“New NAFTA not perfect, but better than the sh*t show we started with”
Mexican President Andrés Manuel López Obrador speaks at the National Palace in Mexico City. | Marco Ugarte / AP

WASHINGTON—The “New NAFTA” President Trump and congressional Democrats unveiled on Dec. 10—and which the AFL-CIO supports—is not perfect for workers but is far better than “the sh*t show we started with,” a top pro-worker trade expert who works closely with unions says.

That summary on Dec. 16, from Lori Wallach, director of Public Citizen’s Trade Watch, received partial confirmation a few days before from two former U.S. ambassadors to Mexico, both career diplomats. They were part of a Brookings Institution panel reviewing the first-year record of new progressive Mexican President Andrés Manuel López Obrador, popularly called AMLO.

As a matter of fact, they said, some Mexican worker rights reforms the “New NAFTA” demands have already begun. They include AMLO’s new tougher pro-worker labor law, higher spending on enforcement, and Mexican unions breaking away from the old “company union” model and competing for workers.

GOP President Donald Trump and congressional Democratic leaders unveiled the rewritten “New NAFTA,” formally the U.S.-Mexico-Canada Agreement (USMCA), on Dec. 10. The House will vote Dec. 19 on legislation to implement it, one day after the representatives vote on two articles impeaching Trump for abuse of power and obstructing congressional investigations into his use of bribery in dealings with Ukraine.

Both are “high crimes and misdemeanors,” the 658-page House Judiciary Committee report on his misdeeds says. It declares his actions endanger national security, and it backed that indictment with detailed evidence and testimony.

The impeachment vote is expected to fall entirely along party lines in the bitterly divided Democratic-run House. By contrast, Wallach predicted the USMCA bill will get a large bipartisan majority “though House and Senate Republicans will hold their noses and vote for it because Trump is for it,” she said.

The USMCA legislation won’t come up in the Senate until after the impeachment trial in January ends, Wallach added.

In the meantime, she said, organized labor and House Democrats can justly claim they forced Trump to rewrite the USMCA largely on their terms, counter to his expected trumpeting that he negotiated a pact that is good for workers.

And unions, Democrats and their allies must take workers the message that while the USMCA is imperfect, it’s a lot better now—certainly in its labor sections and enforcement—than the original version Trump released a year ago. Wallach said labor and congressional Democrats should take credit for that.

“He (Trump) didn’t make it (the old NAFTA) better, he made it worse,” Wallach said of the president’s 2018 rewrite. Labor and its Democratic allies turned that around.

“He got forced to renegotiate what he renegotiated.”

Lori Wallach. | Public Citizen

The rewrite, Wallach said, includes massive labor reforms in Mexico. That’s important for U.S. workers, as U.S. multinationals used the 26-year-old NAFTA to trash 770,000 to 1 million U.S. factory jobs and move them to Mexico.

Other firms have moved call center jobs there, prompting the Communications Workers, who are campaigning to organize those workers, to issue a statement: “Our work to address outsourcing, offshoring and economic inequality goes beyond addressing the flaws in our trade agreements. There are actions that the Trump Administration and Congress can take right now that would have an immediate, positive impact for working people and bring jobs back to our country.”

The Machinists oppose USMCA, saying it still doesn’t stop outsourcing of factory jobs.

Wallach agreed, because the USMCA is not perfect. It won’t completely stop the bleeding immediately “and it won’t bring back the jobs that we lost,” contrary to any Trump claims on the coming campaign trail, she commented.

As an example, just in the week since Trump unveiled the new pact, U.S. automakers said they would close plants in New York and shift the jobs south of the border. “For the first time, the Ford Mustang will be made in Mexico,” Wallach said. The auto plant moves led the Auto Workers to withhold comment so far.

But the USMCA also forces Mexico to end its 700,000 company unions within four years, to erect and fund a new labor enforcement system, and provides “fairly rapid responses” to Mexican labor law-breaking. Again, Wallach said, that’s unlike NAFTA.

And, she deadpanned, business reaction shows the USMCA may be a lot better than NAFTA for workers than people realize.

One U.S. business coalition set up to promote the “New NAFTA” reversed course over the weekend of Dec. 14-15, and now opposes the USMCA. So did Big Pharma. Wallach said the drug makers lost many prior protections written into other “free trade” pacts, including NAFTA.

Plus, a top Mexican official, with the Mexican Chamber of Commerce screaming in his ears, flew to D.C. for an emergency session to lobby the Trump administration. He said Mexican businesses want to ban U.S. embassy labor attaches from inspecting Mexican factories, on no notice and by talking with workers. He—and business—lost.

“The Mexican guys thought it [labor inspections] was horrible.”

By contrast, Wallach noted U.S. car companies aren’t screaming over the USMCA’s higher North American content rule or its mandate that each vehicle be manufactured by workers who make an average of $16 an hour. Mexican auto workers make as little as $2 hourly, while many U.S. auto workers average above $30.

Trump himself backed the $16 demand, though Wallach didn’t say so.

Other pro-worker provisions in the new USMCA, Wallach said, include eliminating 95% of the cases of the Investor State Dispute System (ISDS), a controversial, secret pro-business trade court whose rulings could override U.S. laws on everything from pollution to equal pay, all in the name of present or future profits.

Instead, the 5% of ISDS cases left will be only between the U.S. and Canada, over side issues, or if one of the three governments actually seizes a company owned by a resident of another USMCA nation. And the “future profits” loophole is gone.

“The Mexican trade annex,” which the Dems and labor forced Trump’s bargainers to attach to USMCA, “eliminates the industrial rules that are the basis of the entire ISDS system,” she said. That, plus other provisions, “are a floor” for any future trade pacts, Wallach stated.

And ISDS yields to a new pro-worker system where those factory inspectors can find that Mexican trashing of worker rights violates USMCA trade rules – and those cases must be decided quickly. There was no such anti-trashing provision, and no quick or definitive decisions, in NAFTA, Wallach said.

The two former U.S. ambassadors to Mexico, speaking three days before at the Brookings Institution, a Washington think-tank, were cautiously optimistic, but also warned there is still a long way to go.

“Reform was underway even before the USMCA,” said Roberta Jacobson, a 30-year career diplomat. “It is so long overdue.” Reforms already occurring include the Mexican unions pursuing new workers. And former ambassador Anthony Wayne said AMLO proposed tripling the labor enforcement budget. “They spent hardly anything” before, he said of the Mexicans.

“They have to build a whole new court system” for labor cases “and it’ll be messy,” Wayne warned.


Mark Gruenberg
Mark Gruenberg

Award-winning journalist Mark Gruenberg is head of the Washington, D.C., bureau of People's World. He is also the editor of the union news service Press Associates Inc. (PAI). Known for his reporting skills, sharp wit, and voluminous knowledge of history, Mark is a compassionate interviewer but tough when going after big corporations and their billionaire owners.