Concession Bargaining

Thousands of Canadian families were shocked in October to learn they were left in the lurch by Liberal government concessions to the United States on a renegotiated North American Free Trade Agreement.

The Liberals agreed to a new NAFTA deal even though the Trump administration maintained illegal tariffs on Canadian steel and aluminum that have threatened thousands of Canadian jobs.

Trump acknowledged he was using the tariffs as leverage to get a NAFTA deal with Canada. But even when Trump got the deal he wanted, the Liberals did not insist that the tariffs be lifted.

“Time and time again during the NAFTA renegotiations, the Liberal government assured Canadians that it was defending our steel and aluminum sectors and the livelihoods of tens of thousands of Canadian families,” USW National Director Ken Neumann said when the NAFTA deal was disclosed.

“Given the Liberal government’s rhetoric, Canadians expected an agreement on NAFTA would result in the U.S. lifting the bogus ‘national-security’ tariffs. Instead, Canadian workers are being sacrificed along with all the other concessions made by the Liberal government in this deal,” Neumann said.

Once the renegotiated NAFTA details emerged in October, USW leaders, members and our allies demanded that the Liberal government take a hard line against U.S. tariffs or potential quotas on Canadian steel and aluminum.

“The United Steelworkers on both sides of the border continue to insist that U.S. quotas are unacceptable and the current steel and aluminum tariffs must be lifted immediately,” Neumann said.

As of the time of this writing, the Liberal government had not made any such commitment.

NAFTA to USMCA – A Bad Deal Gets Worse

At the outset of the NAFTA renegotiations, the Liberals boasted their ‘progressive trade agenda’ would bring a better deal for Canadians, including new ‘priorities’ ranging from women’s rights to Indigenous rights to stronger environmental standards.

However, the Liberals quickly abandoned their ‘progressive’ vision.

“Rather than give-and-take negotiations to improve Canada’s trading position with the U.S., the Liberals made concession after concession, until the Trump administration got the deal it wanted. In the end, the new deal is worse for Canada than the old NAFTA,” Neumann said.

“So much for the ‘win-win-win’ deal promised by this government.”

The Liberals’ concessions in the new NAFTA, now renamed the United States-Mexico-Canada Agreement (USMCA), include:

Supply management: Prime Minister Justin Trudeau promised Canadian farmers he would defend them in the NAFTA talks. Instead, Liberal concessions will harm Canadian producers and workers in five agricultural sectors.

Canada’s dairy market will be opened to more American products, while Canadian exports will be restricted.

The Liberals’ concessions will also affect Canadian farmers in four other sectors that will be subjected to more American imports – chicken, turkey, egg, and broiler hatching eggs and chicks.

The Liberals plan to spend billions of taxpayers’ dollars to compensate affected farmers, though the harm to Canadians will endure long after short-term compensation expires.

Higher drug costs: Prescription drug costs in Canada will increase by hundreds of millions of dollars due to the Liberals’ concession on U.S. demands on drug patents benefiting pharmaceutical companies. This concession also will make it more expensive to implement a universal pharmacare program in Canada.

Buy America: While American producers gain greater access to Canadian markets, the Liberals abandoned their key objective to undo ‘Buy America’ rules on government procurement. The Liberals’ failure means Canadian companies – particularly small- and medium-sized businesses – will be blocked from selling their goods and services to the U.S.

Surrendering sovereignty: The Liberals conceded to U.S. demands for new provisions that compromise Canadian sovereignty on trade negotiations with “non-market” countries, such as China. Canada will be forced to inform the U.S. about any intent to pursue such negotiations and divulge the text of any agreement to the U.S. – in advance. If the U.S. objects to such an agreement, it can eject Canada from the USMCA, which would then become a bilateral U.S.-Mexico deal.

The Liberals’ concession bargaining in the new USMCA adds to a failed record on international trade agreements.

In September, the Liberals introduced legislation to ram through the 11-country Trans-Pacific Partnership (CPTPP) – a trade deal projected to kill 58,000 middle-class Canadian jobs in the steel, auto, skilled trades and supply-management sectors.

Last year the Liberals implemented the Canada-European Union Comprehensive Economic and Trade Agreement, which has resulted in a flood of imports from CETA countries into Canada, while Canadian exports to these countries have decreased.

The Liberals’ bluster on “progressive trade” is betrayed by its continual support for corporate trade agreements that erode Canada’s manufacturing base, kill good jobs, drive down wages, increase inequality and worsen environmental challenges.

This article appears in the November 2018 edition of USW@Work.

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