Labor backing for President Trump’s U.S.-Mexico-Canada Agreement on trade in Congress could hinge on his ability to convince them that he’s gotten Mexico to reform its labor laws.
The USMCA deal has labor provisions that organized labor wants enacted, but union leaders are wavering on backing the deal in Congress because they think it might be too good to be true.
Union officials offered praise Tuesday for the labor provisions in USMCA Tuesday, saying they would be a definite step up from the ones in the North American Free Trade Agreement. The officials said, though, that the provisions may not be fully enforced and are pushing for extra safeguards in Trump’s trade deal. The White House, Canada, and Mexico are resisting reopening talks on the deal, not wanting to risk unraveling the deal they made.
“To give credit where credit is due, the labor chapters in USMCA are an improvement over NAFTA,” Shane Larson, legislative director of the Communication Workers of America, told the House Ways and Means Committee Tuesday.
Josh Nassar, legislative director of the United Auto Workers, said that the USMCA is “definitely an improvement. We see this as the chance to make the real change.”
One key provision of USMCA requires that workers earning at least $16 per hour make 40-45 percent of auto and auto parts. Otherwise, the products aren’t exempted from trade duties.
The purpose of the provision is to ensure that more manufacturing is done in the U.S., where manufacturing wages tend to be high, making $16 an easy threshold to clear. Wages tend to be far lower in Mexico, sometimes as low as $2 an hour, according to reports by the Wall Street Journal.
Labor activists approve of the $16 wage provision, but argue that it might not be enough, given how low wages remain in Mexico.
“The larger question is, ‘Are firms going to decide that it makes more sense to invest abroad than pay the tax, which is a 2.5 percent tariff on imports at the moment?’” said Robert Scott, senior economist with the pro-labor Economic Policy Institute.
To really improve things would require Mexico to reform its own labor laws to strengthen the unions there, labor unions argue. U.S. unions argue that Mexican unions are weak, hobbled by laws that make them beholden to the government. USMCA includes provisions to change that as well, but the Mexican government has yet to adopt them.
“Efforts to change Mexico’s labor laws to improve workers’ rights could have some impacts but until the U.S. has enforceable and acceptable standards in binding agreements we’ll continue down the path of outsourcing,” said Holly Hart, legislative director for the United Steelworkers, who nevertheless agreed USMCA was “an improvement” over NAFTA.
Earlier this month, the AFL-CIO announced that “any Congressional consideration of [USMCA] must wait until Mexico has enacted and fully and effectively implemented labor law reform.”
Mexico’s Ambassador to the U.S. Martha Barcena said last month at a D.C. forum on USMCA that her country was “very and totally committed to amend the labor laws” and that the current administration was just “waiting for the debate to take place” in Mexico’s legislature, the Congress of the Union. She did not indicate when that would happen.
