Elizabeth Smythe is a professor of political science at Concordia University of Edmonton.
Flags of Mexico, the United States and Canada are pictured at a security booth at Zaragoza-Ysleta border crossing bridge, in Ciudad Juarez, Mexico, in this file photo from Jan. 16, 2020.JOSE LUIS GONZALEZ/Reuters
Amid the turmoil around pipelines and rail line blockades, the Trudeau government’s introduction of Bill C4 to implement the United States-Mexico-Canada Agreement (USMCA) has gone largely unnoticed. This is unfortunate since the hearings before the House of Commons Standing Committee on International Trade (CIIT) and the government’s push for the bill’s quick approval raise questions about democratic accountability. Although, given the initial U.S. threat to tear up the agreement and impose massive tariffs, the government’s desire to get the bill approved quickly after Mexican and U.S. ratification is understandable.
At committee hearings, some opposition members of Parliament raised questions about the process of launching negotiations and, once an agreement is reached, ensuring MPs have adequate resources and time to evaluate it.
One concern is that the Canadian government is not obligated to outline its objectives to Parliament before initiating negotiations. This is a requirement by which the U.S. President obtains trade negotiation authority. In May, 2017, 60 days prior to talks, the United States Trade Representative issued a 17-page document on U.S. negotiating objectives for congressional approval. In the European Union, the Council, which represents all member state governments, approves a negotiating mandate, laying out what the European Commission will seek in negotiations. Contrast this with Canada, which has no such requirement. For the renegotiation of the North American free-trade agreement (NAFTA), Canada’s most important trade agreement, six broad objectives were outlined by then-foreign affairs minister Chrystia Freeland in August, 2017, in two pages of a public speech.
Why should governments be obliged to outline objectives to elected representatives prior to negotiations? As NDP MP Daniel Blaikie pointed out at the CIIT hearings on Feb. 5, without a clear understanding of our objectives going into the negotiations, it is difficult to assess what was achieved in the final deal and hold government accountable.
A good example is the surprising elimination of the investor-state dispute settlement system (ISDS) between Canada and the United States. This had allowed mostly U.S. corporations to target regulations in Canada or Mexico claiming compensation for their negative impact on the investor. While few will mourn this notorious provision of NAFTA, the way in which it was eliminated is puzzling.
Working on a project called Walking Away from Chapter 11, I noted that prior to USMCA negotiations, Canada had not proposed to eliminate the ISDS in its agreement with the EU. Canada also continued to have ISDS provisions in its bilateral trade and investment agreements. In her August, 2017, speech, Ms. Freeland stated that “reforming the investor-state dispute settlement process, to ensure that governments have an unassailable right to regulate in the public interest,” was the goal. When asked at the CIIT hearings this month about the elimination of the ISDS, the chief negotiator claimed that the goal was “removing the investor-state dispute settlement,” not in fact what Ms. Freeland’s speech indicated. In exchanges with opposition MPs about what Canada’s objective was and how the ISDS came to be eliminated, the chief negotiator was not clear.
According to the newsletter Inside U.S. Trade, the elimination of the ISDS began with a Canadian pitch to U.S. negotiators in February, 2018, designed to give U.S. Trade Representative Robert Lighthizer a “win” in return for movement on other issues. Mr. Lighthizer’s vocal opposition to the ISDS for encouraging U.S. companies to invest abroad is well known. This suggests it was in fact a U.S. proposal that, as the main target of ISDS cases costing more than $300-million, Canada could embrace. What this example suggests is that without clearer objectives, it is hard to evaluate trade-offs and assess the agreement.
The second concern opposition MPs raised is the lack of an economic impact assessment of the agreement prior to Bill C4 being put before the House, a requirement in the U.S. and the EU. While the chief negotiator indicated an assessment was under way, this is hardly sufficient.
Both the lack of clear negotiating objectives that Parliament could review and of an economic impact assessment available before debate and approval of the bill indicate the need to reform the trade-negotiating process to make it more transparent and hold governments accountable for the agreements they sign. A minority government and the likely agreement among opposition parties on this issue provides a golden opportunity to strengthen democratic accountability.
Editor’s note: (Feb. 28, 2020) This version has been updated to clarify the university where Elizabeth Smythe teaches.