Dan Shoom Kingston IS Five Part Series on Nafta

Part 3
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In a gesture of goodwill to the International Socialists the
federal Liberal government has made up its mind (sic) on NAFTA in
time for the Socialist Worker deadline.

Debating whether or not Jean Chretien broke a campaign promise by
implementing the North American Free Trade Agreement (NAFTA) with
the changes he announced on December 2 misses the crucial point.
Even if he had gotten everything he was asking for it would have
made little difference. The changes he wanted would not stop NAFTA
from creating a protectionist trade bloc. Neither would NAFTA cease
to be an excuse for corporate bosses and right-wing governments to
extort concessions from workers, and undermine social programs,
health, safety and environmental regulations in all three
countries.

The Liberal's famous red-book, which includes the promises they
made during the election, claims that they would "renegotiate both
the FTA [the Canada-U.S. Free Trade Agreement] and NAFTA to obtain:
-a subsidies code;
-an anti-dumping code;
-a more effective dispute resolution mechanism; and
-the same energy protection as Mexico."
Environmental and labour standards, the red book states, have been
addressed by the (bogus) side-deals agreed to by Canada, the US,
and Mexico in August. If satisfactory changes were not negotiated,
the FTA and NAFTA would be cancelled, but only as a last resort.

After the election Chretien also promised to get the US and Mexico
to agree that Canada would not be forced to export bulk water under
NAFTA.

On subsidies and anti-dumping, Chretien won an agreement from the
US and Mexico to establish codes by December 31, 1995. This is
essentially a part of the FTA that was dropped in NAFTA. In the
FTA, which has been in effect since January 1, 1989, Canada and the
US were supposed to devise codes within seven years. Yet no
discussions ever occurred. Chretien simply won back an empty
promise.

Even if codes are established, which is unlikely, it is not clear
what difference these codes would make for most workers, and other
opponents of NAFTA.

Dumping occurs when a company sells its product at a supposedly
unfairly low price. In fact, dumping is an old tactic for shedding
excess stock or winning new markets.

Dumping into poor or underdeveloped countries is often a away in
which multinational corporations expand their imperialist control.
Between Canada and the U.S., however, dumping is entirely a
conflict between different businesses. Workers who take a side in
such a dispute are supporting one business over both the bosses and
workers of another. Dumping is simply a way to blame 'foreigners'
and not a nation's own ruling class for its economic problems.
Subsidies, like tariffs, will be considered barriers to trade under
NAFTA. While tariffs make the prices of goods from elsewhere
higher, (they are like the duty you pay on some goods when you
cross a national border), subsidies make prices lower.

'Subsidy' is a vague term that can include government handouts to
business so that they can sell their products cheaper. While
socialists would not miss such 'corporate welfare', there are other
possible definitions to consider.

Subsidies can also include development schemes that would encourage
investment in economically depressed regions. In this sense, any
native self-government plan that would involve assisting native
businesses could be declared a trade barrier under NAFTA.

Social programs, like medicare, can also be called subsidies,
because the government pays for something that businesses elsewhere
have to pay for. It is precisely this type of government spending
that helps people that the FTA and NAFTA are meant to whittle down.

Chretien says that successful negotiations on subsidies and dumping
will eliminate the need for a better dispute mechanism. In other
words, just as the FTA did not eliminate trade wars between Canada
and the US, neither will NAFTA. Only now they'll be even more
complicated with Canadian provinces and Mexico added to the
battles.

Concerns over energy and water involve two principles of NAFTA:
national treatment and proportional-sharing. National treatment
means that Canada (or the U.S. or Mexico) must treat American or
Mexican buyers of any commodity the same as Canadians. Something
for sale in Canada cannot be prohibitted for sale to Americans or
Mexicans.

Proportional-sharing clauses oblige Canada (or the U.S.) to
continue exporting the same proportion of its supply of these
non-renewable resources as were sold over the previous 36 months
even in the case of a national shortage. If Canada were to limit
exports due to a shortage it would be liable to pay compensation to
American or Mexican buyers.

Mexico won an exemption from proportional-sharing of its energy in
NAFTA. It did so at the expense of losing the same market access as
Canada gained by agreeing to proportional sharing.

Chretien wanted the same protection as Mexico. This posed a
problem. If Canada were to lose its market access he would have
come under pressure from energy exporters, especially from
Alberta's oil endustry.

Chretien's tried to get the best of both. He made a unilateral
declaration that his government interprets NAFTA as "not requiring
any Canadian to export a given level or proportion of any energy to
another NAFTA country" in the event of a shortage or to conserve
Canada's resources. Even though this directly contradicts the
proportional-sharing clauses neither the U.S. nor Mexico have to
date contested this interpretation.This means it may well stand up
in any trade dispute over Canada's energy.

On the question of water environmentalists have expressed a concern
that NAFTA forces water exports in a couple of ways. Some say that
the national treatment clauses stop Canada from prohibitting the
sale of water to the US or Mexico if it is for sale within Canada.
The statement released December 2 by Canada, the US and Mexico
would seem to satisfy this fear. It states "nothing in NAFTA would
oblige any NAFTA party to ... begin exporting water in any form."
However, the statement may refer only to water in its natural state
in lakes, rivers, icebergs, etc.

The second fear is that once the tap is turned on, it can't be
turned off. Once Canada begins to sell water to the U.S. it can't
stop in order to maintain supplies to Canadians. The statement is
silent on this issue.

While NAFTA may not force water to be exported, the important point
is that it makes large-scale water exports more likely to occur,
and more difficult to stop once begun.

There are good reasons to be concerned about the export of energy
and water. Megaprojects, like the James Bay Hydroelectric project,
the shipping of petroleum, uranium mining, to name just three, have
profoundly negative effects on the ecosystem and on the livelihood
of people in their way. They are often undertaken without regard to
the wishes of native people and native land rights.

Whether water is transported in bottles, pipelines, tankers, or
canals there are environmental hazards. Wendy Holm and Donald
Gutstein, who have written on water issues under NAFTA, point out
"Water exports pose serious risks to the environment. Supertanker
sales and large-scale diversions could result in the exportation of
micro-organisms to other environments, changes to the salinity and
micro-climate of ocean outfall sites, and the loss of biological
diversity, wildlife habitat, and large tracts of prime land because
of flooding."

Water exports can also violate native water rights. B.C. Klahoose
Band natives threatened a lawsuit in 1990 over a plan to ship 12.4
billion litres of water to Santa Barbara, California.

Conservation programs may also be at risk with NAFTA. Programs must
be weighed against their economic impact and adhere to market
principles. So, for example, Ontario Hydro's modest efforts to
promote energy conservation, already on the chopping block of
fiscal restraint, could be challenged as an unfair barrier to
trade.

Opponents of NAFTA are also worried that it infringes on national
sovereignty. (This is a tricky issue; when Patrick Buchanan invokes
sovereignty he's speaking of the loss of American culture to
Mexican immigrants.) They mean two things when they speak of
sovereignty.

First, they often mean the ability of governments to place
restrictions on business. These restrictions include environmental
regulations, workers rights and many other progressive concerns.

While socialists should support such concerns, we must point out
that rather than looking to national governments for solutions we
must work towards building the capacity for workers and other
oppressed groups to internationally unite in struggle to win
positive changes, not just on a national level but everywhere.

The second way in which sovereignty is used is more troubling. In
this sense Canada should have priority over Americans or Mexicans
in their access to Canadian energy or water in the event of a
shortage or crisis. This puts the interests of Canadians for water
to drink, to cook, or to bathe, or drive over that of Americans and
Mexicans. A compassionate policy would put the interests of people
to fuel and clean water for basic survival ahead of the interests
of big business, regardless of nationality.

This can appear at times to be putting nationalism ahead of
environmentalism. One prominent environmentalist has criticized
NAFTA because "conservation-related policies would only be
acceptable if they were accompanied by similar restrictions on
domestic production or consumption." Wendy Holm, uses the example
of the Rafferty-Alameda dam project in southern Saskatchewan as an
example of what's wrong with NAFTA. Once the water is offered for
sale to Saskatchewan farmers, she says, it must also be offered to
farmers in North Dakota.

This is a strange basis to oppose NAFTA: that we should not be
subject to the same conservation measures we want to impose on the
U.S. Practically, the stakes are higher with respect to the U.S.
since its needs for energy and water, for both people and business,
are so much greater than Canada's. But projects like the
Rafferty-Alameda dam are wrong, not because the water will be
exported. They are wrong because they are environmentally hazardous
and violate native land rights.

The concessions Chretien won do little to satisfy the concerns of
opponents of NAFTA. But his task was made easier by the nationalist
terms in which this opposition is usually expressed.