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What's the Matter With NAFTA?

by Elaine Bernard, Harvard University School of Law. "Here's an example from the investment chapter of NAFTA, Chapter 11. Section 4 of Article 1101 on Scope states "Nothing in this Chapter shall be construed to prevent a Party from providing a service or performing a function, such as law enforcement, correctional services, income security or insurance, social security or insurance, social welfare, public education, public training, health and child care, in a manner that is not inconsistent with this Chapter." This utterly confusing statement is a standard paragraph found in many of the chapters of NAFTA. Double negatives such as "not inconsistent" are common language in many trade agreements. They are a trade lawyer's version of a positive assertion. That is, they allow the drafters to avoid a clear assertion that something is permitted. Instead, activities are crypticly permitted as "not inconsistent." Double, indeed quadruple negatives are positive assertions. Imagine for a moment how the drafters of NAFTA would have phrased the famous quote "Yes, Virginia there is a Santa Claus" into "NAFTAese." It would probably have read, "Yes, Virginia, nothing should be construed to prevent you from believing that the existence of Santa Claus is not inconsistent with reality." But what of the substance of this clause and of similarly written clauses? Here's the real problem. Essentially, it says that the services listed in the paragraph, from corrections to childcare, from public education to social security are to be open to the various investment (and services) provisions of NAFTA. This includes giving companies the rights of national treatment, the right of establishment, and exposing these services to tri-national harmonization. Terrific! This illustrates some of the problems with both the language but also the substance of what is being proposed in this agreement. But why NAFTA, and why now? On the one hand, there is a larger economic story about globalization and the increased mobility of capital, increasing international competition, deregulation, privatization and the business quest for lower wages and higher profits. However, the specific drive behind NAFTA is a business fear that growing public demands for control, called re-regulation, over the excesses of capital and business in the last decades could lead to restrictive legislation. Business fears the possibility of a change in government in all three countries, and it realizes that it could face a change in policy. With NAFTA, business has locked in the policies of Bush, Salinas, Mulroney."