“NAFTA on Steroids”: Mexico and the TPP

By Chris Hershberger-Esh, MCC’s Context Analyst for Latin America and the Caribbean, based in Mexico City.

The Trans-Pacific Partnership (TPP) trade agreement would be the most significant event in international trade since the creation of the World Trade Organization in 1995.

The agreement would encompass 800 million people and about 40 percent of the global economy. The 12 countries include Mexico, the United States, Vietnam, Chile, Singapore, Brunei, New Zealand, Australia, Canada, Malaysia, Peru and Japan.

While it is referred to as a “trade agreement,” the agreement goes far beyond trade, including plenty of corporate-friendly rules regarding food safety, internet freedom, climate policy, medicine prices and financial markets.  It’s been called “a Corporate Trojan Horse” by Lori Wallach, director of Public Citizen’s Global Trade Watch on an unsettling Democracy Now! interview.

Of the agreement’s 29 chapters, only five have to do with trade.

What is most troubling is that while 600 corporate advisors have had repeated access to the text of the bill, U.S. members of Congress have not been able to see the details. Citizens of the countries involved are even more in the dark.

Members of the Independent Workers and Peasants Urban and Popular Movement from the Puebla state in Mexico wrote a letter to members of Occupy Wall Street to ask for their support in opposing TPP:

We aggressively, soundly and totally reject the international ratification of the TPP and its effectiveness in Mexico because it is the most anti-democratic international tool of dispossession and exploitation to the nations that has been designed in the history of humanity, allowing multinational corporations’ rights to supersede the constitutional provisions of all the countries and the peoples’ rights.

In the case of Mexico, it consolidates the numerous inequalities that were already regulated by NAFTA. We know that if the TPP is passed in Mexico, the unacceptable model of “investment protection” — forcing the government to pay millions of dollars to multinational corporations in case their contracts get cancelled as a result of the people’s opposition — will go ahead.

For example, if a local community stops a multi-national corporation from opening a mine based on environmental or public health concerns, the corporation could sue the country’s government to cover the losses. This doesn’t encourage governments to side with their people.

Mexico has been living with the effects of the North American Free Trade Agreement (NAFTA) for almost 20 years. The agreement opened up Mexico’s borders to cheap agricultural goods, severely undercutting small-scale Mexican farmers. NAFTA is largely responsible for the massive Mexican migration to the United States from the mid-90s through 2008.

Factory jobs moved from the United States to Mexico, where the labor was cheaper. But only temporarily – the Race to the Bottom for cheap labor and limited worker protection was just getting started. Many of the factories soon picked up and moved to China, Central America, and other places were corporations could save a bit more on labor costs.

Some factories have moved back from China to Mexico in recent years because of increasing fuel costs to ship products to the United States, but the TPP could direct this movement elswhere. In Vietnam, one of the countries covered by the agreement, factory wages are one third to one half of the wages in Chinese factories.

With almost a dozen countries competing for the lowest wages and weakest worker protections, the Race to the Bottom will only accelerate.

Last year, 150 U.S. Representatives in congress wrote a letter to the Obama administration demanding access to the text of the TPP. In June, they were finally invited to see one chapter, as Lori Wallach explained:

Their staff is thrown out of the room. They can’t take detailed notes. They’re not supposed to talk about what they saw. And they can, without staff to help them figure out what the technical language is, look at a chapter….Alan Grayson, who was one of the guys who helped to get the text released, Alan Grayson said, “I can tell you it’s very bad for the future of America. I just can’t tell you why.”

There is a reason this agreement is kept in secrecy: people would never accept it. Many of the provisions of the TPP have already been rejected as individual laws in the United States because of public resistance. The TPP is an attempt to slip a lot of these corporate legislative gifts through the back door.

In Latin America, Mennonite Central Committee continues to accompany communities affected by various free trade agreements throughout Mexico, Central America and most recently, Colombia. The TPP is a highly complex agreement, and the level of secrecy around its actual content makes it hard to determine exactly how it would affect the countries involved (and how those effects would impact the rest of the world).

From the information available, however, it appears to greatly expand corporate power in the countries involved, which I find troublesome.