but also from the local authorities in Tamaulipas, specifically. So one of the ways in which workers decided to claim for the new rights was organizing through a dependent union that's called MOVIMIENTO 2032 that was born out of this struggle. Workers from many factories affiliated to this union, specifically, workers from Tridonex, who played an important role in the initial uprising. When the workers tried to organize independently, they faced a lot of repression, not only from Tridonex to company management, but also the management was parked by the local authorities that in Mexico are called conciliation and arbitration boards, and those are the authorities that Lori was mentioning before that have been colluding with for decades to repress workers and to undermine the rights. So what we have done, along with our partners in labor, both in Mexico, and in the United States, is to help them present a case before the US government arguing why this has been a violation of the labor rights that are recognized by NAFTA, by the new NAFTA, and consequently, making both the Mexican government and the US government to cooperate to try to find a solution. And if it is not possible to impose sanctions on Tridonex because it has been violating labor rights.

Ryan 

And how does this case tie into? You know, I know that there are now a few other cases as well raising the issue of labor violations under the new rules. There's also the issue of the phase implementation of the rules in Mexico. Why don't you talk about the report that you recently authored looking at the status of the labor reforms and implementation in Mexico and how those kind of relate to the Tridonex case,

Daniel 

The Tridonex case is a good parting point to explain why the stage implementation of the labor reform is worrisome. And is because a good deal of the labor reform in Mexico is related to the creation of new labor courts that will deal with the cases that are filed by unions and workers to fight for their rights. The problem is that in Tamaulipas, that is the state where treatment plans are located. This has been the state that is labeled as phase three estate. What this means is that there are not gonna be any labor courts and the new labor courts in this state until May, 2022. So workers will have to go to the old corrupt labor bodies that already exists, and that are not granting them the rights until at least May 2022, for an additional year. This is not only for Tamaulipas, but it's all for all three states that, together, they have half of the manufacturing output of Mexico, half of the labor conflicts that the country registers every year, and an overwhelming number of strikes per year. And that's the problem that we identified in our report on that we're trying to put the spotlight on so that authorities both in Mexico and in the US look for policy solutions to redress this.

Ryan 

And you can see that report at the link in the summary of this episode. Moving on from that, you know, another one of the big victories during the Replace NAFTA campaign, aside from the labor rights and implementation improvements, was the gutting of Investor State Dispute Settlement rules. While this was a huge moment in the fight For better trade policies, there are still ISDS threats looming across North America. I wanted to talk a bit about both trade deals under the ISDS rules and the situation regarding the gutting of ISDS under the USMCA. Lori, maybe you could tell us a bit about ISDS policies in general and how significant the USMCA is in the context of the ISDS status quo.

Lori Wallach 

So I want to start by reminding folks what Investor State Dispute Settlement or ISDS is, it is a system that empowers multinational corporations, to skirt domestic courts and sue governments for unlimited payments of taxpayer funds over any domestic law or policy or regulation court decision that a corporation thinks violates their special investor rights in a trade agreement or an investor treaty. And these cases are decided by tribunals have three corporate attorneys whose decisions are not subject to appeal, and the amounts they can order taxpayers to pay the corporations have no limits. So the North American Free Trade Agreement, NAFTA, which went into effect in 1994, was the first trade agreement that had this extreme system embedded into it. It basically was a mechanism under which corporations could threaten and or literally extract funds from countries for implementing laws that treat foreign and domestic firms the same. And under NAFTA, almost $400 million were paid out in attacks, on environmental policies, and on totally non trade related policies like bands of toxic substances and land use policies, and water and timber policies. And that system was really one of the most pernicious elements that corporate power rigging was one of the most pernicious elements of NAFTA, it also made an incentive to outsource jobs. Because if you took off and you went to any of the other NAFTA countries, you had more of an opportunity to behave badly. And if the government did anything about it, it was like having basically investor insurance, you could go raid the Public Treasury, if they if the government said follow labor law, follow environmental law, really the wrongheaded way of of having global policy. So the really exciting thing about the revised NAFTA, is that with respect to the US and Canada, that system was simply phased out. So we are now 1/3, of the way to the end of Investor State Dispute Settlement in North America, between the US and Canada. And so July 1 is, you know, we're heading down the road, it's really important because an enormous number of the cases where US corporations attacking Canada's better environmental laws. And when US-Canada, investor state goes away, that means that literally 90% of us investor state liability goes with it. So big improvement. With respect to the US and Mexico, the old ISDS system was replaced by a system that includes most of the reforms progressives have asked for, that, among other things, requires a corporation to actually use up all of its remedies that are available in domestic law and spend a bunch of years trying before they could even use the system. But more importantly, it replaces the old substantive rules where you could get money for almost anything, to literally compensation for actual taking of a property without compensation. And that is not what these cases are about, these cases are about a regulation that changes the use and undermines the expectations. And the way the compensation works, it's the difference between what a company thought they would make their expected profits and what they really make. So it's a big honkin deal. There is one big problem with that fix, which is there was an exception with respect to existing contracts in the petrochemical sector. So oil and gas, if a US company has contracts with Mexico, then if Mexico keeps this full investor state system with any other country that has companies with contracts, then there's a grandfathering of the old outrageous rights with respect to those legacy contracts. And that's super problematic, of course, because those kinds of companies are often the biggest players, some of the biggest money grabs a famous agreement under a US-Ecuador treaty is why the largest ones were oil company is the one that is attacking Ecuador and getting literally more than a billion dollars. So it's a it's a problematic exception, but relatively speaking, almost all the cases actually Have all the cases have happened to the old NAFTA couldn't happen under this new regime. However, three years to phase it in, and as much as we can celebrate, that means there's still three years for bad cases. And already in this first year, some of them have been filed. So there have been some, what we can call legacy cases, phase in period cases. So these corporations are scrambling to use these old corporate rights before they go away. And that's a problem.

Ryan 

You know, Lori, some of the things you just said about the existing ISDS rules under the USMCA what was good, but also the carve out and you know, the the phase in and how that presents these kinds of problems. And Daniel, you were talking about some of the phase in problems under the labor rules. When when the USMCA was passed, some, some are celebrating it as a model for future trade deals, and even a, quote gold standard. But I know Public Citizen, we saw it as progress to be built upon, but far short of a model agreement. We're going to ask you both how is the USMCA looking now after a year? And what does it taught us about the future of US trade policy?

Lori Wallach 

What the whole renegotiation of NAFTA told us is that the old US trade model, which was made worse and worse and worse, until you saw the Trans Pacific Partnership, which was horrific, NAFTA on steroids, is nothing sacrosanct. It is just one version. And it was a version that was not very widely supported. And so after all, the damage it did, it got replaced. Yet, the other thing that told us was, this is an ongoing process. This ain't the gold standard. This isn't the fix. The revised NAFTA is not the model. It was important steps in the right direction. And it fix some things and it tests out some important improvements. But there's a long way to go to get a trade agreement that is really worker centered, that is one that works first for people and the planet. And the whole fight over renegotiating NAFTA is basically from going in a way from NAFTA, which was like five layers below hell we got ourselves up to the surface, which is good. But we aint in any way in trade heaven yet. So there's a lot more work to be done. And we will see how well the changes and improvements in the revised NAFTA actually work because those are things from which we can build. But there's plenty of bad stuff that's still from the original NAFTA and some new bad stuff like rules that help big tech escape, being decent to workers, or that can trash our privacy, all that stuff get added in. So there's a lot further to go. But one very big thing I think this whole episode taught is that the old trade authority system, the so called fast track system, is just a total myth. Because the revised NAFTA was negotiated under so called fast-track. And ultimately, when it came back to Congress, and there simply wasn't a majority that was going to pass that agreement, fast-track or no fast-track, they made the administration go back and renegotiate renegotiate the deal. And it ultimately passed with such a huge supermajority you didn't need fast-track. So the theory of fast-track is you have to put handcuffs on Congress. Well, that didn't work because Congress made them renegotiate it. And then the second theory of fast-track is you'll never get an agreement through Congress unless you have fast track, and no one can have any amendments and debates are limited. Except the thing got the biggest majority of any trade agreement in the 35 years I've been working on trade. Why? Because when you actually include a broad set of interests and make an agreement that actually might work for working people, you have a broad set of members of Congress that are willing to give it a try and support it. So long way to go. Fast-track is not part of the plan going forward. And some improvements that need to be built on is the lesson for me.

Daniel 

As for me, I like to say that USMCA provides hints of what a pro-worker pro-environment trade agreement could look like. At the same time, it has worrisome elements as the ones that Lori was mentioned regarding digital governance that is dying, the states to conduct certain kinds of policies are very much still debated and in there. So now, I think that it is for activists and proposal makers to build up from the good terms that we got from USMCA and not go back to the day that corporate globalization model that has repeatedly shown its shortcomings over the last decades.

Ryan 

As this episode was going live. The company behind the notorious Keystone XL pipeline launched a new attack against the US under the USMCA is legacy ISDS terms. The company TC energy claims is due $15 billion in US taxpayer money because the US government rejected the proposed 875 mile pipeline that would have transported 830,000 barrels of highly polluting crude oil across indigenous communities and more than 1000 rivers, streams and wetlands. We're going to talk a lot more about that in the next episode, so stay tuned. Rethinking Trade is produced by Public Citizen's Global Trade Watch. To learn more you can visit rethinktrade.org, you can also visit tradewatch.org. Stay tuned for more and thank you for listening.

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Victory: Pres. Biden and USTR Tai Announce that U.S. Will Support Emergency COVID-19 WTO Waiver of Big Pharma Monopolies to Boost Vaccine Access

By: Mariana Lopez

On May 5, President Biden and U.S. Trade Representative (USTR) Katherine Tai announced U.S. support for an initiative by 100 countries at the World Trade Organization (WTO) to temporarily waive intellectual property (IP) barriers to facilitate more production of COVID-19 vaccines globally.

“This is a global health crisis, and the extraordinary circumstances of the COVID-19 pandemic call for extraordinary measures,” USTR Tai announced. 

Under Trump, the United States and a handful of other WTO members blocked negotiations on this waiver from even starting last fall. The Biden administration was handed the opportunity to reverse Trump’s self-defeating blockage. Big Pharma lobbied (and will continue to lobby) heavily against the waiver, while a mighty civil society coalition, that Public Citizen helped to build and lead, waged an intensive campaign. On May 5, the administration sided with the people over Big Pharma.

This was an enormous victory that sends a powerful signal to the world by breaking decades of U.S. trade officials’ active promotion of Big Pharma interests over public health. In collaboration with Public Citizen’s Access to Medicines division, Oxfam, Partners in Health, the Association of Flight Attendants-CWA, Doctors Without Borders, Health GAP, Human Rights Watch, Amnesty International and the nurses and teachers unions, Global Trade Watch campaigned to counter Big Pharma’s team of over 100 lobbyists trolling Capitol Hill and pressuring the U.S. to remain on the wrong side of this issue.

Now, it is critical that U.S. engagement in WTO negotiations leads to the fastest possible agreement on a waiver text that encompasses all health technologies needed to end the pandemic, including vaccines, test kits, treatments, medical equipment and PPE. The pharmaceutical corporations want to protect their monopoly control of supply, in part, because as Pfizer briefed investors in March, they see great profit opportunities in producing annual boosters for sale at much higher prices in rich countries. Activists will continue to fight both domestically and globally to ensure that the scope of the negotiated waiver text does not only cover vaccines.

Background:

The WTO requires its 159 member nations to provide pharmaceutical firms certain monopoly rights in a text called the WTO’s Agreement on Trade-Related Aspects of Intellectual Property or “TRIPS.” These monopoly protections mean that pharmaceutical corporations control how much and where vaccines, tests and treatments are made.

This is significant because current production capacity can’t supply nearly enough vaccines, treatments or diagnostic tests to meet global needs. Most in low- and middle-income countries will not get vaccinated until at least 2022, and those in the world’s poorest countries may have to wait until 2024 for mass immunization, if it happens at all.

As we end the first third of the year, global vaccine production has not reached 1.5 billion doses, while 10–15 billion doses are needed. Creating greater supply capacity is critical, especially because COVID-19 vaccines may be like flu vaccines that must be given regularly, not a one-time shot.

While Public Citizen’s Access to Medicine program has been campaigning for the U.S. government to invest $25 billion in expanding U.S. and international production capacity, the Global Trade Watch program promoted another important part of the solution to these issues of capacity and global access. A temporary COVID-19 emergency waiver of some WTO TRIPS monopoly rights would help Global South producers, governments and researchers gain access to the formulas and technology to make vaccines, medicines and tests to prevent, treat and control COVID-19. The waiver was proposed by South Africa and India and supported by more than 100 WTO member countries, now including the United States. The scope of the waiver (whether it will cover more than vaccines) is to be negotiated, but the United State’s support of a waiver is a critical first step.

In every region of the world, there are firms with the capacity to produce vaccines, treatments and tests and greatly increase supply if the formulas and technology are shared. By refusing to voluntarily contract with these firms or issue voluntary licenses to qualified firms so they invest in creating new production capacity, vaccine originators like Moderna and Pfizer are effectively blocking sufficient supply from being made. Johnson and Johnson (J&J) did arrange a contract with South Africa firm Aspen to make their vaccine, but for months required that 91% of the shots be sent for sale in Europe to fulfil J&J contracts there. 

Beginning in January, GTW has built escalating pressure on the Biden administration to support the TRIPS Waiver:

Global vaccine apartheid could cost millions of lives, push tens of millions more into poverty and spawn mutated virus variants that evade vaccines. There can be no end to the public health disaster or economic crises anywhere if people in developing nations are not vaccinated. The announcement from the United States is something to celebrate, but the work does not stop here.

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First Labor Rights Claim Under the Revised NAFTA Filed by Migrant Worker Women in the U.S. -- What Does It Mean in Terms of the New Labor Rulebook in the Region?

By Daniel Rangel

The revised North American Free Trade Agreement (NAFTA) hints at key terms that a pro-worker, pro-environment trade agreement should include, thanks to the crucial engagement of congressional Democrats. In 2019, they forced Trump to renegotiate his initial 2018 NAFTA revision to meet Democrats’ demands. The final pact won unprecedented Democratic congressional support in no small part because of enhanced labor obligations enshrined in the agreement and its novel enforcement mechanisms that many hoped could improve the living conditions of working people throughout North America.

One critique made by some progressives was that the deal targeted labor conditions in Mexico, while offering little that could improve working conditions for people north of the Rio Grande — including labor protections for Mexican migrant workers employed in the Northern neighbors.

Well, it turns out that the first demand for enforcement action for failing to comply with the new labor terms is against the United States. The petition submitted on March 23 was filed by Mexican migrant workers, Maritza Perez and Adareli Ponce, and a binational coalition of organizations led by the binational organization Centro de los Derechos del Migrante, Inc. (CDM). Other signers include the American Federation of Teachers, the Association of Flight Attendants-CWA and the United Food and Commercial Workers International Union.

From the outset, it is important to point out that this submission is not under the labor Rapid Response Mechanism (RRM) that is viewed as one of the most interesting new provisions in the revised NAFTA. RRM allows challenges against specific companies and punishes them directly for violations. RRM enforcement only applies to claims about violations of freedom of association and collective bargaining rights, which are not the focus of this complaint. So, the first test run of the RRM provisions is still pending.

Rather, this submission to the Mexican Secretariat of Labor and Social Welfare is effectively a request that the Mexican government initiate what is called a state-state enforcement claim that the United States has breached the revised NAFTA labor rules by allowing gender-based discrimination in its H-2 non-immigrant worker visa program.

The 133-page complaint basically has four lines of argument.

First, migrant women are largely excluded from the U.S. H-2 visa programs. Through systemic, discriminatory recruitment and hiring practices, women are overwhelmingly left out of both the H-2A and H-2B programs. For instance, in 2018, only 3% of all H-2A visas (for non-U.S. citizens to temporarily work in agricultural essential activities) were issued to women, while women make up 25% of the U.S. agricultural workforce.

Second, the limited number of women who get admitted to the H-2 visa program are routinely funneled into H-2B visas, which are generally less desirable because of lower wages and fewer benefits, such as free employer-provided housing. The petitioners point out that the United States issues approximately three times as many H-2B visas to women as compared to H-2A visas.

Third, even within the less desirable H-2B program, employers generally assign women to less favorable and lower-paid positions than their male counterparts.

And fourth, women that participate in H-2 visa programs experience pervasive sexual harassment and sexual violence and limits to their ability to seek legal counsel.

According to the petitioners, the United States is in violation of its obligations under the revised NAFTA by failing to enforce both the new terms of the deal and its own laws that ban these kind of practices, including Title VII of the Civil Rights Act of 1964. Specifically, the case claims violations of the United States-Mexico-Canada Agreement (USMCA) Article 23.3(1)(d), labor rights; Art. 23.5(1) and (2), enforcement of labor laws; Art. 23.7, violence against workers; Art. 23.8, migrant workers; Art. 23.9, discrimination in the workplace; and Art. 23.10, public awareness and procedural guarantees.

Notably, the petitioners rely on provisions of the revised NAFTA and on U.S. domestic law to back their arguments. This speaks to the critiques about the new deal not protecting Mexican migrant workers. Unlike the original NAFTA’s labor side deal, the revised NAFTA’s Labor Chapter is part of the pact’s core text and contains “hard” obligations that are subject to the agreement’s dispute settlement provisions. This includes obligations on the elimination of employment discrimination (Art. 23.3(1)(d)) and on the protection of migrant workers (Art. 23.8). The original NAFTA’s labor-side agreement only mentioned these subjects as “guiding principles” that the parties were committed to promote without setting common minimum standards.

While the substantive standards give tools to organizations in North America to promote the enhancement of working conditions in the United States and Canada, including for migrant workers, there are no procedural guarantees a formal state-state enforcement action will proceed. Article 23.11 of the revised NAFTA obliges the parties to designate a contact point and to provide a timely response to written submissions related to labor matters. However, whether the enforcement process is launched is solely within the discretion of the government that has been petitioned. Thus, while the strong case made in the petition has advocacy value on its own merits, we must wait for the decision of the Mexican government on whether this will become a formal USMCA case and test if substantive protections for Mexican workers employed in the United States and Canada can be enforced.

Acknowledging the existence of migrant workers protections does not mean that the labor terms in the deal treat each country the same. This imbalance is particularly visible in the procedural requirements to activate RRM, alluded to above. A complaint can be initiated against Mexico based on violations of the right to organize and union democracy rights, under legislation that complies with conditions set out in an annex of the agreement. For all relevant purposes, this refers to violations of Mexico’s 2019 reformed Federal Labor Law. However, cases against the United States and Canada are limited to violations occurring after the National Labor Relations Board or Industrial Relations Board, respectively, has already issued an order, meaning that the issue already has been subject to domestic enforcement action. In practice, what this means is that there is an exhaustion of local remedies requirement to start a RRM case against the United States or Canada and there is no such requirement if the complaint is against Mexico. Furthermore, there is not RRM enforcement between the United States and Canada. 

So, what’s next on this petition? According to the revised NAFTA rules, the Mexican government has to consider and provide a timely response to the petitioners behind this brief, but it still has significant discretion about whether to proceed with state-state dispute settlement. If it chooses to do so, the first step is to start consultations with the United States to try to reach a mutually agreeable solution. If consultations fail, Mexico could initiate a formal dispute settlement proceeding and, eventually, impose trade sanctions against the United States if a panel rules that the violations indeed exist and that the U.S. government has not done anything to redress them.

Whether the Mexican government is likely to pursue this case at all or go all the way through a formal state-state enforcement case remains to be seen. Notably, earlier this year President Andrés Manuel López Obrador (AMLO) aired a proposal to create a Bracero style immigrant labor program to allow Mexican and Central American immigrants to temporarily work in the United States to fill labor shortages. Given that this complaint spotlights bad conditions for workers under existing U.S. visa programs for foreign workers, AMLO could try to leverage the case to promote his plan. However, civil society organizations, among them the lead organization behind the complaint, have sounded alarms about a potential Bracero 2.0 program, due to the exploitative working conditions under the original program during World War II.

In any event, the complaint represents many organizations’ intentions to test if the revised NAFTA’s labor terms could be an effective tool to improve workers’ conditions in the United States, in contrast to the current model that has primarily benefited transnational capital. Now, it is for the governments of North America to treat this case, and those that follow, seriously in order to make the revised deal a floor of decency for worker protection across the region.

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