Unions are withholding support for the Trump administration’s U.S.-Mexico-Canada Agreement on the grounds that the provisions meant to force Mexican factories to pay their workers at least $16 an hour are too weak.
The announcement, made by an official labor advisory committee to the U.S. trade representative, suggests a potentially difficult reception for the USMCA deal next year when President Trump may have to get it through a divided Congress.
“We reiterate that while there are positive provisions in the renegotiated NAFTA, there are also provisions in the agreement which undermine the interests of workers and consumers,” said Leo Gerard, president of the United Steelworkers, in a letter to the USTR in late October. “Among other things, we continue to stress the need to effectively curtail the illegal suppression of wages in Mexico, which leads to the outsourcing of quality, family-supporting jobs and puts downward pressure on wages and standards in the U.S. and Canada.”
Democrats, who are strongly backed by most unions, are likely to make significant gains in Tuesday’s elections. Senate Majority Leader Mitch McConnell, R-Ky., has said the deal is unlikely to come up before the current Congress adjourns.
Gerard serves as chairman of the U.S. Trade Representative’s Office’s official Labor Advisory Committee and made the comment in a letter dated Oct. 25. Others on the committee include the heads of the AFL-CIO, the Teamsters, and the Service Employees International Union, among other top unions.
Among other provisions, the USMCA deal requires that at least 40 percent of all auto content be made by workers earning at least $16 an hour or its equivalent. The change is intended to prod domestic companies to relocate manufacturing in the U.S. by eliminating Mexico’s main advantage in that area: lower labor costs. The unions argue that, while well-intended, the provisions won’t work for several reasons.
“The $16/hour standard is arguably too low to make a significant difference in production location decisions such that new, family-wage jobs would more likely than not be created within the territory of the United States,” they note. They add that the wages are not tied to inflation and the requirement is for an average wage, not a minimum one, so some workers will still be earning less. They also have concerns about how standards will be monitored and certified.
The letter concludes, “We will continue to press for improvements in the text of the agreement itself — including but not limited to labor enforcement provisions — hopeful that we can improve upon the current, unsigned text.”
