Thursday, December 28, 2006

NAFTA Conspiracies: All Smoke No Fire

Sorry, I have to do this.

I use Google Alerts to keep up on NAFTA related news. A large portion of what I get relates to the impending merger of the U.S., Canada, and Mexico into a North American Union and the resultant loss of the American way of life. Go to YouTube and search for video relating to the Security and Prosperity Partnership of North America. Watch videos relating to the North American Union. You will find the shameful and shameless Lou Dobbs fomenting fear and resentment with a non-story relating to the loss of America to a European Union-style North American meta-nation. This is all supposed to happen before 2010.

If you watch these videos and read the equally uninformed web sites and blogs decrying the NAU, one thing quickly becomes clear: although it seems very important to them, these people do not have the faintest idea what sovereignty means. That includes Lou Dobbs who uses a position of media power to whip up strong emotions in well meaning patriotic Americans who may not have access to or the time to consider the information he is ignoring. Shame on him and on CNN for giving him a respectable outlet for his views.

Sovereignty is the exclusive right to exercise supreme political (e.g. legislative, judicial, and/or executive) authority over a geographic region, group of people, or oneself. Keep that definition (which comes from Wikipedia) in mind.

Let's look at some of the key evidence for this mysterious and evil NAU.


NAFTA is a trade agreement permitting the duty-free movement of originating goods between the U.S., Canada, and Mexico. Among other things, it also promotes strong protections for intellectual property and includes side agreements on labor and the environment. It is not a treaty signed by the President and self-executing on the advice and consent of the Senate alone. Rather, it was implemented in a legislative package voted on by both the House and Senate (although in a somewhat limited fast-track mode). Thus, it is entirely domestic U.S. law, not a treaty and not part of any international common law.

Regarding the flow of goods, NAFTA does not remove any significant constraints on the admissibility of merchandise. Basically, it eliminates duties and fees to promote commerce in North America. If NAFTA goods violate U.S. health, safety, environmental, or other legal requirements, they will be barred at the border. For goods, NAFTA does not open the border.

NAFTA has an similarly limited impact on the movement of labor. Basically, the immigration provisions of NAFTA permit only the temporary entry of professionals for business purposes. The Agreement defines professionals through a laundry list of job titles and professional degrees. Nothing in the NAFTA encourages the movement of day laborers either legal or illegal and it does not change the rules with respect to citizenship or permanent immigration.

The part of the NAFTA that gets the most bad press is Chapter 11, which involves the resolution of disputes between foreign investors and the member states. Chapter 11 has been called a secret appellate body with the power to overturn U.S. laws. It is nothing of the sort. Under Chapter 11, a U.S. investor in Canada or Mexico is entitled to treatment no worse than a similar domestic investor in those countries. Same goes for Canadian and Mexican investors in the U.S. That means that the U.S. agreed in the NAFTA not to pass laws that discriminate against Mexican and Canadian investors. In addition, the parties agree to act consistent with international law including "fair and equitable treatment." It prevents a NAFTA party from using regulatory means to expropriate a NAFTA foreign investment or unfairly benefit its own investors.

When a NAFTA arbitration panel finds a violation of these terms, there is absolutely no impact on the underlying regulation, law, or other measure. Take the worst example. Let's say a Mississippi jury awards a half a billion dollars in a claim against a Canadian investor. The Canadian investor then files a NAFTA Chapter 11 claim saying the jury verdict and the subsequent appeals bond requirements violate NAFTA. If the NAFTA panel finds for the Canadian, the Mississippi judgment is not reversed--it stands as the law of Mississippi. Further, the appeals bond rule stands. The NAFTA decision is not a final appeal for the Canadian. All it means is that the U.S. has agreed to make the Canadian whole as a result of the violation. This actually happened although ultimately the Canadian claim was dismissed on procedural grounds.
The sovereignty of Mississippi was never at risk, nor was the sovereignty of the United States. That is because, ultimately, there would have been no impact on the Mississippi rules. Further, the U.S. could, if chose not to pay the Canadian, either accept a possible trade sanction from Canada or withdraw from the NAFTA entirely. The choice remained with the U.S. There is no NAFTA army to enforce these decisions. There is no NAFTA court that can reverse or bind a U.S. court. There is no NAFTA parliament to write laws binding on the U.S. This is not a North American Union.

Security and Prosperity Partnership of North America

This is a non-starter, conspiracy-wise. The SPP amounts is a discussion among the relevant leaders in the U.S., Canada, and Mexico to work together to facilitate legitimate trade in an environment of enhanced security. Mexico and Canada are two of our most important trading partners. The economies of these three neighbors are inextricably linked by companies, big and small, doing business across the borders. America's biggest companies produce goods in all three nations, relying on skilled and unskilled workers, and selling to consumers throughout North America and the world. It is too late to pretend we are not in an environment in which economies prosper through trade. We must recognize that there are comparative advantages at work. Mexico has an advantage in labor; the U.S. in technical innovation, marketing, and services; Canada in natural resources. The SPP is intended to maximize the benefits of the linked economies by promoting a secure environment in which to operate.

The SPP is not a secret organization. Information about it is accessible on its web site. The people managing the SPP have been pretty open about their goals and accomplishments to date. Still, there seems to be much suspicion surrounding efforts directed at border security and facilitation and the harmonization of regulations.

On border issues, the SPP agenda states that its goal is to "reduce the cost of trade" through the efficient movement of goods and people. This will be done by tweaking NAFTA rules of origin and eliminating minor differences in external tariffs. Regarding people, the focus is on facilitating the movement of "business persons." These are measures designed to help industry prosper, which should, in turn, help individuals throughout North America prosper.

On regulatory issues, the objective is to lower the cost of doing business by eliminating redundant or conflicting requirements. Think about this rationally for a minute. If the U.S. FDA tests a drug and finds it to be safe and effective, it can go on the market in the U.S. Does it make a lot of sense for Health Canada and the Mexican authorities to do the same testing? If we trust the process, no it doesn't. Are there mistakes in the U.S. drug approval process? Yes, and there will be in the future. The issue for SPP is whether there is common regulatory ground on which the three countries can agree so as to eliminate cost and uncertainty to business. This is a big issue for businesses large and small. It affects everything from how consumer goods are labeled to whether a car is considered safe for the road. Harmonizing rules eliminates costs and barriers to export markets. That's a good goal.

And, it does not affect our sovereignty. As long as U.S. law requires FDA certification for drugs, unapproved, misbranded, and adulterated drugs and food products will be barred from admission to the U.S. If the U.S. decides that it wants to accept Canadian drug approvals, that will have to go to Congress and the President for approval and implementation. Nothing the SPP does can bypass that legal requirement. The U.S. remains in control of its laws and its borders.

Saying that the SPP somehow translates into a corporate internationalization of the U.S. is the same as saying that the U.S. is prohibited from regulatory cooperation with our neighbors and allies. Efforts to clean up the Great Lakes, for example, or eliminate trade in ozone depleting chemicals, or deliver the mail are not examples of a creeping loss of sovereignty. They are evidence of U.S. efforts to engage the rest of the world to solve practical problems and improve the quality of life for everyone.

The NAFTA Superhighway

Some have argued that efforts to improve the roads linking the U.S., Canada, and Mexico are part of the secret effort to merge the countries. The effort, to improve transportation at least, is not secret. Its supporters have a web site. It is not even new. The roads involved already exist in the form of I35, I29, and I94. And, there is no proposal for anything called the NAFTA Superhighway. The effort simply is to improve the infrastructure of the middle United States to rapidly distribute legal goods and people throughout North America. The business people supporting this effort are doing so through a not-for-profit institution that is collecting funding and lobbying appropriate legislatures.

This argument is ridiculous and probably racist. Detroit is in dire need of improved infrastructure to handle traffic crossing into and out of Canada. Discussions are underway for the building of new bridge. No one is arguing that the possible influx of Canadian truckers is a threat to our way of life.

Security at the land borders is important. The border with Mexico presents unique problems rampant including illegal immigration and narcotics smuggling (although it should be noted that those problems also exist to a lesser degree on the northern border). These troubling issues need to be addressed. Improving the logistical capacity of the borders is not incompatible with law enforcement or with sovereignty.

The Amero

This is an academic discussion that escaped into the wild. When law professors and economists compare the NAFTA to the EU, usually for purposes of explaining what NAFTA is not, the discussion naturally turns to the Euro, the common currency of the EU. Some academics, including Herbert Grubel of Simon Frasier University and Robert Pastor of American University, have proposed the creation of the Amero as a common North American currency. Former Mexican President Vicente Fox appears to have supported the creation of a single currency as part of a more integrated North America.

While there is a certain tendency to consider a single currency as the logical next step in the integration of North America, there is no actual movement in that direction. Instead, the situation on the ground, so to speak, is that most international business done in North America uses the U.S. dollar. The U.S. economy continues to dominate the region. There is no good reason for the U.S. to give up its currency. We are not Italians trading away the lira.

There is a slightly better argument for the middle ground known as dollarization. Under this approach, Mexico or Mexico and Canada would adopt the U.S. dollar as their own currency, thus giving up the control of their own monetary policy. This is, at best, a long shot. To protect its cultures, Canada does not even permit free trade in U.S. movies and television. It is unlikely to drop the loonie for a currency with pictures of U.S. presidents.

Those who oppose the North American Union and the Amero are shadow boxing. They are tilting at windmills of their own creation. The U.S., Canada, and Mexico need to work together to secure a robust environment of legitimate trade and legal immigration. A healthy North American economy is good for all of us.

Lou Dobbs and the others who believe in the conspiracy to create a North American Union will, of course, argue that I am naive and just believing the government's party line. They see efforts at promoting trade and security, and academic "what if?" discussions as sinister clues to the occult hand of globalization controlled by stateless corporations or "international elites" (with its own racist overtones). They will say that my job depends on NAFTA and globalization. That last bit is partly true, but trade lawyers can do quite well in protectionist environments as well.

What is at stake here is rationality and, frankly, the truth. Rational businesses operating in North America need an efficient border crossing system and robust logistical links. Everyone in the region needs security. Recasting governmental and private sector efforts to improve business conditions and border security as a conspiracy to trade away United States sovereignty is at best silly and, at worst, a calculated effort to scare people for personal or political gain.


ceyeef said...

This is a clearly written and expressed explanation as opposed to some of the "smoke and mirrors" used by many people.
Or is this only the expressions of a father?

Richard Brodie said...

We need to get our definitions straight:

trea·ty (n) - a formal agreement between two or more States in reference to peace, alliance, commerce, or other international relations.

Is the SPP an agreement between two or more States in reference to commerce? Yes. It is an agreement between three States regarding matters of international trade, among other things. And I don’t know how much more formal you can get than having dozens of trilateral groups that have been working, albeit clandestinely, for nearly two years now, fleshing out this grandiose agreement by establishing every parameter necessary to merge (or to use a favorite EU term, "harmonize") all aspects of (illusive) North American joint Security (peace) and Prosperity (commerce).

So the SPP most certainly is a treaty, even if there is not some “goddamn piece of paper” (to borrow a phrase from Mr. Bush) that says “Treaty” at the top and has some signatures at the bottom. One could say that it is a de facto treaty, if not a de jure one, about which the vast majority of the American people have been kept in total ignorance.

If the SPP says such ludicrous things as "The SPP is not an agreement" then not even the village idiot is going to give any credence to their pathetic "Myth" debunking spin. Again, back to the dictionary:

agreement(n) - 1. the act of agreeing or of coming to a mutual arrangement. 2. the state of being in accord.

Have the leaders of Mexico, Canada, and the United States "agreed" to go forward with implementation of the SPP? Yes. Is the SPP a "mutual arrangement" between the three countries? Yes. Are the leaders of the tree countries "in accord" about proceeding with the SPP? Yes. So is the SPP an agreement? Yes.

Gosh, bureucratese language corruption use to involve at least some slight amount of obfuscatory finessing. But now, through either arrogance or laziness, they think it's sufficient to simply state that what is by definition clearly an agreement, is a non-agreement!

What the SPP really is, is an Executive coup … totally without the requisite Congressional approval … let alone discussion with the American people.

Article 2 Section 2 of the Constitution states:

“He [the President] shall have Power, by and with the Advice and Consent of the Senate, to make Treaties, provided two thirds of the Senators present concur”

Until very recently, I doubt that two thirds of them had ever even heard of it, let alone been asked their opinion by the Oval Office! Not only has our Imperial Leader failed to obtain the Consent of the Senate, he has deemed their Advice not even worthy of seeking! The man is a total failure at honoring his oath of office to uphold the Constitution. He is the equivalent of the arrogant and careless little leaders, like Valens, who presided over the demise of the Roman Empire - the only difference being that while they welcomed in the Visigoths, he welcomes in the Hispanic hordes.

And as to discussing such a profoundly significant initiative with the people, I challenge anyone to find a single reference to the SPP in any of his public speeches. Less than 3 months ago in his State of the Union address he said, ominously: “We enter the year 2007 with large endeavors underway”. Yeah, and the largest such endeavor, the one having the most profound potential for radically changing the fundamental nature of this country, is the SPP. But he refrains from mentioning it by name anywhere in his speech!

If it is such a great thing why is he trying to hide it? I’ll tell you why. He’s afraid most of us wouldn’t think it was such a hot idea, and so he wants to get it going with as much momentum as possible, so that when the people finally discover what he’s been up to he will have been able to sneak it in as a fait accompli.

In the State of the Union speech, the word “security” is mentioned ten times, twice with a capital S when talking about Social Security, and eight times when talking about Iraq. The word “prosperity” is mentioned once in a very general and platitudinous context. And the word “partners” is mentioned once in connection with North Korea. But never do these three words come together to finally lift the veil of secrecy from the darkened eyes of the citizenry and let the vast majority of them learn for the first time of the existence and nature of this truly “large endeavor” that is well “underway” - one whose dire consequences will reverberate into our Nation's future long after his Iraq fiasco is relegated to the same dustbin of history as Vietnam.

Lonny said...

I love your response. So well written. I liked your writing demeanor so much that I looked further into your identity. Math and writing are your fortes. I wondered about your family. You have many offspring. The photos tells me the mother is absent. So she is not part of your life anymore. You appear to be Christian.
Just curious,

Larry F. said...

I was going to let this go. Now, I feel like I need to respond. The problem with Mr. Brodie's otherwise well-written comment is that it is based on a misconception about treaties. Even though the SPP appears to him to be a treaty, it is not. A treaty is the law of the land. When agreed by the President AND ratified by the Senate, a treaty is binding on the government. A ratified treaty can bind the government to take some action and make other actions illegal. A treaty can be enforced by a court. In other words, a treaty has meaning and impact on all three branches of the government. That is why the constitution puts a check on the President's power to make treaties. Otherwise, the President could give away US sovereignty on his or her whim.

Fortunately, the constition doesn't permit that. As a result, the SPP has no legal significance. Nothing about the SPP permits any agency of the United States to take any action contrary to regulation, law, or the constitution. Any initiative that results from the SPP will either be consistent current law or will require congressional authority through new law. So, I hope you can see that the SPP is not an end run around anything and is no threat to our sovereignty or independence.

Is it possible that the large endeavors of 2007 are the war?

Richard Brodie said...


The SPP is "not" a treaty in the same sense that our involvement in Iraq is "not" a war. We have an arrogant, imperial President who brazenly evades being held to the requirements of the constitution, by coming up with different terminolgy for the same things. Thus, something that looks like a treaty, sounds like a treaty, and feels like a treaty, is instead called a "discussion", or a "dialogue", not even an agreement!

If the SPP is not, as you claim "binding on the government", then if and when Ron Paul becomes President in January of 2009, he won't have any trouble, disbanding all the "working groups" that have been busily putting the teeth into this "dialogue", and nullifying the mountains of bureaucratic paper they have already generated.

We shall see. The CFR's announced agenda calls for a North American Union by 2010 - that's a documented fact, not an "urban legend". And so if Mr. Paul does not take office, it is unlikely that any other defender of the Constitution ever will, in which case I think it's safe to say that the SPP will evolve into a supra national monstrosity that will have acquired all the force of a treaty without having had to go through the bothersome process of obtaining Congressional Advice, let alone Consent.

Richard Brodie said...


Your kind remarks are much appreciated. I don't do much in the way of math anymore. Rather I am concentrating on literary endeavors - whenever I can find time for them after the ongoing responsibilities of helping eleven children to survive in this period of major delcine in the country's standard of living.

The children's mother is still very much present in their lives. We were amicably divorced around ten years ago. The kids are fortunate to have had someone like her, a woman who believed in home birthing, nursed each one for two and half years, and exposed them to Montessori training in our pre-kindergarten home school. We are the best of friends and have always shared the children according to their desires.

I miss having little ones. My youngest is our 16 year old whom I just removed from the pathetic disaster of a bilingual public high school system, and whom I am helping to get through a Charter school. I toy with the idea of starting a second family, but I'm not sure I have enough faith that my Heavenly Father would allow me to live long enough to raise another bunch!

Richard Brodie said...


I realize that you are a lawyer by trade, and hence are perhaps more interested in wording than in substance - i.e. what something is said to be, as opposed to what it really is. And so I think you may not realize the implication of what you said in your (reluctant) reply, when you were trying to point out why the SPP is not a treaty: You stated:

Nothing about the SPP permits any agency of the United States to take any action contrary to regulation, law, or the constitution.

So, if a litmus test of the SPP not being a treaty, is that it cannot permit any action contrary to the Constitution, then it must be the case that a real treaty could permit actions contrary to the Constitution! Are you sure that you really want to maintain that treaties allow the Constitution to be violated?