USMCA covers international labor rights, leaves out climate change
Thursday, December 12, 2019
After a recent deal between the White House and Democrats in the House of Representatives, an updated version of the North American Free Trade Agreement (NAFTA) — the United States-Mexico-Canada Agreement (USMCA) — will likely be approved by Congress, albeit not imminently. How are trade relations and prevailing concerns for labor, the environment, and human rights addressed in the USMCA?
When NAFTA liberalized trade between the U.S. and Mexico, the agreement threatened the traditional livelihoods of farmers and other laborers who faced a deluge of cheap U.S.-made products. To simplify, the free trade zones that established exploitative factories (updated “maquiladoras”) replaced land-based rural production that had yet to see the ravages of growing international markets.
There is no doubt that NAFTA intensifies the drug trade's allure. NAFTA exported displacement and instability in large quantities, requiring new income sources from now-infamous cartels.
Women and girls began disappearing from towns like border town Ciudad Juárez after leaving home in search of work. U.S. jobs moved across the border, where less environmental and labor regulations allow for cheaper production. This is a globalization/NAFTA legacy USMCA attempts to partially rectify.
Many U.S. companies have Mexican manufacturing sites. GM has retained Mexican factories even while closing a few U.S. plants down. Why? Because it remains more cost-effective.
U.S. profit margins are still facilitated by USMCA, but Mexican workers' union organizing rights and higher wages threaten wealth accumulation.
This threat is covered over by a pro-union, even pro-human rights, tone. USMCA has Canada and the U.S. providing “labor experts” to ostensibly monitor “union complaints at Mexican factories.” Originally, the U.S. wanted to provide labor inspectors, but Mexico said “no deal” there.
The U.S. accounts for 40% of all foreign investment in Mexico. That's 18,000 companies, including GM, VW, IBM, HP, Nestle, Bayer, Sony, Nissan, and Xerox that bank on Mexican labor as a rule.
For USMCA, if union bargaining rights are violated, foreign expert panels can be called, even bringing penalties on goods and services. But foreign companies benefit from cheap Mexican labor, so what is their incentive to support Mexican unions? Human rights appearances?
Mexico can bring complaints against U.S. workplaces and factories, but given the North's market dominance, this is an unequal playing field. What's new?
Beyond that: a conflict of interest falls on the U.S. side. How can a country, reliant on Mexican labor, justify a union-busting track record and aid workers' organizing rights across the border — regardless if it’s workplace inspectors or expert panels?
According to the Economic Policy Institute (EPI), U.S. employers violate “federal law in 41.5% of all union election campaigns, and illegally fire organizing workers in nearly 20% of all elections.”
Also, as the USMCA supports Mexican workers' union organizing, the EPI report highlights the prevalence of the “union avoidance” industry, which has U.S. employers hiring consulting services for $340 million annually. This is a “secretive industry” and much more likely to be growing across the border, as President Andrés Manuel López Obrador signed a reform bill supporting independent Mexican unions.
The U.S. (and Canada) must clean up their own collective bargaining shops before providing “experts” to Mexico for the same purposes. How can a union-busting nation provide unbiased experts to judge Mexican labor conditions?
Since the AFL-CIO tentatively supports USMCA, U.S., Canadian, and Mexican unions should control foreign expert panel selections: they are the labor experts. If organized labor doesn't control this process, or have effective representation at the table, it will be patronizing or even corrupt government or corporate ties controlling the reins of so-called independent Mexican unionization.
This is when international worker solidarity matters; this feature of USMCA should be closely watched.
Other notable features include the steel and aluminum deal. Canada is the largest exporter of steel and aluminum to the U.S. and Mexico is the second largest exporter of steel. Hence all the tariff drama, which looms as a defensive response to the threat of strong Mexican unions.
The U.S. automobile industry relies heavily on these imports: USMCA imposes penalties if 75% of auto content is not made in North America. Eventually, 40-45% of auto content has to be made by workers making $16 hourly: if Mexico wants to export auto content, workers will get paid more.
This should also be closely watched for fair implementation, as U.S. manufacturing should be held to the same standards.
As continued extraction and emissions-intensive auto manufacturing sets a large part of the USMCA negotiation tone, this historic agreement does not include climate change language. Sure, included environmental provisions contribute to improved climate conditions, but missing language already renders USMCA an ecological dinosaur in trade agreement history.
These are some key USMCA issues. There is much more, including Big Pharma and food security issues, in the full text of the agreement.
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