The Building Tradesman Newspaper

Friday, October 19, 2018

‘New NAFTA’ draws skepticism, questions from union leaders, allies

By The Building Tradesman

By Mark Gruenberg

PAI Staff Writer

WASHINGTON (PAI)— President Donald Trump’s Sept. 30 announcement that Canada signed the “new NAFTA” pact Trump previously negotiated with Mexico – with a few modifications to appease the Canadian government -- drew devil-is-in-the-details skepticism from union leaders and workers’ allies.

And the whole fight over the so-called three-way “free trade” agreement will probably play out next year, as the bargain was reached too late to come before Congress this year, unless lawmakers ponder it in a lame-duck session.  Meantime, “new NAFTA” may well become an issue on the U.S. campaign trail.

Which means there will be another battle royal over a pact that Teamsters President Jim Hoffa nicknamed “NAFTA 2.0.”

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," said AFL-CIO President Rich Trumka. "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."

The U.S. won't have the only war over NAFTA among 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 for our neighbors to the north. Trudeau’s government faces Canadian voters in 2019. 

And Mexico’s small farmers, clobbered by NAFTA’s opening of the Mexican corn and maize 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 U.S. in ensuing years, especially after the peso crashed. 

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 hourly, compared to $3 hourly which Mexican auto workers now earn, or are supposed to earn. He also touted higher labor standards for Mexico. 

“The problem with U.S. trade policy isn't that it's caused the ‘loss of a few factory jobs,’” tweeted Celeste Drake, the AFL-CIO's trade policy specialist. “It's more than four million manufacturing jobs + $2k in annual income for the majority of U.S. workers. Trade rules needs 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 of 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, too, 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. 

Hoffa continued: “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 re-negotiation.”

“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, 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.”