President Donald Trump says what millions of Americans have known for 25 years but no politician had the brains to understand or the guts to say: NAFTA has been a disaster.
Thousands of factories, tens of thousands of jobs and entire industries have left the United States for Mexico since the North American Free Trade Agreement (NAFTA) went into effect in 1994.
President Trump has zeroed in on one part of NAFTA that actually subsidizes American companies to move to Mexico. And he’s told his trade negotiators to kill it in the new version of the deal now being negotiated.
This perverse incentive is known as Investor State Dispute Settlement (ISDS). ISDS enables foreign corporations to challenge our laws and any actions of the United States government before international arbitration tribunals composed of three private-sector lawyers.
These three-man kangaroo courts exist outside the judicial system established by the U.S. Constitution. They can award corporations unlimited sums of money to be paid by taxpayers. They do not follow constitutional due process guarantees or judicial precedent, and their decisions are final, no appeal.
Why, you might ask, would our government agree to such a monstrosity?
Follow the money.
American businesses eager to take advantage of the cheap labor and filthy pollution south of the border were previously scared off by Mexico’s notoriously corrupt government and legal system.
Fear of having their assets stolen by a crooked foreign government would normally incentivize investors to stay in the United States, where respect for private property and the rule of law prevail.
If dead set on moving abroad, they could buy political risk insurance and factor that into the cost of the investment.
Instead, they pulled some strings in the Swamp and had the American taxpayers buy insurance for them.
Under NAFTA, our government created a separate-but-unequal court system – ISDS – to guarantee businesses won’t have any risk by investing in Mexico. We, the People, of the United States pay for this insurance twice – once with our taxes, and again when our jobs disappear.
President Trump’s chief trade negotiator Robert Lighthizer asks, “Why is it a good policy of the United States government to encourage investment in Mexico? … To me that’s absurd.”
He’s right.
NAFTA tribunals are a gift from Washington to globalist corporations. It costs $8 million to bring a case before these NAFTA courts, according to the Organization for Economic Cooperation and Development. Only those with a platoon of white shoe lawyers have access, and they use it to crush smaller competitors.
Besides being blatant cronyism, ISDS is also unconstitutional.
Reagan Justice Department official and constitutional attorney Bruce Fein notes that the NAFTA ISDS “judges” exercise as much as or more power than judges in our federal courts. In Buckley v Valeo, the Supreme Court declared that any person exercising significant authority under the laws of the United States falls under the Appointments Clause of Article II of the Constitution: all “officers” of the United States must be appointed by the President with the advice and consent of the Senate. That’s not how the ISDS panels are chosen.
Writing the dissenting opinion in BG Group PLC v. Republic of Argentina, Chief Justice John Roberts expressed alarm that international tribunals such as ISDS have the power to “effectively annul the authoritative acts of [a country’s] legislature, executive, and judiciary … a power it typically reserves to its own courts, if it grants it at all: the power to sit in judgment on its sovereign acts.”
President Trump has set out to negotiate a new NAFTA. He says we must abolish the corrupt NAFTA tribunals as part of the deal.
The U.S. Chamber of Commerce and the other Swamp denizens are squealing.
Candidates and members of Congress need to support President Trump’s proposal for a new NAFTA that puts America first, upholds our Constitution and protects our nation’s sovereignty.
Curtis Ellis is the founder and chairman emeritus of the American Jobs Alliance, an economic nationalist trade non-profit. He and his organization were instrumental in building public awareness about the “Trans-Pacific Partnership” that lead to that trade-deal’s defeat. He served as senior policy advisor on the Donald J. Trump for President campaign and Presidential Transition Team. You can find his work at http://www.americanjobsalliance.com/.
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