Teamsters Note Good and Bad Points of New NAFTA
The Trump administration’s “New NAFTA” contains many pro-worker improvements, but still has some remaining holes in worker protections, including the need to eliminate the last remaining vestige of the pro-corporate secret trade courts, Teamsters Legislative Director Mike Dolan says.
But at the same time, the pro-worker provisions are so many and varied that Dolan praised the U.S.-Canada-Mexico pact as “a new paradigm” for future U.S. trade deals.
And it was good enough for workers that Dolan gave a proverbial chuckle at the Chamber of Commerce’s “frustration” over the new NAFTA’s pro-worker sections before asking: “Has the Chamber ever opposed a ‘free trade’ deal?”
“Their concerns about the new NAFTA, and their opposition to aspects of the renegotiations the labor movement has historically called for, are auspicious from our perspective. The worm turns and a new model for future FTAs emerges,” Dolan said.
Dolan was one of two pro-worker witnesses to discuss the pact, which GOP President Donald Trump reached with Canada and Mexico – the Canadians and Mexicans would say “jammed down our throats” – earlier this year. Dolan and AFL-CIO Trade Specialist Celeste Drake spoke during the U.S. International Trade Commission hearings on it on Nov. 15-16
The USITC heard Drake, Dolan and the other witnesses, all representing corporate interests – including the Chamber – in preparation for a report on the trade pact’s impact ITC must send to Trump, and probably Congress, next year. USITC has set no date for its report.
Dolan called the new NAFTA “a historic rebalancing” of the benefits and costs of trade, not between the three countries, but for workers as opposed to bosses and investment elites.
But the new NAFTA doesn’t quite go all the way to get the union’s wholehearted endorsement, which would be its first ever of a free trade pact, Dolan said.
“We have described to the administration” in prior hearings and sessions on the new NAFTA and trade in general “our bottom-line interest in eliminating the incentives for outsourcing by big corporations, which we repeat today,” he noted. Some specifics Dolan said would make the pact, formally called the U.S.-Mexico-Canada Agreement, even better for workers, include:
• As “America’s supply chain union” – Teamster truckers and train crew members haul the nation’s freight – the union is particularly concerned with working conditions and worker rights in that sector.
The Teamsters waged a decade-plus fight under the current 25-year-old NAFTA to keep unsafe Mexican trucks, driven by sleepless drivers, from roaming all U.S. roads, restricting them to within 20 miles of the U.S.-Mexico border. It reiterated that demand in previous hearings and statements, but didn’t explicitly win it in the new NAFTA.
What it got, Dolan said, was “non-conforming measures in Annex I and II relating to trucking (that) will benefit the American trucking industry by explicitly permitting new restrictions on cross-border operating authority for the Mexican truck fleet.”
• While that’s a possible gain, the railroaders lost, he noted. “Mexico retains a non-conforming measure prohibiting U.S. freight rail crews from operating in Mexico.
The Brotherhood of Locomotive Engineers & Trainmen/Teamsters “report some freight rail companies are already bringing Mexican crews into the U.S…which is depriving Teamster members of work they have historically and patriotically performed along our southern border.” Dolan recommended Trump “negotiate a side agreement with Mexico that will enshrine and enforce the principle of freight rail crew exclusivity with our NAFTA partners.”
• The remnants of Investor-State Dispute System secret pro-business trade court should go, Dolan said. That would reduce incentives by firms to outsource, uprooting factories and moving them south of the border. Of course, firms could still move, Dolan conceded, and take their chances with expropriation, rather than using the ISDS to force governments to repay lost future profits.
Instead, Dolan said such outsourcing firms would have to take out insurance against takeovers – a boost to the insurance industry, he deadpanned.
• Dolan greeted Trump’s win on more domestic content for cars and trucks, along with his requirement that at least 45 percent of car and truck workers make $16 an hour. But Dolan said that should be a floor, not a ceiling, on wages.
And the $16 wage should be indexed to inflation, Dolan said, otherwise it’ll lose its value, both as a deterrent to company moves to Mexico and as a wage for workers. Mexican car workers now average $3 an hour – when they get paid.
• The new NAFTA’s chapter on government procurement should “require” bidders for contracts to obey the new NAFTA’s stronger worker rights chapter. It now reads the bidders should “promote” worker rights. Dolan called the word “promote” an oversight.
• A footnote in the new anti-currency manipulation chapter of the new NAFTA “attempts to reserve the policy space for” three nations “to address currency misalignment and its effect on overall trade balances, but does not go far enough and could be made stronger by explicitly exempting all fiscal, monetary and foreign exchange rate management tools and policies.”
Though Dolan did not say so, such a change would let the U.S. use all those tools if Mexico ever manipulated the peso or Canada played around with the Canadian dollar, popularly called “the loonie.”
Both Dolan and Drake urged the USITC to adopt an economic model United Nations economists use to measure the impact of trade pacts that records what happens in the real world. They want the ITC to use it to evaluate the new NAFTA.
Both denounced the “ideal” model the ITC now uses. It assumes low unemployment and inflation and no widening of income inequality, among other ideals.
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