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News from EPI EPI lays out key priorities to put working people first in NAFTA renegotiations

With another round of negotiations over the North American Free Trade Agreement (NAFTA) scheduled for Montreal in January, and policymakers and lobbyists continuing to engage with the White House and USTR, a new EPI policy memo lays out key principles that should take priority as talks continue.

Instead of allowing multinational corporations to dominate the agenda, the authors argue, U.S. negotiators should instead address the ways in which corporate-led globalization has hurt American jobs and wages through pressures such as trade deficits caused by currency misalignments and the systematic and egregious repression of workers’ rights, which disempowers workers and exacerbates inequality in all three North American countries.

“NAFTA was an historically bad deal for working people, costing hundreds of thousands of U.S. jobs and exacerbating inequality in all three North American countries,” said incoming EPI President Thea Lee. “We have an opportunity to go back and try to craft a trade agreement that puts the interests of North American workers ahead of multinational corporations. This process is important because it could set a new template for trade policy – but there are many obstacles ahead.”

The six priorities laid out are:

  1. Put labor standards with strong enforcement tools into NAFTA, with specific provisions protecting workers’ rights and wages, including the right to form unions and bargain collectively and establishing an enforcement body that can penalize those who infringe on those rights.
  2. Eliminate investor–state dispute settlement (ISDS) provisions, which have a chilling effect on regulatory safeguards, infringe on the democratic rights of all three countries to manage their own domestic economies, and encourage American firms to locate abroad.
  3. Revise intellectual property provisions, which inflate prices in areas such as health care.
  4. Revise rules of origin provisions, to maximize the benefit to workers, farmers, and firms, and to ensure that NAFTA is not turned into a back door through which products from nonsignatory countries flood the North American market.
  5. Eliminate procurement requirements that undermine “Buy American” policies. Because they require that foreign bidders have equal access to U.S. government contracts, the current procurement provisions have resulted in the loss of U.S. jobs.
  6. Include enforceable currency rules that include penalties for violations. Currency manipulation and misalignment are the most important causes of manufacturing job loss. Including currency rules with enforcement in a major trade agreement would create a standard that should be incorporated into all present and future trade and investment agreements.