NAFTA Vote Reveals New Reality for Trade Deals: Passage Possible Only After Democrats Forced Trump to Cut Pharma Giveaways and Extreme Investor Rights Plus Strengthen Labor and Environmental Terms
December 19, 2019
Statement of Lori Wallach, Director, Public Citizen’s Global Trade Watch
Note: The U.S. House of Representatives today passed the revised North American Free Trade Agreement (NAFTA).
The unusually large, bipartisan vote on the revised NAFTA shows that to be politically viable, U.S. trade pacts no longer can include extreme corporate investor privileges or broad monopoly protections for Big Pharma and must have enforceable labor and environmental standards, in contrast to the 2016 Trans-Pacific Partnership, which never got close to majority House support.
Renegotiating the existing NAFTA to try to reduce its ongoing damage is not the same as creating a good trade agreement that creates jobs, raises wages and protects the environment and public health. That would additionally require climate provisions, stronger labor and environmental terms, and truly enforceable currency disciplines, and not limit consumer protections for food and product safety and labeling, the service sector, online platforms and more.
The NAFTA 2.0 deal that President Donald Trump initially signed in 2018 betrayed his campaign promise to fix NAFTA: It included new Big Pharma giveaways that lock in high drug prices, making it worse than the original, and its labor and environmental terms were too weak to counteract NAFTA’s outsourcing of jobs and pollution.
However, after congressional Democrats, unions and consumer groups forced Trump to remove Big Pharma giveaways and improve labor and environmental terms, the final revised deal is better than the original and might reduce some of NAFTA’s ongoing damage. Although the new deal still includes problematic terms, the alternative is status quo NAFTA, not a more improved deal.
But this new NAFTA won’t bring back hundreds of thousands of manufacturing jobs, as Trump nonsensically claims. Nothing makes that clearer than U.S. auto manufacturers’ recent announcements that they plan to expand production in Mexico – from Ford’s decision to make its new Mustang electric SUV in Mexico to GM closing U.S. auto plants while expanding production in Mexico.
One clear and important win for consumers, workers and the environment is the gutting of NAFTA’s Investor-State Dispute Settlement (ISDS) regime. ISDS empowers multinational corporations to go before panels of three corporate lawyers to demand unlimited compensation from taxpayers over claims that domestic laws, regulations and court rulings violate special investor privileges. The lawyers can award the corporations unlimited sums to be paid by taxpayers, including for the loss of expected future profits. To date, corporations have extracted almost $400 million from North American taxpayers after attacks on energy, water, timber and toxics policies, largely eliminating ISDS will foreclose numerous corporate attacks on environmental, health and other public interest policies and send a signal worldwide to the many countries also eager to exit the illegitimate ISDS regime.
The new NAFTA is not a template for future agreements; rather, it sets the floor from which we will fight for good trade policies that put working people and the planet first.