Democracy vs Free Trade

Democracy vs. Free Trade
Renegotiate NAFTA? Sounds like a good idea.
Maude Barlow
Vancouver Sun, Saskatoon Star Phoenix, Vue Weekly (Edmonton)
March 5, 2008

Two Democratic contenders for the U.S. presidency suggest they’d like to renegotiate NAFTA and it’s as if the sky were falling in Canada.

Conservatives and Liberals joined frightened CEOs across the country this week to describe a potential U.S. abrogation of NAFTA under a Democratic presidency as “disastrous.” It is as if they all believe that trade between Canada, the United States and Mexico would simply dry up without an official treaty binding it together. Either that or we will stop “building things together,” as other commentators have suggested as more true to the North American relationship.

Nothing could be further from the truth. And if the Democrats are honest enough to recognize NAFTA’s numerous failings, then our politicians owe Canadians more than useless doomsday rhetoric.

Both Hillary Clinton and Barack Obama have declared that they would withdraw from NAFTA within six months after taking office failing a complete renegotiation of the trade deal to include better, enforceable protections for the environment and labour. These issues were dealt with in toothless side-agreements at the time of signing the treaty in 1994 while corporate trade and investment remains protected by NAFTA’s Chapter 11, which allows companies to sue governments for lost profits due to local, provincial or federal regulations and policies.

As of January 1, 2008, there had been 49 investor-state claims under Chapter 11 (18 of them in Canada), nearly half of which have involved challenges to government efforts to protect the environment or manage resources. Wealthy oil giant Exxon Mobil is currently suing the federal government for Newfoundland’s requirement that some of the company’s revenues from offshore development be re-invested locally. And just over a year ago, U.S. investor V.G. Gallo decided to sue the government for over $351 million when Ontario blocked it from turning a man-made lake into a dump for Toronto’s garbage.

This discrepancy between citizens, or democratic rights under NAFTA, on the one hand, and corporate rights on the other has not gone unnoticed in North America. It has accompanied a widening gap between corporate profits and real wages in both Canada and the United States, as recorded in official government statistics and labour studies. Real wages have been stagnant for 30 years while corporate profits are at an all-time high. In other words, NAFTA has meant riches for a few and shrinking spending power for the rest of us.

If the issue of inequity is finally taking centre stage in the run-up to the 2008 U.S. election it is an indication of just how many Americans want a new trading relationship with their neighbours – one that protects their jobs and the environment from the often socially and physically destructive whims of large, increasingly wealthy corporations.

So why is the Canadian government stuck in reverse, clinging to wishful thinking about NAFTA and rushing into new, unsustainable and anti-democratic continental agreements like the NAFTA-plus Security and Prosperity Partnership (SPP) which just offers more of the same?

The SPP was created in March 2005 to deepen the NAFTA relationship based entirely on corporate lobbying from groups like the Canadian Council of Chief Executives (CCCE) and the U.S. Council on Foreign Relations. The CCCE boasts that its companies collectively administer $3.5 trillion in assets and have annual revenues in excess of $800 billion.

Despite these companies’ rather exclusive status in Canadian society, they have been granted a disproportionate amount of influence when it comes to economic, and now even security policy under the SPP. Actually, they are the only non-governmental group allowed to attend secretive annual SPP leaders summits, the fourth of which will take place in New Orleans this April.

Before this week’s comments on NAFTA, Obama had also come out strongly against these executive meetings, writing in the Dallas Morning News that as president he would still like to meet with the Canadian prime minister and Mexican president once a year, “Unlike similar summits under President Bush, these will be conducted with a level of transparency that represents the close ties among our three countries.” Obama also said that he will “seek the active and open involvement of citizens, labor, the private sector and non-governmental organizations in setting the agenda and making progress.”

The fact that Harper and his ministers have purposely kept these groups as far away from the SPP as possible and are reluctant to even consider opening up NAFTA is proof of how beholden our government is to corporate interests. If our politicians would just open their eyes they would see a Canadian electorate that is just as impatient for a fairer trading model as its American friends. Like them, we also want a trading model that enforces environmental and labour rules with as much, and preferably more, vigour as it has investors’ rights.

Canadians and Americans are telling their leaders, loudly, that they want a debate on NAFTA and the post-NAFTA SPP agenda. The Conservatives owe it to all of us to take these concerns seriously instead of continuing to pander to minority corporate interests.

Maude Barlow is the national chairperson of the Council of Canadians.