Trump NAFTA proposal: End corporations’ right to sue governments

In the North American Free Trade Agreement (NAFTA) renegotiation talks that have been under way since August, union trade policy experts are finding that Trump Administration trade negotiators are more willing to listen to their suggestions than Obama trade officials were.

“These are steps in the right direction.… But unless a renegotiated NAFTA has stronger worker protections, it still won’t be a good deal.”
— Russell Lum, Oregon Fair Trade Campaign

In the three-way talks, Trump trade representative Robert Lighthizer is proposing to gut one of NAFTA’s most controversial provisions: The so-called Investor-State Dispute Settlement (ISDS), which allows foreign investors to sue governments in special trade tribunals if new regulations deprive them of opportunities for profit. The Administration proposes to let foreign investors sue governments over the direct seizure of property, but nothing more. And each NAFTA country could opt out of being sued by foreign investors.

The U.S. is also proposing to significantly increase “rules of origin” requirements for automobiles: Currently, to get tariff-free status, just 62.5 percent by value of a vehicle’s components must have been manufactured in the three NAFTA countries. The White House wants to raise that to 80 percent.

Other proposals would allow countries to favor domestic industries in government contracting, and require the three nations to periodically vote to keep the deal in place or else face NAFTA’s expiration in five years.

But Russell Lum, coordinator of the Oregon Fair Trade Campaign, says unless a new NAFTA does something to improve workers’ rights and raise wages in Mexico, the free-trade zone will still be a bad deal, and labor and its allies would oppose it.

Trump has threatened to withdraw the United States from NAFTA if his demands aren’t met. Lum says that wouldn’t be a bad outcome — if the alternative is an agreement that fails to protect workers rights.

The talks continue next month in Washington, D.C., and late January in Montreal.

-Don McIntosh

Be the first to comment

Leave a Reply

Your email address will not be published.