Trade Policy

Trade Policy

Trade Policy

In the wake of our successful fight against the climate-killing Trans-Pacific Partnership trade agreement, this workgroup is now working with other organizations around the country to envision and promote a new trade policy in which the health of the climate is of central focus. Sierra Club’s policy paper  expressing such a vision is a possible starting point. This policy promotes three main ideas: 1) that trade rules that conflict with existing climate policies should be eliminated; 2) trade rules should increase climate protections; and 3) trade agreements should discourage trade in climate-polluting fossil fuels, and address the climate emissions that result from shipping.

At 350 Seattle, we’ve been working for the last three years to stop harmful trade deals, including the Trans-Pacific Partnership. Most recently, because the Trump administration is working to re-negotiate the North American Free Trade Agreement (NAFTA), we are urging Congress to remove the most harmful portions of that deal, and at the same time, to push for more climate-friendly provisions.

NAFTA has harmed communities across Canada, Mexico, and the U.S.—particularly people of color and lower income families—by undermining environmental protections, eliminating jobs, increasing air and water pollution, eroding wages, and fueling climate change. In addition, NAFTA enabled a flood of cheap corn into Mexico, which contributed to a 66 percent drop in the price that Mexico’s corn farmers received, in turn helping to drive one million farmers out of corn production. In fact, Mexico lost over 900,000 farming jobs in the first decade of NAFTA, according to data from the United States Department of Agriculture. And ironically, although it was the pro-corporate US policies within NAFTA that forced these agricultural workers to lose their jobs and travel to the US, they now find themselves and their children, unwelcome here.

For these and other reasons, several environmental organizations, including 350.org and the Sierra Club have stated publicly that any renegotiation must include, at a minimum, the following eight changes. At 350 Seattle, we are meeting with Congressional representatives to push for these. (Full document is here.)

 

  1. Eliminate rules that empower corporations to attack environmental and public health protections in unaccountable tribunals. NAFTA’s investor-state dispute settlement (ISDS) system has empowered multinational corporations like ExxonMobil to bypass our courts, go to private tribunals, and demand money from taxpayers for policies that affect corporate bottom lines. Corporations have used NAFTA to challenge bans on toxic chemicals, the decisions of environmental review panels, and protections for our climate. They have extracted more than $370 million from governments in these cases, while pending NAFTA claims total more than $35 billion.2 The cases are heard not by judges, but by corporate lawyers outside the normal court system. Broad corporate rights, including ISDS, must be eliminated from NAFTA to safeguard our right to democratically determine our own public interest protections.
  2. Add strong, enforceable environmental and labor standards to the core text of agreement. NAFTA’s weak and unenforceable environmental and labor side agreements facilitated a race to the bottom in which corporations could offshore jobs to exploit lower environmental and labor standards in another country. Any deal that replaces NAFTA must create a fair playing field by requiring each participating country to adopt, maintain, and implement policies to ensure compliance with domestic environmental laws and important international environmental and labor agreements, including the Paris climate agreement, and treaties protecting Indigenous rights. In addition, each country must be required to eliminate fossil fuel subsidies, which encourage climate pollution while distorting trade, and must make commitments to tackle critical conservation challenges related to illegal timber trade, illegal wildlife trade, and fisheries management. These commitments must be included in the core text of the agreement and made enforceable via an independent dispute settlement process in which trade sanctions are used to correct labor and environmental abuses.
  3. Safeguard energy sector regulation by overhauling overreaching rules. NAFTA’s energy chapter limits Canada’s ability to restrict production of climate-polluting fossil fuels such as tar sands oil. The chapter, written before awareness of climate change was widespread, must be eliminated. Other NAFTA rules allow renewable portfolio standards, low-carbon fuel standards, and other climate-friendly energy regulations to be challenged for impeding business for foreign fossil fuel firms. Such rules must be narrowed to protect climate policies in each country.
  4. Restrict pollution from cross-border motor carriers. NAFTA encouraged a rise in cross-border motor carrier traffic without doing anything to mitigate the resulting increase in harmful vehicle emissions. Any deal that replaces NAFTA must require cross-border motor carriers to reduce emissions in order for their goods to benefit from reduced tariffs. In addition, all cross-border commercial vehicles must be required to comply with all state and federal standards to limit pollution.
  5. Require green government purchasing instead of restricting it. NAFTA’s procurement rules limit governments’ ability to use “green purchasing” requirements that ensure government contracts support renewable energy, energy efficiency, and sustainable goods. NAFTA’s replacement must require signatory governments to include a preference for goods and services with low environmental impacts in procurement decisions.
  6. Bolster climate protections by penalizing imported goods made with high climate emissions. NAFTA allows firms to shift production to a country with lower climate standards, which can spur “carbon leakage” and job offshoring. To prevent this, and encourage greater climate action from high-emissions trading partners, each country must be required to impose a border tax on imported goods made with significant climate pollution.
  7. Require governments to prioritize policies that minimize climate pollution. While NAFTA restricts climate policies that limit trade or investment, any replacement deal must instead put climate first. This includes requiring governments to use a “climate impact test” for policymaking, in which potential climate impacts of policy proposals are reported and weighed.
  8. Add a broad protection for environmental and other public interest policies. NAFTA’s many overreaching rules restrict the policy tools that governments can use to protect the environment and other broadly-shared priorities. NAFTA includes no provision that effectively shields public interest policies from such rules – only a weak “exception” that has consistently failed to protect challenged policies. Instead, any deal that replaces NAFTA must include a broad “carve-out” that exempts public interest policies from all of the deal’s rules.