After a multi-year campaign by unions, civil society groups and congressional Democrats won critical improvements to the bad NAFTA 2.0 deal Trump signed in 2018, the new North American Free Trade Agreement goes into effect on July 1.
But it’s a bad start: a leading Mexican labor lawyer, Susana Prieto Terrazas, has spent weeks in jail on trumped up charges for helping workers use USMCA’s labor rights, and Mexico’s new USMCA-compliant labor law is bogged down by hundreds of lawsuits aimed at derailing it.
In this episode we discuss the decades-long movement against the original NAFTA, that pact’s outcomes, the recent Replace NAFTA campaign and the cross-border effort to free Susana Prieto Terrazas.
Transcribed by Kaley Joss
Ryan: You’re listening to Rethinking Trade with Lori Wallach. I’m Ryan, and I’m joined once again by our in-house trade expert, Lori Wallach.
So, Lori, Wednesday is a big day, because it's the day when the new NAFTA is going to be implemented. This is something that you’ve worked extremely hard on, not just in the last few years, but in the last few decades. Maybe you can tell us first about NAFTA, and what the new NAFTA is.
Lori: So NAFTA, the North American Free Trade Agreement, was this radical, corporate experiment in using the brand “Free Trade Agreement,” to implement a set of new corporate rights and powers and to constrain government regulatory authority on a wide scale, on issues that never would have gotten through Congress as normal legislation. So at the heart of NAFTA are foreign investor rights that made it easier, cheaper, less risky to outsource U.S. production jobs to much lower-wage Mexico. These investor rights basically took away a lot of the potential threats that would otherwise be associated with outsourcing jobs and investment. And in short order, we saw a mass movement of higher wage union jobs from across the United States, not just the Midwest but California, New York, Texas, that in NAFTA’s 25 years resulted in over a million government-certified NAFTA job losses, which some of the pro-NAFTA think tanks say is an undercount of one out of ten of the real damage.
Also, at the heart of NAFTA were corporate tribunals called investor state dispute-settlement tribunals, where corporations were empowered to go before tribunals of three corporate attorneys to demand taxpayer compensation for any domestic law, or government action, court decision that the corporations claimed undermined their NAFTA investor rights. Over the decades of NAFTA, $400 million dollars were paid out in taxpayer money, to corporations attacking tax expansions, water policies, timber policies and energy policies. There is no outside appeal in these cases, and there is no limit to what the corporations can get paid.
And finally, NAFTA had, at its heart, some very strong limits on its government policies that are pro-people, pro-planet. So, for instance, it did not have any disciplines on subsidies for agribusiness, but it had rules banning certain food policies that were designed to protect small farmers. So, in the course of NAFTA, even in its first 10 years, according to the Mexican government, more than two million campesinos, small independent farmers, were pushed off their land. And NAFTA even made the Mexican government change the Mexican revolutionary-era constitution, to allow U.S. agribusiness to buy up farmland.
Very quickly, migration of desperation from Mexico to the U.S. expanded enormously, as workers first went to the borders, where they were seeing dollar-an-hour jobs in these U.S. plants that had moved to Mexico. But so many more people lost their jobs, that even those low wage jobs couldn’t contain people's needs. There was a wave of really NAFTA-forced migration to the U.S.. NAFTA’s been a loser for people on the planet for all three countries, but there've been some big multinational corporations that loved it. And, because the NAFTA experience has been so devastating, and there are whole parts of the country—El Paso, Texas, Parts of Los Angeles—where there are a lot of Latino workers, the African-American new union-based middle classes of Milwaukee, Wisconsin, Detroit, Michigan—people were just devastated. And, there’s been a lot of pushback from Congress to fix NAFTA.
So when NAFTA renegotiations were announced, there was some hope that actually, things might get fixed. But, the first new renegotiated NAFTA that Donald Trump announced, actually kind of made things worse. It didn’t fix the bad stuff that promoted outsourcing, and it added a variety of new giveaways for Big Pharma that would have locked-in high U.S. medicine prices, and exported our medicine/Pharma monopoly ripoff pricing policies to Mexico and Canada. So it wasn’t a big shocker that the Democrats in the House of Representatives said, “Uh, no thank you.” And they ultimately, after a year of a standoff where Trump tried to ram that bad NAFTA 2.0 deal through Congress and Congress said “No,” finally that deal got renegotiated a second time, Trump got forced to take the Big Pharma giveaways out, to improve the environmental and labor standards, and to implement a totally different enforcement system for labor that might have some chance of raising wages in Mexico, which obviously is critical for people there, and also is critical to stop the race-to-the-bottom outsourcing.
And that deal passed with very wide majorities of Democrats and Republicans in both the House and the Senate. And on July 1, it’s supposed to go into effect. But some of the things that were supposed to happen before it went into effect, especially Mexican labor rights, just aren’t looking so good.
So speaking of those labor rights, and the coalition that fought against Trump’s original NAFTA 2.0, maybe you can talk about the coalition that formed around the original NAFTA’s implementation, and how that same coalition of different types of organizations are working together now to address future trade policies and advocate for changes for people and the planet.
The original NAFTA fight really birthed the fair-trade movement in the United States. At that point, the labor unions and the environmental groups were fighting over the Clean Air Act. The consumer groups and the family farm groups were fighting over a dairy bill, and no one was really working together on trade. But NAFTA was such an obvious threat to everyone’s interests, because it had become this cauldron, where every corporate interest from Wall Street, to the food processors, to oil and gas companies, to the chronic outsourcing of manufacturing companies like GE. They all had thrown all their favorite ingredients into this toxic soup, and so, really, a lot of groups that were fighting with each other sat down and realized, well, hell we have a lot more in common trying to fight this corporate nightmare NAFTA than we have in fighting each other. So let's put those to the side. We’ll keep having them over those specific issues, but lets get united together across the country with all of our different organizations—labor, environmental, faith, family farms, women's groups, consumer groups—and let's figure out if united we can actually try and beat the corporations.
And in 1993, on November 17 in the House of Representatives, NAFTA was almost defeated. In fact, two weeks earlier there was a large majority against NAFTA. Then President Clinton bought the votes one by one, trading a project there, a highway there. NAFTA narrowly passed and went into effect February 1, 1994, and the disaster was ongoing.
The groups that started that fight back in the early ‘90s stayed together. And as the evidence of the disaster that was these corporate-rigged trade agreements became more evident, they started to have successes: stopping the expansion of the WTO, stopping a hemisphere-wide NAFTA expansion called Free Trade Area of the Americas, stopping a 30-country investor-state dispute settlement agreement called the Multilateral Agreement on Investment, ultimately making it possible for the Trans-Pacific Partnership to get through the U.S. Congress for the year after it was signed. And then that was the coalition of groups that basically made it impossible for Donald Trump to railroad through the House of Representatives his NAFTA 2.0 deal that was worse than the original. And that’s ultimately the group that forced the renegotiation of the renegotiated NAFTA.
So that now we have an agreement that, though certainly not the model going forward, is better than the original NAFTA. It might have some chance of improving the labor situation in Mexico, which would be a big deal. It doesn’t have the investor-state dispute settlement at all between the U.S. and Canada, and it is much scaled back between the U.S. and Mexico. Got rid of some outrageous mandatory natural resource export rules, but left in place the bad agriculture rules, the problems with food safety and added some really retrograde rules that have to do with limiting the government's ability to regulate in what they call “digital trade,” which is what we’d all think of as our online privacy and the liability of the big online platforms. So, it’s a mixed bag. It’s better than the original for sure. It was worth passing this so that we don’t have the old thing.
But again, it's like the difference from being in the twelfth rung below Hell, and we’re now, you know, a ring above the surface, but our butts still are getting grilled. This is not the agreement that we want! We want something that is aspirational, that is actually, objectively good for people and the planet. So, yes, big improvement, something to be proud of, but again, there’s a lot more work to be done to build on the gains that were made between the NAFTA renegotiation and the kind of agreement we’d really be for.
So one of the more significant of those changes was in the labor rights and the labor standards. We just received news recently, from Mexico, that independent labor activist Susana Prieto Terrazas has been arrested on bogus charges, and it does not look good, considering Mexico’s commitment to sweeping labor reforms. Maybe to close us out, you could just talk a bit about the challenges facing improved labor standards in the new NAFTA, and how society can play a role in making sure those changes are made real.
So, there’s no doubt that the new NAFTA on paper is an improvement over the old one. But it remains to be seen if real people’s lives get improved: if in Mexico people for the first time are allowed to actually organize independent unions that can fight to raise their wages, if their working conditions will improve, whether that will incentivize U.S. companies to not see Mexico as a labor-union-free, low-wage, torment-the-worker zone, and if as a result there’d be less outsourcing from the United States of manufacturing jobs. We do know, under the new NAFTA, corporations will lose the investor-state attack rights. We do know policies like mandatory natural resource exports are out. But the real change, the real thing, is still to be seen: will the new NAFTA translate to improvements on the ground of labor rights for Mexican workers where they can fight to improve their conditions?
And this situation with Susana Prieto is really bad news. She is a very well known, very brave organizer and labor lawyer. She was involved in fighting for rights of workers along the U.S.-Texas border last year. You probably saw in the news a lot of what were called ‘wildcat strikes’ of workers at maquiladora plants, which are where workers at the border manufacturing plants in Matamoros and Juarez, Mexico fought to get pay increases. Totally inspiring. They did strikes, they got renegotiated contracts, they got pay increases. She was one of the folks who helped workers there achieve that goal. And she’s been incredibly forceful fighting for workers now that they’re being pushed to go back into their plants when it's not safe. COVID is increasing and maquila workers are dying from exposure to the coronavirus in these plants. She’s been pushing to get health and safety improvements and to not reopen the plants until workers have personal protective equipment,and there's plexiglass between their stations, et cetera. She was swooped up on false charges of mutiny, among other things, and not only jailed but now denied bail twice. She is locked up 200 kilometers away from where she lives in the capital of one of the border states, in what is a really dangerous situation. Like in the U.S., the Mexican jails have very high incidences of COVID-19. She’s been denied bail, locked up, they don’t want her organizing and they don’t want her helping the workers. And the thing she was fundamentally trying to do was one of the guarantees in the new NAFTA. That is, to have workers vote for their own union leadership, to file a petition to get rid of an old, fake ‘protection’ company union and replace it with a real union that represents the workers. That’s one of the essential guarantees of the new NAFTA, and that is basically what she was arrested for trying to file.
So it is super ominous, she has been in jail for three weeks, the federal government- the president of Mexico- has not intervened. It’s obvious that some right-wing governors in some states in Mexico are heavy-handed in trying to defeat the labor reform. But, now it’s the issue of AMLO, the president of Mexico, as well, because he hasn’t done anything to, hell, get her out on bail, much less to ensure that the labor law reforms that he enacted in Mexican law, great improvement, and on paper in NAFTA, much better, actually result in improvements people's lives. It really is casting a very dark shadow over the July 1st enactment date of the New NAFTA that Susana Prieto is in jail. And frankly, a bunch of those corrupt unions that she’s been fighting against have tried to legally challenge the new labor law, which would be implemented with NAFTA. So we are all going to have to really be on our toes.
If you tune into our rethinktrade.org website, you can get updates about what’s going on. We’re going to be tracking Susana’s situation, and also the status of the labor law reforms. If you want to read a legal memo about those issues, it’s posted at tradewatch.org. Working with our counterparts in Mexico, we intend to fight tooth-and-nail to actually make real the changes we want on paper in the NAFTA renegotiation fight.
That’s all for today, thank you all for listening. Rethinking Trade is produced by Public Citizen's Global Trade Watch. I would encourage you to visit rethinktrade.org, as well as tradewatch.org to educate yourself and find out how you can get involved in the work we’re doing to fight for fairer and more equitable trade policies.