Sixty years ago, Pakistan and West Germany inked the first Bilateral Investment Treaty. This agreement paved the way for a glut of dispute settlement and arbitration systems, and other appendages of so-called “trade” policy, that have exploited unequal power relations to increase inequalities between and within countries.
Six months ago, Pakistan was hit with a USD $6 billion fine for allegedly infringing on the profit making opportunities of a multinational mining corporation. This fine was leveled by an unelected three-person court within the International Centre for Settlement of Investment Disputes, part of the World Bank Group, and one of the many enablers of unchecked corporate power unleashed sixty years back.
It is clear that these trade and investment policies no longer even benefit the signatory countries, but rather line the pockets of global elites at the expense of ordinary people and the planet we share. Backlash to these policies has waxed and waned, peaking twenty years ago with the Seattle WTO protests and again reemerging in the past decade, with opposition to status quo trade policies now part of political campaigns across the political spectrum .
As the right has increasingly taken up opposition to trade policies from a protectionist and often xenophobic angle, the need to distinguish a left, internationalist critique of corporate globalization has never been more urgent. The chauvinist policies of the Trump administration and its imitators need to be strongly condemned. But if the progressive movement is simply reacting to the neoliberal trade agenda and its right-wing disruptors, it is unlikely to achieve meaningful change.
Progressive politicians and policymakers – from AMLO, to Elizabeth Warren and Bernie Sanders, to Jagmeet Singh and the inspirers of the Leap Manifesto (to name just a few in North America) – must unify around a progressive vision of trade to guide an international system that places people and planet over profits. That is why a bold new vision for international economic cooperation and global development is so crucial.
Drawing on the rich history of trade policy alternatives, we have developed a working paper that uses NAFTA 2.0 as a case study and prism through which to articulate key pillars of a progressive trade and development agenda.
Signed into law in 1994, NAFTA was the first modern regional free trade agreement, incorporating investor-state dispute settlement mechanisms and other corporate-friendly features like monopoly patent protections for medicines, strict limits on environmental and food safety rules, and restrictions on buy-local government procurement. Now under consideration for implementation, NAFTA 2.0 is both a political fight for progressives and an opportunity for us to consider what it is that we want in its stead.
In our framework, trade and investment are regarded as means to enhance material and social well-being, not ends to be pursued at any cost. Existing trade and investment agreements, and proposals for a progressive trade agenda, must be judged against the following four principles:
- Human rights in the broadest sense, including economic, social, cultural and environmental rights, must have primacy over corporate and investor rights, and there needs to be legally binding obligations on transnational corporations.
- Democratic governments must have the policy space to pursue and prioritize local and national economic development, good jobs for their citizens, and the preservation, promotion and restoration of public services.
- Citizens, communities, and the environment have the right to protection through public interest regulations.
- A climate-friendly approach should be adopted whenever pursuing trade and investment, which can no longer be allowed to outpace the carrying capacity of the planet.
Only by securing these principles will we achieve true cooperation; only then will we establish the base for a broad public interest in a more egalitarian and ecologically sustainable system, while ensuring fair and prosperous international trade. The progressive trade agenda outlined in our report is forward-looking and aims to mobilize urgently needed international efforts to address intolerable levels of inequality and the existential threat posed by the climate crisis.
Our report discusses the alternatives we need in a range of issue areas, and in accordance with the four pillars and principles. This positive, progressive trade agenda includes, but is not limited to, the following proposals:
- eliminate ISDS and investment protections that undercut the right of duly elected governments to regulate in the interests of their citizens and the environment, and establish binding investor obligations;
- replace excessive intellectual property rights with balanced protections that encourage innovation while supporting user rights, data privacy, and access to affordable medicines;
- replace non-binding, unenforceable labor provisions with a floor of strong, fully enforceable labor rights and standards that enable citizens and trade unions to take complaints to independent international secretariats, which should also have the authority to proactively investigate labor rights abuses;
- fully recognize and respect gender and indigenous rights, including prioritizing women’s employment and economic well-being, and recognizing indigenous title to land and resources and the right to free, prior, and informed consent;
- ensure international trade agreements respect food sovereignty and the livelihoods of small holdings and family farmers by giving priority to local producers and providing a fair return for small-scale agricultural producers;
- enshrine binding, enforceable obligations to reduce and mitigate the effects of climate change in all international commercial agreements and remove the ability of foreign investors and governments to challenge good-faith greenhouse gas reduction initiatives;
- encourage policy flexibility for those industrial and community economic development strategies striving to ensure that trade and foreign investment contribute to good jobs, local economic benefits, healthy communities, and a clean environment;
- pursue international cooperation that respects regulatory autonomy and aims to harmonize to the highest standards, instead of the current corporate-dominated regulatory cooperation agendas that erode autonomy and harmonize to the lowest common denominator;
- remove the pressure under current services and investment rules to privatize public services and instead fully protect the right to preserve, expand, restore, and create public services without trade treaty interference; and
- end the current secrecy in trade negotiations and privileged access for vested interests, and establish procedures that provide full disclosure, transparency, and meaningful public participation.
While these suggestions alone will not build the multilateral system that we need, they represent crucial foundational blocks to get us there. International trade has consistently been left to the back burner of policy circles, allowing corporate capture to continue unabated. But now, with opposition to status quo trade policies increasingly a dinner-table conversation, the time has come to demand that our policymakers and politicians take up this vision for a progressive trade agenda.
The triple crises of democracy, social inequality, and climate change are deeply intertwined and driving humanity to the brink. But we still have a choice. We still have time to fight for a world based on economic and social equality and ecological sustainability. The Green New Deal championed by Alexandria Ocasio-Cortez and thousands of young activists gives us just one glimpse into what this world could look like, and how we can get there.
Building a new multilateralism based on internationalism and solidarity is a prerequisite for getting us to that world, and the lessons we have drawn from our work constitute a crucial part of the roadmap.
Beyond NAFTA 2.0: Toward a Progressive Trade Agenda for People and Planet is a working paper jointly prepared by the Canadian Centre for Policy Alternatives, Institute for Policy Studies, and Rosa Luxemburg Stiftung, and published in July 2019. The working paper brings together the voices of 18 leading experts in progressive trade policy and received additional input from dozens of experts and leading organizations across the Americas. It was edited by Manuel Pérez-Rocha (IPS), Scott Sinclair (CCPA), and Ethan Earle, with assistance from Aaron Eisenberg (RLS).