For your information: NAFTA becomes USMCA

NotInOurNameThe supranational oligopolies that control the economies of North America and seek global hegemony have tightened the screws of their domination over the peoples of the U.S., Mexico and Canada. The changes to the North American Free Trade Agreement (NAFTA) in becoming the U.S. Mexico Canada Agreement (USMCA) have both strengthened and loosened the rules of international trade on the continent to favour the most powerful oligarchs.

NAFTA, in its new configuration called USMCA, continues to deny the sovereign right of the peoples of North America to control their affairs and chart a direction for their economies that favours the working people and their concerns.

Similar to the original NAFTA of 1994, the ruling elite are imposing USMCA without the people’s consent or say. The revised NAFTA serves the financial oligarchy centred in the United States, along with its powerful members and allies in both Canada and Mexico who have integrated the economies of those countries into a new Fortress North America. The agreement further guts any semblance of Canadian or Mexican sovereignty and hands over both countries’ human and natural resources to the U.S.-led oligarchs.

Supply management in the agricultural sector

2018.09.06.MontrealDairyFarmersProtest-NAFTANegot-BProulx

Action by dairy producers in Montreal, September 6, 2018, demanding supply management be protected in any new trade deal.

Very little of the Canadian economy bears any resemblance to a nation-building project favouring development in opposition to U.S. continentalism, which was the founding purpose of Canada under British colonial rule. Almost all sectors and features of the economy have come under the dominance of the U.S.-centred financial oligarchy and its global oligopolies. Agriculture suffered a huge blow with the elimination of the single selling desk of the Canadian Wheat Board under the previous Harper regime.

160513-Toronto-TPP-01cr2An exception to nation-wrecking has been the determination of farmers to defend supply management in dairy and poultry production and retain some control over standards of production. The management of this agricultural sector in a manner that defends itself from inroads of the U.S. financial oligarchs serves the actual producers and guarantees a certain food quality and security for Canadians. Supply management and standards in this sector act as a barrier to U.S. oligarchs being able to seize control in ways that enabled them to gain hegemony over the agricultural sector in the United States. Trump himself made this particular sector of Canadian agriculture a target with constant diatribes, and now puffs himself up as quite content that his threats have succeeded with the USMCA.

The Dairy Farmers of Canada has denounced the USMCA and calls it the death of supply management by a thousand cuts. This attack intensifies the earlier ones in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership that Trudeau signed in March 2018, and the Comprehensive Economic and Trade Agreement between Canada and the European Union (CETA), which is awaiting final approval in Europe. Both agreements allow inroads into the Canadian agricultural market currently under supply management. The USMCA intensifies the trend by breaching the barrier of supply management with greater freedom for the U.S. farming monopolies to penetrate the Canadian market. This will allow the U.S. oligarchs to dump their excess product into Canada at low prices for a time, which is a typical method to wipe out smaller competitors. The amount of domestic milk now displaced with all these global agreements has reached 18 per cent or $1.3 billion in annual sales according to the Dairy Farmers of Canada.

The loosening of standards regarding the quality of milk and other products is another feature of the USMCA. The U.S. allows cows to be fed artificial hormones to increase milk supply from 11 to 16 per cent. Feeding hormones to increase production is not allowed under current Canadian regulations. Research reveals significant damage to cows from the hormones while the health risks to humans have not been sufficiently investigated. The USMCA appears to overturn this prohibition on the sale of milk produced with artificial hormones.

The USMCA diminishes Canadian standards for industrial milk used in secondary production. Canada currently has what is called a “Class 7 designation” for the quality of milk in this regard. Again, the USMCA appears to circumvent, if not eliminate, any Class 7 designation, which opens the door for U.S. industrial milk that does not meet current Canadian standards.

The USMCA also interferes with the Canadian dairy sector’s ability to export production not only to the U.S. and Mexico but also outside North America. The agreement caps Canadian exports of skim milk powder, milk protein concentrates, and infant formula.

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Dairy farmers protest, Montreal, September 6, 2018.

The pharmaceutical oligopolies (Big Pharma)

The Canadian health care sector is under immense pressure from high drug prices and the lack of any domestic public production and distribution of pharmaceuticals to serve the people and Medicare. The USMCA tightens the grip of private Big Pharma over the sector. An intellectual property chapter lengthens the time from eight to ten years that Big Pharma drugs are protected from generic drug competition. This means Canadians will pay more for biologic drugs.

Big Pharma realizes that many Canadians cannot afford to fill their prescriptions. To serve the narrow interests of Big Pharma and the financial oligarchy, a push is underway for a government-funded pay-the-rich pharmacare system that guarantees the sales of Big Pharma but does not solve the problem of their domination of the sector and their manipulation which results in absurdly high costs to individuals or to the state purchasers of drugs. The pressure for pharmacare will become greater with USMCA, as no end or solution is in sight to produce domestic pharmaceuticals where the value workers generate is poured into the entire health care sector to sustain it rather than bleed it dry, as is the case now. Discussion must begin on building a Canadian public pharmaceutical sector that develops, supplies and controls the sector in the interest of Canadians and health care for all, including pharmacare that is not a pay-the-rich scheme.

BC wine

The USMCA even attacks the sale of BC wine in grocery stores. The California wine monopolies, such as Gallo, have long denounced the BC practice of encouraging the provincial wine industry by allowing it exclusive presence in grocery stores. Other wines are allowed in the much larger government BC Liquor Store retail outlets. The USMCA “commits Canada” to end the practice of promoting BC wines and allows U.S. and other foreign wines into grocery stores. This is a direct blow against the smaller Okanagan and Vancouver Island wineries.

USMCA restricts trade with China

The USMCA contains Article 32.10 that infringes on Canadians’ sovereign right to develop trade with countries outside North America. According to the USMCA, Canada now has to discuss with the U.S. and gain its approval for any attempt to negotiate broader trade with China or any country the U.S. considers a “non-market economy.” Failure to inform the U.S. and win its approval for the terms of any new agreement would terminate the USMCA.

This article within USMCA clamps down on any attempt by Canada to explore new avenues to trade. Escalating U.S. imperialist trade and military competition with China does not bode well. It also makes a mockery of the Trudeau Liberals’ claim that the Trans Mountain Pipeline expansion to Vancouver is to open heavy oil export markets to China. Oil is a strategic military product that the U.S. is determined to control globally even to the point of blockades and war. Heavy Alberta oil transported through an expanded Trans Mountain Pipeline and additional tanker traffic is destined for U.S. refineries on its West Coast.

“Macroeconomic policies and exchange rate matters”

Chapter 33 of the USMCA is entitled “Macroeconomic Policies and Exchange Rate Matters.” It gives the U.S. ruling elite power over Canada’s currency, government spending and taxation. The USMCA puts these matters under the control of the U.S. financial oligarchy to strengthen dollar hegemony.

Chapter 22

Chapter 22 of the USMCA classifies as State-Owned Enterprises (SOEs) all Crown corporations in Canada. These include Canada Post, public electricity producers and presumably public health care providers such as public hospitals, public pharmaceutical enterprises and mass public transit, in particular any production in the public interest rather than for private profit.

The U.S. ruling elite classifies SOEs as non-market entities subject to restrictions. The USMCA targets SOEs and demands they not compete with private sector companies. The USMCA text even spells out specific penalties to be paid for non-compliance if a non-market entity – SOE – uses public investment to develop an enterprise in the public interest as part of nation-building.

Copyright extensions

Copyright terms in Canada now extend for 50 years beyond the year the creator of the work dies. The USMCA extends the term to 70 years.

Issues not in USMCA

The global oligopolies in vehicle production retain their control with almost no change from NAFTA. International trade of vehicles produced in North America is mostly intra-company movement of production within the oligopolies. This also includes long-term agreements with the big parts suppliers.

The Trump tariffs on steel and aluminum in the name of U.S. national security were not removed.

Canadian softwood lumber production, which was not part of NAFTA, is not included in the USMCA and remains subject to special U.S. tariffs and duties.

160513-Toronto-TPP-5cr2The U.S. policy of “Buy America” for all publicly-funded projects remains intact. Trudeau apparently made the elimination of “Buy America” an objective in renegotiating NAFTA. In the USMCA, production in Canada and Mexico cannot be used in U.S. state-funded projects, including U.S. sub-national states and municipalities. Open procurement for state-funded projects forms part of CETA with the European Union. This open procurement goes both ways and increases the pressure to privatize all provincial and municipal business, including services.

The list for professional visas to work in the U.S. remains unchanged. The list of professions currently eligible for the special class of temporary work visas in all three countries created under NAFTA known as TN (Trade National) visas stays the same, which excludes many of today’s professions.

The language of Canada’s existing cultural exemption from NAFTA remains in the new USMCA. This means that digital audio and video content was not addressed. It seems that the U.S. cultural oligopolies, such as Disney, want to use their command of digital works as a modern means to break down any barriers to U.S. imperialist cultural control in Canada. The lack of any specific agreement on digital content means, in addition to unlimited distribution, Canada does not have a legal means to force U.S. producers and distributors of digital content to pay into any government program assisting Canadian cultural workers.

(Photos: B. Proulx, M. La Plante)

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