New Generation Trade blog

A call for trade that protects the new generations coming to this beautiful planet.

The Price of Free Trade: NAFTA’s Acceleration of Climate Change

The NAFTA re-negotiations played like a bad movie this week. In President Trump’s bullying of Canada, and Mexico, you could see the hidden motives of power and control in trade revealed. North American trade houses implications for many, but climate change hasn’t even been broached by the negotiators. This is no surprise for a President who doesn’t acknowledge that climate change is happening. And what about the rest?

This summer has been hot – wildfires have consumed places in Greece, Sweden, California, British Columbia and elsewhere. Many suffer and are afraid as the world continues to produce its warmest average temperatures on record throughout the last four years. While the mainstream media is booming with doom stories depicting humanity as losers, people on the ground have been quietly making climactic shifts; an ethic of care born from awareness is rising. Fusing creativity and concern, there are tremendous citizens, entrepreneurs and city councils pushing back on the status quo. They rarely make the news. The town of Parkes, Australia, led by their Elvis-impersonator mayor, produces double the amount of energy they need each year through solar power; lucky because their extra energy is more than enough to fuel their sustainable Elvis festival. The municipal movement to carve a climate-safe path is starting to bud: the following cities have reduced their total carbon emissions by a quarter since 1990, and they are on track for 80% or more reductions by 2050: Copenhagen (42%), Stockholm (25%), Toronto (24%), Berlin (32%), Washington (24%), and San Francisco (28%). This ability for humans to collaborate is evolutionary and thus, unstoppable, but we don’t have tons of time. The challenge we face is a systems problem.

There was a historical period when it was right to celebrate the erasure of distance through world trade; the last four years, the hottest on record, is no longer that time. Global trade of the last three decades, stylized as free trade and archetyped under the North American Free Trade Agreement (NAFTA), has surpassed its biological due date. For example, just because we can manufacture one product in multiple distant locations, doesn’t mean that we should obsessively do so. Or, just because corporations can use NAFTA courts to sue countries for their use of ecological and local-investment policy, doesn’t mean that they should. It’s important to become aware of all the cogs and wheels inherent in the present trading system and reflect on their costs for your well-being; there are enormous requirements of extraction, packaging and transport to produce exponential trade; this uses huge amounts of carbon. In this sense, every free trade agreement is the commitment of nations to fossil fuels.

Global trade can never be free – all extraction, production, packaging, and transport happens on the backs of forests, oceans, mountains, human and non-human communities. The sending of enormous amounts of goods around the planet will always be expensive for the atmosphere, the natural world and quite frankly us – people. This is even more true in developing countries where the waste required for this level of “sales” is dumped. That being said, trade fashioned in the style of NAFTA, is much more toxic than necessary. NAFTA has a legal mechanism to block environmental policy that slows profits called Investor State Dispute Settlement (ISDS); since its passing we have shaped the most ecologically dangerous society in history. According to the gifted thought-leader and communicator Naomi Klein, with the advent of NAFTA in the mid-nineties and all the mirror deals created after it, we have seen emissions steadily rise from 1% annually in the nineties to 3.4% in the 2000’s to more recently, a 5.9 % increase in global emissions in 2010 (Klein, 2014).

With over 3500 free trade treaties all focusing world governments to grow the Gross Domestic Product (the GDP, or sale of new goods), the physical boundaries of our earth’s systems are being compromised. NAFTA is nearing the end of its renegotiation but its impact on greenhouse gasses hasn’t even been mentioned. The correlation between free trade and climate change isn’t just the result of increased emissions from limitless transport of whole goods and their many parts. Free trade architecture shapes culture, practice and policy far beyond what appears possible because it is an all-encompassing body that touches increasingly every domain of life.  With texts upward of a thousand pages, free trade now covers world-wide rules for medicine and health care, local procurement, culture, agriculture and more. It shapes the way we live and behave in society though its ramifications on our well-being are ignored and have been totally absent in the creation of a new trade deal for North America. How could it be that the continental commitments that set the terrain for governance do not include explicit instructions and laws to safeguard our well-being and our home?

Essential spheres of public, private and biological life are encoded into trading rules every time a handful of free trade negotiators get together. Their influence on national and municipal law needs to be scrutinized with a gargantuan magnifying glass. Preferencing local goods is illegal in free-trade style treaties; National Treatment of foreign corporations is mandatory. Countries who sign trade agreements like NAFTA can be prosecuted in trade courts and come out paying hefty fines in the millions or billions. Canada is the most sued developed nation in the world as a result of NAFTA – largely attacked for environmental policy. Since 2010 there’s been an increase in transnational corporations suing countries to prevent policies from blocking profits. Specifically, cases against renewable energy programs are on the rise — such as the attack on India’s national solar mission project and the Ontario Green Energy Act (Klein, 2014).

NAFTA was the first multilateral agreement between developed nations to include the ISDS legal mechanism to raise profits for corporations over national policy decisions; in the past thirty years, ecological, health and social-based policies, have become less popular and less likely to be enacted by government because they are free-trade illegal. There are many pieces of trade law invented since NAFTA that deter countries from enacting the full potential of renewable energy plans. While choosing free trade commitments over the Paris Agreement for climate security makes no sense to us, it appears to make sense to governments that are trapped in an abstract global market competition where national success is measured, celebrated and reinforced by how much GDP a country can gain. Remember: GDP increases with the selling of new products – that means more use of carbon fuels.

I was horrified to learn that NAFTA has distinct rules that bind Canada to specific types of energy production and high levels of emissions; these trade rules are called the Energy Proportionality clause. In this section of NAFTA, Canada is required to give a proportion of all its domestic oil to the United States; Mexico blocked energy rules in the original NAFTA but it appears that they have accepted new rules for their energy contracts in negotiation with the Trump administration. According to an excellent and revealing report (Ackerman, Alvarez-Bejar, Laxer, and Beachy, 2018) about the connection between Canada’s energy projects and trade policy, Canada is required to give 74% of its oil (mainly from the Alberta oil sands) and 52% of its gas (mainly from Greenhouse intensive fracking) to the United States. It further states that “an exporter cannot disrupt the normal channels of supply.” According to Ackerman et al. (2018), the oil sands is 22 to 58% higher in Greenhouse Gas emissions, but because of a treaty signed in 1994 by a government that no longer exists, the oil sands are committed to production. The report beautifully names “NAFTA’s proportionality rule…a relic of the fossil fuel past.” The Trump, Trudeau and Pena Nieto governments are including rules to harmonize the three countries’ energy sectors; they are about to sign off on a fossil fuel future with their new NAFTA.

Donald Trump has also recommitted to the corrupt court system, ISDS, that defined NAFTA – Investor State Dispute Settlement according to the Council of Canadians, Canada’s long-standing network of trade justice educators. It is illegal and sue-able in NAFTA-style trade to slow profits of foreign investors for any reason including ethics or planetary emergencies like climate change. If Canada does not deliver oil to the US through pathways like the Kinder Morgan Trans Mountain pipeline, companies through NAFTA can sue Canada. Maude Barlow, the preeminent educator on the real impacts of free trade for the past three decades, shares that using NAFTA, Lone Pine, a Canadian corporation with an American office, is suing Canada for Quebec’s moratorium on fracking for 150 million dollars. Sadly, according to Ackerman et al. (2018), signed in its present state, NAFTA courts will continue to mandate the extraction of fracked gas and oils sands beyond the thresholds committed to the 2030 and 2050 global goals. Canada’s global goal for 2030 carbon emissions under the present rules of NAFTA will be five times more than what was committed to. Despite wanting to mount protective policies for US manufacturing, the Trump administration has held onto this trade pact for its bonuses to American power and political ideology like its energy rules. Climate change and earth expropriation is a free trade specialty. It’s no surprise the Trump administration wants in with trade courts and all. As Naomi Klein has said: “To allow arcane trade law, which has been negotiated with scant public scrutiny, to have this kind of power over an issue so critical to humanity’s future is a special kind of madness.” (Klein, 2014).

Free trade is unresponsive to ecological security issues because it’s aggressively focused on disembodied and immature measures for the twenty-first century reality like GDP growth. Before free trade began, however, in 1987 the world passed the Montreal Protocol, another atmospheric treaty to protect present and future generations. Scientists discovered a widening hole in the ozone layer which let in harmful UV rays that burn plants and animals including humans. Without free trade law that would have allowed corporations to sue governments who blocked their ozone-hole producing products, governments safely and collaboratively ushered in rules that see the hole still decreasing today and on track to recover by 2050. The difference between that treaty and the Paris treaty context is that back in the eighties there was not a fictitious international court system that pushed nearly every country to bully other countries into selling dangerous products and practices as a right of business. The system of free trade, which is not global trade but simply an interpretation of how we trade and govern, is non-responsive to our deeper needs. It’s a dinosaur in the twenty-first century. It does not have any learning capacity built into its design. Not only are deals like NAFTA, not responding to climate change, but fossil fuel extraction has become their law.

The evolutionary pulse to promote life is peeking through a rigid system that is intimidating nations to stick with the status quo, gut their environmental, social and health regulations for so-called cooperatory regulation. People in North America and all around the world are making changes despite a patriarchal, international trade system that’s risking our home. The Tiny House Warriors, people of the Secwepemc nation and settler allies, are building tiny houses along the route of the Kinder Morgan pipeline in BC to not only witness and resist the denial of their rights, but to eventually house people living below the poverty line in renewable energy homes; this determined group is creating integrated and creative solutions now. Ireland recently joined the flowering fossil fuel divestment movement and unanimously passed policy to phase out all funding for greenhouse gas-emitting projects in the next five years.  Canadian Environmental lawyer David R. Boyd (Boyd, 2015) reports that a handful of nations including Iceland, Albania, and Paraguay use renewables to fuel their energy grid, and a handful of other nations, like Costa Rica, have surpassed 90% production in energy other than gas, oil, and coal. With its national measure for success a well-being index, instead of GDP, Bhutan sequesters more carbon than it uses and has become a human-assisted carbon sink. International trade law slows countries from investing in local solutions to stabilize the atmosphere, but individuals, cities, and nations continue to push back. People want change and they are going to find it.

This international economic system is stuck in the dark ages – nineteenth century goals and beliefs are dictating policy that’s dangerously out of touch with earth reality. A free trade fixation with GDP that alights a worldwide competition for the biggest profits for transnational corporations has written rules incompatible with a stable climate. Because free trade lawsuits using ISDS and other rogue incarnations of law, have been launched against most nations (and their public interest policy) over the last three decades, the movement to secure our home is being blocked. Free trade is stalling our movement to secure the atmosphere.

When we negotiate trade deals, let’s ask timely questions; in the past we could marvel and even celebrate the technological and networking feat of global delivery. We can always cheer and promote increased access for developing nations. But this moment of four-hundred and fifty-plus parts per million of carbon in the atmosphere take us out of the celebration. It’s time to get sober. We must pause the hype on NAFTA re-negotiations and reflect on what such a harsh drive for material growth does to planetary security under all-encompassing treaties; we’re in need of social well-being, ecological security, and the rise of local autonomy to enter the greatest race of humankind: the defending of our beautiful home. Global climate change is a side effect of the way NAFTA and other trade treaties that followed it function.The one thing that Donald Trump has right is that we need to protect local emerging economies; but from a balanced and compassionate place, not from an energy of cut-throat competition. The rushed parametres of this negotiation are completely out of sync with our collective situation. They reflect Donald Trump and regulatory impoverished governments, not the vision that lives in the hearts of citizens.

We must loosen the hold trade agreements have over the design of our countries and cities and the ability of government to fund sustainable and local solutions. We need trade with a mixed design promoting local and global flows that penalizes projects that risk international security such as the Alberta Oil Sands. We can love Albertans and create a safe future if we dismiss the Kinder Morgan project and invest heavily in renewable projects and supports that are home-grown in Alberta; it doesn’t have to be either-or. This would be more possible if we do not accept the Energy Proportionality Clause or ISDS hiding in NAFTA. We must end this ethos hell-bent on competition and move into the era that is, despite what the media says, in the heart of the people: cooperation. What we focus on grows. Resources are not simply resources, they are the furniture and family in our 4.5 billion year heritage home; we need a biologically-responsive design for NAFTA – the world’s first and worst fossil fuel trade policy – that is aligned with the ecological reality we are actually living in; this is the twenty-first century with its infinite capacity to re-imagine and create, and its slew of complex ecological and security problems. Let’s ask big questions when creating continental policy, like how can we secure our stay here? People on the ground are aware and working towards solutions – NAFTA either needs to join us and get real about the physical planet we rely on, or get out of the way.


Author: newgenerationtrade

I am a Canadian with serious concerns about new generation trade deals. This blog considers what trade would be if its first purpose were the security of the new generations coming to this beautiful planet.

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