The first round of discussions are underway for the renegotiation of the 23-year-old North American Free Trade Agreement NAFTA. Many are expecting thorny bargaining to take place between Canada, Mexico, and a newly “economic nationalist” United States imbued with President Trump's “America First” outlook promising stringent protectionist measures.
Meant to do away with trade barriers and expedite the free circulation of goods and services between the countries, the 1994 pact reconfigured the countries' economies toward regional integration – a task critics doubt the Trump administration is willing to advance.
In Mexico, agrarian organizations and popular movements have criticized NAFTA for devastating the country's small producers and hurting Mexico's overall food sovereignty, turning the country into an exporter of raw materials and an importer of processed products. Meanwhile, industrial jobs in the U.S. were offshored to Canada and low-cost manufacturing hubs in Mexico.
The negotiators – U.S. Trade Representative Robert Lighthizer, Canadian Foreign Minister Chrystia Freeland and Mexican Economy Minister Ildefonso Guajardo – will each come to the table with different sets of proposals representing the interests of their own respective business sectors.
There are no signs that demands by labor are being heeded or taken into account, according to Manuel Perez-Rocha, an associate fellow at the Institute for Policy Studies.
"The negotiations are being carried out in total secrecy, without the participation of labor groups," Perez-Rocha told teleSUR. "Only big corporations are invited to the 'side room.'"
Mexico, a favored punching-bag for the U.S. president, will approach the table defensively. The country's commercial dependency on the U.S. will likely translate into precious little leverage in the talks. Mexico has the most to lose from any protectionist measures imposed by Washington, as it sends 80 percent of its exports to its northern neighbor.
While the country's goods surplus with the U.S. is about US$63 billion – a sharp increase from the US$1.3 billion surplus in 1994 – the nation is also a major consumer of U.S. agricultural and processed food exports. U.S. administration officials say there is no deadline to reach an agreement, but Mexico is pushing for the sides to reach an agreement before its presidential campaign begins in earnest in February.
"The Mexican government will do everything it can to maintain the status quo of wages repression in Mexico," said Perez-Rocha. "Cheap labor is the big advantage of NAFTA, for both sides – that is, for corporations."
Canada likewise is comprehensively enmeshed in NAFTA, and the Liberal administration of Justin Trudeau is deeply committed to ensuring the talks' success. The country is the largest export market for the U.S. According to Freeland, Canada hopes to transform NAFTA into a “fair trade deal” that includes a range of chapters addressing gender and Indigenous rights, as well as climate change. Critics, both left and right, have scoffed at ambitions to turn the talks into an opportunity to push a “progressive” agenda, considering the far-right bent of the White House.
Perez-Rocha points to the gap between Trump's superficial “jobs, jobs, jobs” appeal to worker's interests, and his cabinet, which is filled with bankers and figures from the corporate world.
"We cannot allow the trade policies that replace it to put the interests of multinational corporations first, as the renegotiation of NAFTA under a Trump administration teeming with corporate interests is positioned to do,” said Perez-Rocha. “Trump has promised that the NAFTA renegotiation will create jobs in the United States, but if corporate elites are allowed to dictate the renegotiation, Trump’s false economic populism will result in Americans facing job loss, wage stagnation, and eroding working conditions, especially for low-income workers and workers of color.”
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“We need an internationalist approach to trade that lifts up labor rights, environmental standards, and human rights for people in all of the nations involved in the agreement, and provides good jobs for workers in the U.S.,” he continued. “Trump wants to allow corporations to pit U.S. workers against other working communities in a global race to the bottom."
Lori Wallach, the director of Public Citizen's Global Trade Watch, agreed while urging Trump to make good on past promises to protect U.S. workers.
“With talks starting, the administration must decide between the corporate lobby and working people,” Wallach said. “The administration approach either will expand the old job-killing model as the corporate lobby demands or it will replace NAFTA with a deal that creates jobs and raises wages as the American people expect.”
Perez-Rocha sees a potentially dangerous outcome from the renegotiations in the form of components from the scrapped Trans-Pacific Partnership related to investment, e-commerce and intellectual property rights which are being carried into a revamped trade deal.
"If the new NAFTA deal is modeled under the TPP, all workers and (middle) class people will be hit," Perez-Rocha remarked. "In particular, Mexico could see a dramatic increase of environmental degradation because of the expansion and growth of the fossil fuel energies – oil, fracking, et cetera. Also, millions of patients who depend on generic drugs may suffer from stricter intellectual property rights that benefit the profit-making of big pharma."
Perez-Rocha has a grim perspective on whether the renegotiated NAFTA can be anything more than a boon to the interests of multinationals.
"Sadly, the areas of unanimity among negotiators will end up being what is best for big corporations, including further facilitating intra-firm trade at the lowest possible costs, as well as strengthening the North American energy market in favor of U.S. demand and in detriment of the environment."
For author and sociology professor William I. Robinson, there's also little question that a deal renegotiated by a far-right Trump administration and his neoliberal counterparts will favor corporations, banks, and the “transnational capitalist class.”
“The Trump family's business empire spans the globe, including factories in Mexico that take advantage of cheap labor and export back to the United States, thanks to the provisions of NAFTA,” Robinson wrote for Truthout.“(B)eyond public discourse, there is nothing populist in the policies that the Trump government has so far put forth.”
“Trumponomics involves deregulation, slashing social spending, dismantling of what remains of the welfare state, privatization, tax breaks to corporations and the rich, and an expansion of state subsidies to capital – in short, neoliberalism on steroids.”