Years of Damage is Enough

December 30, 2008
For Immediate Release

(Montreal, Ottawa, Washington and Mexico City / December 30,
2008) – January 1, 2009 marks the 15th anniversary of the implementation
of the North American Free Trade Agreement (NAFTA), which integrates the
economies of Canada and Mexico with that of the United States. For civil
society networks in the three North American signatory countries, this
anniversary is no cause for celebration.

In a Joint Declaration entitled “NAFTA must be renegotiated” (available
at, the networks propose that NAFTA re-negotiation
should centre on 10 crucial areas: agriculture, energy, foreign investment,
financial services, the role of the state and public services, employment and
labour rights, migration, environment, intellectual property rights, and the
dispute settlement mechanism.

We concur with U.S. President-elect Barack Obama’s statement that “NAFTA
and its potential were oversold to the American people”. We would add that
NAFTA was oversold to Canadians and Mexicans. We believe that NAFTA is a
flawed deal that governments imposed under pressure from large
corporations, and that re-negotiation should ensure that any future
agreement benefits workers in the three countries.

In calling for a re-negotiation of NAFTA, our organizations are opting for a new
trade model in which our governments govern for the people instead of having
large corporations call the shots. NAFTA’s most damaging elements must be
eliminated – in particular the investor-state provisions found in Chapter 11,
and the Chapter 6 proportionality clause that currently forces Canada to send
two-thirds of its oil to the United States.

The all-powerful corporations

Under NAFTA, only the CEOs of large companies have privileged access to key
government officials, while all other sectors of society, including elected
members of Parliament and Congress, are excluded.

This trend became especially obvious in March 2005 when the three countries
launched the Security and Prosperity Partnership of North America (SPP, or
what quickly became known as NAFTA-Plus). One year later the NorthAmerican
Competitiveness Council (NACC), made up exclusively of CEOs from
North America’s largest companies, was created. At that time, government
ministers responsible for the SPP said to CEOs : “Tell us what we need to do
and we’ll make it happen.”

Key to any NAFTA re-negotiation will be ensuring that every sector of society
can contribute to the debate about North America’s future and that they will
be listened to by our governments.

A charter that protects investors’ rights – NAFTA Chapter 11

For the first time ever, under NAFTA, foreign investors got the right to
challenge policies or legislation of national governments by claiming that these
policies would affect their ability to make profit.

NAFTA’s Chapter 11 Investor/State provisions can be triggered in a number of
ways. Foreign investors can claim they were not given equal treatment. They
can challenge government measures to require the use of local goods or
measures that protect a population’s health or the environment. And the
private company can sue the government for damages. Such cases have
resulted in “chilling” governments’ efforts for the public good or for national or
regional development strategies.

Canada, an energy colony of the United States

Another aspect of NAFTA that needs to be re-examined, particularly in this
period of unstable oil prices, is the “proportionality” clause found in NAFTA’s
Chapter 6. This clause prevents the Canadian people from exerting their
sovereignty over their own energy resources by guaranteeing the United
States a greater proportion of Canada’s oil production than Canada gets itself.
After seeing this clause during the original NAFTA negotiations, Mexico
demanded – and was given – an exemption. Far from being an “energy
superpower,” as Prime Minister Stephen Harper claims, Canada is actually an
energy colony, putting the voracious appetite of the U.S. for non-renewable
hydrocarbons ahead of Canada’s own needs.

The economic crisis requires that a new development model be put in

Deregulation, an objective once revered by NAFTA proponents, has proven to
be an abject failure. In fact, it is one of the principal causes of the current
economic crisis, as admitted by none other than the former president of the
Federal Reserve of the United States, Alan Greenspan. We need now to
restore the role of the state as protector of the common good, a role that has
been greatly undermined in the last two decades.

A new trade model between the three North American countries must promote
economic relations based on human rights, social justice and national
sovereignty, while focusing on sustainable development. We demand that the
executive branches of our respective governments listen to their people and to
the duly elected representatives in their legislatures. This is the only way to
ensure that another world is possible – a world where peoples’ rights take
precedence over corporate profits.

(en español)