House Call with Carol Hughes

Democrats in US deliver improvements to CUSMA trade deal

NAFTA was signed in 1994 with the promise of jobs, rising productivity and secure access to the largest market in the world. What it delivered for Canada was 400,000 lost manufacturing jobs and the decimation of our textile industry. Many of those jobs moved to Mexico with its low-wage economy that could suddenly sell finished products back into Canada and the US without penalty. This came to be true for the automotive sector as well with layoffs hitting southern Ontario as Mexican production ramped up.

At the time, New Democrats concerns for job losses were brushed aside, as were our warnings that NAFTA’s investor-state resolution mechanism (chapter 11) constituted a threat to our ability to make sovereign decisions. Then, job losses mounted and Canada was sued numerous times for things like trying to ban the gasoline additive MMT—a suspected neurotoxin. NAFTA’s provisions made it easy for that American company to sue us for $20 million and force an apology. Instead of being able to protect our environment and health, chapter 11 allowed a company to over-ride our government. That is the loss of sovereignty the government was warned about.

NAFTA lasted 25 years until Donald Trump decided he didn’t like it. As he set negotiators to work on its replacement, he also started a multi-front war that hit Canada with tariffs on aluminum and steel. This added to the sense of urgency but shouldn’t have affected our negotiations on a new agreement. It did, and the government was prepared to accept a quickly negotiated Canada-United States-Mexico Agreement (CUSMA) that still had room for improvement as the best that we could hope for.

It took the Democrat-led Congress in the United States to improve the deal. They are the ones who proposed the elimination of the chapter 11 investor-state dispute settlement mechanism that gave Ethyl Corporation its win over Canadians’ health and the environment. In fact, our government initially said they would fight to keep it. It was the Democrats who introduced provisions enabling monitoring and enforcement of labour standards in Mexico. And it was Congress that stood up to drug companies and eliminated measures that would have raised the cost of prescription drugs.

It’s distressing that it took the insistence and work of American politicians before our government admitted the deal could be improved. After dismissing NDP concerns about labour standards, drug prices and the chapter 11 mechanism, the government suddenly realized that better was possible. To hear that CUSMA had flaws was not surprising, but to hear that from the government was a shock, especially given how dismissive they were of the same ideas when they came from the NDP.

While the new deal is being studied at committee, New Democrats are saying that now is the time to examine how trade deals are negotiated and ways that can be improved. That starts with making the process more open and transparent by involving Parliament from the outset. We can build confidence by formalizing the consultation process so Canadians know when, where and how they will be able to express their hopes and concerns for a proposed trade agreement, and by ensuring that all the appropriate people, organizations and institutions are consulted.

Canadians shouldn’t have to depend on politicians from other countries to get us a better deal at the bargaining table. Instead, they should have confidence that their government is at the table fighting for them and not acting on the wishes of corporate lobbyists. That’s why New Democrats are calling for a process to ensure that happens from the outset.