A Not-So-Modest Proposal to Reform NAFTA

Celeste Drake AFL-CIO

The next NAFTA negotiation round officially begins Nov. 17, and the news isn't all bad. It may sound crazy, but the same administration that put a Goldman Sachs and OneWest operative in charge of the Treasury Department and an anti-public school advocate in charge of the Department of Education recently made a NAFTA proposal that would nearly eliminate the private corporate justice system known as ISDS (investor-to-state dispute settlement).

This proposal alone is not enough to fix NAFTA's many shortcomings, but it is a step in the right direction. As trade activists know, ISDS is nothing more than a crony capitalist giveaway that reduces our power as citizens to impact our government. It gives foreign companies the right to use private tribunals to attack local, state and national decisions they deem not "fair and equitable." This private justice system has been used to attack worker training programs, local building permit decisions and even criminal indictments of corporate CEOs.

For the United States, NAFTA’s ISDS means our democratic choices are threatened and foreign companies have as much sovereignty as the U.S. government. It acts like a free insurance policy that rewards outsourcing. It provides an edge for foreign companies over small, local businesses. For our trading partners, the corporate power of ISDS is even more insidious, because their governments are not as powerful as our own. In other words, it is a win-win for global companies (no matter what country they like to call "home") and a lose-lose for workers that makes it even harder to join together to negotiate for better wages—no matter where we live or work.

The U.S. proposal, designed by U.S. Trade Representative Robert Lighthizer, would allow each NAFTA party to opt out of being sued by foreign investors. More importantly, for those who opt in, it would eliminate claims based on the vague and easily abused "fair and equitable treatment" standard. It reportedly even would close a loophole that would allow U.S. companies to "pretend" to be foreign companies so they can seek U.S. taxpayer funds in these private kangaroo courts.

As you might imagine, corporate CEOs and their powerful lobbies are freaking out about this proposal. They are panicked that they might lose this special privilege and have to play on a more level playing field.

We don’t know whether this proposal will make it into any final renegotiated NAFTA, and even if it does, there are lots of other things that need to be improved, including labor protections, currency rules and the right to label meat by country of origin. But this is one bright proposal in times of extreme challenge for North American working families.

To get involved this week, the most important thing you can right now do is ask your member of Congress to speak up for higher wages and labor standards in NAFTA. We need to keep pushing for trade rules that work for all working people. 

*Note: Given the secrecy of the NAFTA proposals, we know a lot about the details about the ISDS proposal because they have been extensively reported in the media. 


Reposted from the AFL-CIO