Trade

Trump’s Fake NAFTA Deal Would Expose American Business to Corrupt Courts

JM Ashby
Written by JM Ashby

For nearly 30 years, American businesses operating in Mexico have been able to settle disputes with the government in an international court where an independent judge would oversee the case, but that won't be possible if the new trade agreement becomes law.

Trump's effort to simply rename the North American Free Trade Agreement (NAFTA) while leaving the overwhelming majority of the law intact includes an obscure provision that would force American businesses to file cases within Mexico under their court system.

From Reuters:

NEW YORK/MEXICO CITY(Reuters) - The new North American trade agreement ends key legal protections for many U.S. businesses operating in Mexico, leaving their operations exposed to a risk they had avoided under the old trade deal: Mexico’s court system. [...]

The removal of the investment protection means firms would now be at the mercy of Mexico’s courts, which are notorious for corruption, an energy industry source said.

The provision has been part of numerous trade pacts to lessen risks for firms operating overseas. Its removal makes the new agreement an outlier, trade experts and industry sources in Washington said.

This may seem counterintuitive, but Mexico opposed this during negotiations with Trump's unhinged trade representative Robert Lighthizer.

No one knows the Mexican court system better than the Mexican government and they did not want to see these protections for foreign businesses eliminated under the new agreement. Protecting foreign investors from corruption is key to getting them to invest in Mexico in the first place.

For his part, Lighthizer reportedly believes the protections are a "subsidy" for American companies, which is puzzling to say the least.

If I understand the Trump regime's position, exposing American businesses to corrupt courts is intended to dissuade them from doing business in Mexico. But they're going to do business in Mexico anyway, so what's going to happen is American business will end up paying something equivalent to protection money to corrupt judges.

Lighthizer apparently believes that should be the cost of doing business outside the United States.

We're way far away from Free Market principles here.

Suffice to say, this could be something that is rolled back in the coming months and during the next session of Congress which may or may not agree to approve a deal that removes these protections for American businesses. And that seems like a no-brainer, doesn't it? Who's going to attack members of Congress for trying to protect American businesses from foreign courts?

  • katanahamon

    Ok NBC, you think it’s time to fire Megan Kelly yet, or is defending blackface appropriate? From Daily Beast…
    “Megyn Kelly on Tuesday morning once again inspired outrage reminiscent of her Fox News days after seemingly defending the use of blackface on Halloween.

    “But what is racist?” the host asked a panel that curiously did not include any black guests. “You truly do get in trouble if you are a white person who puts on blackface at Halloween or a black person who puts on white face.”

    “That was okay when I was a kid, as long as you were dressing like a character,” Kelly lamented.

    Kelly pointed to the backlash inspired by Real Housewives of New York star Countess Luann de Lesseps, who used blackface while dressing up as Diana Ross—and later apologized for the offensive costume.

    “I don’t see how that is racist on Halloween,” said Kelly. But her all-white cast of panelists didn’t agree.

    “I haven’t seen it, but it sounds pretty racist to me,” remarked NBC News correspondent Jacob Soboroff.

    “During the 2008 election, she infamously led the Fox News charge in claiming that the New Black Panthers were destroying American democracy through alleged voter intimidation. Kelly later lamented, via the Washington Post, that her reporting on the subject had been viewed as racist.

    But her most infamous moment came in 2013 when Kelly addressed her Fox primetime viewers during a segment about arguments that Santa Claus should not always be depicted as white: “For you kids watching at home: Santa just is white.”

    She later added: “Just because it makes you feel uncomfortable doesn’t mean it has to change. You know, I mean, Jesus was a white man too.””

  • muselet

    … Lighthizer reportedly believes the protections are a “subsidy” for American companies.…

    Good lord. And I had begun to think I was beyond being surprised by anything coming out of this administration.

    –alopecia

    • Georgie

      Well the businesses could paid them in coal, that should make trump (and others) happy.

    • Badgerite

      Incentive or not, the American companies that want to do business in Mexico will just the expense of bribes in corrupt Mexican courts onto American consumers. They will still probably do business there.