Globalization and Democracy: The Threat to Jobs and Citizens’ Rights in theTrans

Pacific Partnership

Prof. G. LaferUniversity of Oregon

2014

EU vs. NAFTA: Two Models for Trade

US Canada Mexico$0

$5,000$10,000$15,000$20,000$25,000$30,000

North American GDP Per Capita, 1994

EU Social Charter

Minimum wages Right to paid vacation and weekly

rest. Freedom to form union Part-time workers’ protection Support for unemployed and

pensioners Worker say over layoffs,

reorganization or technological change

Mobility of workers across borders

A Treaty Between Countries?

Former Mexican Foreign Minister Jorge Castenada

NAFTA was “an agreement for the rich and powerful in the United States, Mexico, and Canada, an agreement effectively excluding ordinary people in all three societies.”

U.S. has lost 5 million manufacturing jobs since

NAFTA

Over 50,000 Oregon jobs have been certified by the

federal government as eliminated due to

“free trade.”

Under CAFTA, investors are protected against “indirect” expropriation.

This includes government actions that reduce investors’ reasonable “expectation of gain or profit.”

Investor Rights Under FTAs

Foreign Investor Complaint ProcedureCentral American Free Trade Agreement

Step 1. Investor notifies a country of its intent to file an arbitration claim, providing an explanation of the case.

Step 2. After 90 days, investor files claim and three-person arbitration panel is established.

Step 3. Arbitrators hear the case and render a decision. Decisions are binding and final, with no possibility for appeal.

Sample Investor Claims Under NAFTA

•  Forced Privatization (UPS versus Canada Post)

• Domestic Industry Undermined (U.S. Corn Producers attack Mexican sugar industry)

•  Environmental Regulations Overturned

•  Public Regulations