February 21, 2014 - No. 17
Summit of North American Leaders
No to Expansion of the United
North American Monopolies!
Demonstration against the
leaders' summit and the visit to Mexico of President Obama,
outside the U.S. Embassy in Mexico City, February 19, 2014.
• No to Expansion of the United States of North
• Mexican People Greet Summit of North American
Leaders With the Cry: 20 Years of NAFTA -- No Más! -
• Oppose Canada's Operation as
Trojan Horse for
U.S. Imperialism in the Americas! - Enver Villamizar
For Your Information
• Open Letter from Mexican Organizations
• FTA at 25: NAFTA at 20 - Bruce
Campbell, Canadian Centre for Policy
Summit of North American Leaders
No to Expansion of the United States of
North American Monopolies!
The Summit of North American Leaders took place in
Toluca, Mexico on
February 19, bringing together Canadian Prime Minister Stephen Harper,
U.S. President Barack Obama and Mexican President Enrique Peña
This summit has been held every year since 2005 (except for 2013).
Under the Harper government Canada has been further
the U.S. imperialist war machine. Canada's military, security
apparatus, spy agencies and various ministries have become increasingly
taken over by private interests engaged in the intermonopoly fight for
control over the Canadian and U.S.
states, creating a new United States of the North American Monopolies.
This has been put in place using formal agreements signed without the
approval of the Parliament of Canada or the U.S. Congress, let alone
the peoples of Canada or the U.S. and now Mexico. The exercise of the
prerogative powers of the Crown
has done away with any impediments to placing Canada directly under
U.S. command structures. Through omnibus bills and other "legal" means
the Harper government has operated as a fifth column of the
intermonopoly rivalry, ramming through the powers it requires to try to
prevent Canadians from rejecting
such an arrangement.
As part of this overall
direction, the U.S. and Canadian governments
and the monopolies that have taken them over seek to extend this new
military security state apparatus to Mexico and into Central America to
keep Latin America and the Caribbean from integrating economically and
politically in a manner
that favours their economic development and upholds their right to be.
All of it seeks to maintain control of their natural resources and
territory and ensure that the people are not able to affirm their right
to decide the direction of their societies free from coercion,
blackmail, coup d'etats and state terror.
This has been stepped up in the last two years as the
Latin American and the Caribbean have established new institutions to
block the domination of the hemisphere by the U.S. imperialists and to
permit their governments to come together in an atmosphere of equality
and diversity to sort out their
differences without open manipulation and interference. In this period
in countries such as Nicaragua and El Salvador, governments have been
elected which reflect the determination of the peoples of the Americas
to defy U.S. dictate under the current conditions. The attempts to
destabilize Venezuela show how desperate
the U.S. has become.
Since February 12, U.S.-instigated violence has
Venezuela, for purposes of overthrowing the government of President
Nicolás Maduro. The government of Venezuela has taken important
measures to maintain the peace, including the expulsion of three U.S.
diplomats for their role in fomenting the
At the North American Leaders' Summit, President Obama
"Venezuela, rather than trying to distract from its own failings by
making up false accusations against diplomats from the United States,
the government ought to focus on addressing the legitimate grievances
of the Venezuelan people."
In a statement, President Maduro condemned Obama's
Mexico and said the fact that Obama keeps attacking a free and
sovereign country in Latin America, is an offence to the heroic land of
the Aztecs, Villa and Zapata, and the noble Mexican people.
Maduro stressed that what sovereign governments
worldwide are really
expecting is an explanation of why the White House finances, encourages
and defends opposition forces that promote violence in Venezuela.
He added that Deputy
Assistant Secretary Alex Lee has no right to
condition or threaten the Venezuelan government because of its decision
to prosecute those responsible for the recent violent acts.
The Venezuelan government repeats that it will continue
and take all necessary actions to prevent U.S. agents from spreading
violence and destabilization, and keep the world informed of President
Obama's interventionist policy against our country, he added.
The Summits of the heads of state of Canada, the U.S.
have been opportunities for the executives of the three countries to
sort out new arrangements which go in this overall direction and to
coordinate their moves to try to rip Mexico away from its links with
the new direction being forged in South
and Central America. Part of this direction is the determination of the
U.S. imperialists to prevent the full blossoming of friendly relations
between the Canadian, U.S. and Mexican people with Cuba by exerting
economic and political blackmail over the other two countries and
peoples so that they do not throw off
the pressure to remain outside the progressive trend for rights taking
hold in Latin America.
Developments This Year
Of note is that this year's
Summit highlights the preoccupation of the heads of state with the
transport of natural resources, especially energy in the form of oil
and gas, as well as electricity. The Summit approved the development of
a "North American Transportation Plan,
beginning with a regional freight plan and building on existing
In addition, emphasis on
establishing an arrangement called a North
American Competitiveness Work Plan, similar to the Regulatory
Cooperation Council set up as part of the Canada-U.S. Security
Perimeter Agreement, which would see the biggest monopolies put in a
decision-making role over the rules and
regulations that will govern the industries they operate in, and the
daily working lives of all the working people of Canada, the U.S. and
Also announced to the media
following the event was the
the leaders to extend the Canada-U.S. "trusted traveller" arrangement
to Mexico. The arrangement establishes expedited crossing for those
"trusted" based on criteria that has nothing to do with human rights.
Such an arrangement will likely
become a mechanism for the monopolies to pick and choose who they want
to travel in a just-in-time manner across the borders to fulfill the
need of the monopolies to establish a North American slave-labour force
which is "allowed" to move freely to wherever the monopolies demand. It
also will no doubt include
measures the North American monopolies want established whereby skilled
workers laid off in one country can be sent the next day to set up
factories in another country. According to their communique, the
leaders will seek to "streamline procedures and harmonize customs data
requirements for traders and visitors.
We will facilitate the movement of people through the establishment in
2014 of a North American Trusted Traveller Program, starting with the
mutual recognition of the NEXUS, Global Entry, SENTRI and Viajero
Meanwhile the leaders agreed to continue their focus on
U.S. Homeland Security's operation into Central America and the
Caribbean in the name of stopping drug trafficking and the illicit gun
trade. This as the U.S. has shown time and time again that its security
agencies operate within these criminal
establishments in order to destabilize countries by encouraging a
situation of chaos and lawlessness within which they can then present
themselves as knights in shining armour coming to the rescue.
A summary of the main areas discussed at the Summit
provided by the Prime Minister's Office indicates the following:
"Develop a North American
Competitiveness Work Plan
focused on investment, innovation and increased private sector
"Develop a North American Transportation Plan, beginning
regional freight plan, and the establishment of a North American
Trusted Traveller Program in 2014, which will facilitate the movement
"Develop our ability to foster innovation, provide our
access to high quality educational opportunities and to technology, and
promote a workforce with the skills needed for success in the 21st
century global economy;"
"Collaborate on disaster risk prevention and insurance,
management, access to affordable and clean energy, and the promotion of
sustainable social development; and,"
"Continue to coordinate and
pursue new areas of cooperation to
counter drug trafficking, arms trafficking and other illicit trade, as
well as cooperate with partners in Central America and the Caribbean,
and with other countries in the hemisphere, to promote development,
economic growth and citizen security."
"In order to promote transparency, accountability and
the leaders asked officials to report on progress in implementing joint
efforts before each NALS. They also asked them to develop a new
outreach mechanism in 2014, through which experts and stakeholders will
be able to share their perspectives
on the agenda and activities."
It was also decided that Prime Minister Harper will host
the next Summit.
Mexican People Greet Summit of North American Leaders
With the Cry: 20 Years of NAFTA -- No Más!
February 19, the city of Toluca, the capital of the State of Mexico,
hosted the Sixth Summit of North American Leaders. It received the
President of the United States, Barack Obama, the Prime Minister of
Canada, Stephen Harper and the President of Mexico, Enrique Peña
At this summit the
heads of state agreed to celebrate the 20th anniversary of the North
American Free Trade Agreement (NAFTA), which came into force January 1,
1994. Since its inception in 2005, this summit has served to develop
integration policies in the areas of security, energy and political and
legal structures of the three countries
and has been an important lever to ensure the prosperity, not of
peoples as it claims but the big monopolies at the expense of the
peoples of North America and also worldwide. It also serves to
negotiate behind closed doors new agreements that further favour the
big monopolies, including the Trans Pacific Partnership
(TPP) to update NAFTA according to the current needs of the monopolies.
For the organized opposition in Canada and the U.S. and
all the Mexican people there is
nothing to celebrate except the struggle of all sections of the people
against poverty, violence, insecurity, privatization of education and
destruction of agriculture, manufacturing centres, the theft of natural
resources in the mining sector and the privatization
of oil energy resources. In 20 years of NAFTA, Mexico has increased its
economic exchange with the United States five times according to the
Ministry of Industry. But for the Mexican people that increase in the
level of trade is characterized by the massive export of human
resources of the country, as every
year millions of workers and Mexican professionals must leave for the
United States and Canada to work as modern slaves and to send money to
ensure the survival of their families. The rate of economic growth in
Mexico has not exceeded 1 percent since NAFTA's implementation. The
country has been transformed
into a commodity exporting country and must now import food commodities
such as maize and pay royalties to the monopoly Monsanto whereas before
it was self-sufficient.
As of February 15 many workers' organizations in energy,
mining, education, social organizations, organizations in defence of
rights and indigenous communities took a series of actions
across the country to say: Twenty years of NAFTA -- No Más!
Thirty years of
neoliberal policies -- Enough! Enough structural
reforms! Stop selling out the country!
On Saturday, February 15, thousands of people
participated in a
demonstration outside the offices of the parent company of the Grupo
Mexico mining company, then carried on to the monument of the Angel of
Independence on Reforma Avenue, rallying there and marching to the U.S.
embassy on the same street.
On Monday, February 17, thousands of teachers took to the Mexico-Toluca
highway heading to Toluca demonstrating their opposition to the
privatization of education and other consequences of NAFTA. They were
blocked a few kilometres from the city by police and the army who
denied them entry into the city,
which has been transformed into a bunker for the occasion. During the
weekend of February 15-16, Andres Manuel Obrador, leader of the Morena
movement, which includes over 2 million people, spoke to thousands of
people in San Luis Potosí, saying that the leaders of the United
and Canada have come to
celebrate with Mexican President Peña Nieto, the theft of gold,
and copper in the country as well as the handover of Mexican oil to the
foreign monopolies such as Exxon, Chevron and others. The city of San
Luis Potosí is a centre of active struggle against the
mining and Obrador mentioned
that 25 percent of the national territory, 50 million of the 250
million hectares that make up the republic, is in the hands of
predominantly foreign and mostly Canadian mining companies. Throughout
Mexico many struggles are being waged against the theft of indigenous
lands by mining companies, which not only
extort the wealth of gold, silver and copper from the Mexican people,
but also destroy the environment and communities with poison cyanide
contamination of groundwater and all with impunity. This is a direct
consequence of the implementation of NAFTA. Monopolies use this
agreement to impose their interests
on member countries using an extraterritorial court to force the
to submit to their dictates under threat of millions in damages and
interest for lost income as was the case in the state of Chiapas,
Mexico, but also in El Salvador and Costa Rica. It is a direct attack
on the sovereignty of countries.
Thousands of Mexican
teachers march along the highway to the site of the summit in Toluca,
February 17, 2014.
Among the important demands of the Mexican people is the
cancellation of the energy reform recently adopted by the Peña
Following this reform it is
now possible for foreign companies to
invest in the national oil company PEMEX and receive dividends, as well
as to participate in exploration and extraction. This is in total
contradiction to the country's constitution which stipulates that oil
and its derivatives are a national asset that
belong to the Mexican people and cannot be tampered with or sold to
foreign interests in any measure. More than two million people have
signed a petition calling for a national referendum on the issue so
that the people can decide.
But the government of the ruling Institutional
Revolutionary Party (PRI) in alliance with the former ruling National
Action Party (PAN)
used their majority to bypass the right granted to the people in the
constitution and adopted reform. This process of the privatization of
Mexican oil began with the imposition of neoliberal policies thirty
years ago and has rapidly expanded
since. First the PEMEX scientific research institute was eliminated,
thus destroying the whole centre of expertise in the country in the
matter, then distribution was privatized, maintenance given to
subcontractors services, construction of new refineries blocked and the
sale of crude oil was made directly to American
monopolies that bring it to the United States, refine it and sell the
derivatives to Mexico at exorbitant prices. Having thus placed the
domestic enterprise in a situation of loss of income, the neoliberal
government of Peña Nieto then used the pretext that to eliminate
loss, it was necessary to exploit the large oil
resources owned by the country, including the Gulf of Mexico but the
country does not have the expertise to do so it must partner with
foreign companies working in the modernization of exploration and
exploitation and extraction equipment. The movement against
privatization continues to grow across the country.
kinds of actions are being taken to prevent the application of the
reform in question such as the intensification of measures to demand
that the government respect the right of the people to demand a
referendum on the issue and an appeal to the Supreme Court to charge
President Peña Nieto and all those who
voted in favour of the reform with treason against the nation. All this
is accompanied by demonstrations and meetings developing the discussion
and organization of the various sections of the people to change the
On February 19, thousands rallied in the city of Toluca
of the summit's venue to let the"three amigos" know: 20 years of NAFTA
Oppose Canada's Operation as Trojan Horse for
U.S. Imperialism in the Americas!
Prior to this year's North American Leaders' Summit,
Minister Harper held his first official state visit to Mexico for
meetings with Mexican President Enrique Peña. In addition he
meetings with Canadian energy monopoly TransCanada which operates in
The meeting results
indicate an emphasis on incorporating the Mexican military into the
U.S. Northern Command by increasing the participation of the Mexican
military in various activities with the Canadian armed forces. This is
part and parcel of new arrangements to establish new
the three militaries at the continental level. This is also significant
given the Mexican Army does not yet operate in the same manner as the
Canadian and U.S. armed forces with centralized command over all
branches through arrangements like a joint chiefs of staff. The Mexican
Navy have two separate government departments, the National Defence
Secretariat and the Naval Secretariat, and maintain two independent
chains of command, with no joint command except the President of Mexico.
There is another notable difference between the way
forces have traditionally operated as compared to those of the U.S. and
increasingly, Canada through its involvement in NATO and as an
appendage of the U.S. military. Mexico's military has operated almost
exclusively within the country's
borders rather than as an expeditionary force. It is also a known fact
that according to the Mexican Constitution no military armed force can
leave Mexican territory without a declaration of war, and approval of
the Congress. The last time this was invoked was in 1942, to send an
expeditionary force to the Philippines, after war was declared against
and Japan, following the sinking of two Mexican ships by U-boats. In
1990 President Carlos Salinas de Gortari asked the permission of the
Congress to send troops to the Gulf War, but it was refused, since
there was no declaration of war against Iraq."
In 2012, Canada hosted the inaugural meeting of North
Defence Ministers (NADM) meetings "to discuss continental and regional
defence and security challenges, as well as to explore collaboration
opportunities in hemispheric defence fora." Since the inaugural
meeting, a continental threat assessment
has now been completed and a trilateral table-top exercise on
humanitarian assistance and disaster response is being planned for
March 2014 in Mexico.
The goal of such exercises is to play out emergency
order to see where various policies and protocols, as well as
constitutional limitations, need to be overcome so that the militaries
and civilian agencies can be made to operate under centralized command,
ie. NORAD/U.S. Northern Command.
a pre-meeting with President Pena, Harper announced that Canada and
Mexico will sign a Declaration of Intent on Defence Cooperation in
April 2014, to "further strengthen bilateral defence relations." The
implementing authorities are the Canadian Armed Forces (CAF), Canada's
Department of National Defence
(DND), Mexico's Secretariat of National Defence, and the Mexican Navy.
Giving a sense of the
ongoing activities to bring the
military under the U.S. fold, it was announced that in June 2012, two
officials from the Mexican Navy participated in the Maple Flag 45
(Serial 1) International Observers Program in Cold Lake, Alberta.This
was the first time a Mexican Navy ship participated in an exercise in
Canada. The Mexican Navy also participated in the Rim of the
Pacific Exercise off the coast of Hawaii in August 2012.
The Harper government also outlined the following
which are being strengthened with the new Declaration of Intent:
"Directorate of Military Training and Cooperation --
Mexico has been
a member of Canada's Military Training and Cooperation Programme (MTCP)
since 2004. To date, 168 Mexican students have received MTCP-sponsored
training. The Directorate of Military Training and Cooperation, which
and Canadian Joint Operations Command are examining innovative ways to
expand baseline cooperation with Mexico. "
"Canada-Mexico Political-Military Talks -- Established
these regular engagements between Foreign and Defence Ministries in
Canada and Mexico provide the basis for developing defence and foreign
policy cooperation on hemispheric and international security issues.
The seventh round of talks was held
in December 2013 in Mexico, and included productive discussions on
regional security, military training, and military justice."
Staff Talks -- Building on the
the Political-Military Talks, Canada and Mexico established
Canada-Mexico Military Staff Talks in May 2011 as an effective and
enduring way to maintain a strong relationship between the armed forces
of both countries. The third iteration of
these staff talks was held in Canada in May 2013."
"North American Maritime Security Initiative (NAMSI) --
trilateral initiative was established for the United States, Mexico and
Canada to share information and improve maritime interoperability,
domain awareness and joint response to maritime threats."
part of the pre-meeting it was announced that Canada and Mexico had
also signed an agreement to establish "an open framework for direct
flights by any number of Canadian and Mexican carriers; greater
flexibility for air carriers to introduce new prices to respond to
consumer demand; and, strong provisions
to ensure the safety and security of flights between both countries."
Agreements were also signed between The Export
Corporation and Banco Nacional de Comercio Exterior, S.N.C. (Bancomext)
to improve the financing opportunities for Canadian and Mexican
companies, as well as a "Master Cooperation Agreement (MCA)" between
EDC, Bancomext, Scotiabank,
Bank of Montreal, HSBC Mexico, Banorte, BBVA Bancomer, Banamex and a
private equity fund administered by Mexican government-owned financial
institutions. The agreement will establish a "collaborative approach"
to providing financial support, guarantees, private equity and
assistance to Mexican and Canadian
projects and companies, "with a particular focus on promoting small-
and medium-sized enterprise exports between the two countries."
For Your Information
Open Letter from Mexican Organizations
Mr. President of the Republic of Mexico
Mr. President of the United States of America
Mr. Prime Minister of Canada
The peoples and communities of Mexico opposed to the
predatory mining extractive model, gathered in the 2014 National Forum
in Zacualpan, in the municipality of Comala, state of Colima, Mexico,
make the following statement with regard to agreements first signed
twenty years ago by all three nations that
gave rise to the now well known "Free Trade Agreement" (FTA).
On the eve of your meeting
in the city of Toluca on February 19th, during which you will "renew
and adjust" the commercial agreements between the three nations, we
feel it necessary to remind you that is it not possible to continue
promoting this sort of agreement and make us believe that this is the
to the problems we face. Hundreds of investigations and cases
demonstrate that this global framework has clear signs of wearing out,
is a set back for human rights, and is depleting the natural commons in
a dramatic way given the predatory vision of the world that you and
this framework share. A view of the world
that involves handing over the natural commons to predatory and
insatiable transnational companies that day after day destroy
communities, populations and ecosystems in every corner of the world.
It is clear that every year there are a growing number
of communities in resistance and in direct confrontation with national,
foreign and transnational mining companies, especially Canadian firms,
although not exclusively. This is a result of the clear, recurring and
intransigent way in which they try to appropriate
the natural commons in our territories. With their false vision of
progress and development, they cause serious and irreversible damage to
health and the environment, while at the same time destroying the
social fabric of our communities by fostering divisions between
individuals. This contributes to growing insecurity
linked to organized crime, as well as the murders of brave community
leaders, crimes which are then covered up and protected by the state
and federal apparatus.
For us, it is not strange to learn that the Canadian
Government has just announced its Global Markets Action Plan in which
it makes "economic diplomacy" a big focus. According to the government
this equates to "All diplomatic assets of the Government of Canada will
be marshalled on behalf of the private
sector in order to achieve the stated objectives within key foreign
markets" (announced November 27, 2013), including: Mexico, Brazil,
Chile, Colombia and Peru within Latin America.
We already have information about twelve cases that
demonstrate what this sort of "diplomacy" means where communities are
opposed to mining or are speaking out about mining-related abuses. It
is enough to recall what happened in the ejemplary case of Blackfire
Exploration in Chiapas.
We have also been closely following the laws,
regulations, legal processes and budgetary measures in which there are
clear indications about how legislatures favour the interests of
extractive companies to such a degree that it is ever more common to
see entire countries defenseless when they measures against
companies. Companies submit local governments to lawsuits in
international arbitration tribunals to resolve disputes over the
natural commons, as if this belonged to them and not to peoples and
nations. This is evident in the cases that have been presented to the
World Bank's International Center for the Settlement
of Investment Disputes (ICISD). Up until March 2013, there were 169
investor-state disputes. Sixty of these, or 35.7%, are related to
disputes over oil (23), mining (19) and gas (13), with another 5 cases
related to both oil and gas.
Another indication of the tremendous pressure that
companies exert over nations can be observed in that, since 2012, 48
new cases have been registered with ICSID. Seventeen of these, or 35%,
are related to extractive industries, while have all been filed against
countries in development. It is notable that 46.7%
of all of these cases correspond to legal proceses between companies
and countries in Latin America or the Caribbean, making it clear how
empire makes its mark.
A number of these cases are strongly linked to lawsuits
undertaken by Canadian companies. For example, Pacific Rim Mining (now
OceanaGold) has sued El Salvador, pressuring the government to
authorize permits for the exploitation of a gold mine that would be
potentially devastating for the environment.
With regard to Pacific Rim, ICSID has decided that it lacks
jurisdiction under the Free Trade Agreement with Central America, the
US and the Dominican Republic (DR-CAFTA by its initials in English)
given that it is a Canadian firm, but that the case can continue under
the investment laws of El Salvador. Pacific
Rim is suing El Salvador for $301 million dollars, which is equivalent
to approximately 1.8% of the GDP of El Salvador or about half of its
total education budget.
Two months after the assassination of Mariano Abarca and
after the closure of the Payback mine by the state environmental
authorities of Chiapas, Mexico, Blackfire Exploration threatened the
state of Chiapas with a suit for $800 million dollars.
The company Infinito Gold is threatening Costa Rica with
a suit for $1 billion dollars (note: this suit has just been filed for
$94 million). Costa Rica has prohibited open pit gold mining and there
have been successive findings by the Supreme Court of Costa Rica
against the company's Crucitas project. In additioning
to threatening the state, the company has sued a couple of professors
and a lawyer for having made statements against its project.
If this were not enough, the Canadian Government
announced a $25 million investment for the creation of the Canadian
International Institute for Extractive Industries and Development,
which involves a collaboration between three universities: the
University of British Columbia, Simon Fraser University and
the Ecole Polytechnique de Montréal. The financing comes from
Canada's overseas development funds with a mandate to collaborate with
governments of other countries regarding their policies and
institutions responsible for natural resource management, supposedly to
improve and stregthen natural resource governance
in other countries. It is unfortunate that these universities, like
others in the world, would put themselves at the service of
corporations and lose the ethical and moral compass that science should
have so as not to hide or cover up environmental and health harms.
This institute, of course, already has strategic and/or
financial relationships with: Goldcorp, New Gold Inc, Fresnillo, as
well as the Mexican Undersecretary of Industry, the Mexican General
Coordinating Office for Mining and the Mexican General Directorate for
Promotion of Mining.
There are multiple ways through which companies and
governments exert great diplomatic influence to bring about laws in
countries with considerable mineral wealth. One example of this is how
technical assistance was provided paid for by Canadian overseas
development aid (2012-2013) for the development
of a new mining law in Honduras. Its approval, in January 2013, lifted
a moratorium on new mining projects in place since 2006, facilitating
the opening of the mining sector to new projects and implementing a new
security tax for mining companies that will contribute to ensuring
security forces defend private
Examples like the above are
common throughout Latin America. Mexico, of course, is undergoing
similar processes in which there is a clear tendency for governments to
stop serving society and to put themselves at the service of
transnational, foreign and national corporations.
Favourable legal reforms, the lack of application of
laws that are intended to protect peoples, communities and the
environment, combined with impunity, corrupt officials and inspectors,
and growing insecurity linked to organized crime, work in favour of
extractive corporations. Meanwhile, peoples in resistance
lack basic respect for their rights, are not consulted, face
informative processes undertaken in coercive ways, and social protest
is criminalized or leaders and opponents are assassinated. These are
the common consequences of the projects of companies working within the
predatory extractive mining model.
Given the above, we demand that you abstain from
defending the interests of large mining companies and focus on ensuring
that peoples are fully guaranteed the rule of law and respect of their
human rights, which governments have ratified in international
conventions. Until this happens, we will continue in
resistance to these predatory policies that violate the lives of the
Mesoamerican Movement against the Extractive Mining
Model (M4) Mexican Network of People Affected by Mining (REMA) National
Forum of People Affected by Mining in Zacualpan, Colima, 2014
FTA at 25: NAFTA at 20
Mass demonstration against neo-liberal free
trade at the Summit of the Americas in Miami, November 20, 2003.
Twenty-five year anniversaries are symbolized by silver,
but on the 25th anniversary of the Canada-US Free Trade Agreement
(FTA), that symbol is pretty tarnished.
The FTA and the now 20-year-old North American Free
Trade Agreement (NAFTA) managed to tilt the balance in favour of big
corporations at the expense of the public good.
The FTA/NAFTA's characterization as a trade agreement
misses the forest for the trees. It was a big business-driven
initiative whose primary purpose was investment deregulation.
Trade was important, but as a second order rather than a
The agreements did make it easier for business to ship
goods and services across the border. However, at its core were new
powers and freedoms granted to corporations to facilitate their pursuit
of shareholder value.
These provisions enabled corporations to move with
minimal restrictions on the North American continent, shifting
production to jurisdictions that offered the greatest returns in terms
of regulations, subsidies, taxes, labour costs, etc.
Exports to the US as a share of GDP, boosted by a low
Canadian dollar and a robust American economy, rose from 15% in 1990 to
34% by 2000. But then exports shrunk back to 18% of GDP, almost where
they were when the FTA was implemented. Services exports followed a
Now freed from government restrictions, corporations
have been able to relocate production, whether because of the post-9/11
"thickening" of the border, or to offset the higher costs in Canada
caused by the petro-boom-driven rise in the dollar.
The FTA/NAFTA laid the institutional foundation for the
petro-boom, reorienting production North-South and preventing any
recurrence of the National Energy Program. It also limits governments'
ability to actively shape business investment. Industrial policies such
as the 1960s Auto Pact--which had greatly
expanded value-added exports--were no longer possible.
Post FTA/NAFTA, Canada has regressed toward its
traditional status as a resource exporter. Exports of unprocessed
petroleum and other resources now account for almost 2/3 of Canada's
goods exports, from 40% just before the turn-of-the-century.
Value-added products have shrunk from almost 60% of exports
to roughly one-third in 2012.
The FTA/NAFTA was expected to close the relative
productivity gap between Canada and the US. In 1950, Canadian business
productivity was about 70% of the US level. The gap closed steadily in
subsequent decades reaching over 90% by 1980. However, it stagnated
throughout the 1980s. The FTA/NAFTA
was supposed to provide the boost that would eliminate the gap, but
instead the gap began to widen; and by 2011 business productivity had
fallen back to 70% of US levels.
Of course, there are specific examples of firms that did
restructure, increasing efficiency, exports to the US market and
employment. But the fact remains that for the economy overall, the
FTA/NAFTA failed spectacularly to boost productivity.
Even more important were provisions that enabled large
corporations to grow even larger through cross-border restructuring of
corporate ownership. FTA/NAFTA triggered a massive increase foreign
direct investment flows--overwhelmingly in the form of mergers and
During the previous 40 years, foreign direct investment
flows (inward and outward) fluctuated between 2-3% of GDP. After NAFTA
they rose dramatically, peaking at almost 6% of GDP in the early 2000s.
Large corporations grew even larger as did profits. So
too did the corporate universe become more concentrated. Investment
deregulation--20-25 years out-- has produced impressive results for big
The average firm size of the 60 largest corporations on
the Toronto Stock Exchange (TSX 60) compared to all firms registered on
the TSX, had increased slightly, from 5 times to 6 times between 1950
and 1990. Thereafter it climbed to 23 times by 2010.
While TSX 60 companies' share of the total revenue of
all TSX companies remained the same before and after NAFTA--hovering
just under 20%--their share of TSX company profits rose from 30% to 60%
The trends in the concentration and profits of these
dominant corporations are shadowed by the trends in income share of the
richest 1%. At its most extreme, the compensation of the 100 most
highly paid CEOs has risen from 105 times that of the average worker in
1998 (when records first became public) to
177 times in 2012.
During the four decades to 1990, there was a steady drop
in the share of national income appropriated by capital (profits) and a
rise in labour's share (wages and salaries) of national income. In the
wake of the FTA/NAFTA, that relationship reversed, with capital's share
rising back to where it was in 1950, and
labour's share declining in lock step.
Not coincidently, these trends also correlate closely
with the rise and subsequent fall of union density in the trade-exposed
private sector, and with the proliferation of bad jobs--low income,
Contrary to assurances given Canadians prior to the
FTA/NAFTA, big business lobbied hard to reduce both program spending
and taxes in the name of competitiveness.
Unemployment insurance, health and education transfers,
social assistance and housing programs etc. were "harmonized downward"
toward US levels. Governments, either willingly or grudgingly, reduced
From the mid-1990s to 2012 the overall tax level of
Canadian governments shrunk from 36% of GDP to 31% GDP. Had it remained
the same, they would have had $90 billion more last year to invest in
social programs and public services.
Corporate income tax rates were cut in half and the
total tax rate of the richest 1% of families dropped to less than that
of the poorest 10%.
The FTA/NAFTA has not been solely responsible for these
outcomes, but was a key component of a web of mutually reinforcing
"market friendly" policies that produced them.
It ensured, in an international treaty, that continental
integration would proceed within a policy framework consistent with big
business priorities. Both directly and indirectly the FTA/NAFTA
enhanced the power of business relative to that of workers and
communities. It shrunk the boundaries of allowable public
sector economic activity and constrained the power of governments to
shape economic and social development, regulate markets and empower
The FTA/NAFTA failed to meet the fundamental test of any
major policy initiative--to better the lives of its citizens. And it
helped to weaken the bonds of nationhood embodied in the Canadian
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