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Obama’s visit to Canada:
“Yes we can” renegotiate NAFTA

By Rick Arnold
Common Frontiers

This article originally appeared Jan 23, 2009 as a "Guest Viewpoint" in the Cobourg Daily Star and Port Hope Evening Guide newspapers

With the Inauguration in Washington over, Canadians are looking forward to President Barack Obama’s upcoming visit to Canada. Many of us here dare to hope that Obama's ‘change’ agenda will inspire some fresh thinking among our own politicians. Ironically, Canadians concerned about our country’s economic future (along with that 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 NAFTA (the North American Free Trade Agreement).

NAFTA has recently been in the headlines in Canada thanks to Obama’s election promises to renegotiate it. In contrast, 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 Feds 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.

If this suit by Dow Chemical goes ahead in 2009, it could have major implications for new pesticide regulations that the Ontario government plans to introduce this spring. A successful claim could also filter down and impact on the ability of municipalities to enact public policy. For example, Cobourg Town Council enacted a pesticide reduction bylaw on May 1st, 2005, but would it survive a successful NAFTA challenge by Dow?

The Dow claim is one in a long string of disputes (more than 50) to arise under Chapter 11 of the NAFTA—a legal back channel which 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.

Other significant Chapter 11 challenges were brought against Canada in 2008. For example, in July, a group of 200 US investors, led by an Arizonan 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. In December, US AbitibiBowater threatened a NAFTA Chapter 11 suit even though by closing all its plants it was violating the terms of the 1905 Newfoundland Charter Lease that required it to provide jobs in order to continue logging on public lands.

January 1st, 2009 marked the 15th Anniversary of the implementation of NAFTA. To date, no public impact assessment has ever been done by any of the three North American governments. A 2008 posting on Obama's web-site speaks 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 play book and put Canada's working people and unemployed at the centre 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 US. This was one of the ‘sleeper’ provisions contained in NAFTA (much like Chapter 11), and it has come back to haunt us by requiring that almost two-thirds of our oil be sent stateside. With conventional oil sources drying up out west, the Canadian government should be negotiating an end to ‘proportionality’. Instead it is doggedly backing the oil patch in one of the biggest climate-change debacles the world has ever known – the tar sands development.

Mexico has to be factored into the opening up of NAFTA. There are some similarities in the impact that the deal has had on both Canada and Mexico that have in turn led to a growing divide between rich and poor in both nations. However in the case of Mexico, some two million farmers have been driven off their lands by a double whammy - the removal of corn and bean tariffs (to meet NAFTA requirements) while subsidized US grain is being ‘dumped’ on the Mexican market. As a result, each year several hundred thousand Mexicans with no where else to turn, attempt to cross the US border in search of employment. In response, the former Bush administration spent hundreds of millions of dollars erecting fences along their southern border to keep people out - money that could have better been directed into job creation programs south of the Rio Grande.

Up until recently Prime Minister Harper could count on his ideological soul-mate in Mexico, President Felipe Calderon, to help him brush away criticisms of NAFTA. However, following a January 12th meeting with Mr. Obama, President Calderon professed a willingness to re-visit the deal. This policy shift leaves the Canadian government out of sync with the other 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.

On the road to the US Presidency, Obama was unequivocal in stating, "Starting my first year in office, I will convene annual meetings with Mr. Calderon 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."

In 2008, Canadian, Mexican and U.S. organizations launched a joint policy proposal entitled "NAFTA Must be Renegotiated; A Proposal from North American Civil Society Networks" that calls for a fundamental review of NAFTA so as to establish economic relations based on social justice within a framework of sustainable development. (View the report at www.commonfrontiers.ca.)

The supra-national ‘rights’ accorded large corporations under NAFTA are undermining the decisions of our democratically-elected governments. Barack Obama was swept in to the White House on a transformational wave that has people saying “yes we can” build something better. It is a message that many Canadians hope the new US 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 agreement to the benefit us all.