Posts Tagged ‘NAFTA’

Bipartisan policies create a bad economy

August 15, 2016




Many Americans are suffering because of the loss of good jobs during the last 20 years.

This is largely due to bi-partisan government policies that began in the late 1990s.   The 1994 North American Free Trade Agreement and later trade agreements, in the name of free trade, limited the power of national governments to regulate banks in the public interest.

Repeal of the Glass-Steagall Act in 1999 allowed banks to engage in risky investments, but retained the U.S. government’s guarantee of individual deposits.   This was part of an overall economic policy, which continued under the George W. Bush and Barack Obama administrations, of deregulating financial institutions, bailing them out when they failed, refusing to enforce the anti-trust laws and refusing to prosecute financial fraud.

Concentration of wealth destroys the mass consumer market, which was the source of American prosperity during most of the 20th century.   It means that what economic activity there is goes to serve the needs and wishes of the upper 10 percent or upper 1 percent of the population, which can be done without high wages or full employment.

These were the conditions that led to the 2008 financial crash and probably will lead to a worse financial crash to come.

Eventually someone — either a great statesman or a great demagogue — will emerge to change all this.   Neither Hillary Clinton nor Donald Trump is that leader.

Hillary Clinton, whose personal income and campaign contributions depend on these powerful institutions, cannot be expected to fix the problem.  Neither can Donald Trump.   While Trump has criticized corporate trade agreements, the rest of his economic program is lower taxes on the rich, deregulation of business and economic austerity, which will make conditions even worse.


The Day After Election Day by Rob Urie for Counterpunch.

Does Bernie Sanders have a real trade policy?

March 3, 2016
Bernie Sanders

Bernie Sanders

Bernie Sanders is an economic nationalist, like Donald Trump.  But while Trump complains about how other countries are taking advantage of the United States.  Sanders talks about how international corporations are taking advantage of working people (to be sure, with China’s help).

He said he has voted against every trade treaty that came before Congress during his tenure in the House and Senate, and said that, if elected President, he would rescind them all.  Like Trump, he opposes the Trans Pacific Partnership (TPP) agreement.

His opposition is fully justified, in my opinion.  The World Trade Treaty, the North American Free Trade Agreement (NAFTA) and similar agreements limit the ability of national governments to regulate foreign corporations, and give these corporations equal standing with supposedly sovereign governments.

These agreements are not what I would call free trade, but Sanders is not for free trade either.  He says he is for “fair trade,” which I take to mean a fair balance of trade with other nations.  Unlike Trump, he does not say anything about imposing new tariffs and restrictions on imports.


How NAFTA drove poor Mexicans north

July 22, 2015

If not for NAFTA, the United States probably wouldn’t have the issue it does with unauthorized immigration from Mexico.

The North American Free Trade Agreement, enacted in 1993, was part of a strategy by the Bill Clinton administration, continuing the policy of previous administrations, to increase U.S. exports.

ImageGen.ashxThe government gave up trying to preserve the family-operated farm.  Instead it favored large-scale operations that could produce food for export.  Farmers were told: “Get big or get out.”

NAFTA, although it eliminated government subsidies for many products, preserved U.S. subsidies for corn and dairy products.  The corn subsidy was also in effect a subsidy for meat, since meat animals are fed subsidized corn.

Small Mexican farmers, especially corn farmers, could not compete against the cheap food imports that flooded into Mexico.  Many left the land, and joined the migrant stream into the United States.

U.S. government policy was successful in increasing exports of corn.  The unintended result was increased imports of unauthorized workers.   I think NAFTA should be amended or repealed, but, sadly, this will not change the results of NAFTA.


Under Nafta, Mexico Suffered and the United States felt its pain by Laura Carlsen for the New York Times.

Corn Sales to Western Hemisphere Surge by the National Corn Growers Association.

NAFTA and US farmers—20 years later by Karen Hansen-Kuhn for the Institute for Agriculture and Trade Policy.

Mexican Farmers Affected by Agricultural Subsidies from NAFTA, Other International Agreements by Susana G. Baumann for the Huffington Post.

Corn Subsidies at Root of U.S.-Mexico Immigration Problems by Anthony B. Bradley of the Acton Institute.

How U.S. Policies Fueled Mexico’s Great Migration by David Bacon for The Nation.

Free trade: As U.S. corn flows south, Mexicans stop farming by Tim Johnson for McClatchy Newspapers.

What trade agreements have done to us

June 12, 2015


It is true that democracy and national sovereignty are threatened by proposed international agreements such as the Trans Pacific Partnership, Transatlantic Trade and Investment Partnership and Trade in Services Agreement.

What I’m coming to realize is how much democracy and national sovereignty have already been compromised by the North American Free Trade Agreement and other existing so-called trade agreements.

They all have investor-state dispute settlement provisions that allow corporate-friendly special tribunals to override national laws and regulations.  And they all go far beyond setting terms and conditions for imports and exports.

Since almost anything can affect international trade, almost anything can go into an international trade agreement.  As David Dayen documents in a coming issue of the American Prospect, lobbyists have learned to bypass Congress and persuade the U.S. International Trade Representative—typically a former or future lobbyist himself—to enact their wish lists through trade agreements.

Rejecting the TPP, TTIP and TISA will not be enough.  The next step will be to renegotiate or cancel the existing toxic trade agreements.


Dems support politicians they don’t believe

June 10, 2015

One oddity of American political life is the voter who support Democratic candidates because he or she doesn’t believe their campaign rhetoric.

I encountered this in 1992 when I talked to a United Auto Workers leader who was working to elect Bill Clinton for President because he was convinced that Clinton didn’t mean what he said about the North American Free Trade Agreement.

True, the UAW guy said, Bill Clinton said he’s for NAFTA, but he also said he is for a lot of other things, such as treaty protection of labor and environmental rights, that would negate NAFTA.  So in effect, his reasoning went, Clinton is really against NAFTA.

But Clinton betrayed him.  He pushed NAFTA though, just as he said he would.  The part he wasn’t serious about was the protection of the labor and environmental rights.

I saw the same thing among supporters of President Obama.  Every time Obama would do something such as offering to cut Social Security and Medicare as part of a budget-balancing deal, they would say this is something he “had to” do.

Really?  “Had to”?  Did somebody like the Luca Brazzi character in The Godfather put a pistol to his head and make him an offer he couldn’t refuse?

Hillary Clinton

Hillary Clinton

Now we have the same thing with Hillary Clinton, but with a twist.  She is trying to steal Elizabeth Warren’s and Bernie Sanders’ thunder by talking about economic inequality, while signaling that she doesn’t really mean it to the Wall Street figures, who have made her rich by paying her six-figure fees to give speeches.

It will be interesting to see where Clinton comes down on the Trans Pacific Partnership.  She historically has supported trade agreements and in her 2014 book called the TPP the “gold standard” for such agreements.  Now she declines to take a clear stand.

A lot of the political commentary describes her “dilemma” over the TPP—the dilemma consisting of the politics of the TPP, not the merits of the agreement.

If she were to come out strongly against the TPP when her opposition might have some effect in defeating it, I would give her credit for a sincere change of heart.  I don’t expect this to happen, but I would be pleased to be proved wrong.  Otherwise I will view Clinton’s campaign rhetoric with the same skepticism that is being asked of her Wall Street supporters.

I don’t think this happens so much in the Republican Party because there is less of a disparity in the Republican Party between what’s said to the voters and to the financial backers.


Hillary Clinton Traces Friendly Path, Troubling Party by Jonathan Martin and Maggie Haberman for the New York Times.

In Classic Clintonian Fashion, Dems Insult Their Own Voters by Matt Taibbi for Rolling Stone.

Is Clinton Still Down With TPP? by Freedom Partners.

The passing scene: Links & comments 10/11/13

October 11, 2013

The Golden Dawn Murder Case, Larry Summers and the New Fascism by Greg Palast for TruthOut.

The Greek government has banned the xenophobic racist Golden Dawn party and arrested six members of Parliament who belong to that party.  Greg Palast wrote that the real reason for the Golden Dawn’s ban is that it is the only Greek political party who opposes the austerity measure imposed by the European central bank.  If you define fascism as the union of corporation and government, Palast said, then the Golden Dawn party is Greece’s only anti-fascist party.  He predicted that Greek leftists will come to bitterly resent the precedent that has been set, because they will be next.

He quoted Joseph Stiglitz, former chief economist for the World Bank, as saying that when the International Monetary Fund and World Bank impose austerity measures on Third World governments, they always insist that money be set aside for riot control.  He said they even have an expression, the “IMF riot.”

Fear and Loathing in the House of Saud by Pepe Escobar for Asia Times.

Peace between Iran and the United States would be good for almost everybody except the Saudi Arabian royal family and maybe the government of Israel.  Pepe Escobar explained why the Sandi Arabian government is threatened by a U.S.-Iran agreement and how it will use its leverage to prevent it.

Murder in the Age of Distraction by Jonathan Coppage for the American Conservative.

A man on a San Francisco commuter train pulled out a .45 pistol and aimed it at fellow passengers.  Nobody noticed until he actually shot someone because they were all focused on their hand-held phones and computers.

New law threatens vote-counting reliability by Thomas D. Elias of the San Bernadino County Sun.  Hat tip to the Brad Blog.

Touch screen voting machines can vulnerable to tampering by hackers.  But California has enacted a new law that allows counties to use touch screen machines that have not been certified as reliable.  This is a bad law and a bad precedent for other states.  Why take a chance on tampering with voting results?

Pharmaceutical firms paid to attend meetings of panel that advised FDA by Peter Whorisky of the Washington Post.

Two college professors who organized an FDA advisory panel on painkilling drugs charged big pharmaceutical companies $25,000 each to have their experts attend meetings.  The money went to fund their research projects.

There’s nothing wrong with a government agency getting outside advice, including advice from drug companies, but it is wrong to charge for the right to give advice and with giving special privileges to big companies who can pay a fee.

Quebec Fracking Ban Lawsuit Shows Perils of Free Trade Deals by Julian Beltrane on the Huffington Post.

A Canadian company registered in Delaware has appealed to a NAFTA tribunal to overturn Quebec’s mortatorium on hydraulic fracturing because it takes away expected profit.  The moratorium is intended to give the Quebec government time to study the impact of fracking.

The proposed Trans-Pacific Partnership agreement also would give international companies the right to appeal and possibly overturn national laws if it deprived them of privileges granted under the treaty.

Hillary Clinton: It’s Not Her Turn by Richard Kim for The Nation.

It would be nice to show that a woman can be elected President, just as it was nice to show that an African-American can be elected President.  But Hillary Clinton, like Barack Obama and like her husband Bill Clinton, represents the corporate and Wall Street establishment, not working people and young people.

The maturing of democracy: Picking up the tab in the Economist.  Hat tip to Craig Hanyan.

A democratic system requires wisdom and maturity in the electorate and in elected and appointed government officials.  The Economist reviewer considers two books that examine the past and future of democratic governance.

Pushing back against pro-corporate treaties

May 6, 2013


Last month representative of 12 Latin American governments met in Guayaquil, Ecuador, to talk about what to do about trade treaties that give private business the right to appeal to international tribunals to overturn laws and court decisions for the protection of workers, consumers and the public interest.

Such provisions are part of the North American Free Trade Agreement and of numerous bilateral agreements between the United States and foreign governments.   These treaties not only give them the right to appeal to a tribunal of foreigners to overturn a nation’s laws, but to collect damages for loss of “expected profits.”   Only investors have the right of appeal under these treaties.  Labor unions and citizens groups do not.  As Public Citizen reported:

Many of the other countries present have also faced a taxing litany of investor-state cases in recent years:  Mexico (e.g. losing $170 million in a NAFTA-created tribunal to the same U.S. agribusinesses that, under the same NAFTA, displaced over two million farmers), Argentina (e.g. losing a slew of cases to foreign financial firms for using financial regulations to mitigate the country’s 2001 financial crisis), Guatemala (e.g. losing $13 million to a railroad company that failed to build a railroad because the tribunal thought that the government had failed to fulfill the company’s expectations), etc.

via Eyes on Trade.

These “investor-state” provisions are being used more and more.   Recently a company appealed Quebec’s moratorium on hydraulic fracturing for natural gas to a NAFTA court.   Lone Pine Resources, a company incorporated in Delaware and headquartered in Calgary, Alberta, has asked for $250 million to compensate for its time and expense in obtaining necessary permits and approvals for hydrofracking.  Under the treaty, the appeal must go to binding arbitration to a three-person panel of professional arbitrators in a hearing closed to the public.   If Lone Pine wins, this would have grave implications for the ability of New York state or any other North American government to regulate hydrofracking.

Red bar is cases before International Center for Settlement of Investment Disputes.  Grey bar is other cases.  Source; UNCTAD

ICSID is the International Center for Settlement of Investment Disputes.

Barack Obama in his 2008 Presidential campaign promised to renegotiate NAFTA so as to give better protections for labor and the public interest, but as President, he did not make even a token effort to do so.   Instead his administration is embarked on negotiations for a new Trans-Pacific Partnership agreement and a new agreement with the European Union which would lock in investor rights to appeal national laws.

I don’t think global corporations need the benefit of special protection under international law.   If corporate executives feel their company is treated unfairly by a government, they have the power to simply cease doing business there.  Public Citizen’s Global Trade Watch organization quoted reports that there is no evidence that investor-state treaties increase the amount of foreign investment in a country.

As a result of the Guayaquil meeting:

At the end of the day, seven of the governments present signed a declaration to coordinate efforts in seeking to replace the investor-state regime with an alternative investment framework that respects sovereignty, democracy, and public well-being.  They announced the launch of an International Observatory, a intergovernmental commission based in Latin America to audit investor-state tribunals, draft alternative investment agreements, and collaborate in strategies for reform. … …  Representatives from the remaining five governments participated as observers and are now taking the declaration back to their capitals to discuss joining the emerging Latin American coalition.

via Eyes on Trade.

I hope something comes of this.   It is U.S.-based corporations and the corporate-influenced U.S. government that are pushing for unequal trade treaties.  They do not benefit the American people.


TTP trade deal would override American law

April 1, 2013

Right-wing opponents of President Obama say that his policies are a threat to American democracy.  I think that’s true—but not in the way they think.   He claims the right to sign death warrants based on secret criteria.  He has brought government secrecy to unprecedented levels.  His administration protects wrongdoers and prosecutes whistle-blowers.   But all these things will be possible for a future President to roll back.

Not so the TransPacific Partnership agreement, a treaty now being negotiated in secret.  The TPP treaty will be submitted to the Senate under the Fast Track system under which it can be voted up or down but not modified.   It is very possible that it will be enacted before the majority of the American public has a chance to learn what it is all about.

The full extent of the TPP is not known, but some provisions have been leaked.  They are all favorable to global corporations and unfavorable to the public.  The worst provision is the agreement to submit to special courts with authority to overrule U.S. law and U.S. court decisions when they are deemed unfair to “investors.”

Investors will be the only class of people protected by the TPP.   They will be allowed to ask for damages not only loss of business due to labor, health or environmental laws, but for hypothetical losses of future profits.

One purpose of the TPP is to create an 11-nation Pacific bloc in which there are no national boundaries for global corporations, but China is locked out.  But there is no minimum number of nations that have to sign for the TPP to go into effect.  Even if only a handful of nations besides the United States sign on, it will have achieved another purpose, which is to create a body with power to override U.S. laws that are objectionable to corporations.

Under Article VI of the U.S. Constitution, treaties are the supreme law of the land.  That is a necessary provision.  If it were otherwise, treaties would not be binding.  Unfortunately, this opens the door to treaties such as the North American Free Trade Agreement, which set up courts superior to national courts, to which corporations can appeal to overturn national and local laws.  For example, a NAFTA court recently ordered the Province of Ontario to pay damages to a national gas company for future profits lost because of Ontario’s restrictions on hydraulic fracturing.  TPP is NAFTA on steroids.

There are many other pernicious provisions in the TPP.  Click on TransPacific Partnership Will Undermine Democracy, Empower Transnational Corporations for details.

Click on US secretly negotiating NAFTA-like TPP treaty for an earlier post of mine on TPP.

Click on Trans-Pacific Partnership: NAFTA on Steroids for another earlier post.

Click on Barack Obama’s economic legacy: His four must-have items for comment on how TPP fits in with Obama’s overall economic agenda.