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Op-Ed: Canada’s NAFTA priorities exclude key proportionality clause

The Canadian list is quite short and some objectives are not described in any detail at all. The objectives include important goals such as retaining our right to supply management in areas such as dairy production. The U.S. is bound to challenge this as Trump has demanded more access for U.S. products in this area. Canada also wants to reform the investor-state dispute mechanism to ensure that governments are allowed the right to regulate in the public interest. It is unlikely the U.S. will sign on to this as it could conflict with the interests of corporations in seeing that regulations do not negatively impact on their profits.

Freeland said after outlining Canadian goals: “As in any trade negotiation, we have some areas of our offensive interests, areas where we think the agreement can be strengthened and improved. And we have some areas where we believe the agreement currently serves its purpose and areas that need to be preserved in the national interest.”

Freeland also spoke of progressive elements in a renegotiated NAFTA that include chapters on gender and indigenous rights. However, no description of what this will be involved is given at all. Don’t expect first nations to be given the right to veto the passage of pipelines over their territories.

Canada will press for tougher labor and environmental standards as well. Given Trump’s views on the environment it is unlikely he will agree to tougher standards. Corporate interests are likely to take precedence over labor rights in U.S. bargaining. Nevertheless Freeland claims that Canada can find common ground with the US and Mexico in all four areas saying: “Progressive elements are also important if you want a free-trade deal that’s also a fair-trade deal.” However Freeland also said: “I think we all do need to be prepared for some moments of drama. We should just see that as an expected part of any trade negotiations.”

Mark Warner of MAAW Law said that the six core objectives listed by Freeland are lacking in substance: but are just an “invitation to the dance”. Warner said: “There’s nothing in here that the American’s will trigger off and say ‘that’s terrible, we’re walking away, we’re not going to talk to you. So, this is just an invitation to the dance. The more fundamental document, of course, is the American document.Which spells out in more details the kinds of things the Americans will want to discuss, and she doesn’t address any of that here. This to me is just a place-filler.”

In contrast to the Canadian list, U.S. Trade Representative released the US set of priorities last month. The list was 14 pages long and includes many specific goals and demands. Some are discussed here. The Canadian list makes no mention of the key proportionality clause, that gives the U.S. privileged access to our natural resource exports such as oil. There is also not a mention of the issue of water which unless it is designated as not a trade-able good, service or investment, in terms of the act would also give privileged access to our water resources and allow for increased privatization.. The two issues are discussed briefly in the appended videos. The issues were discussed also in a recent Digital Journal article.

The proportionality clause is unique to NAFTA: “Proportionality is unique in all of the world’s treaties,” writes Richard Heinberg, a noted California energy expert. Cyndee Todgham Cherniak, a Toronto trade lawyer, says the energy chapter is unique for a trade agreement. There are only three free trade agreements in the world that have energy chapters, and the other two don’t have NAFTA-like proportionality clauses.”

Proportionality requires NAFTA members to make available the current share of energy exports to other NAFTA members even when their are energy shortages in that country. Canada has no government-owned energy firm that could help assure Canadian interests are served. Most are large, often foreign-owned, global energy corporations who operate purely on a profit basis.

So far, I have seen no discussion in the mainstream media about these crucial issues. There has been little discussion either of the need for a transparent negotiating process where the public is made aware of what is happening. The negotiations will probably be kept under wraps and behind closed doors. Canada may have a difficult time trying to break through the Trump’s administration’s determination to promote a buy American campaign rather than allowing more access of Canadian products to US markets.

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