[R-G] Obama's Canada Trip May Spell Change for NAFTA

[Anthony Fenton]

Obama's Canada Trip May Spell Change for NAFTA
Rick Arnold | February 11, 2009
Editor: Emily Schwartz Greco
http://www.fpif.org/fpiftxt/5861
Foreign Policy In Focus 	
www.fpif.org

Canadians are looking forward to Barack Obama's February 19 visit to  
Ottawa — the president's first trip to a foreign country since he took  
office. Many of us here dare to hope Obama's "change" agenda will  
inspire some fresh thinking among our own politicians. Ironically,  
Canadians concerned about our country's economic future (along with  
the well-being of our social programs) may now find a more sympathetic  
ear in Washington than in Ottawa — particularly when it comes to the  
subject of renegotiating the North American Free Trade Agreement  
(NAFTA).

NAFTA made headlines in Canada last year thanks to Obama's election  
promises to renegotiate it. White House press secretary Robert Gibbs  
recently said, "I strongly anticipate…that trade will be part of that  
docket" in the upcoming Ottawa talks. The apparent openness in  
Washington toward reviewing trade arrangements is in marked contrast  
to the ostrich-like stance of government officials and the business  
elite north of the 49th parallel. For example, the issue of "free  
trade" was largely a non-issue during Canada's fall 2008 federal  
election. However, NAFTA might have garnered a few headlines if the  
federal government had disclosed that U.S. chemical giant Dow had  
signaled in late August that it was gearing up to sue Canada over a  
pesticide ban in Quebec.

Dow's claim is one in a long string of disputes (more than 50) to  
arise under NAFTA'S Chapter 11 — a legal back channel that permits  
foreign investors to detour around local courts and sue the federal  
government before an international tribunal. Chapter 11 effectively  
puts foreign corporations on a par with government thus undercutting a  
nation's sovereignty. This investor-state provision has also had a  
"chilling effect" on governments at various levels by keeping them  
from enacting public policy. The province of New Brunswick, for  
example, backed away from public auto insurance after receiving legal  
advice that it could be actionable under NAFTA's Chapter 11.

Another significant Chapter 11 challenge was brought against Canada in  
July 2008 when a group of 200 U.S. investors, led by an Arizona  
businessman, launched a $155 million lawsuit under NAFTA against the  
Canadian government claiming they faced 'anti-American' roadblocks in  
trying to establish private health clinics in Canada. Canadian  
politicians from the two major political parties have always insisted  
that Canada's Medicare was safe under NAFTA and could not be re- 
modeled after the U.S. system. This case represents the first test of  
that assertion.
Fifteen Years

NAFTA has been in effect for 15 years now. To date, none of the three  
North American governments have assessed the accord's public impact. A  
2008 posting on Obama's web-site spoke to this issue: "Obama and Biden  
believe that NAFTA and its potential were oversold to the American  
people. They will work with the leaders of Canada and Mexico to fix  
NAFTA so that it works for American workers." Hopefully Ottawa can  
take a page from Washington's new playbook and put Canada's working  
people and unemployed at the center of any future trade deals.

During the NAFTA negotiations Canada (but not Mexico) agreed to a  
"proportionality" provision tied to our oil exports to the U.S. This,  
like Chapter 11, was one of NAFTA's "sleeper" provisions, and it's  
come back to haunt us by requiring that almost two-thirds of Canada's  
oil be exported to the United States. With conventional oil sources  
drying up out west, the Canadian government should be negotiating a  
way out of "proportionality." Instead, it's doggedly backing the oil  
patch in one of the biggest climate-change debacles the world has ever  
known — the tar sands development.

Until recently Canadian Prime Minister Stephen Harper could count on  
his ideological soulmate in Mexico, President Felipe Calderón, to help  
him brush away criticisms of NAFTA. However, following a January 12  
meeting with Obama, Calderón professed a willingness to revisit the  
deal. This policy shift leaves the Canadian government out of sync  
with its two "amigos."

Public opinion has changed in Canada as well. A September 2008 public  
opinion poll done by Environics found that 61% of Canadians agreed  
that NAFTA should be renegotiated. In another Environics poll on  
February 9, over 70% of respondents in both the United States and  
Canada agree that energy corporations should not be allowed to sue  
governments (as Chapter 11 enables them to do) for policy changes  
aiming to protect the environment or otherwise safeguard the public  
interest.

On the road to the presidency, Obama stated unequivocally: "Starting  
my first year in office, I will convene annual meetings with Mr.  
Calderón and the Prime Minister of Canada. Unlike similar summits  
under President Bush, these will be conducted with a level of  
transparency that represents the close ties among our three countries.  
We will seek the active and open involvement of citizens, labor, the  
private sector and non-governmental organizations in setting the  
agenda and making progress."
Shutter the SPP

The first order of business at such a tri-national meeting should be  
an agreement to shut down the undemocratic and corporate-led Security  
and Prosperity Partnership of North America (SPP). Ever since its  
inception in 2005, the SPP program excluded legislative oversight,  
lacked any consultation with civil society, and led to further  
deregulation that has benefited only corporations. The SPP has also  
led to an increase in militarism and the violation of civil liberties  
in North America.

In 2008, Canadian, Mexican, and U.S. organizations launched a joint  
policy proposal titled "NAFTA Must be Renegotiated; A Proposal from  
North American Civil Society Networks" that calls for a fundamental  
review of NAFTA and of the SPP so as to establish economic relations  
based on social justice within a framework of sustainable development.  
The new Environics poll indicates that 9 out of 10 Canadians believe  
the Canadian government should pursue a comprehensive strategy to  
create more green jobs in renewable energy and improve energy  
efficiency, areas that Washington is noticeably paying more attention  
to than is Ottawa.

The supra-national "rights" bestowed upon large corporations under  
NAFTA are undermining the decisions of our democratically elected  
governments. Obama swept in to the White House on a transformational  
wave that has people saying "yes we can" to building something better.  
It's a message many Canadians hope the new U.S. president will bring  
to Ottawa, and one that can inspire our politicians to take a good  
hard look at a poorly designed trade deal, and turn it into a fair  
trade agreement to benefit us all.

Rick Arnold, a Foreign Policy In Focus contributor, is the coordinator  
of Common Frontiers, a multi-sectoral network of Canadian  
organizations working on trade issues. Common Frontiers is also the  
Canadian chapter of the Hemispheric Social Alliance.