On or about July 17, 2017, as required by law, U.S. Trade Representative (USTR) Robert Lighthizer will release the Trump Administration’s North American Free Trade Agreement (NAFTA) renegotiating objectives.(1) Formal negotiations with Canada and Mexico will commence on or about August 16, 2017.
Donald Trump demonized NAFTA during his presidential campaign, calling it “the worst trade deal,” and made assurances that he would rework NAFTA and other trade deals to protect the American people. Now, it appears that Trump modified his message. He plans to step up his war on the planet in the course of renegotiating NAFTA.
NAFTA renegotiation raises a wide range of environmental concerns, as well as an even broader range of public interest and economic concerns. This note, however, focuses on NAFTA negotiating objectives affecting food, agriculture, chemicals, and biotechnology policies. The Administration’s statement on July 17 of its NAFTA negotiating objectives may reveal with more certainty a threat to environmental regulations related to food and chemical safety, sustainable family farms, and biotechnology, among many others. At the same time, however, rumors are circulating that Trump may seek to keep Congress and the public in the dark about many of his real intentions by breaking with all past practice and failing to provide any details on his objectives.
This note, nonetheless, should be useful as you quickly unpack the July 17 document and meet your publication deadline. Friends of the Earth will also evaluate the document on the 17th and issue a statement and an analysis of its implications. It may also be helpful in making sense of a document likely to be composed in trade law jargon. For example, “sanitary and phytosanitary measures” refers to food safety and animal welfare regulations.
The Big Picture
Negotiating objectives related to environmental regulation in a NAFTA “re-do” are likely to reflect many elements of the Trans-Pacific Partnership (TPP), along with elements of U.S. proposals in the Transatlantic Trade and Investment Partnership (TTIP) and Trade in Services Agreement negotiations.
All of these proposed trade deals, like the current NAFTA, establish international trade tribunals with authorization to impose sanctions such as export tariffs or loss of international intellectual property rights to enforce environmental regulations in non-compliant member states. In addition, the original NAFTA, the TPP, and the TTIP included investment chapters that would allow global corporations and wealthy investors to sue nation states for millions or billions of dollars in money damages. More often than not, these measures are effective in rolling back environmental and consumer safety regulations.
Trump expediently attacked the TPP in his presidential campaign due to concerns about the trade deficit and the outsourcing of manufacturing jobs. Nevertheless, he apparently likes the provisions of the TPP that can undercut environmental regulations. Commerce Secretary Wilbur Ross recently said, “There are some concessions that the NAFTA partners made in connection with the proposed TPP. There is no reason to throw those away. We would view those as the starting point.”
Trump can be expected to support global corporations that have called for a rollback of environmental and public health regulations. Dozens of powerful corporate lobby groups ranging from the American Farm Bureau and the Corn Growers Association to DuPont Chemical and the Business Roundtable have filed public comments with the USTR demanding a rollback of public health, environmental, and other public interest regulations.
After unleashing Scott Pruitt and his deregulation task force to cripple the Environmental Protection Agency and pulling the U.S. out of the Paris climate agreement, Trump is almost certain to continue his record of attack on the planet in the upcoming NAFTA renegotiation.
What to Look for when Reviewing NAFTA Renegotiation Objectives
A renegotiated NAFTA is likely to have a largely unenforceable environment chapter similar to what is found in the TPP, opening the way for a rollback of public interest regulations. Friends of the Earth believes that a new NAFTA must include an environment chapter that is comprehensive and enforceable through dispute resolution.(2) It must include an obligation for Canada, Mexico, and the U.S. to enforce their domestic environmental laws, including those related to agriculture, food, chemicals, and biotechnology. It also should include an enforceable obligation on the three parties to NAFTA to adhere to a comprehensive list of multilateral environmental agreements, including the Paris Climate Accord.
Technical Barriers to Trade (TBT) Chapter
Renegotiation of the TBT chapter of NAFTA on the model of the TPP is likely to expand the legal basis for international suits before NAFTA trade tribunals challenging regulations in North America. As a result, the new NAFTA could force the rollback of effective chemical regulations in some U.S. states such as California’s Green Chemistry initiative and preclude future, more effective U.S. federal regulation of dangerous chemicals associated with breast cancer, autism, infertility, and other illnesses.
NAFTA renegotiation could thwart efforts to stop the use of bee-killing neonicotinoid (neonic) pesticides, which are a leading cause of bee declines. The new NAFTA could stop future national action to save pollinators and the crops that depend on pollinators. It might also undercut more limited state and local initiatives, like Minnesota Governor Mark Dayton’s executive order restricting the use of neonic pesticides.
TBT provisions in the new NAFTA will also likely undercut food-labeling standards, putting GMO labeling requirements in Vermont and other states at risk. Global corporations are likely to use a new NAFTA to further undercut consumers’ right to know what is in their food and whether their food is produced in a humane manner protective of animal welfare.
The goal of global corporations is to include “TBT-plus” provisions in NAFTA that are even more restrictive of protective regulations than the tough standards in the current NAFTA agreement as well as harsh World Trade Organization (WTO) standards related to technical barriers to trade. The WTO TBT standards, for example, were in part the basis for an international tribunal ruling in a case brought by Mexico, which concluded that the voluntary U.S. dolphin-safe tuna product-labeling standard violated international trade law. A renegotiated NAFTA chapter on technical barriers to trade promises to be even worse than the very bad WTO and current NAFTA agreements.
Sanitary and Phytosanitary (SPS) Measures Chapter
Friends of the Earth is concerned that provisions in a renegotiated NAFTA will make it even easier to challenge food safety and animal welfare safeguards. These fall into the categories of sanitary measures related to food safety, such as bacterial contamination, and phytosanitary measures related to animal and plant health, such as animal diseases. The goal of global corporations is to include “SPS-plus” provisions that are more restrictive of protective regulations than the tough restrictions in the old NAFTA agreement as well as overbroad World Trade Organization standards. NAFTA and the WTO are already a threat to food safety and animal welfare, but a renegotiated NAFTA could very well be an even bigger threat.
A renegotiated NAFTA, like the TPP, is likely to put food safety protections at risk by authorizing more industry legal attacks on food safety standards before corporate dominated trade tribunals. Furthermore, it might very well follow the TPP model to give foreign food exporters greater powers to challenge border inspections and substitute private food safety certifications for government inspections in many cases.
Regulatory Review and Intellectual Property Rights Chapters
Negotiating objectives related to intellectual property and regulatory review should be examined to determine the potential impact on food, agriculture, chemical, and biotechnology regulations as well as environmental and climate measures generally. The regulatory review provisions in Trump’s NAFTA are likely to encourage regulatory impact assessments based on the inappropriate use of cost-benefit analysis.(3) This would stymie the promulgation of new and improved environmental and public health regulations. Regulatory review provisions are also likely to establish committees of trade bureaucrats and industry representatives empowered to review and stymie new regulations before they can be formerly proposed to the public.
A renegotiated NAFTA is also likely to provide new protections for biotechnology and the use of genetically modified organisms (GMOs). Obligations are likely to be established for NAFTA countries to quickly approve GMO crops and products unless unreasonably high standards of scientific certainty regarding the risk to health and the environment are met. In addition, significant patent protections could be provided to biotechnology seed companies.
All of this runs counter to the precautionary principle, a central tenet of sound environmental regulation that provides that deregulatory action should not be taken if the consequences are highly uncertain and potentially quite dangerous. When industry initiatives, such as many forms of biotechnology and synthetic biology, threaten serious or irreversible damage to people and the planet, the lack of full scientific certainty should not be used as a reason to block or postpone the promulgation of environmental regulations.(4)
A renegotiated NAFTA must not include a chapter on investor-state arbitration. The U.S., Mexico, and Canada have well-developed and generally fair court systems to resolve allegations of property rights and due process violations resulting from environmental and public health measures. Investors’ substantive and procedural rights are sweeping when compared to U.S. constitutional law or the general legal practice of nations around the world.
Arbitrators in these cases are typically international commercial lawyers who may alternately serve as arbitrators one day and return as corporate counsel the next, thus raising questions of conscious or unconscious bias. Scholarly studies often based on empirical research make a convincing case that arbitrator bias is real.
The Bottom Line
NAFTA is about trade in goods and services, but it is also all about deregulation and forcing governments to pay corporations and wealthy investors for the cost of complying with environmental and other public interest safeguards. Like the old NAFTA, any new NAFTA will broadly restrict the policy space for governments to take effective environmental and climate action. This applies particularly with respect to public policy related to food, agriculture, chemicals, and biotechnology.
(1) The Trade Promotion Authority law and past practice contemplate that the publication of negotiating objectives will be detailed, but rumors have been circulating that the NAFTA renegotiation objectives will be broad and general in order to cloak Trump’s plans, thereby keeping Congress and the public in the dark.
(2) This should include a formal administrative process for citizen and civil society submissions regarding enforcement of environmental laws, compliance with multilateral environmental agreements, and initiating dispute resolution against other NAFTA parties.
(3) These seemingly definitive calculations of ratios of benefit to costs are frequently misleading and sometimes totally bogus. Identifying and quantifying the costs of environmental regulation can be inflated by assumptions, bias of the analyst, and flaws in data gathering. Quantifying the benefits of environmental regulation can be difficult, for example because public health data is not as comprehensively collected as economic data. Or, it can be impossible: an attempt to attribute a price to the intrinsic value of human life, living things and nature itself.
(4) An excellent example of an environmental issue involving uncertain outcomes that requires application of the precautionary principle, not cost-benefit analysis, is regulation of synthetic biology. While genetic engineering involves the exchange of genes between species, synthetic biology involves artificially creating new genetic code and inserting it into organisms. Synthetic organisms self-replicate. No one knows how they will interact with naturally occurring organisms or the consequences for the ecosystem as a whole. Standard forms of risk assessment and cost-benefit analyses used by current biotechnology regulatory approaches often used in the U.S. are inadequate to guarantee protection of the public and the environment.