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USW: Administration’s NAFTA Renegotiation Objectives Must
Reverse Past Failures
(Pittsburgh) -- United
Steelworkers (USW) International President Leo W. Gerard released the following
statement after the office of the United States Trade Representative (USTR)
released a letter to Congress identifying the objectives it would seek to
fulfill in its upcoming renegotiation of the North American Free Trade
Agreement (NAFTA).
“The USW has long
supported the renegotiation of NAFTA, but unfortunately, the objectives
identified in the USTR’s letter do not go nearly far enough to ensure that the
negative impact of NAFTA on workers in the United States, Canada and Mexico
will be reversed.
“The USTR seems to be
backing the same priorities that have guided trade agreements since NAFTA was
first negotiated, promoting corporate interests and leaving workers behind.
This is not what workers who supported President Trump in the election
expected: They assumed that he would renegotiate NAFTA to create better paying
jobs for them and their families, rather than chasing higher profits and
greater protections for corporate interests.
“The President
campaigned on promoting a new approach on trade, and the USW made clear, right
after the election, that we would work with him where we could. Today’s letter
makes us wonder how different his policies will really be. At the end of the
day, the measure of success will be the number of manufacturing jobs – and the
quality of those jobs – that are maintained and created.
“Renegotiating NAFTA
is a complex undertaking. Workers’ rights need to be expanded, implemented and
enforced. Currency manipulation must be addressed. Rules of origin must be
dramatically changed to promote production and jobs. Coordination on trade
rules should be strengthened to ensure that China and other countries engaged
in unfair and illegal activities can’t use our NAFTA partner markets to
undermine our interests. Investor state dispute settlement provisions must be
eliminated.
“Washington remains
out of touch with working people. In the coming days, our members will fight
for trade policies that advance our interests and those of our fellow workers
in North America. We will hold the Administration accountable to its promise to
truly fix NAFTA, and if the renegotiations fail to advance the concerns of
working people, we will fight like hell to defeat them.”
Arbitration
Provision Emerges as Flashpoint in Nafta Overhaul
Corporations, labor
representatives clash on dispute settlement scheme as U.S. leaves its fate
unclear
By William Mauldin
July 18, 2017 4:05
p.m. ET
WASHINGTON—A day after the
Trump administration unveiled its objectives for renegotiating the North American Free Trade
Agreement, U.S. businesses and a major labor coalition sparred over the
merits of an international arbitration system embedded in the agreement with
Canada and Mexico.
The arbitration provision, contained in Nafta’s Chapter 11 and
known as investor-state dispute settlement, allows an investor from one
country—often a large corporation—to challenge regulations or actions of a
government in another country through an international arbitration tribunal,
potentially bypassing national courts. Its fate was left unclear in the
document released by the Trump administration on Monday.
In its negotiating blueprint, the administration said it wanted
not only to secure rights for U.S. investors in Canada and Mexico, but also to
prevent investors from those countries from gaining rights in the U.S. that
domestic firms don’t have. The document didn’t specify what should happen
to the current system, and a spokeswoman for U.S. trade
representative Robert Lighthizer had no immediate comment.
At a House of Representatives subcommittee hearing Tuesday,
businesses and the AFL-CIO, America’s largest labor federation, pointed to the
ambiguity in the administration’s blueprint. Corporate executives pressed to
retain the current settlement process as a way to defend their investments
abroad, while the AFL-CIO urged removing the provision, which they say favors
companies over workers and undermines national court systems.
American businesses point to research saying they sometimes face
discriminatory treatment abroad compared with local businesses and therefore
require an international arbitration system.
“It’s not academic, it’s for
real,” Dennis Arriola, executive vice president for strategic development
at Sempra
Energy , told the House hearing Tuesday. “We had an experience in
Argentina where overnight the government changed the rules and regulations.”
Sempra challenged Argentina under a similar provision in a bilateral pact with
that country.
The chief executives of
railroad Kansas
City Southern and engine maker Cummins Inc.also backed
the arbitration process in the hearing as a way to protect their investments in
Mexico.
Labor leaders and some Democratic lawmakers see the arbitration
as a green light that encourages American companies to invest in production—and
create jobs—abroad because they are exposed to fewer legal risks.
“I see no evidence that we can’t trust Canadian courts,” Celeste
Drake, an AFL-CIO trade expert, told a House trade panel on Tuesday. The Sierra
Club also said Monday it opposed the arbitration provision.
The U.S. has never lost an
arbitration with a foreign investor under the Chapter 11 provision.
Canada’s TransCanada Corp. used the provision to sue the U.S. after the Obama
administration didn’t grant a permit for the Keystone XL pipeline. TransCanada
suspended that case after Trump 8lifted U.S. objections to the project.
Companies can sue governments for monetary damages but can’t overturn laws or
regulations through the process.
Lawmakers and congressional aides say the Trump administration
is still deliberating its stance on key Nafta issues, including the arbitration
system, as it heads into negotiations with Canada and Mexico that are expected
to begin next month. Provided the three sides can reach an agreement, it 8needs
to be ratified by a majority in the House and Senate, as well as by the
parliaments of Mexico and Canada.
“I think they’re still in the process of trying to figure out
what’s the best way to proceed in protecting American companies overseas,” said
Rep. Dave Reichert (R., Wash.), who chairs the House trade panel.
The Obama
administration disappointed many Democratic lawmakers by
including a revised version of the arbitration provision—with added safeguards
to prevent frivolous claims—when it negotiated the 12-nation Trans-Pacific
Partnership, or TPP. Mr. Trump rejected TPP, which hadn’t been ratified by
Congress, on his first working day as president.
A senior U.S. trade
official indicated a desire in March to “maintain
and seek to improve procedures to resolve disputes between U.S. investors and
Nafta countries,” according to a draft letter to Congress viewed by The Wall
Street Journal.
In June congressional testimony, Mr. Lighthizer, the U.S. trade
representative, said he was “troubled by the sovereignty issue” with regard to
the arbitration provision. Still, he said he supported the “legitimate
interest” of American firms to have their rights protected abroad and backed
further congressional consultations before making a final decision on the
arbitration provision.
Trump’s actions could bring back memories of former President George W. Bush's decision in 2002 to slap hefty "safeguard" tariffs on steel imports to give domestic industry time to restructure. That triggered global outrage and a WTO case, which the U.S. lost. Trump’s trade plan sets up global clash over 'America First' strategy
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