Trump’s Trade Deal: A Gift to Climate Polluters?

Could a trade deal prolong the climate damage furthered by Donald Trump?

Unfortunately, yes. A trinational report published today, NAFTA 2.0: For People Or Polluters?, unveils new climate hazards hidden in the Trump administration’s agenda for renegotiating the North American Free Trade Agreement (NAFTA). As talks over the future of NAFTA intensify, the inclusion of these climate-denying proposals could lock in Trump’s polluting legacy for decades.

In fact, the existing NAFTA already poses climate threats to workers and communities across North America. Today’s report -- co-written by the Sierra Club and leading economists from Mexico, Canada, and the U.S. -- quantifies the climate emissions locked in by NAFTA and reveals how the deal supports fracking, tar sand oil pipelines, and the offshoring of jobs and climate pollution.

We cannot shift to a clean energy future if a corporate trade deal tethers us to the fossil fuel past.

NAFTA was written over two decades ago with input from fossil fuel executives -- not workers, climate scientists, or climate-impacted communities. Predictably, the deal prioritized the profits of multinational firms, not the well-being of working families who face increasing climate threats. That explains NAFTA’s array of polluter-friendly provisions, such as those that lock in perpetual tar sands oil extraction in Canada, encourage banks to finance fossil fuel pipelines in the U.S., and contribute to the dominance of gas over wind and solar power in Mexico.

We must replace NAFTA with a deal that prioritizes people over polluters -- centering on those hit hardest by the fossil fuel economy: working families, immigrants, women, people of color, Indigenous groups, and climate-impacted communities. What would a North American trade deal look like if it prioritized the needs and aspirations of our communities, not the profit margins of CEOs?

Today’s report offers answers, with concrete proposals for a deal that no longer allows corporations to evade climate policies and harm workers across North America by offshoring jobs and pollution. A deal that reinforces the goals of the Paris Climate Agreement rather than undermining them. A deal that stops allowing corporations to sue governments over climate policies, and instead empowers climate-impacted communities to sue corporate polluters.

That, however, is not the deal on the table as NAFTA negotiators meet behind closed doors this month. Most of NAFTA’s handouts to corporate polluters remain untouched, while Trump’s negotiators entertain new corporate-backed rules that are a dangerous exercise in climate denial.

Here are some of the findings in today’s report:

NAFTA’s Obstacles to Climate Progress

  • NAFTA’s “proportionality” rule locks in tar sands oil extraction and fracking in Canada, while giving banks a permanent green light to finance new tar sands oil pipelines into the U.S. If Canada tries to meet its climate goals but remains bound by this NAFTA rule, the country will produce nearly 1,500 metric megatons more climate pollution by 2050 than if it ditched the rule. That NAFTA climate pollution penalty is twice Canada’s current annual emissions.

  • NAFTA has facilitated a fivefold increase in U.S. fracked gas exports to Mexico by requiring that those exports  be automatically approved. This has fueled increased fracking in the U.S., expansion of cross-border gas pipelines, and a surge in climate-polluting gas power in Mexico that has crowded out wind and solar energy.

  • NAFTA allows corporations to evade climate policies by offshoring their production, pollution, and jobs to countries with weaker climate standards. Policymakers across North America regularly cite this climate pollution loophole as a reason not to enact stronger climate policies.

New Climate Threats in NAFTA 2.0?

  • NAFTA negotiators have explicitly stated that they want NAFTA 2.0 to lock in the recent deregulation of oil and gas in Mexico, which has encouraged increased offshore drilling, fracking, and other fossil fuel extraction. NAFTA 2.0 could protect these polluting activities with a “standstill” rule that requires oil and gas deregulation to persist indefinitely, even as the climate crisis worsens and demands for climate action crescendo.

  • NAFTA 2.0 includes expansive “regulatory cooperation” rules that could give corporations increased ability to delay, weaken, or halt new climate policies. These rules also could be used to pressure Canada and Mexico to adopt climate standards weakened by the Trump administration, making it harder to resume climate progress in the post-Trump era.

A Climate-Friendly NAFTA Replacement

  • To allow governments to take climate action without fearing the offshoring of jobs and pollution, NAFTA’s replacement must require each country to enforce robust climate, labor, and human rights protections, in line with the Paris Climate Agreement and other international agreements. In contrast, the Trump Administration is proposing that NAFTA 2.0 replicate the weak environmental text of the Trans-Pacific Partnership, which did not even mention climate change.

  • To prevent climate and other public interest policies from being challenged as “trade” violations, NAFTA’s replacement must eliminate private “investor-state dispute settlement” (ISDS) tribunals and include a broad exemption that shields public interest policies from challenge. Negotiators have indicated that they might curtail ISDS tribunals, but a broad shield for public interest policies appears not to be on the table.

  • To support a just transition to a clean energy economy, NAFTA’s replacement must allow governments to swiftly phase out fossil fuel exports. The deal must eliminate NAFTA’s proportionality rule and the rule that requires automatic U.S. approval of gas exports. Instead, negotiators are reportedly contemplating maintaining or even expanding these rules.

As the NAFTA renegotiation intensifies, so does the climate crisis. In just the last year, back-to-back hurricanes flooded Houston and knocked out power in San Juan, massive fires ravaged California and British Columbia, and record-breaking droughts afflicted Saskatchewan and Oaxaca.

We cannot afford to lock North America’s communities into another multi-decade pact that ignores climate change. To replace NAFTA with a deal that protects people, the officials renegotiating NAFTA must reverse course and solicit the guidance of communities on the front lines of climate change, not the corporations fueling it.

Tell your members of Congress to #ReplaceNAFTA with a trade deal that protects the environment and workers!

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