AFN BULLETIN – United States-Mexico-Canada Agreement October, 2018

Published: Oct 19, 2018Bulletin

USMCA Breaks New Ground by including Indigenous Peoples

After more than a year of discussion on how to replace the North American Free Trade Agreement, Canada reached a new trade deal with the United States and Mexico late in the evening of September 30, 2018. It is a deal secured after intense negotiations, and the result breaks new ground for Indigenous peoples and Indigenous rights.

In the most inclusive international trade agreement for Indigenous peoples to date, the United States-Mexico-Canada Agreement (USMCA) will serve to help protect Indigenous peoples’ rights and provide for preferences for First Nations businesses.

Specific provisions for Indigenous peoples are found in the Exceptions and General Provisions chapter, the Environment chapter, Investment chapter (corporate social responsibility), Textiles, Small and Medium Sized Enterprises Chapter and North American Competitiveness Committee Chapter.

Throughout the negotiations, AFN National Chief Perry Bellegarde had the opportunity to provide advice to federal Foreign Affairs Minister Chrystia Freeland, who led Canada’s negotiation team. Early on, Minister Freeland agreed it was a priority for Canada to have a dedicated chapter on Trade and Indigenous peoples. When Mexico and the United States were resistant to a chapter, the Minister continued to push for provisions to protect and benefit Indigenous peoples in North America. The National Chief stated he is pleased to see the agreement in principle contains some provisions to protect the rights of Indigenous peoples. The National Chief pressed for the inclusion of First Nations negotiators to be part of Canada’s team. While that request was not fulfilled, First Nations have had significant influence on the outcome.

In August 2017, Canada established an Indigenous working group to discuss elements for a Draft Trade and Indigenous Peoples Chapter. The working group included First Nations, Inuit and Métis participants.  First Nations participants included some self-governing nations and tribal organizations, national organizations, development corporations, business and lending organizations, and those respective groups involved legal advisors, policy analysts, technical leaders, international policy experts and others.

The single most important provision in the USMCA, as it impacts Indigenous peoples, is the General Exception for Indigenous Rights.  This clause is pivotal. It assures the parties freedom to meet their legal obligations to Indigenous peoples and to act in the interests of Indigenous peoples without anxiety or nagging concerns that such actions may run afoul of trade or investment rules. It means that one state cannot bully the other at the cost of Indigenous peoples’ rights.  Canada’s constitutional and international human rights obligations require it to protect the rights, title and jurisdiction of First Nations and all Indigenous peoples across North America. The general exception clause is much stronger than in other agreements. The exception included within NAFTA only covered certain sections of the investment chapter, and not the ones most likely to lead to a dispute.  This new exception clause covers the entire agreement and applies to Indigenous peoples across North America.  It will allow all three states to take action to fulfill their legal obligations to Indigenous peoples with no concerns of reprisal.

Specific references to protection of Indigenous peoples’ interests are found throughout the Agreement in Principle. The Corporate Social Responsibility language, which has become ‘boilerplate’ in investment agreements, finally makes a specific reference to Indigenous peoples. This is a positive step and a strong signal to foreign corporations. First Nations must be involved from day one for any proposed projects on their lands.  It is good business sense and provides the security needed for any proposed development.

The USMCA recognizes the important role Indigenous peoples play in the long-term conservation of the environment. Water is the foundation of life. Although not specific to First Nations, it was good to see the confirmation between the United States and Canada that the USMCA creates no rights to the natural water resources of Canada.

The USMCA is a trade agreement, so of course the business provisions that benefit Indigenous peoples are crucial. There is a new emphasis on cooperation activities to promote and enhance opportunities for Indigenous businesses in the Small and Medium Sized Enterprises Chapter. First Nations are the youngest and fastest growing demographic in Canada. Opportunities for First Nations business means opportunities for First Nations women and youth – especially if the activities span the border and spur inter-nation trade amongst Indigenous peoples.

In the chapter on Textiles there is a provision that provides for duty free treatment of Indigenous handicraft goods. To achieve the advantages this provision provides, Indigenous peoples must work with the state to determine what does and does not qualify as an Indigenous handicraft. A positive result of this provision would be a certification program that ensured that Indigenous handicrafts are legitimate and certified authentic by Indigenous Nations themselves, perhaps opening the door to a broader certification program to Indigenous arts in Canada.

Another important point for First Nations is that the investor-state dispute settlement (ISDS) is being phased out of UMSCA between US and Canada.  There will still be an ISDS for a three year “legacy period.”  After the legacy period ends, there will be no ISDS with the US or Mexico, which removes the biggest potential threat to First Nations rights, especially land rights, from this agreement.

During negotiation, Canada was able to make some advances that benefit First Nations peoples, but there is still much more to do. All three parties to the USMCA have endorsed the United Nations Declaration on the Rights of Indigenous peoples. Although there is no mention of the UN Declaration in the USMCA, trade agreements cannot, and must not, trump fundamental human rights, including the rights of Indigenous peoples.

Canada is negotiating other international trade (free-trade agreements) and international investment agreements (foreign investment promotion and protection agreements) with the South American trade bloc, known as Mercosur, and the Pacific Alliance, as well as entering into exploratory conversations with the Association of Southeast Asia Nations and China. The Assembly of First Nations will continue to work with Canada to ensure that protections for First Nations inherent and Treaty rights, as well as preferences for First Nations business, remain a priority and are included and enhanced in future agreements.

The AFN will continue to push to ensure all trade agreements explicitly acknowledge the United Nations Declaration on the Rights of Indigenous Peoples, and for a full Indigenous Peoples Chapter.  The AFN will continue efforts to improve the Corporate Social Responsibility language in future investment agreements so that free, prior and informed consent becomes the standard for investors.  Proposed developments that involve Indigenous lands will only proceed with the full and equal participation of First Nations.

The USMCA does not address an issue of great importance to many First Nations whose communities are separated by a border not of our making.  First Nations would welcome discussions with Canada and the United States about mobility rights and inter-nation trade.

It is time for Canada to include First Nations representatives in negotiating teams. This would be the most effective way to ensure proper consultation and cooperation. Due to their Aboriginal and inherent rights, jurisdiction and title, First Nations need representation in the negotiation room at future trade and investment tables. The AFN will continue to urge Canada to work in partnership with First Nations to ensure recognition, protection, implementation and enforcement of First Nations rights in this agreement and other international trade and investment agreements.

First Nations are ready to get to work to improve trade opportunities for our people. It should be clear by now that economic and legal certainty cannot be achieved without First Nations at the table as governments and decision-makers. It makes good business sense for First Nations, Canada and North America.

Currently, USMCA is an Agreement in Principle.  It will first need to be signed by each Party, and then go through a ratification process.  Canada will also require new legislation to implement the agreement.  In the meantime, the North American Free Trade Agreement remains in force.

If you require additional information please do not hesitate to contact the Assembly of First Nations.