NAFTA renegotiation: An opportunity for more fairness

More than 20 years after signing on to the North American Trade Agreement (NAFTA), the ways it has failed working Canadians are very clear. Canadians were told that NAFTA would create good jobs, shared prosperity, and a better future for working people. Instead, far from generating good jobs and prosperity, NAFTA has undermined secure, well-paid employment and devastated manufacturing and processing industries and the communities that depend on them. While there has been increased trade and economic growth, large corporations and investors have gained the most, leaving workers behind. NAFTA doesn’t just govern trade, but empowers foreign investors to sue Canadian governments, threatening public services and limiting the ability of governments to regulate in the public interest. This so‑called free trade agreement has not fostered fair or balanced trade.

We are glad to hear the Canadian government state publicly that it is willing to walk away from a deal that is not in Canada’s best interest. It is time to take a new approach to trade that puts the interests of working people and the environment first. A renegotiated continental free trade agreement must include the following reforms to address the failures of NAFTA:

1. Labour and environmental side agreements in NAFTA must be fundamentally strengthened by bringing them into the main agreement and making them subject to trade sanctions. NAFTA’s labour chapter must include workers’ rights to organize and bargain collectively for better wages and working conditions, and must contain effective enforcement provisions. For the last 20 years, NAFTA has led to lower workers’ safety standards across Canada and the US, and the toothless labour side agreement has meant very few complaints have been filed, and not a single complaint has succeeded. Complaints under the environmental side agreement have been similarly ineffective.

2. Eliminate the dispute mechanism in NAFTA that grants special rights to foreign investors and allows corporations to sue governments. Canada is the most frequently-sued country under NAFTA, eroding democracy, undermining environmental regulations, and discouraging public interest policymaking. Canada’s judicial system is respected and emulated internationally, and is perfectly capable of adjudicating investor-state disputes. Chapter 11 of NAFTA must be abolished.
3. Encourage proportionality in trade flows across key sectors. Governments must enshrine the principle that investment and employment in key goods-producing sectors should be proportional across borders, requiring multinational corporations to build where they sell. Such a model, similar to the Canada-US Auto Pact – a free trade agreement with provisions for balanced trade – could underpin future growth of investment and good jobs in key industries such as auto manufacturing. “Rules of Origin” provisions could also be strengthened to ensure “made in North America” requirements are not undermined by various loopholes, and act as incentives to greater continental production.

4. Protect our country’s supply management system. This will help ensure Canadians have access to high-quality, locally-produced food and will support small family farms and rural communities.

5. Protect existing public services, as well as new public services, such as any new national Pharmacare program.

6. Negotiate a fair resolution to the softwood lumber dispute. The United States has repeatedly challenged Canada through World Trade Organization and NAFTA tribunals over softwood lumber industry trade, and both tribunals have ruled in favour of Canada. Current rules for bilateral trade in softwood lumber between our two nations are fair, despite protestations from the US lumber industry. The Canada-US Softwood Lumber Agreement (SLA) expired in 2015, and there is concern that the US government will pursue industry-led changes that would be detrimental to the Canadian industry. The Canadian government must ensure that forestry workers in Canada are protected, and that any new agreement struck (whether inside or outside of the NAFTA) upholds the rules that maintain a level playing field across borders.

7. Make strategic and effective use of government procurement for Canadian economic development goals. “Buy American” rules are bound to disrupt jobs in Canada, even if we are able to secure some carve-outs for critical industries such as steel. While proposed rules under the Canada-EU trade agreement would limit our ability to pursue similar “Buy Canadian” policies, there remains some latitude to support Canadian industry and jobs in upcoming infrastructure spending.

8. Ensure that sectors now exempt from NAFTA are not included in any new negotiations.

9. Engage labour and civil society from the outset. Unions and civil society can offer crucial perspective coming out of on-the-ground, concrete knowledge and experience. Agreements negotiated behind closed doors foster public distrust and scepticism.

The Canadian labour movement is optimistic about this opportunity to rewrite the rules of NAFTA. We are determined to ensure that any new trade deals are fair and protect workers’ rights, public services, the government’s right to regulate in the public interest and our environment.