Rewiring our “trade brains” for the climate crisis

I wrote this piece, below, for the summer issue of the CCPA’s Monitor.

Trade etches patterns and relationships into our global economic system that become deeply entrenched over time. This is not dissimilar to the way that neurochemical patterns are etched into our brains in a way that makes overcoming addiction, mental illness or trauma so challenging: perceptual responses are hard to change because they are literally fixed in the cells of our mind. So, too, trade flows and rules, fixed in a web of international agreements, can be difficult to change—even when they are not inherently beneficial for people or the planet.

System, Network, Connection, Connected

 

Much like pipelines and other costly, long-term fossil fuel infrastructure, trade agreements contribute to the rigidity of our carbon-based economy. The North American Free Trade Agreement (NAFTA), for example, is a key vehicle for the movement of hydrocarbons. Proportionality rules in its energy and trade in goods chapters require Canada to maintain a consistent share of energy exports to the U.S. The Canadian Association of Petroleum Producers (CAPP) openly credits NAFTA with the incredible growth in exports of oil and gas, suggesting that without the agreement the rapid pace of oil sands development would have been “unimaginable.” CAPP continues to lobby the federal government to further ease the movement of hydrocarbons to the U.S. For example, CAPP is asking for a product specific rule of origin for diluent, products added to bitumen oil to make pipeline transport easier.

In the current NAFTA renegotiations, environmental NGOs and activists have challenged these and other trade rules that interfere with Canada’s ability to protect public health and the environment, such as NAFTA’s investor-state dispute settlement (ISDS) process. In May, Canada lost its legal challenge to an investor-state ruling claiming the environmental assessment process that rejected a planned quarry in Nova Scotia violated the U.S. mining company’s minimum standards of treatment in NAFTA. Notwithstanding Canada’s decision to purchase Kinder Morgan’s existing Alberta-B.C. pipeline, the U.S. company has claimed a right to file a NAFTA lawsuit as a last resort in case the pipeline expansion falls through. In both cases, the rigidity of trade agreements—to the benefit of fossil fuel companies—is apparent.

In April, I was part of a gathering of trade activists, organized by the Council of Canadians (CoC), tasked with reimagining Canada’s trade agenda, specifically in my case to make trade more environmentally sustainable. There are a few clear starting points. Removing ISDS provisions from all trade agreements and taking the proportionality clause out of NAFTA are two of them. Canada won’t be able to meet its climate targets if it can’t simply—without penalties or the threat of a corporate lawsuit—start to turn the taps off fossil fuel exports.

CoC event photos by Rachel Small and Sujata Day

While taking the most harmful language out of trade deals, we might also consider adding new rules that are pro-climate. The leaders of all three NAFTA countries have pledged to phase out “inefficient” fossil fuel subsidies by 2025, but none have any plans to do so, and Canada has been unwilling to release much information on its fossil fuel subsidies. NAFTA currently allows Canada to subsidize the discovery and development of oil and natural gas without fear of tariffs from the U.S., when instead it could be changed to penalize government handouts to the fossil fuel sector.

At the same time, given the political hurdles to co-operation on subsidies, as well as carbon duties and taxes, a trade negotiation like NAFTA might not be the most appropriate venue for this kind of climate action. Still, there is no good reason why climate change should not be considered in all phases of free trade negotiations and in all parts of the agreement. This could be done through ex-ante assessments of carbon emissions produced through greater trade liberalization, and by adding responsibilities for investors (emitters) and rules for emissions reduction.

Lastly, Canada’s free trade agreements must also recognize the right of Indigenous peoples to free, prior and informed consent as enshrined in the United Nations Declaration on the Rights of Indigenous Peoples. This is particularly relevant for the ongoing negotiations for the Canada-Pacific Alliance Free Trade Agreement, since Canadian companies are heavily invested in the extractive sectors in Latin America. More broadly, trade agreements could include binding, enforceable rules and mechanisms to redress environmental and social injustice caused by corporations operating at home and abroad.

In short, Canada’s trade agreements do more to get in the way of addressing today’s climate and ecological crises than they do to protect the environment. We need to be thinking much more creatively about “alternative trade” if we’re going to fix this problem. To return to the brain metaphor, overcoming our addiction to fossil fuels requires us to rewire our “trade brains” so that our trade rules can facilitate—not frustrate—healthier and more humane relations.

 

 

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