As If NAFTA Weren’t Bad Enough

Originally posted at on January 27, 2012

The verdict is in: NAFTA (North American Free Trade Agreement) of 1993 has been a complete and utter failure to provide what it promised. Many of the world’s largest corporations claimed it would create hundreds of thousands of new high-wage U.S. jobs, raise living conditions in the U.S., Mexico and Canada, improve the environment and transform Mexico from a poor country into a booming U.S. export market.

At first, I could not understand why people complained so much about government regulations. Weren’t government regs supposed to set guidelines to protect our environment, require products, drugs, drinking water and food to be safe for consumers, and help structure federal programs to provide roads, libraries, education? What was the problem?

The more I study the bills that were passed, the more convinced I am of one thing: the corporations are writing the regulations that everyone is complaining about! It’s the lobbyists and the lawyers who are writing these omnibus rules that favor the biggest corporations and remove safeguards like meat inspection, environmental protection, and labor standards. In many cases, these corporate-favored laws make it impossible to replace old, dirty technologies with cleaner, less expensive alternatives. (I will give examples of this in future posts.)

NAFTA is a perfect example of a corporate-favoring regulations nightmare. “Hidden” in this 900 page behemoth are rules that benefit corporations without regard for the country’s domestic laws, even when the safeguarding policies of said governments were voted in by democratically elected representatives and their constituents.

According to Public Citizen, a public advocacy group: “NAFTA requires limits on the safety and inspection of meat sold in our grocery stores; new patent rules that raised medicine prices; constraints on your local government’s ability to zone against sprawl or toxic industries; and elimination of preferences for spending your tax dollars on U.S.-made products or locally-grown food. In fact, calling NAFTA a ‘trade’ agreement is misleading, NAFTA is really an investment agreement. Its core provisions grant foreign investors a remarkable set of new rights and privileges that promote relocation abroad of factories and jobs and the privatization and deregulation of essential services, such as water, energy and health care.”

Even worse, Chapter 11 of NAFTA allows corporations to sue governments when their consumer protection actions prevent those corporations from making profits. One example lawsuit is enough to make anyone sick:

Canada tried to ban the fuel additive MMT (methylcyclopentadienyl manganese tricarbonyl) because it has been shown to cause nervous-system problems. When MMT’s maker Ethyl Corporation sued, a secret tribunal ordered the Canadian government to pay $10 million in damages and issue a public statement that the formula posed no health risk.

The same corporations who supported NAFTA are pushing to expand it into 31 more countries in Central and South America through FTAA, Free Trade Area of the Americas. In 2005, Congress voted to extend NAFTA to five Central American countries through the Central American Free Trade Agreement (CAFTA)Peru was added in 2007.

The problems of free trade aren’t just a race-to-the-bottom dynamic where workers get paid less and less, with less labor protections. Free trade encourages the practice of moving jobs to other labor markets, and away from the United States. NAFTA, CAFTA, FTAA are all supported by the World Trade Organization (WTO) and World Customs Organization. Beware arguments that use faulty reasoning by the World Bank or Mackinac Center for Public Policy, which are both bolstered by the corporate wealth of the largest companies.

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