Labor Leaders, Allies Skeptical about New NAFTA
GOP President Donald Trump’s announcement that Canada signed the “new NAFTA” pact that Trump had previously negotiated with Mexico – with a few modifications to appease the Canadian government -- drew skepticism from union leaders and allies.
The fight over the so-called 3-way “free trade” agreement will probably play out next year, as the bargain was reached too late to come before Congress this year.
There will be another battle royal over a pact that Teamsters President Jim Hoffa nicknamed “NAFTA 2.0.”
That won’t be the only war over NAFTA in the three nations. The Canadian Parliament will have something to say about whether Foreign Minister Chrystia Freeland and Prime Minister Justin Trudeau got a good deal. Trudeau’s government faces Canadian voters in 2019.
And Mexico’s small farmers, clobbered by NAFTA’s opening of the Mexican market to cheap U.S. farm goods, are extremely upset with the “new NAFTA’s” virtually identical provisions. Mexico now imports 46 percent of its food as a result of NAFTA. Dispossessed farmers were part of the Mexican migration to the United States in ensuing years, especially after the peso crashed.
One positive aspect of the new deal – guaranteeing the right to strike – is tucked away in a footnote in the labor chapter.
Section three of Labor Chapter 23, written into the pact, says all three countries “shall adopt and maintain the following rights: (a) freedom of association and the right to collective bargaining. Freedom of association has footnote 5; collective bargaining has footnote 6.
Footnote 5 reads: “For greater certainty, the right to strike is linked to the right to freedom of association, which cannot be realized without protecting the right to strike.”
Footnote 6 refers to an annex “which sets out obligations with regard to worker representation in collective bargaining.”
On the campaign trail two years ago, Trump vowed to scrap NAFTA, the 25-year-old U.S.-Canada-Mexico so-called “free trade” pact, which GOP President George H.W. Bush negotiated and Democratic President Bill Clinton shoved through a Democratic-run Congress, over labor’s outspoken opposition. Thousands of ex-factory workers held NAFTA against Democratic nominee Hillary Clinton in 2016.
Unions and their allies predicted NAFTA would cost hundreds of thousands of U.S. factory jobs, and they were right. Corporations, NAFTA’s big winners, shifted between 700,000 and 1 million factory jobs – and, later, call center and other jobs, too – to Mexico to exploit its low wages, weak labor regulation, company-controlled unions and lack of enforcement of either labor or environmental laws.
Trump trumpeted the new pact as a win for workers in all three countries. Among the provisions he cited are higher domestic content, 75 percent for vehicle production, and a guaranteed higher wage for 40 percent-45 percent of auto workers of $16 an hour. That’s significantly higher than the $3 hourly average wage for Mexican auto workers now. He also touted higher labor standards for Mexico.
But will the “new NAFTA” cost U.S. jobs? The AFL-CIO’s answer, right now, is “we don’t know.”
“Our history of witnessing unfair trade deals destroy the lives of working families demands the highest level of scrutiny before receiving our endorsement. Added protections for working people and some reductions in special privileges for global companies is a good start, but we still don’t know whether this new deal will reverse the outsourcing incentives present in the original NAFTA,” federation President Richard Trumka said.
“The problem with US trade policy isn't that it's caused the ‘loss of a few factory jobs,’” tweeted Celeste Drake, the federation’s trade policy specialist. “It's more than 4 million manufacturing jobs + $2k in annual income for the majority of US workers. Trade rules need to focus on working family interests, not corporate profits.”
In response to an e-mailed question, she said the labor provisions, which – unlike the original NAFTA – are in the pact’s text, are stronger in guaranteeing Mexican workers rights. That includes the right to freely organize. Enforcement has yet to be guaranteed, though the pact pledges toughness there, too.
But a close reading the new pact’s labor section, Chapter 23, shows an initial Canadian proposal which would have toughened workers’ rights in the U.S. by outlawing so-called “right to work” laws, isn’t there. RTW laws weaken unions and drive down workers’ wages, benefits and safety protections. Drake confirmed the RTW ban didn’t make it into the “new NAFTA.” Trudeau never really pushed it.
And three days before Trump’s announcement, the administration’s Labor Advisory Committee on Trade – a group often ignored – issued its own 88-page analysis of the “new NAFTA,” noting it has many holes. Steelworkers President Leo Gerard chairs the committee, which also includes Hoffa, Trumka, Auto Workers President Doug Jones and AFSCME President Lee Saunders, among others.
Gerard and Hoffa are skeptical. They say some “new NAFTA” details must be worked out and other sections yanked.
“The effort to achieve the goal of a fair trade agreement that protects workers in the United States, Canada and Mexico is far from over,” Gerard said after Trump’s announcement.
“There are provisions in the draft agreement between the United States and Mexico that represent improvements over NAFTA, but there are also provisions that must be removed. Further, we have not evaluated what changes resulted from the just-concluded agreement to include Canada.”
The Steelworkers strongly objected to Trump’s imposition of 25 percent tariffs on Canadian steel and aluminum, key materials for U.S.-made and Canadian-made cars and other U.S. goods. The new NAFTA leaves those tariffs in place, at least for now, and subject to further U.S.-Canada bargaining.
Hoffa cheered potential new restrictions on Mexican trucks roaming all U.S. roads. NAFTA let them do so, but the Teamsters waged a long legal and congressional battle to keep the creaky and unsafe trucks, driven by over-tired truckers, within 20 miles north of the U.S.-Mexico border.
“As North America’s supply chain union, the Teamsters have a big stake in cross-border trade. That’s why we appreciate the creative approach by the U.S. Trade Representative in fixing a problem with the original NAFTA that is a legacy issue for us and our allies among environmental and highway safety advocates,” Hoffa said of the ban on Mexican trucks rolling over all U.S. roads.
“To the extent the United States reserved the right to institute new restrictions on” the Mexican trucks, “we look forward to working with the administration and Congress to craft those new restrictions in the implementing legislation and new regulations,” Hoffa said. Left unsaid: Letting unsafe Mexican trucks roam over all U.S. roads endangers U.S. auto drivers, and robs U.S. truckers of jobs.
“We also note with approval the considerable progress on workers’ rights. The new labor chapter and the annex with Mexico contain obligations and protections that are superior to the original NAFTA. However, until we are satisfied those obligations will be subject to swift and sure enforcement, we cannot endorse this renegotiation.”
“Similarly, unless the Mexican government adopts new labor laws that meet their constitutional requirements and the new criteria of this NAFTA, then the fundamental flaw of the original pact will remain unresolved, and American jobs will continue to migrate south, and this union must therefore withhold our unconditional support. In short, there is still work to be done on this deal.
The labor advisory committee’s report says the new NAFTA pact is full of uncertainty.
“We do not know whether the ‘Buy American’ rules will be strengthened,” it says, for example. “Critically, if the labor rules and enforcement system are left as it is…without other measures, the overall system will fall short of what is needed to create real change for working families,” it adds.
“We learned through 25 years of experience that it is simply too easy for firms and trading partners that outsource to violate labor obligations” and for U.S. governments of both parties “to look the other way.”
“A worker who is fired for exercising the freedom to join a union is just as fired, regardless of whether the firing violates a trade obligation or not. His or her former co-workers are just as intimidated and wages are just as suppressed.”
Canadian Prime Minster Trudeau touted retention of a modified dispute resolution system between the three countries as a win for his country. The controversial Investor-State Dispute System (ISDS) was eliminated. This system, opposed by Trump and workers, let firms challenge state, federal and local laws before panels of trade lawyers.
Outgoing Mexican president Enrique Pena Nieto of the Institutional Revolutionary Party (PRI) will sign the deal, leaving the ratification fight to the new, progressive president, Andres Manuel Lopez Obrador.
AMLO, as he’s known, raised no objections to the new NAFTA, even though he championed a wide-ranging farm reform program during his campaign to return prosperity and power to the campesinos. He will be inaugurated and his new party, Morena, will control the Mexican Congress after December 1.
“We need to push our new president to stop the signing of this agreement,” farm leader Gerónimo Jacobo told Common Dreams. “This is life or death for us. With NAFTA it will be a slow death. Our national sovereignty is at stake here!”
