NAFTA 2.no

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Almost 1 million American jobs were lost to the North American Free Trade Agreement (NAFTA), according to a narrow U.S. government measure. More are being outsourced to Mexico each week.

The devastation of the Midwest’s “Rust Belt” is well-known but every state has been and is effected. That includes Colorado. Public Citizen, a consumer rights advocacy group and think tank, notes:

“Colorado has had a net loss of more than 9,000 manufacturing jobs since the 1994 NAFTA and 1995 World Trade Organization (WTO) agreements went into effect. More than 30,000 specific Colorado jobs have been certified under one narrow government program, Trade Adjustment Assistance (TAA), as lost to outsourcing or imports since NAFTA. The TAA figure represents a significant undercount because the program’s scope excluded many types of jobs lost to trade. According to the Department of Labor, manufacturing workers who lose jobs to trade and find re-employment are typically forced to take pay cuts. Two of every five rehired in 2016 were paid less in their new jobs. One in four lost greater than 20 percent of their income. That means a $7,900 pay cut for the median-wage worker earning $39,500. With displaced manufacturing workers competing for jobs not exposed to trade competition, wages in fast-growing service sectors are kept down. The resulting broad-based middle-class wage stagnation has contributed significantly to growing inequality.”

Trump promised to reform NAFTA or pull out of it. Negotiations were conducted for over a year in secret with over 500 “advisors” representing dozens of multinational corporations and investors in attendance. Then Trump rebranded it the USMCA (or U.S.-Mexico-Canada Agreement). It has better language about labor and environmental protections but there aren’t real enforcement provisions.

Progressives have concluded that while Trump changed the name and his negotiators had agreed to some improved tweaks, this is the same old shit.

In an analysis of the final draft, the Labor Advisory Committee (LAC), representing the Teamsters, American Federation of Teachers, SEIU and other major unions, said that the deal’s “incremental” reforms were wholly inadequate. The LAC made numerous recommendations for improving and enforcing labor standards (including rules adopted by the U.N.’s International Labour Organization concerning freedom of association, collective bargaining, discrimination, forced labor, child labor, workplace safety and health). 

None of these changes were made to NAFTA 2.0. If such standards were enforced, U.S. and Canadian companies would be much less interested in outsourcing jobs to Mexico.

The LAC concluded that the NAFTA 2.0 text neglected “the basic fact that the United States’ market-fundamentalist, pro-corporate approach to trade and globalization fails socially, politically and economically.”

The Sierra Club said NAFTA 2.0 “preserves a bad NAFTA rule that, in combination with a bad U.S. law, effectively bars the U.S. government from determining whether gas exports to Mexico are in the public interest. This automatic gas export guarantee facilitates increased fracking in the U.S., expansion of cross-border gas pipelines, and growing dependency on climate-polluting gas in Mexico.”

 The new deal also retains NAFTA’s kangaroo private tribunals for the fossil fuel companies which can be used to undermine Mexican climate and environmental policies.

NAFTA 2.0 is significantly worse than the old deal in crucial ways. It has a provision that will guarantee long term high prices for prescription drugs. A headline in the June 23, 2019, issue of The Hill says it all: “‘Big Pharma’ is the big winner of the USMCA.”

The op-ed was authored by Veronika J. Wirtz ,Warren A. Kaplan and Kevin P. Gallagher who are trade experts at Boston University’s Global Development Policy Center and School of Public Health. Their research examining similar previous trade pacts shows that the revised deal will increase the price of medicines and boost the power of Big Pharma.

NAFTA 2.0 gives pharmaceutical corporations special monopoly protections so they can block competition from generic drugs and charge more in all three NAFTA nations. The authors point out that “the pharmaceutical industry is the most active lobby group when it comes to trade agreements. One analysis of the Trans-Pacific Partnership (TPP) — a deal that was scrapped — stated that it ended up having many of the same provisions for pharmaceuticals and biologics that the USMCA has.”

The new text requires each nation to provide drug makers at least 10 years of “marketing exclusivity” for new biologic drugs derived from living organisms. These drugs now frequently cost $100,000 per person per year. This monopoly for brand-name drugs would ban cheaper “biosimilars” (i.e., generic biologics).

NAFTA 2.0 needs to be fixed or killed. Congress will be voting on it soon.  

this opinion column does not necessarily reflect the views of Boulder Weekly.