2:00PM Water Cooler 12/27/2018

By Lambert Strether of Corrente.

Trade

“The Battle Over NAFTA 2.0 Has Just Begun” [Lori Wallach, The Nation]. “On the upside, NAFTA’s outrageous investor privileges and ISDS tribunals are dramatically reined in under NAFTA 2.0… For Mexico, ISDS is replaced by a new approach: Whereas ISDS allows investors to skirt domestic courts, the new process requires investors to use such courts to resolve disputes with a government until the highest available domestic court rules, or until two and a half years pass with no resolution. In the latter case, an investor can seek compensation—but only for limited claims…. The five other investor protections in NAFTA that have resulted in almost all payouts so far are eliminated in the new agreement….. However, unless the final deal includes strong labor and environmental standards that are subject to swift and certain enforcement—which is not the case with the NAFTA 2.0 text—US firms will continue to outsource jobs, pay Mexican workers poverty wages, and dump toxins in Mexico. Absent a remedy to this fundamental failing, NAFTA 2.0 will face broad opposition.”

“China’s draft foreign investment law bans forced tech transfer, emphasizes reciprocity” [Reuters]. “China has proposed a ban on forced technology transfer and illegal government ‘interference’ in foreign business operations, practices that have come under the spotlight in a trade dispute with the United States. A draft foreign investment law, the full text of which was published by the top legislature on Wednesday, comes as China tries to resolve its protracted standoff with the United States, which accuses it of unfair trade practices

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