Quick Vote Push on Trade Deal with Fossil Concessions

The Trudeau government is making it a top legislative priority to ratify a trade agreement with the United States and Mexico that is under fire in the U.S. for its concessions to oil and gas companies.

The United States-Mexico-Canada Agreement (USMCA) “will help corporations export pollution and jobs, weaken climate policies, and extract more fossil fuels,” said Ben Beachy, director of the U.S. Sierra Club’s Living Economy Program. “It’s a climate failure any way you look at it. How do you square that with the science telling us that we have 10 years to avoid a climate catastrophe?”

Yet Deputy Prime Minister Chrystia Freeland is asking opposition parties in Canada’s minority parliament to ratify the deal “without undue delay”, with news outlets casting the vote as a potential early win for the new federal government.

With the deal already ratified by the U.S. and Mexico, “any uncertainty that remains is entirely the choice of Canadians,” Freeland said Monday. “For the first time since these negotiations began, NAFTA is now about choices that Canadians make.”

The National Post adds that “finally completing the negotiation would provide significant relief to Freeland and the Liberals under Prime Minister Justin Trudeau, who were forced to navigate highly unconventional and volatile negotiation tactics employed by the Trump administration.”

Among the opposition parties, the Post says the Conservatives are broadly supportive of the deal, though they’re seeking details on which sectors in Canada would see negative impacts, while the Bloc Québécois and New Democrats have been more skeptical. Even if the Conservatives merely abstained on the ratification, the Liberals would have enough votes to override objections from the three other opposition parties.

The Post chronicles statements from the Canadian Chamber of Commerce and the Grain Growers of Canada calling for rapid adoption. But there’s a wider conversation emerging in the U.S., where InsideClimate News lists five features of the new deal that make it a victory for the fossil industry.

“The oil and gas industry had qualms when Trump first moved to scrap the 23-year-old North American Free Trade Agreement,” InsideClimate writes, citing a 2017 position paper from the American Petroleum Institute. “But through lobbying over subsequent months, the industry helped shape a deal better for its interests than NAFTA. The USMCA takes into account the monumental transformations in the North American oil and gas industry since NAFTA—the rise of the Canadian oil sands, the U.S. fracking boom, the opening of Mexico’s long-nationalized industry to private investment—and seeks to maintain them.”

InsideClimate says the USMCA boosts the fossil sector by:

• Easing the US$60 million per year in duties that Canadian tar sands/oil sands producers have paid on diluent, sometimes imported from places like Peru, Bolivia, or Pakistan, that makes it possible to Alberta bitumen through a pipeline;

• More favourable treatment for natural gas that may include product shipped from other countries in liquefied form;

• “Most-favoured-nation” status for U.S. fossils operating in Mexico, protecting them from a more nationalistic take on oil and gas privatization from the recently-installed government of President Andrés Manuel López Obrador;

• Phasing out NAFTA’s widely-panned Investor-State Dispute Settlement (ISDS) process between Canada and the U.S. over a three-year period, but keeping it in place between the U.S. and Mexico for selected sectors, including oil and gas;

• Making specialty steel available to pipeline builders at lower cost by eliminating Trump’s 25% tariff on Canadian and Mexican steel imports—a move championed by the Texas Oil & Gas Association in the name of U.S. “energy dominance”;

• Helping U.S. fossils avoid a lengthy permitting process for natural gas exports to Mexico.

“House Democratic leaders did win some environmental concessions before giving the USMCA the support it needed for passage—restoring provisions on overfishing, illegal taking of flora and fauna, and other protections that had been part of NAFTA,” InsideClimate writes. But they failed to get the trade agreement to address any of the seven core failures that the environmental community identified in the deal—including getting the Paris accord included as one of the international environmental treaties that the three nations pledge to maintain.”

Those seven complete or partial failures, contained in a U.S. Sierra Club analysis, include:

• A lack of binding climate standards;

• A lack of binding clean air, water, or land standards;

• No obligation to fulfill obligations under key multilateral environmental agreements;

• No independent, binding enforcement mechanism to stop environmental violations;

• Continuing NAFTA’s “corporate polluter handouts” for tar sands/oil sands and fracked gas producers;

• Sustaining companies’ right to sue Mexico over its environmental policies;

• Continuing to allow U.S. corporations to undercut environmental regulations.

U.S. Sierra’s Beachy said strong statements by 10 U.S. senators opposed to the USMCA, including Minority Leader Chuck Schumer (D-NY) and Sen. Bernie Sanders (I-VT), had helped cement the link between trade and climate.

“That helps us set a baseline for future trade negotiations, which have to include climate,” Beachy told InsideClimate. “We cannot let this be the end of the story.”