The 1994 version of the North American Free Trade Agreement (NAFTA) was impressively terrible. President Donald Trump said it was the worst trade deal ever. Of course, that was because NAFTA was not negotiated by his administration. His 2018 version, the USMCA, was even worse.
The original NAFTA did nothing to benefit workers or farmers in any of the countries involved. It did nothing to improve environmental standards, it made no effort to stop job outsourcing, raise wages or protect worker rights. Pharmaceutical companies were granted extended patent protection thereby locking in higher prescription drug prices, not just in the U.S., but in Canada and Mexico as well. Corporations were, in effect, incentivized to carry on business as usual and move jobs wherever the wages were the lowest and the labor standards were the weakest. The Investor State Dispute Settlement mechanism (ISDS) allowed businesses to take states to court over what they deemed unfair trade practices.
Under NAFTA rules, at least Canadian farmers were protected by their farmer-run supply management policies, which insured them a fair price and allowed Canadians to feed Canadians. Mexican farmers, however, were smothered under a flood of cheap U.S. taxpayer-subsidized grain exports that put many small farmers out of business. Many of those farmers in Mexico who were forced off their land took jobs in the maquiladoras of Northern Mexico, (which became the new home of NAFTA-outsourced jobs from the U.S.) or they crossed the Rio Grande and left their country altogether.
After a year of revisions to the Trump administration’s version of USMCA, an agreement has passed the House. Democrats assert that their negotiations have produced a deal that is significantly better than NAFTA. Both parties are taking credit for what the White House calls a “huge win for American workers, farmers and businesses.” It’s hard to know what’s worse, the deal itself, or that Democrats buckled under Trump’s pressure to support it.
Removing the Investor State Dispute Settlement provision and pharmaceutical patent extensions were clearly wins, but they hardly make USMCA a “huge win”— it is clearly still a huge loss for everyone except the corporations who have always won.
Considering how low the bar is for worker justice, farm justice and environmental protection in free trade bills, saying that there are improvements in the USMCA doesn’t mean much. Giving Mexican workers the right to form independent unions and establishing inspection standards for Mexican factories won support from some U.S. labor unions, but not the Mexican government, which insisted that “inspectors” be “independent panelists” who would work toward Mexican labor reform, thus, the low bar was hardly raised.
The administration’s claim that thousands of manufacturing jobs will be moving back to the U.S. is ridiculous at best, as its tax policies continue to incentivize job outsourcing, green-lighting U.S. auto manufacturers to expand production in Mexico. Assurances that Mexican workers would eventually earn a $16 an hour wage lets the government set wages, not the collective bargaining of unions. It also does nothing for U.S. workers, who in many industries were, at one time, paid close to double that figure plus good benefits and health-care coverage.
In almost every way the revised USMCA falls far short on the protections needed for workers and the environment. There’s more language in the agreement on how the Canadian dairy industry would be dismantled than on how pollution would be measured. Environmental groups saw nothing in the final agreement that could win their support, noting that the agreement does not even mention climate change, let alone take measures to address it.
While some farm groups and corporate agribusiness wholeheartedly support USMCA as a big win for all of agriculture, their definition of winning is expecting Canada and Mexico to, at the expense of their farmers, absorb the chronic overproduction of U.S. agriculture. USMCA will not, as the Farm Bureau Federation seems to think, make major improvements for U.S. farmers and ranchers. As Farm Journal Washington correspondent Jim Wiesemeyer notes, “Overall, there’s not much major news out of this for agriculture, except this solidifies the North American market that we have” — a market that doesn’t even pay farmers their cost of production. Democrats know that they have lost the votes of rural Americans and their support for USMCA, rather than fair farm prices, will not help win those votes back.
Cosmetic changes to NAFTA will not save the farm. Expecting our trading partners to absorb our excess agricultural production will not save the farm.
Saving the farm will only happen when Congress passes sensible legislation that prioritizes the interests of farmers over those of corporate agribusiness. Promoting fair farm prices by strengthening and enforcing anti-trust laws, re-instituting Country of Origin labeling, implementing sensible rules on agricultural biotechnology and implementation of farmer-controlled production management systems for agricultural commodities will save the farm — not more one-sided free trade deals.
The Administration will say, “promises made, promises kept.” The Democrats, although they will deny it, have helped Trump’s reelection bid, while throwing a few more Americans under the bus. We might be better off with no deal at all than with this corporate giveaway that’s little more than a basket of lies.
The governments of the USMCA member states and multi-national corporations have been using the long con — playing on the desperation of farmers, farm workers, unions and the general public and in the process, destroying the environment and making us all marks for corporate greed.