Douglas Sutherland op-ed: A NAFTA renegotiation must put workers first
The 2016 presidential election exposed Americans’ anger about our failed trade policies — especially in areas where job offshoring has hollowed out a once thriving manufacturing sector, leaving behind few opportunities for well paying jobs for many hard working Americans. On the campaign trail, Donald Trump promised to bring down our massive trade deficit and “bring back” American manufacturing jobs. Now that he is president, will he deliver on this promise?
On May 18, Trump’s newly confirmed U.S. Trade Representative, Robert Lighthizer, sent Congress a letter notifying them of the administrations intent to renegotiate the North American Free Trade Agreement (NAFTA). This action sets in motion a 90-day period of consultation before the administration can actually begin negotiations with Canada and Mexico. Lighthizer’s letter was just more than one page in length and it was short on details and long on vague generalities. It is up to all of us and our congressional representatives to make sure a NAFTA renegotiation makes things better and doesn’t double down on corporate driven provisions that have already done so much harm.
At the core of NAFTA toxic policies are special protections for investors (i.e. corporations) known as the Investor-State Dispute Settlement provisions (ISDS). ISDS makes it easier for corporations to offshore jobs to Mexico, where workers make less per day than many Connecticut workers are paid per hour. By eliminating many of the usual risks that make firms think twice about moving to low-wage countries, and explicitly forbidding us to use “Buy American” procurement rules that would reinvest our tax dollars into creating jobs here, NAFTA incentivizes American job offshoring and it has been doing so for more than 20 years.
NAFTA’s ISDS provisions grant rights to thousands of multinational corporations to bypass domestic courts and directly sue governments before a panel of three corporate lawyers. These lawyers can award the corporations unlimited sums to be paid by taxpayers, including for the loss of “expected future profits.” To win monetary damages, a corporation need only convince these lawyers that a Wall Street regulation or environmental or health policy violates their extreme NAFTA rights. The corporate lawyers’ decisions are not transparent and are not subject to outside appeal. Under NAFTA, tribunals have ordered nearly $3 billion in taxpayer compensation to multinational firms, and nearly $70 billion more is pending.
When NAFTA was implemented in 1994, it was a boon for multinational corporations, but for millions of citizens in the United States, Mexico and Canada, the agreement left a trail of devastation. Hundreds of thousands of U.S. jobs moved south of the border. In Mexico, cheap subsidized U.S. corn flooded the market and wiped out millions of Mexican farmers — pushing them off their land and forcing them into city slums or north across our border creating serious immigration problems here in the U.S. Canada has also suffered from dozens of corporate lawsuits allowed by NAFTA’s ISDS regime. Canada has now been sued more times through the ISDS process than any other developed country in the world — costing the Canadian people hundreds of millions of dollars in payouts to foreign corporations, most of these suits were challenging Canadian environmental regulations which were put in place to protect Canadian citizens.
Here in Connecticut, more than 34,500 specific jobs — almost all in manufacturing — have been certified as lost to offshoring and import surges from NAFTA and other corporate-rigged trade deals under the Trade Adjustment Assistance (TAA) program alone and that accounts for only a subset of jobs lost to bad trade policies.
Economists widely agree that all of us face lower wages because of NAFTA and similar deals. The workers who lost well paying manufacturing jobs and were lucky enough to find work in other sectors took significant pay cuts in most cases. This dynamic has exacerbated the increasing income inequality in the U.S. that has further hampered our recovery from the Great Recession.
Any NAFTA replacement must benefit working people in all three NAFTA countries, not just multinational corporations. In the strongest possible terms, this means ending the NAFTA ISDS provisions and the ban on Buy American/Buy Local procurement. It means getting rid of rules that require us to import food that doesn’t meet U.S. safety standards and intellectual property terms that drive up the price of medicines for our citizens. It also means that any new deal must only go into effect if all three countries enact and enforce strong labor, wage and environmental standards to truly level the playing field for trade.
The Connecticut Fair Trade Coalition is calling on our entire congressional delegation to get out in front and make our demands for a new NAFTA loud and clear. The Citizens Trade Campaign has outlined specific changes that must be made if a NAFTA renegotiation is to deliver for working people. Their letter to the president can be found at: bit.ly/CTC-NAFTA-Priorities. Our representatives and senators should make it clear to the Trump administration that anything less than a NAFTA replacement based on these principles will NOT be acceptable.
Douglas Sutherland is the Fairfield County chairman of Democracy for America, and a member of the Connecticut Fair Trade Coalition.