10/04/2018 15:10 EDT | Updated 10/04/2018 15:12 EDT

USMCA Proves Canada Learned From NAFTA's Failures

I had a front-row seat throughout the talks after being asked to be an adviser to the Canadian negotiating team.

This past weekend, negotiators from Canada and the United States put pen to paper on a new North American trade pact — awkwardly called the United States-Mexico-Canada Agreement (USMCA) — after a roller-coaster year of talks.

A generation ago, the Brian Mulroney government negotiated its own deal with the U.S., and then with Mexico, to form the North American Free Trade Agreement (NAFTA).

That deal, and others like it, led to a massive bleeding of industrial jobs out of the country, and extraordinary corporate power — just as the labour movement warned. These deals strove to protect private profits, with only token reference to people and the planet. NAFTA represented the worst that globalization had to offer.

For 25 years, Canada's labour movement called for NAFTA's renegotiation. Thankfully, last year we had our first chance in a generation to do so.

AFP/Getty Images
Canadian Prime Minister Justin Trudeau Canada's chief trade negotiator Steve Verheul and minister of Foreign Affairs Chrystia Freeland walk to a press conference to announce the new USMCA trade pact in Ottawa on Oct. 1, 2018.

I had a front-row seat throughout the talks after being asked to be an adviser to the Canadian negotiating team, including the intense last-minute talks this past weekend.

From the beginning, the emphasis for the Canadian team was to produce a "progressive" deal that put the needs of working people, and their families and communities, first. My job, as I saw it, was to force them to keep that focus.

The Canadian team didn't get everything it wanted, of course. Having spent my working life negotiating contracts, I can tell you that's entirely normal.

What we did get, however, was significant.

Consider that, for the first time, there has been an honest discussion about the need for strong labour standards governing trade. In the USMCA, there is language designed to promote free and independent trade unions in Mexico — not the company unions that held workers back. As well, 40 per cent of the content of a car, and 45 per cent of a truck, must be sourced from plants paying workers on average $20 Canadian.

The cultural exemption for culture has been preserved, despite Trump's wishes.

There are also increased content rules for vehicles. Cars must contain 75 per cent North American content — up from 62.5 per cent in NAFTA — to be considered North American made. As well, Canada was effectively exempted from U.S. President Donald Trump's threat of tariffs on cars and trucks.

These provisions alone directly address some of the major issues that caused good auto jobs leave Canada.

There's more, including two very important provisions that will help our media industries in Canada.

The cultural exemption for culture has been preserved, despite Trump's wishes. Having a cultural exemption protects our media companies from being taken over by much-larger U.S. companies, and allows us to regulate Canadian content in the public interest.

On top of that, the USMCA removes the Stephen Harper-era policy requiring TV broadcasters in Canada to air U.S. Super Bowl TV ads in this country. This rule cost Canadian broadcasters the revenue they needed to fund local news and create quality Canadian-made entertainment. A cultural exemption is one thing, but you still need the money to produce the content.

For the first time, Canada has negotiated removal of an Investor-State Dispute Settlement (ISDS) clause from a trade deal. ISDS clauses allowed private investors to sue governments for decisions that hurt profits, even if those decisions are in the public interest. Good riddance.

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Canadian Prime Minister Justin Trudeau and minister of Foreign Affairs Chrystia Freeland announce the new trade agreement between Canada, the United States and Mexico, in Ottawa on Oct. 1, 2018.

I'm also glad to see the end of the energy proportionately provisions in the old NAFTA, which guaranteed U.S. access to Canadian oil and energy, essentially stripping Canada of the right to manage production.

There's even a new and enforceable chapter on the environment. While it doesn't include reference to the Paris Accord or climate, it's stronger than what appeared in NAFTA and other trade deals, which rarely go beyond lip service on the environment.

Let's be candid though, there are some major concerns.

New patent rules could lead to higher drug prices, all the more reason Canada needs to establish a national Pharmacare program.

Supply managed farmers, particularly in dairy, will be affected by rising imports, compounding the negative effect of previous deals (like the Canada-European Union CETA, and the pending trans-pacific trade pact) negotiated by the former Conservative government. Immediate aid is needed to help farmers adjust.

National security tariffs imposed on Canadian exports of steel and aluminum remain in place, continuing the uncertainty for Canadian workers. The USMCA contemplates a process for further negotiation, and its imperative that a timely resolution is reached.

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Unfair U.S. duties on Canada's softwood lumber also remain intact, but thankfully, Canada's negotiators held onto an important dispute settlement system found in Chapter 19 to challenge these tariffs, despite U.S. opposition.

Having been there throughout, and consulting with our top negotiators, including Foreign Affairs minister Chrystia Freeland, I can say that this unorthodox negotiation has shown that fundamental change in how we approach trade deals is possible. Where there is political will to change, there is a way.

Trade deals need not be only about corporate profits and privilege. The assumption that if you help corporations, people will benefit as a side effect, is being fundamentally challenged. I firmly believe we can chart a better way.

I was shown that it can happen. I insisted that it did.

The USMCA is certainly far from perfect. It won't be the last trade deal Canada negotiates. In fact, more are already in the works, and we must all strive to ensure the shift in focus that guided the renewed NAFTA talks continues to be the central focus of all trade negotiations.

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