Will the global economic crisis save or kill NAFTA?

Jan. 2008: Demonstrators carry an oversized replica of a corn cob to protest the removal of import tariffs on farm goods from U.S. and Canada, as agreed by the North American Free Trade Agreement (AP Photo / Eduardo Verdugo)

January  4 2009

By Parminder Parmar

For years, NAFTA had remained dormant as a significant issue in American and Canadian federal political campaigns.

In both countries, the viability of the free trade agreement between Canada, Mexico, and the U.S. hadn’t been questioned since the early 1990s.

Sure, there have been disputes — for example, over softwood timber — but the trade pact, itself, was never in doubt.

That is, until this spring 2008. That’s when the Democratic presidential candidates thrust NAFTA back into the political limelight, telling voters they wanted to take a second look at the deal.

“I think we should use the hammer of a potential opt-out as leverage to ensure that we actually get labour and environmental standards that are enforced,” Barack Obama told Democrats in Cleveland, Ohio, during the primaries.

The man who is now U.S. president-elect was trying to sway voters in the region who’ve seen hundreds of thousands of jobs shipped overseas since the 1990s.

Proving the old adage about politics and strange bedfellows, the NDP’s Jack Layton didn’t skip a beat. He went on CNN’s “Lou Dobbs Tonight” to tell the anti-immigration crusader that some Canadians don’t think the pact is such a good idea, either.

Pro-NAFTA forces both here and in the U.S. appeared dismayed at the resurgence of all the protectionist talk. They probably needn’t worry any more, says an expert on the pact.

“Look at the election speeches and the (U.S.) primaries in places like Pennsylvania and Ohio. You will find there were all sorts of things being promised, being talked about, that have suddenly gone to the backburner,” Ron Wonnacott, professor emeritus in the economics department at the University of Western Ontario told CTV.ca.

Wonnacott, who has been researching and writing about U.S.-Canada trade relations since the 1960s, says the emergence of the economic crisis this fall changed everything.

“I would put NAFTA way down in their (lawmakers’) list of priorities — if it’s any sort of objective at all at this point,” he says bluntly.

But Wonnacott says the economic downturn will also likely bring out protectionist forces in both Canada and the U.S.

“Protectionists’ pressures will come from just about every court … every industry under pressure will be asking for relief,” he says, adding that will mean calls for more trade barriers and higher tariffs.

Is it all about Mexico?

But Wonnacott adds that in the U.S., most of the pressure lawmakers face will have to do more with Mexico than with Canada. He’s careful to point out, however, that Canada shouldn’t assume that some Americans will not look north as they try to protect industries, particularly when it comes to the automobile sector.

“I don’t see the Americans taking this action,” he says, adding, “but in this climate, never say never.”

Wonnacott suspects that talk of an expanded hemispheric trade deal will die down in the current climate. He says, however, there may be bilateral agreements that are signed.

He also notes that as North America and the world begins to come out of the recession, initiatives to further liberalize trade will emerge again.

“But right now, given the problems that countries now face … the big problem on the trade front will be defensive,” he says.

Recognizing this, Canadian, U.S., and world leaders have warned against protectionist pressures that may further hurt the global economy.

Former U.S. vice presidential candidate Sarah Palin told CTV’s Canada AM this month, she believes the current climate will force everyone, including the president-elect to rethink their campaign rhetoric about NAFTA.

“I think (Obama) is going to see some conditions that will allow him to temper his position,” the Alaskan governor said.

“It’s a good agreement and our trade partnering with Canada is extremely valuable. The number of jobs created as a result of NAFTA has been good for both of our countries.”

Even Obama has backtracked from his initial call to re-open NAFTA unilaterally, noting that he doesn’t believe that “we can draw a moat around the American economy.”

But Wonnacott notes that the current economic crisis is relatively unprecedented — and it’s not easy to predict political or economic winds.

“It’s uncharted territory,” he says.


April 7, 2005
Since the North American Free Trade Agreement was signed by the first Bush and the now reviled Carlos Salinas in 1992, over 4000 Mexican workers, many of them campesinos displaced from the land by NAFTA agricultural imports, have died trying to cross that line to find a job no North American citizen will work.
They have drowned in the All-American Canal and the river that Mexico calls the Rio Bravo and the U.S. the Rio Grande.

They have been bitten by vipers running through south Texas, suffocated to death in boxcars, died in car crashes after high speed chases or simply been shot down by the Migra and their volunteer vigilantes.

They have fallen into ravines or froze to death in the winter snow up in the Rumarosa, the most dangerous part of the border to which it is U.S. immigration policy to chase them in a strategy to “up the risks” of migration. And mostly they have dropped out there in the cruel desert never to rise again as the vultures circle slowly in the spotless heavens above.  Source

November 17, 2003

Since the North American Free Trade Agreement (NAFTA) was signed in 1993, the rise in the U.S. trade deficit with Canada and Mexico through 2002 has caused the displacement of production that supported 879,280 U.S. jobs. Most of those lost jobs were high-wage positions in manufacturing industries. The loss of these jobs is just the most visible tip of NAFTA’s impact on the U.S. economy. In fact, NAFTA has also contributed to rising income inequality, suppressed real wages for production workers, weakened workers’ collective bargaining powers and ability to organize unions, and reduced fringe benefits. Source

NAFTA: Manufacturing job loss in Canada*
After 15 years under NAFTA Canada is a much more unequal society. Free trade boosters still credit the agreement with increasing employment and
prosperity, but though ‘compensation’ for a few corporate CEOs has rocketed up, NAFTA has in fact contributed to the loss of manufacturing jobs and exerted a downward pressure on wages. Here’s the real story on jobs and NAFTA:
• In the last 6 years, we have lost 350,000 manufacturing jobs. That’s like 150 good jobs disappearing every day. And it’s getting worse.

• The job loss is hitting many different industries all over the country: auto, food processing, forestry products, textiles, metals, furniture etc. The details are different, but
the story is the same: decline in orders lost to cheaper imports, missed investment, job cutbacks and plant closures.
• Too many of the new jobs being created today are low-paying, insecure jobs with fewer benefits, particularly for women.
• Canada is increasingly becoming a society of haves, and have-nots with the gap in wealth growing every year. Source

Food safety, free trade and the election

If ever voters have power, it’s now – and that includes putting your candidates under the microscope on food safety issues. Common Frontiers sends along a link to a useful site (Food Safety First) for voters that offers insight from various media reports on the timing of cuts to safety inspection programs and the outbreak of listeriosis. In my view, the finest work has been done by Toronto Star investigative reporter Robert Cribb, working in conjunction with his colleagues at the CBC.

What does food safety have to do with free trade? A great deal, argues Common Frontiers, a Canadian group critical of the trend towards economic integration – harmonization, as it’s politely put – of standards under the North American Free Trade Agreement. Rick Arnold, the group’s executive director, says deregulation in the food industry in Canada has its genesis with the folks at the Security and Prosperity Partnership (SPP), an ongoing program among Canada, the U.S. and Mexico to harmonize across-the-board. In other words, standards in Canada are lowered to match those south of both borders. Says Arnold:

“Part of the SPP agenda involves developing common North American standards on how food is produced, how it is inspected, how it is processed and how it is moved from one place to another. Common food safety standards developed in the public interest might be a good idea. But the SPP is not about raising food standards. It is about removing ‘trade irritants’ and deregulating the food industries.”

Arnold criticizes the secrecy surround SPP decisions. An exception, he says, was the 2006 SPP report that identified stricter pesticide residue limits in Canada as a “barrier to trade,” a finding resulting in the relaxation of Canadian standards. Large corporations appear to have privileged access to the SPP process under the umbrella of the North American Competitiveness Council (NACC). Arnold asks Canadians to check out the food safety site and, if they have questions, take them to candidates in their ridings to find out where they stand. Now is the best time to expect answers.  Source

This has nothing to do with the Free Trade Agreement with the US but it is rather interesting all the same. Something Canadian should be aware of at the very least.

January 3 2008

Manuel Rozenthal, a long-time international solidarity activist and surgeon, is a member of the Association of Indigenous Councils of Northern Cauca, a political organization that works with indigenous communities in Southwest Colombia. He recently toured Canada, sponsored by the Canadian Labour Congress, speaking about the proposed Canada-Colombia Free Trade Agreement, a deal that has been kept almost completely out of the public eye by the Harper government.

Stuart Neatby caught up with Rozenthal in Edmonton in the midst of this tour.

Stuart Neatby: What do we know about the proposed Canada-Colombia Free Trade Agreement and what are its implications for the Colombian people?

Manuel Rozenthal: We know very little, but what we know is of enormous concern.

The so-called negotiations between Canada and Colombia started in July of this year after the visit of Harper to four Latin American countries, including Colombia. On the 26th of November, the fourth round began in Lima and there were rumours and statements pointing to the fact that it might be definitely signed soon, that they might reach an agreement. They have been kept confidential, in almost absolute secrecy, and the communiquÃs that have come out about the state of the negotiations are almost impossible to understand by anybody without good technical knowledge of trade deals.

Secondly, it is the same or more profound agreement that was negotiated with the US that the U.S. congress is refusing to sign with Colombia because of profound concerns of environmental and human rights.

To summarize the concern in a nutshell about free trade agreements, I think that first ” it is not a free trade agreement. I have in my hands the Colombia-U.S. free trade agreement and it’s(TM)s more than 1300 pages long. If it was truly a free trade agreement, it would be very short. It would state that your goods and products would enter my country and mine would enter yours under equal conditions of reciprocity.

But, when you read this text, you actually discover that it is a supra-national constitution that allows access for multi-national corporations, financial and otherwise, to all resources, territory, labour, government contracts, and savings throughout the country with which the agreement is signed. Therefore it is an agreement signed between government officials, on behalf of corporate interests, at the expense of the wealth and the labour of the poorest countries involved, but also affecting dramatically the well-being of the poorest people and labour in the wealthy country at the same time. And that is, in a nutshell, what the agreement is.

One of the biggest recent political scandals in Colombia has been the links that have emerged between high level political officials and paramilitaries. A sort of parallel scandal that has been playing out in recent months has been that of legal court cases, linking multi-national corporations to the Autodefensias Unidas de Colombia (AUC) paramilitaries as well.

Can you talk about the pattern of multi-national corporate involvement with the AUC and what interests for them it actually serves to employ these paramilitaries?

What is very important to do is to make the links between the use of violence and the corporate support for these death squads, all in connection or related to these free trade agreements. I can begin by examining what happened to Chiquita.

Chiquita accepted in court an agreement that acknowledged that it had funnelled $1.7 million in support for the paramilitaries, which the U.S. has declared a terrorist organization. The horrendous thing about these statements is the fact that the $25 million [settlement] was given to the U.S. government! Not a cent of it went to any Colombian victim of the paramilitaries that were supported by Chiquita.

Chiquita was recently sued once again by Jonathan Reiter, a lawyer in New York City. He sued them on behalf of 393 victims of the death squads, either relatives of the people who had been killed or disappeared, or people who had been directly affected by the company’s practices. What Reiter argued is that Chiquita did not have to channel funds to the paramilitaries to protect itself from threats. In fact Chiquita actually funded, trained, and armed paramilitary forces as part of its systematic operations in the country in order to increase profit, dismantle labour, and forcibly remove people from the land that they wanted to use to produce bananas.

Now there is worse evidence coming out: the paramilitaries have confessed. The highest commanders of these death squad forces have stated that every one of the six banana companies that act in Colombia has paid between three and four cents U.S. for each banana that has been produced. So in fact the amount of money that has been delivered to paramilitaries has been enormous. There are three American companies still with the largest proportional Banana production in Colombia: Chiquita, Del Monte and Dole, which have all funded and armed paramilitaries, according to the testimony of those funded by them.

Some of this testimony [states that] whenever the company wanted some land, they would approach the poor peasants in the region ” the rightful owners of this land ” and offer to buy the land for no money at all. If these people refused to sell their land, the next thing they heard was a threat. Following the threat, if they didn’t leave, was the commission of a massacre either using chainsaws to cut people alive into pieces, or mass graves and assassinations, or mass displacement.

So that’s the case of the banana plantations. Drummond, a coal and gas producing company, was also sued because a high official from Colombia witnessed Drummond officials passing lists of union leaders on to paramilitary commanders. Some of those leaders were later murdered or disappeared. Glencore, the Swiss multinational, was involved with similar kinds of activities. Then Coca-Cola was sued because union leaders at four of their plants were threatened and murdered by paramilitaries in order to dismantle their negotiated agreement and to dismantle the union.

If you add up these specific cases and go around the country, you discover that these are systematic practices, that Colombia is the most dangerous place in the world for trade union workers. More than 2500 trade unionists have been murdered in the last 10 years, targeted specifically in areas that were either privatized or delivered to multi-national corporations. During the Uribe administration over the last six years, more than 500 trade union leaders have been assassinated, 28 of them this year. So there is ample evidence that terror is used in a systematic way to cheapen the cost of production and access to resources and territories in order to increase the profit of corporate interests and multinational corporations.

What the free trade agreements do is to legalize and legitimize what terror has achieved for them. And that is why signing a free trade agreement with Colombia is actually becoming an accomplice to the use of terror to make profits.

And terror, of course ” together with extreme destruction of nature and exploitation of people ” is necessarily what the free trade agreement between Canada and Colombia is all about.


In Colombia’s mineral-rich underworld, often demarcated by the full-scale destruction of towns near mining sites, environmental contamination, paramilitary attacks and assassinations of those who stand up to mining interests, Canadian hands are dirtier than those of a coal miner coming up from the pit.

Privatization, Pollution and Free Trade, WTO

World Leaders Must Roll Back Radical WTO Financial Service Deregulation