(image by DonkeyHotey)
For those of us old enough to remember, The North America Free Trade Agreement came into force on January 1, 1994. January 1, 2014 represents the 20th anniversary of NAFTA.
We also might remember some of the promises that were made in support of NAFTA when the Clinton Administration was pushing for its passage in 1993:
" NAFTA promised 170,000 jobs created per year, yet by 2004 increased trade deficits had equated to a net loss of 1 million jobs.
" Pre-NAFTA trade surplus of $2.5 billion with Mexico and deficit with Canada of $29.1 billion has morphed into a combined deficit of $181 billion. This represents an inflation-adjusted increase of 580%.
" Real wages in Mexico have fallen dramatically. A minimum wage earner in Mexico today can buy 38% fewer consumer goods than pre-NAFTA. This has contributed to a doubling of Mexican immigration to the U.S. since NAFTA's implementation.
" U.S. manufacturing workers displaced by NAFTA see a 20% drop in earnings when re-employed. The shift in employment to low-paying service jobs has contributed to wage stagnation.
More statistic son trade deficit analyses, off-shoring of jobs, "Buy America" provisions, and prevailing wages are available from this new report by Public Citizen's Global Trade Watch entitled "NAFTA at 20".
Of most significance in all this, is that the Obama Administration is currently pressing for an expansive new trade pact with 11 countries that will dwarf NAFTA in scope.The countries involved in the talks include Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
The emerging pact, the Trans Pacific Partnership (TPP), will apply to 40 percent of the world economy. The Obama administration has been leading negotiations on this international trade accord since 2010 but appears to have almost no international support for its controversial new trade standards.
On November 13, 2013, a complete draft of the treaty's Intellectual Property Rights chapter was published by WikiLeaks. This and other leaks have drawn criticism and protest in large part due to the secrecy of the negotiations, the expansive scope of the agreement, and controversial clauses in the drafts leaked to the public.
One of the most controversial provisions in the talks includes language which would allow foreign companies to challenge laws or regulations in a privately run international court. Under World Trade Organization treaties, this political power to contest government law is reserved for sovereign nations.
Other provisions include further job-offshoring incentives, requirements to import food that doesn't meet U.S. safety standards and rights for firms to get taxpayer compensation before foreign tribunals.
Previously leaked TPP documents have sparked alarm among global health experts, Internet freedom activists, environmentalists and organized labor. The Obama administration has deemed negotiations to be classified information -- banning members of Congress from discussing the American negotiating position with the press or the public. Congressional staffers have been restricted from viewing the documents; the extreme secrecy surrounding the process of the current negotiations surely should raise a red flag of caution.
The U.S. is also facing major resistance on bank regulation standards. The Obama administration is seeking to curtail the use of "capital controls" by foreign governments. These can include an extremely broad variety of financial tools, from restricting lending in overheated markets to denying mass international outflows of currency during a financial panic. Loss of these tools would contribute to a forfeiture of governmental sovereignty and would dramatically limit the ability of governments to prevent and stem banking crises.
1 | 2