Trumping NAFTA: Free Trade versus Democratic Planning
- Details
- Published on Wednesday, 19 July 2017 21:45
- Written by editor
~~~~~~~~~~~~~~(((( T h e B u l l e t ))))~~~~~~~~~~~~~~~
A Socialist Project e-bulletin .... No. 1451 .... July 20, 2017
____________________________________________________
Trumping NAFTA: Free Trade versus Democratic Planning
Socialist Project
Opposition to ‘free trade’ is in the air again, though not in the way most of us expected or hoped. Three decades ago, the move to guarantee, extend and deepen Canada’s economic integration with the United States by way of the bilateral Free Trade Agreement (FTA) between the two states mobilized an impressive though ultimately unsuccessful opposition. This opposition continued, though with less intensity, when that agreement was later extended to include Mexico via the North American Free Trade Agreement (NAFTA). Since then, however, with so many other free trade agreements (taking these first ones as their foundational model) deployed as key political levers in fostering neoliberal globalization, NAFTA came to be widely perceived by labour... and the left in Canada as just another part of an unfriendly landscape, as one imposition among so many others passively accepted by a dispirited populace. And even when Canadians managed to raise their spirits in the course of finally banishing Harper’s somber moods in favour of Trudeau’s sunny ways, they soon found that the new government was even more intent on quickly seeing through the vast expansion of ‘free trade’ through the trans-Atlantic Comprehensive Economic and Trade Agreement (CETA) as well as reinforcing Harper’s support for the Trans-Pacific Partnership Agreement (TPP) and a host of bilateral trade agreements being pursued in Asia in particular.
The crucial point about so-called free trade agreements is that they are not in fact primarily about trade, but about the free flow of corporate and financial investment through promoting and protecting the property rights of capital (as with the so-called FIPAs, or Foreign Investment and Protection Agreements, of which Canada has dozens) . In the case of NAFTA, its most crucial provisions are contained in the notorious Chapter 11 which addresses the security of foreign investments. It gives private corporations the right to sue governments when their actions negatively affect corporate profits. In many of these cases, governments were already anxious to play this role but were limited by popular opposition. With such clauses, governments could do what they wanted to do anyway and blame the agreement -- ‘We have no choice’. In that sense, it is not state sovereignty that is lost (states are in fact freer to serve capital) but the popular sovereignty/democracy of workers and communities to control capital movements. A CCPA Research Paper published in January 2015 captured very well what this meant for Canada:
"Currently, Canada faces nine active ISDS [investor state dispute settlement] claims challenging a wide range of government measures that allegedly interfere with the expected profitability of foreign investments. Foreign investors are seeking over $6-billion in damages from the Canadian government. These include challenges to a ban on fracking by the Quebec provincial government (Lone Pine); a decision by a Canadian federal court to invalidate a pharmaceutical patent on the basis that it was not sufficiently innovative or useful (Eli Lilly); provisions to promote the rapid adoption of renewable energies (Mesa); a moratorium on offshore wind projects in Lake Ontario (Windstream); and the decision to block a controversial mega-quarry in Nova Scotia (Clayton/Bilcon). Canada has already lost or settled six claims, paid out damages totaling over $170-million and incurred tens of millions more in legal costs. Mexico has lost five cases and paid damages of US$204-million. The U.S. has never lost a NAFTA investor-state case."
More generally, and especially in the context of the growing unpopularity of neoliberalism and austerity, these types of agreements have been accompanied by a restructuring of states which, to the end of protecting corporate rights, shifts state power toward agencies like central banks and ministries of finance that are responsible for the globalization of capital and not coincidentally well-insulated from democratic pressures. Frequently sold under the banners of "regulatory independence" and "good governance," it is this which allows for crucial commitments to restrict social and economic policies to be made by trade representatives at the international level. In this context, such environmental or labour ‘safeguards’ that were added by them as ‘side agreements’ did very little to slow down a process that was inherently socially regressive.