President Trump once again dangled fake good news to distract his base from bad news. In late August, he called a press conference to showcase an awkward phone call with Mexico’s outgoing President Enrique Peña Nieto in which it appeared that they had reached an arrangement to dismantle the North American Free Trade Agreement (NAFTA). Actually this was not within the power of either man and was a Trump reality show diversion from the federal court convictions of Paul Manafort and Michael Cohen shortly before the hastily arranged call.
A little research revealed that for either Canada, Mexico or the U.S. to withdraw from NAFTA, they must give six months’ notice to the other partners. And while the U.S. president negotiates trade agreements, Congress approves or rejects them. No one knows for sure what, if anything, has actually been agreed to between countries so far, since trade negotiations are secret. But Congress must approve anything before it becomes a reality.
For his part, anything that Peña Nieto agreed to now, without congressional approval in Mexico, can be overturned by the country’s incoming president Andrés Manuel López Obrador. And it is no secret that both Mexico and Canada want trilateral agreements, not bilateral deals with the U.S.
So the phone call was just another strange day in the Trump presidency.
NAFTA — a bad deal for workers. Unfortunately, in the stories about renegotiating NAFTA, little or nothing is said about its overall purpose or impact. NAFTA was written by and for the corporate class to stimulate trade and the movement of manufacturing from the United States to Canada and Mexico where labor was cheaper. It provided no meaningful protections of labor and environmental standards or indigenous rights.
Since its signing in 1988, NAFTA has produced a bonanza in corporate profits, but has depressed U.S. wages and created massive unemployment, especially in Mexico. Its provisions directly conflict with the responsibility of the U.S. government to protect tribal lands and resources. And U.S. companies continue to use NAFTA to subvert union organizing drives by threatening to close factories.
A particularly astonishing power granted by NAFTA is the ability of multi-national corporations to sue governments seeking to protect the environment. For example, a U.S. company known as Ethyl manufactured a gasoline additive that Canada banned because it polluted the air. Ethyl sued the Canadian government and ultimately forced it to lift the ban and pay Ethyl $13 million.
At the same time Trump is talking free trade, he is pushing tariffs as a boon to workers. But this is as phony as his call with President Peña Nieto. The Economic Policy Institute report to the U.S. Senate in September, 2018 reveals that the tariffs so far implemented “affect only 0.1 percent of the U.S. economy.” The other 99.9 percent is business as usual. Clearly working people cannot look to Trump’s trade policy for help.