Small Business Leaders to Trump: End Advantage for Multinationals Over U.S. Small Businesses in NAFTA

flag of NAFTA
flag of NAFTA

100 small businesses: NAFTA currently privileges multinational corporations over U.S. small business unfairly under “Investor-State Dispute Settlement” preferential treatment.

Washington, DC; July 12, 2017// Today, more than 100 small business leaders sent a letter to President Donald J. Trump urging the President to ensure that the re-negotiation of the North American Free Trade Agreement (NAFTA) and other global trade pacts does not allow foreign multinational corporations to attack U.S. laws that protect U.S. communities and the environment. Right now, foreign-owned companies are allowed to challenge such laws before tribunals of three private lawyers, which is bad for our communities and the environment and also puts U.S.-based small firms -- that comply with our laws and use our courts -- at a competitive disadvantage.

In May, Trump notified Congress of his Administration’s plans to renegotiate NAFTA, setting in motion a 90-day period before negotiations with Canada and Mexico can begin in August. According to trade legislation, the Trump Administration must make public its more detailed plans for the negotiations next week, 30 days before negotiations begin.

Small business leaders are weighing-in at this crucial time on the need to ensure that multinational corporations are no longer given more favorable treatment than U.S. small business and special rights to attack our laws. The business leaders’ letter and signatories are at:        

Of particular concern to small business is Investor-State Dispute Settlement (ISDS) – a provision that in NAFTA and other trade deals that enables multinational corporations to sue the U.S. government over laws at the local, state, and federal levels that they claim violate their broad “investor” rights under NAFTA. These laws, which US small businesses must abide by, are intended to protect the health, environmental, and financial well-being of our nation. As the business leaders’ letter to the President notes, in addition to threatening U.S. laws, the special treatment for foreign investors that the ISDS system allows also incentivizes the off-shoring of jobs by removing many of the costs and risks associated with re-locating to low-wage countries.

Corporations do not need these special privileges. Jerry Greenfield, co-founder of Ben and Jerry’s ice Cream stated: “We started with one store in Vermont, and now Ben & Jerry’s ice cream is sold around the world. This success required a good product and hard work from lots of folks, but not special rights to attack other countries’ laws. It is unacceptable that agreements like NAFTA provide vast powers for corporations to sue governments before tribunals of three corporate lawyers.  Those corporate lawyers can award unlimited sums to be paid by taxpayers, including for the loss of expected future profits, simply when corporations claim a health or environmental law violates special privileges granted by these agreements.”

Fran Teplitz, Director, Green America’s Green Business Network, Washington, DC said, “Trade should have broad-based benefits for all partners. Trade that enriches and privileges foreign multinational corporations at the expense of US businesses, communities, labor, and the environment is a bad deal. The Investor-State Dispute Settlement that allows multinationals to attack US protections for people and the planet should not be part of any trade agreement our nation joins.”

Richard Eidlin, Vice President, American Sustainable Business Council, Washington, DC said: “While there’s no doubt that trade agreements between nations are important to economic development, the key question is whether the rules are fair to small and mid-sized businesses and to local communities. We’re concerned that the Investor State Dispute Settlement (ISDS) mechanism embedded in current NAFTA and other trade negotiations, tilts the playing field against smaller companies and communities. Allowing multinationals to have special procedural rights to challenge environmental, labor and land use policies is bad for the majority of businesses.”

Small business leaders recognize the value of U.S. laws and courts and demand that multinational corporations abide by them as well:

Elliot Hoffman, CEO, REV, San Francisco, CA said: “As a businessperson with broad experience in the field of corporate sustainability, I believe we must not allow multinational corporations to attack U.S. laws that protect U.S. workers, communities, the environment, and the long-term health of our economy and society. U.S. and foreign companies of all sizes, large and small that do business in the U.S should be held to the same standard”

Jim Epstein, Co-founder, Blue Ridge Produce, Elkwood, VA, said: “In addition to all businesses, large and small, abiding by the law and doing good while preserving the environment, I am concerned that far too many of the laws and trade policies (and indeed the whole issue of repatriating profit) creates an unlevel playing field that unfairly favors large corporate interests that have been parking their profits overseas and not the small businesses that have always complied with both the letter and the spirit of the law. If America truly represents the land of equal opportunity for all, then a level playing field for all businesses is essential.”

Helen Beichel, ChFC, Fat Tail Financial Advisory Group, Brooklyn, NY, said: “Risk management is an important part of putting together a portfolio. From a portfolio building perspective, we want to invest in companies that are law abiding, ethical, transparent in their operations and focused on long term sustainability. There should be no distinction in law, or law enforcement, between a small business and a multinational corporation. Multinationals must abide by the laws of the countries they operate in.”

As a presidential candidate, Trump repeatedly denounced NAFTA, calling it "the worst trade deal maybe ever signed anywhere." There is indeed much that economic, labor, environmental, and other civil society organizations seek to change about NAFTA. Trump is now back-peddling on his earlier pronouncements about eliminating NAFTA and we are entering a period where the voice of sectors not at the negotiating table must be heeded if a reformed-NAFTA is to be an improvement.

The letter signers are members of the American Sustainable Business Council and Green America’s Green Business Network.

MEDIA CONTACT: Natalie Wats, (703) 276-3256 and