Blog

Statement on NAFTA’s “Kafkaesque” Turn

Associate fellow at the Institute for Policy Studies, Manuel Pérez-Rocha wrote the articles, “NAFTA Pushes Many Mexicans to Migrate,” and “NAFTA’s 20 Years of Unfulfilled Promises: The trade deal has become an engine of poverty in Mexico.” 

The supposedly concluded renegotiation of NAFTA has reached a Kafkaesque stage. As the United States Trade Representative has stated: “The United States and Mexico have reached a preliminary agreement in principle, subject to finalization and implementation.”

Not only the negotiations have not been finalized, and without Canada, but the texts remain hidden from the public.

However, it is not surprising that the governments have conducted the negotiations in complete secrecy from the very beginning of Trump’s imposition to renegotiate NAFTA.

What is unconceivable is the blind support of Mexico’s newly elected government, not only to the current Mexican government’s negotiating position, but the whole process. AMLO’s [President Elect Andrés Manuel López Obrador] office came out immediately, yesterday, to support the “understanding between Mexico and the United States in the renegotiation of the Free Trade Agreement.” It declared that “it reflects the main concerns raised by the president-elect’s team. Especially, those related to the Mexican energy sector; the labor and salary conditions of our workers and the maintenance of trilateral spaces for the settlement of disputes, as well as the medium-term certainty of the Treaty itself.”

Unfortunately, the public doesn’t have an idea of what the exact decisions on energy are, labor organizations have been kept completely aside from the negotiations and in terms of the settlement of disputes these mechanisms will only handcuff AMLO’s government when it starts office on Dec. 1.

With respect to Chapter 11 of NAFTA and the Investor State Dispute Settlement (ISDS) mechanisms that give supranational rights to transnational corporations, and rights to avoid the host country courts, it is paradoxical that the Mexican government is the one that wants to keep it. Mexico is the fifth country most sued under these investor-friendly rules and has had to pay more than $200 million in “compensation” for profits lost over governmental decisions in favor of the public interest and the environment. Moreover, under pending suits under NAFTA and other investment treaties (notably with European countries) it may be already liable to pay billions of dollars to transnational companies.

The newly elected government of Mexico must ensure that preeminence is given to human and environmental rights of Mexican communities instead of yielding to investors’ demands. The renegotiation of NAFTA in the present terms and process is incompatible with AMLO’s new project for the nation.