29 January 2020 — FAIR
Janine Jackson interviewed Manuel Pérez-Rocha about NAFTA 2.0 for the January 24, 2020, episode of CounterSpin. This is a lightly edited transcript.
Janine Jackson: In keeping with their time-tested support for things bipartisan, corporate media saluted the passage through Congress of the US/Mexico/Canada trade deal. The New York Times called it a “big economic win” for Donald Trump, who NPR says “can say he has fulfilled his pledge to get tough on trade and eliminate ‘bad deals’ made by his predecessors.” NPR ends by noting that the agreement some call NAFTA 2.0 includes provisions on things like the ozone layer and fisheries, “but that hasn’t been enough to satisfy environmental groups,” who say it encourages pollution and doesn’t address the climate crisis.
Those critical of original-recipe NAFTA were likewise consigned to the last, “but some people” paragraphs of news stories, and described as “opposing trade,” rather than promoting a vision of it that places people and the environment above corporate profits. USMCA, as it’s known, is on Trump’s virtual desk as we speak, on January 23.
Here to suggest some questions we could be asking about it is Manuel Pérez-Rocha. He’s an associate fellow of the Institute for Policy Studies and an associate of the Transnational Institute. He joins us now by phone from Maryland. Welcome to CounterSpin, Manuel Pérez-Rocha.
Manuel Pérez-Rocha: Thank you so much for having me, Janine.
JJ: In your recent article for Inequality.org, also on IPS’s site and Truthout, you say that USMCA—which was supported by the AFL-CIO and lots of Democrats—is better in some ways than NAFTA, but “remains a handout to large corporations,” in particular around the area of investor rights. I hope listeners will remember the outrage that NAFTA sanctioned: allowing corporations to sue governments if a regulation about air quality, for instance, cuts into their profits or reduces the value of their investments. It’s called investor/state dispute settlement, or ISDS. So what would change under this deal, with regard to investor rights and that whole ISDS thing?
MPR: What the USMCA creates is three distinct investment protection regimes in North America. One is a regime between the United States and Canada, in which ISDS no longer exists. That is definitely a positive step. Many substantive investment protections, though, will remain, but they will need to be handled in national courts or local courts or through state-to-state mechanisms, rather than through international, supranational tribunals, like with NAFTA. And then there is a system for Mexico and the United States, in which ISDS persists, and this is a very strong step backwards, because it really makes what I would say is a neocolonial distinction: Rich countries amongst themselves are using less and less ISDS, but it is very notable that it is being imposed towards the Global South country, which is Mexico, and in particular it is very concerning for ecological reasons, but I will touch on that later.
The third other relation is between Canada and Mexico. It is not under the USMCA, but ISDS persists under the Trans-Pacific Partnership, of which Mexico and Canada are members. (The United States is not; Trump pulled out the United States from the Trans-Pacific Partnership.) And this is very concerning also, because of the great destruction of the Mexican environment by Canadian mining companies. So, all in all, Mexico remains under ISDS, whether under the USMCA or the TPP, and it’s very concerning, particularly for environmental reasons.
JJ: I want to draw you out on this point that I found really interesting and disturbing. You note that developed countries are increasingly pulling out of ISDS among themselves, but not with regard to the Global South. In one way, when we talk about this stuff, we seem to be talking about a kind of supra-sovereignty of corporations, free-floating capital vs. governments. But then, within that, there’s still this “North vs. South” or “developed vs. developing” dynamic going on, right? I mean, no Mexican company has ever won a case versus the US or a European country.
MPR: Yeah, the vast majority of cases are European or United States companies suing countries of the Global South. There are very few cases of companies of the Global South suing countries in the North, because there’s not such capacity and such power to hire expensive lawyers and so on. This is really concerning, that the continuation of this neocolonial system is not being dismantled, and only countries in the North are starting to get rid of ISDS amongst themselves. The European Union, for example, is starting to cancel all its internal bilateral investment treaties among their countries. Also, countries like New Zealand and Australia managed to not get investor protection with a free trade agreement with the European Union, under the argument that they have robust local courts and robust legal systems. But the case that I would like to make is that the countries in the North should help countries in the South to strengthen their internal legal systems, instead of just bypassing them with ISDS.
JJ: The example of mining in Mexico really illustrates what this can look like, and I know your report Extraction Casino explores this. Mining companies file suits against Latin American countries because, you know, why not? They might not win, but they have the time and the money to just roll the dice on it. But the people at the sharp end are communities that are trying to protect their land, are trying to protect their health; the deck is really stacked here.
MPR: Yeah, exactly. In the report Extraction Casino, we examined 38 cases of mining companies, mostly from Canada or the US, that have been filing dozens of multi-million dollar claims against Latin American countries. The World Bank’s International Centre for the Settlement of Investment Disputes, or ICSID, this is where most of the suits come. This is really an assault against the self-determination of countries when they try to enact responsible environmental policies, or other kinds of policies in the public interest.
And Mexico, just last year, received two huge cases of two US mining companies under NAFTA, one is called Vulcan and the other one’s called Odyssey, for the total amount of $4 billion, I didn’t say million, I said billion dollars. That’s a huge amount that many countries just cannot be subject to, particularly poorer countries, like countries in Central America, where I’ve worked a lot, and other countries in Africa, for example, or Pakistan, that also received a $4 billion demand.
Manuel Pérez-Rocha: “This is really an assault against the self-determination of countries when they try to enact responsible environmental policies, or other kinds of policies in the public interest.”
And this is really provoking, more than anything, what is called regulatory chill; it’s withdrawing or constricting the capacity of governments to enact responsible environmental policies that, above all, help to mitigate the climate crisis that we’re living globally.
JJ: We can’t fight climate disruption without reducing the value of somebody’s investment, period. And it’s bizarre to make environmental laws that corporations can then just dodge by outsourcing. It’s as if we’re living in different worlds, where the climate effects or the pollution here don’t affect anybody else. Of course it’s not true.
But it seems as though the left has been a bit on the back foot in terms of trade and globalization. And I wanted to ask you what a progressive vision of trade policy looks like. How is it different from what we see now?
MPR: The problem is that free trade agreements, including the new NAFTA, they’re all about expanding more international trade, and pushing more for increasing the supply chains. And this is what is really exceeding the planet’s ecological limits. We think that a reformed international trading system must be, above all, tolerant of different ideas about how our economies and societies should be organized, and not only under this principle of “more trade, more growth is better.”
So we have lots of proposals. We also have a paper called Beyond NAFTA 2.0, in which, among many other things, we propose a new trade treaty framework that supports core progressive policy priorities, such as universal healthcare, strong public services, robust environmental protection and resolute action on climate change. There is no mention about climate change or the climate crisis in the new NAFTA. This is clearly the same pattern of expanding trade, expanding investment and expanding the depletion of the environment in different countries.
JJ: Finally, my biggest problem with media, I think, has been the way they’ve played kind of a bait-and-switch. When NAFTA was coming through, the New York Times [7/21/92] said it would bring “jobs, wealth and economic activity throughout the continent.” The Washington Post [5/11/93] said “opposition to the agreement is rooted in dark forebodings almost comically out of proportion to any possible results.”
Well then, when NAFTA did not result in “jobs, wealth and economic activity throughout the continent,” these media promoters just turned and said, “Oh, but it’s not as bad as critics said it would be,” you know; they just kind of left their promises behind.
And I think trade deals in general are kind of preapproved by the media. You’re either a smart person who understands it, or you’re a Luddite with a special interest who’s trapped in the past. I wonder what you would like to see journalists do more of, or maybe less of, in reporting, not just on the new NAFTA, but on trade deals in general?
MPR: What they should do in general is make the connections between the climate crisis that we live in, but also the refugee crisis from countries like Honduras, El Salvador, and what free trade agreements have done in those countries.
Nobody talks about CAFTA anymore, the Central America Free Trade Agreement. But that agreement has only worked for elite of those countries. And it has not given all the jobs that they promised it would do.
So there are economic disruptions all over the world created by free trade agreements, and also neoliberal policies and structural adjustment policies enacted by the World Bank and the IMF. There’s little connection between the migration crisis, the rampant poverty in so many countries and violence and economics, no? I think this is something that we don’t see in the mainstream media very much.
JJ: We’ve been speaking with Manuel Pérez-Rocha of the Institute for Policy Studies. You can find the work we’ve been discussing online at IPS-DC.org. Manuel Pérez-Rocha, thank you so much for joining us this week on CounterSpin.
MPR: Thank you. Thank you, Janine.