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Trudeau clings to Chapter 19 in NAFTA, but why?

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U.S. President Donald Trump and Prime Minister Justin Trudeau during their expanded bilateral meeting at the G7 Summit in Charlevoix. Photo: Shealah Craighead/Wikimedia Commons

As talks on a revised version of the North American Free Trade Agreement (NAFTA) continue, Prime Minister Justin Trudeau appears to be saying that its Chapter 19 provision is an essential element to getting a good "free trade" deal.

Similarly, the Canadian Chamber of Commerce has called on Trudeau to "vigorously defend" Chapter 19, the Business Council of Canada says "Canada needs a mechanism to respond" to U.S. protectionist measures, and The Globe and Mail editorial board has almost breathlessly extolled, "An independent dispute settlement mechanism is Issue No. 1 for Canada."

Should we accept this argument?

The CBC (anthropomorphizing transnational capital with emotion) explains, "Chapter 19 allows companies that feel their products have been unfairly hit with anti-dumping or countervailing duties to request arbitration. If a panel with representatives from both countries agrees, it can require the return of those duties."

The Trump administration wants Chapter 19 eliminated from NAFTA, most likely because the U.S. lumber industry lobby doesn't like it (it's viewed as an infringement on U.S. sovereignty, has been challenged in court by them as unconstitutional, and undoubtedly and most significantly is an impediment to maximizing their profits and market share).

Yesterday, Trudeau stated, "One of the things that is clear is that we have red lines that Canadians simply will not accept. We need to keep the Chapter 19 dispute resolution because that ensures that the rules are actually followed and we know we have a president who doesn't always follow the rules as they're laid out."

Canadians "simply will not accept" NAFTA without Chapter 19? Really? The prime minister, who bailed on his promise of electoral reform, is playing for time on pharmacare (which NAFTA would make harder to implement), and whose government just bought a deeply controversial tar sands pipeline, has the audacity to paint this particular "red line" for us.

The Chapter 11 provision that allows corporations to sue governments for lost future profits due to public interest legislation does not seem to be a red line for Trudeau. Nor is the energy proportionality provision that is a significant obstacle to stopping the planet from burning. Nor is water being considered a tradable good apparently a concern for him. Nor is the provision that enables transnational pharmaceutical corporations to extend patents on life-saving drugs, thus prioritizing profit over accessibility.

Winning Chapter 19 would not make NAFTA a good agreement. It would still be a deeply flawed, deeply harmful tool given to transnational capital to wield against us. The types of NAFTA-backed "rules" that Trudeau argues need to be followed hurt people and the planet, full stop.

Trudeau says, "We'll walk away and not sign a deal rather than sign a bad deal for Canadians." That's a clever spin, and portrayed as tough talk, but it's a deception. 

A good deal would constrain the power of transnational corporations, confront climate change, recognize water as a human right, ensure life-saving medicines were available to those in need, just to name a few things.

Toronto Star columnist Thomas Walkom has highlighted:

"As written, [Chapter 19] simply requires each NAFTA member to follow its own trade laws. When the Americans have been ruled against in such cases they have sometimes acquiesced. But at other times, they have simply ignored the ruling. In at least one case involving softwood lumber, they dealt with the problem not by changing their practices to meet the law but by the reverse -- changing the law to meet their practices."

Trade expert Scott Sinclair has argued that the inclusion of Chapter 19 historically should be understood as a "face-saving gesture" for the Canadian government. He highlights, "It is not a true, independent dispute settlement process. Its mandate is strictly to determine whether the importing country's trade remedy laws have been applied properly."

Sinclair has also noted, "Even if the [Chapter 19] review process were abolished completely, Canadian exporters will still be able to have a final determination reviewed in the U.S. courts. [Its loss] would be felt, but its benefits should not be exaggerated."

rabble columnist Rick Salutin more colourfully concludes, "[Chapter 19 is] a useless cosmetic crock installed to allow [then-prime minister Brian] Mulroney to claim victory when he signed the original deal."

Let us also remember that the NAFTA talks not only lack transparency and genuine public input, but they are now being rushed, in part, so that they can be concluded under outgoing NAFTA-friendly Mexican president Enrique Peña Nieto, rather than Andrés Manuel López Obrador (who was elected on July 1 and is to be sworn into office on December 1).

NAFTA is part of the architecture of corporate rule, the Chapter 19 provision doesn't change that fundamental truth.

Photo: Shealah Craighead/Wikimedia Commons

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