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NAFTA Negotiations Start in Secrecy, Lobbying Heats Up

Summary:
After fake promises of transparency, Americans aren’t allowed to know what’s being negotiated at their expense. The first round of re-negotiating the North American Free Trade Agreement between the US, Canada, and Mexico began on Wednesday and is scheduled to last through Sunday. And the one thing we know about it is this: Despite promises in March by US Trade Representative Robert Lighthizer (USTR) that the negotiations would be transparent, the USTR now considers the documents and negotiations “classified” and they’ll be cloaked in secrecy. But corporate lobbyists have access. And they’re all over it. The Electronic Frontier Foundation put it this way: Once again, following the failed model of the Trans-Pacific Partnership (TPP), the USTR will be keeping the negotiating texts

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After fake promises of transparency, Americans aren’t allowed to know what’s being negotiated at their expense.

The first round of re-negotiating the North American Free Trade Agreement between the US, Canada, and Mexico began on Wednesday and is scheduled to last through Sunday. And the one thing we know about it is this: Despite promises in March by US Trade Representative Robert Lighthizer (USTR) that the negotiations would be transparent, the USTR now considers the documents and negotiations “classified” and they’ll be cloaked in secrecy.

But corporate lobbyists have access. And they’re all over it.

The Electronic Frontier Foundation put it this way:

Once again, following the failed model of the Trans-Pacific Partnership (TPP), the USTR will be keeping the negotiating texts secret, and in an actual regression from the TPP will be holding no public stakeholder events alongside the first round. This may or may not set a precedent for future rounds, that will rotate between the three countries every few weeks thereafter, with a scheduled end date of mid-2018.

But during his confirmation hearing in March, Lighthizer had promised to make the negotiations transparent and to listen to more stakeholders and the public. The EFF reported at the time that in response to Senator Ron Wyden question – “What specific steps will you take to improve transparency and consultations with the public?” – Lighthizer replied in writing (emphasis added):

“If confirmed, I will ensure that USTR follows the TPA [Trade Promotion Authority, aka. Fast Track] requirements related to transparency in any potential trade agreement negotiation. I will also look forward to discussing with you ways to ensure that USTR fully understands and takes into account the views of a broad cross-section of stakeholders, including labor, environmental organizations, and public health groups, during the course of any trade negotiation.

He said that “we can do more” to ensure that we “have a broad and vigorous dialogue with the full range of stakeholders in our country.”

Senator Maria Cantwell tried to have Lighthizer address the skewed Trade Advisory Committees that currently advise the USTR, by asking:

“Do you agree that it is problematic for a select group of primarily corporate elites to have special access to shape US trade proposals that are not generally available to American workers and those impacted by our flawed trade deals?”




Lighthizer replied:

“It is important that USTR’s Trade Advisory Committees represent all types of stakeholders to ensure that USTR benefits fully from a diverse set of viewpoints in considering the positions it takes in negotiations.”

He also said that he’d look forward to discussing “additional means for ensuring public input into US trade negotiations.

All of them were fake promises. The negotiations and the texts are classified and secret, and unless something is leaked, Americans (along with Canadians and Mexicans) will not know what is being negotiated at their expense.

But lobbyists have access, and they’re being listened to. One big topic is the inclusion of an Investment State Dispute Settlement (ISDS) procedure.

This is important for Big Oil, as represented by the American Petroleum Institute, which said in its brief that “NAFTA must include Investor-State Dispute Settlement.” It called ISDS “a neutral, international arbitration procedure” that “is necessary to ensure that, when US oil and natural gas companies invest abroad, they can seek protection for their investments if they do not have access to developed and independent court systems.”

This also goes for Mexican and Canadian oil and gas companies that invest in the US. But API doesn’t give a hoot about that.

ISDS is an arbitration procedure outside of the national court system. Its rulings force legislatures to change laws in favor of foreign corporations, and the courts are helpless. The Big Oil lobbying group also said this in the brief:

API is not aware of any adverse decisions among the handful of ISDS cases ever brought against the US. US companies have won or favorably settled many of the approximately 35 cases they have brought against Canada and Mexico.

“Adverse decision” is in the eye of the beholder. Here is an ISDS case that the US lost against Canada and Mexico. It whacked American consumers and reduced Congress to a rubber-stamping entity.

On December 2015, a WTO arbitration panel, in siding with Canadian and Mexican beef and pork producers, ruled against the US Country-Of-Origin Labeling (COOL) requirements for beef and pork, originally passed by Congress in 2002 and strengthened in 2013.

After that strengthened act became effective, beef and pork products sold in the US had to show where the animal was born, raised, and slaughtered. Americans finally could make decisions based on this knowledge. The labeling was very popular in the US. A little consumer knowledge goes a long way.

But the WTO claimed that the labeling requirements discriminated against Canadian and Mexican meat imports. And to heck with consumers. It allowed those countries to impose up to $1 billion a year in trade sanctions against US exports if the COOL requirements weren’t removed. Congress buckled in no time and voted to repeal the COOL law.

This is how ISDS operates. Consumers and workers have no seat at the table. What matters are corporate interests lined up against the rules and laws put in place by elected governments. The ruling is a deal made between companies and an arbitration panel, and Congress then has to repeal its offending laws.

ISDS provisions are an attack on national sovereignty. Big Oil doesn’t want governments to get in the way with rules and laws that might trim their profits or limit their power or curtail their freedom to operate wherever and however they see fit.

So if the USTR contemplates handing over this power to some arbitration panel, the negotiations should at least be public, and the documents should be public, and the lists of lobbyists and their priorities should be public so that outrageous portions of the agreement could elicit public outrage. And it should be public from the very beginning, not just when the final package of thousands of pages is presented to Congress, which then is under tremendous pressure to rubber-stamp the thing.

But fat chance. Already, penalties imposed during the first half of 2017 on Wall Street firms by their regulators have plunged compared to the same period in 2016. The Financial Crisis is forgotten. Even sounds of gentle wrist-slapping fade. Read… Wall Street Firms Win Again, Regulators Capitulate 




Wolf Richter

Founder, Wolf Street Corp.

In his cynical, tongue-in-cheek manner, he muses on WOLF STREET about economic, business, and financial issues, Wall Street shenanigans, complex entanglements, and other things, debacles, and opportunities that catch his eye in the US, Europe, Japan, and occasionally China.

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