Canada: New NAFTA must include ban on so-called right-to-work laws

The second round of negotiations on changes to the North Atlantic Free Trade Agreement (NAFTA) convened on September 2  in Mexico City, and some unexpected news came out of the first session.

Canada demanded that any changes to NAFTA must include an agreement by the US to roll back anti-union right-to-work laws.

Canadian negotiators said that the so-called right-to-work laws, which have been enacted in 28 states, lower labor standards by making it more difficult for workers to form and maintain unions.

The Canadians also said that lower labor standards in the US and Mexico are costing Canada good-paying jobs and driving down living standards for Canadian workers.

The Canadians said that one of the things that the US could do to raise labor standards is to pass a federal law nullifying state right-to-work laws.

Doing so would increase unionization and give workers more bargaining power with their employers.

The Canadians also urged Mexico to discontinue government support for yellow unions, those unions more concerned with protecting employers’ interests than the interest of their members.

“I’m very pleased with the position the Canadian government is taking on labor standards,” said  Jerry Dias, president of Unifor, Canada’s largest labor union.” Canada’s got two problems: The low wage rates in Mexico and the right-to-work states in the United States.”

When round two of NAFTA negotiations began, Dias was in Mexico City to speak at a rally of workers and farmers opposed to NAFTA.

At the rally, Dias said that Mexican workers need a big pay raise and criticized the Mexican NAFTA negotiators for ignoring the concerns of Mexican workers.

“I don’t buy the argument that the Mexican negotiators are making that somehow we have to keep our citizens living in poverty in order to get jobs,” said Dias. “That’s a nonsense argument.”

Canada’s Foreign Minister Chrystia Freeland, who is leading Canada’s delegation at the NAFTA negotiations, said that a new NAFTA had to be a fair NAFTA that benefits workers of all countries as well as business.

All of us want to come out of this negotiation being able to say to workers in our countries, ‘We have achieved a deal that will improve your standard of living’,” said Freeland. “That is an essential foundation for going forward.”  

Prior to the beginning of the negotiations on a new NAFTA, the Canadian government created a NAFTA Advisory Council to help the government shape its agenda for the negotiations.

One of the members of the advisory council is Hasan Yussuf, president of the Canadian Labor Congress, Canada’s national labor confederation.

Prior to the commencement of the NAFTA negotiations, he and other labor leaders met with representatives of Canada’s Prime Minister Justin Trudeau to discuss a new NAFTA.

They told the prime minister that a new NAFTA should boost the living standards for workers in all of the countries affected.

In addition to ending so-called right-to-work laws in the US and yellow unions in Mexico, Dias said that a new NAFTA must contain a commitment by all countries involved to honor eight core conventions laid out by the International Labor Organization:

  • the freedom to join labor unions
  • the right to bargain collectively
  • freedom from forced labor
  • abolition of slavery
  • a minimum wage
  • abolition of the worst forms of child labor
  • equal pay for equal work
  • abolition of discrimination on the job

Speaking to reporters, Dias said that wages of Mexican auto workers were so low that many of them can’t afford to buy the cars they make.

Raising those wages would improve living standards for Mexican auto workers and make it more difficult for Canadian and US auto makers to move work to Mexico, which would improve living standards for US and Canadian workers.

In the US, labor activist were encouraged by the position taken by the Canadian government, especially its stance on right-to-work laws.

In Ohio which is shaping up to be the next battleground state for right-to-work legislation, Richard Dalton, business manager for International Union of Operating Engineers Local 18 was pleased to hear that Canadian negotiators wanted the new NAFTA to ban right-to-work laws.

“Canada is taking a bold step to do what’s right,” said Dalton. “Right-to-work is not only bad for American business, it’s bad for international businesses as well.”

Dias said that the Canadian government is serious about raising labor standards and ending anti-union laws like the US’ so-called right-to-work laws.

Dias told Bloomberg Politics that without improved labor standards for all workers, Canada will walk away from the negotiations.

“It’s a red line,” said Dias.

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Unions want renegotiated NAFTA to put interests of workers first

In written comments to the US Trade Representative, unions urged the Trump administration to put the interests of workers and the public first when it renegotiates the North American Free Trade Agreement (NAFTA).

President Trump in April set in motion the process for renegotiating NAFTA.

After that process was set in motion, interested parties had a chance to submit written recommendations for changes to NAFTA.

The deadline for submitting recommendations ended on June 12, and on that day, several unions and the AFL-CIO issued statements outlining their recommendations

The general theme of the recommendations was that NAFTA should be a new kind of trade agreement–one that “prioritizes benefits for working families, not simply benefits for multi-national or global enterprises,” reads a statement from the AFL-CIO.

Richard Trumka, president of the AFL-CIO, said that a new NAFTA must be “New Deal” that benefits workers in Canada, Mexico, and the US.

Leaders of other labor organizations made a similar point.

“We must replace this deal written by and for multinational corporations with an agreement that is designed to live up to our values, create jobs, and raise wages for working men and women across North America,” said Chris Shelton, president of the Communication Workers of America.

To make sure that workers receive the benefits of a renegotiated NAFTA, the new agreement must protect workers rights, added Leo Gerard, president of the United Steelworkers.

“Most important among our recommendations,” said Gerard. “Is the need to ensure that internationally-recognized workers’ rights are promoted and also protected through aggressive enforcement provisions. Mexico has become a magnet for foreign investment in sectors like autos and auto parts because workers are not paid fair wages. That must change.”

The AFL-CIO’s recommendations also included changes that would protect the general public against corporate abuses.

“(Our) recommendations include changes to labor and procurement rules, as well as improved consumer protections and new rules to prevent currency misalignment and tax dodging. The improvements are meant to ensure working people receive a fair return on their work and new rules aren’t written to benefit wealthy corporations and CEOs,” reads a statement about its recommendations from the AFL-CIO.

In addition to ensuring that workers benefit from and their rights are protected by a revised NAFTA, unions called for other changes that protect consumers and the environment.

Unions urged the trade representative to eliminate the Investor-State Dispute Settlement (ISDS) section from NAFTA.

ISDS creates a process allowing investors and corporations from a foreign country to sue a government if the government passes a law or enacts a regulations that might hurt future profits.

ISDS clauses in other trade agreements allowed Phillip Morris, the international tobacco company, to sue Australia for requiring health warnings on cigarette packages and Dow to sue Quebec after the Canadian province passed a law banning certain lawn pesticides because they were a threat to the environment.

ISDS suits aren’t heard in a court of law; instead, they are heard by an arbitration panel composed of trade attorneys.

Hearings before an ISDS tribunal are held in secret and aren’t subject to appeal.

“Giving foreign corporations special rights to challenge our laws outside of our legal system would be a bad deal,” said Sen. Elizabeth Warren last year in a Washington Post op-ed piece criticizing the proposed Trans Pacific Partnership treaty.

Other recommedations from the AFL-CIO  include:

  • Democratize the negotiations process
  • Protect consumers by ensuring that pharmacuetical companies can’t use intellectual property rights to “undermine affordable medicine”
  • Strengthen rules of origin language to maximize benefits for workers, farmers, and NAFTA companies and
  • Add strong environmental rules with swift and certain enforcement.

“If President Donald Trump follows our recommendations—if he renegotiates NAFTA, so it’s a real force for higher wages and broadly shared prosperity—we will help him pass it,” said Tumka. “If he uses renegotiation to further rig the rules for the wealthiest few, we will fight him with everything we have. And if President Trump breaks his promise and leaves the worst pieces of NAFTA in place, we will never forget it.”

Keystone XL company seeks $15 billion from US after gov’t rejects its pipeline

TransCanada, a Canadian pipeline company, has asked an international arbitration panel to award it $15 billion because President Obama rejected the company’s plan to build the Keystone XL pipeline, an 1179 mile pipeline for transporting oil extracted from tar sands in Alberta, Canada to US Gulf Coast refineries.

The arbitration procedures that TransCanada is using were established by the North Atlantic Free Trade Agreement (NAFTA) signed in 1994.

Because of NAFTA, companies like TransCanada may be owed lost earnings and damages if a foreign country takes action to protect its environment, its workforce, or its consumers that infringe on a company’s future profits.

Similar language is in the final version of the Trans Pacific Partnership (TPP) agreement pending approval in the US Congress.

“The idea that after all those many, many, many millions of Americans and Canadians participated in this fight (to stop the Keystone XL pipeline), it could somehow be negated by three guys sitting in a room that nobody’s ever heard of and nobody ever voted for, is all the proof that anyone would ever need as to why these kinds of arrangements like NAFTA are something we should be wary of to a huge degree,” said Bill McKibben, founder of 350.org, an environmental group urging action to stop climate change.

A posting on the United Steelworkers (USW) Oil Workers Facebook page had a similar message: “This is what happens when you negotiate these bad trade deals,” said the posting.

Back in 2009, USW warned what might happen if Keystone XL were allowed to proceed.

At the time, TransCanada was seeking a permit from the US Transportation Department to operate its proposed pipeline at a higher pressure than US safety regulations permitted.

USW pointed out that TransCanada was proposing to use thin steel pipe in its pipeline, which would transport highly corrosive sand tar bitumen. Doing so would increase the risk of “leaks, ruptures, and spills,” stated the letter.

USW also pointed out that TransCanada in other pipeline projects purchased pipe from abroad and would likely do so for the Keystone XL project.

Purchasing pipe abroad, wrote USW, “might reduce cost somewhat but would also reduce the ability of the company to control quality.”

USW subsequently said that it could support the Keystone XL pipeline if there could be assurances that the pipe used was manufactured in the US.

The AFL-CIO endorsed the pipeline, but several unions notably the Communications Workers of America, National Nurses United, SEIU, the Transport Workers Union, and the Amalgamated Transit Union joined with environmental activists to create a grassroots movement to oppose the Keystone XL pipeline.

The participation of the many eventually triumphed over the private interests of the few when President Obama rejected the pipeline because of its threat to the environment and safety.

Recently a leak at another pipeline owned by TransCanada showed that these concerns were warranted.

US News reported in April that 17,000 gallons of oil had leaked from a segment of TransCanada pipeline in South Dakota. The pipeline carried sand tar oil and was similar to the Keystone XL pipeline that was rejected.

The company failed to detect the leak, which was discovered by a passerby.

After the leaked was discovered, TransCanada reported that only 187 gallons has leaked, but that proved to be untrue.

Since 2010 when this pipeline began operating, it has recorded 35 leaks, including a leak of 21,000 gallons of oil in North Dakota.

Despite the risk that Keystone XL and similar pipelines present to the environment, TransCanada thinks that its own interest and those of its shareholders should come first.

And it’s quite possible that the arbitration panel where its complaint will be heard could agree.

According to Bloomberg, TransCanada “has a legitimate argument” because Obama’s decision was based on political considerations rather than the business merits of the project.

“I’m betting for TransCanada on this one and certainly hoping they win the case,” said Rob Merrifield a former Canadian member of parliament to Bloomberg.

Opponents of the pipeline had another take on the arbitration case.

“This outrageous lawsuit by a money-hungry transnational corporation displays not only the depravity of the NAFTA provision that allows it, but also the depravity of imposing deadly tar sands oil upon the people of North America and the rest of the world,” said Bill Snape, senior counsel with the Center for Biological Diversity.

“TransCanada filed this lawsuit as a bullying tactic,” said Jill Kleeb, president of Bold Alliance. “Now TransCanada is trying to bully the American taxpayers and President Obama and any future president that they should not dare to mess with big oil.”

If TransCanada wins and TPP is ratified, then its fair to expect that many more corporations will looking to overturn actions by the government that they don’t like.