U.S. tables NAFTA negotiating position: time for Canada to respond

“Regarding the labour provisions, it’s a step in the right direction to see that the U.S. government is promoting core ILO standards such as the right to collective bargaining. And the proposal that labour and environmental standards should be enforceable is also a positive development. But the other language makes the burden of proof too high, and the scope too limited. No labour violation complaint would ever be successful if violations of labour rights must be proven in a ‘sustained or recurring’ manner, and the environmental provisions offer no objective standards to enforce. And all these obligations should not merely apply in a manner affecting trade or investment.” — Larry Brown, NUPGE President

Ottawa (19 July 2017) — As required by law, on July 18, the United States Trade Representative Robert Lighthizer released a detailed and comprehensive 17-page summary of the negotiating objectives for the renegotiation of the North American Free Trade Agreement (NAFTA).

It lists more than 100 negotiating objectives, including

  • expanding market access for US agricultural goods. Here Canada is specifically singled out in Lighthizer’s press release: the U.S. wants to give American companies more access to "dairy, wine, grain and other products," it said
  • expanding market access for telecommunications, financial services (which could be interpreted as a call for Canada to accept U.S. deposit-taking banks), and online purchases (according to some Canadian news sources, the U.S. wants to increase the amount Canadians can buy online without paying an import tax by 4,000 per cent)
  • creating new rules on currency exchange rates, intellectual property, and state-owned enterprises
  • increasing access of American companies to Canadian government procurement contracts, while reserving the right to bar Canadian firms from seeking U.S. contracts under so-called “Buy America” provisions
  • abolishing the Chapter 19 trade dispute resolution mechanism — the “trade remedy” system that regularly rules in Canada’s favour on the long-running softwood lumber dispute. This is not to be confused with Chapter 11, the notorious investor-state dispute.settlement mechanism (ISDS) that allows private investors to sue governments before a private panel, a system that regularly rules against Canada, and made us the most sued country under NAFTA.

The US position makes no mention of Chapter 11, and it’s unclear how the U.S. would replace Chapter 19.

Labour Rights & Environment

The negotiating objectives also suggest incorporating and strengthening labour and environmental obligations that are currently in NAFTA side agreements. But the U.S. position is not as good as it appears. The proposal is to:

  • bring labour and environment provisions “into the core of the Agreement rather than in a side agreement” and
  • “Establish strong enforceable…obligations that are subject to the same dispute settlement mechanism that applies to other enforceable obligations of the Agreement.”

Furthermore, the labour section says that NAFTA should require countries “to adopt and maintain in their laws and practices the internationally recognized core labor standards as recognized in the ILO Declaration,” including “freedom of association and the effective recognition of collective bargaining,” and ”laws governing acceptable conditions of work with respect to minimum wages, hours of work, and occupational health and safety.”

Sounds good -- But the devil is in the details

This all sounds good, but it requires an onerous burden of proof, namely “a sustained or recurring course of action or inaction” and furthermore only “in a manner affecting trade or investment between the parties.”  That’s where the rub is – the bar is set very high in those words, and that’s why labour complaints never get past the requirements. And the labour and environment rules will only be enforced if they affect trade and investment, so the scope is too limited.

Steps in the right direction, but...

Larry Brown, President of the National Union of Public and General Employees (NUPGE) noted that the recognition of ILO standards such as the right to collective bargaining, and the requirement to have laws governing such matters as minimum wages and acceptable working conditions, are all steps in the right direction. But both the labour and environment provisions are still deeply flawed. 

“While they are supposed to be enforceable,” Brown said, “the labour chapter proposes a burden of proof which is too high, and the environmental chapter has essentially no core standards to enforce.”

In response to the U.S. release, Chrystia Freeland, Canada’s Foreign Affairs Minister, said the Canadian government welcomes “the opportunity to modernize NAFTA to reflect new realities — and to integrate progressive, free, and fair approaches to trade and investment.”

If Canada is really committed to 'progressive' trade

“If Canada is committed to progressive trade,” Brown replied, "we need to establish strong objective standards on the environment, and we need to enforce labour standards in general, not just in a manner that affects trade or investment.”

The Canadian government will not produce a similar public list of negotiating objectives. It’s not a requirement under Canadian law, as it is in the U.S., where lawmakers must be consulted throughout the negotiating process, and will ultimately have to vote on any deal.


NUPGE

The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 370,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. ~ NUPGE

 

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