Canadian, U.S. Unions Push for Wage Hike Amid NAFTA Talks

Labor leaders in the U.S. have made it clear they are supportive of a NAFTA overhaul — but only if it helps eliminate the wage gap with Mexico and includes Canada’s long-shot demands for labor reform.
Ginger Adams Otis
October 14, 2017
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Amid tense talks to renegotiate the North American Free Trade Agreement, one strong alliance has emerged: a pro-worker bond between Canadian officials and the U.S. labor movement.
 
Both American and Canadian unions want to raise wages in Mexico — in part to improve conditions for workers there and also to level the playing field on production costs.
 
And the Canadian government has won union allies with its hard-line position that the U.S. must ban state right-to-work laws as part of an updated NAFTA.
 
Canada believes that lax labor standards in America — including right-to-work laws — and Mexico give those countries an unfair advantage in attracting jobs.
 
Right-to-work — now active in 27 U.S. states — allows employees in unionized shops to refuse to pay dues even if they benefit from union protection, ultimately draining labor groups of resources.
 
Jerry Dias, the leader of Unifor, Canada’s largest private-sector trade union, has praised his government for making right-to-work and other labor reforms a central tenet of the ongoing NAFTA overhaul.
 
But he’s also said it’s clear the U.S. does not want a deal.
 
“The comedy show is unfolding in Washington, there is no question about it,” he said. “That is exactly what this NAFTA renegotiation is.”
 
Justin Trudeau says Canada can shine as U.S. is 'turning inward' Negotiators from all three countries were in D.C. last week for the fourth session of NAFTA talks.
 
Teamsters President James Hoffa told Canadian negotiators “to hold their ground” in the fight to end right-to-work.
 
On Thursday, discussions in Washington focused on government procurement, cross-border trade in services, environmental issues and state-owned enterprises.
 
More contentious topics were broached Friday, and discussion on them will be continued this week.
 
Among the thorniest of items was a discussion on the rules of origin, a controversial issue involving regional content requirements for auto companies, and talks on labor that center on Mexico’s chronically low wage rates.
 
Trump says Mexico will pay for wall 'one way or another' Teamsters President James Hoffa on Thursday told Canadian negotiators “to hold their ground” in the fight to end right-to-work.
 
But given the already precarious state of the NAFTA talks — with President Trump’s negotiators sending strong signals they may pull out altogether — that may be hard to do.
 
Chris Wilson, deputy director of the Mexico Institute at the Wilson Center, a nonpartisan Washington think tank focused on international affairs, called it a “crisis” moment for the 1994 agreement that turned Mexico, the U.S. and Canada into a tariff-free zone.
 
“The U.S. has prepared and begun to deliver a series of proposals that run headfirst into the basic positions of Canada and Mexico — and that could create an impasse without any flexibility,” Wilson said.
 
Trump, who repeatedly called NAFTA a “total disaster” and “one of the worst deals ever” on the campaign trail, came close to pulling out of the agreement during his first 100 days in office.
 
“I was all set to terminate,” Trump told The Washington Post in April. “I looked forward to terminating. I was going to do it.”
 
He was dissuaded at the last minute through heavy lobbying from NAFTA supporters on his White House team — many with ties to the business community that stands to lose billions if the trade deal comes undone.
 
Agriculture Secretary Sonny Perdue convinced the President it was the wrong thing to do by showing him a map of the rural communities that would be hardest hit by a NAFTA withdrawal — overlaid with a map of “Trump country” voters. The two demographics shared a hefty overlap.
 
“It shows that I do have a very big farmer base, which is good,” Trump told The Post. “They like Trump, but I like them, and I’m going to help them,” he said.
 
Two days later, he’d backed off from his decision to pull out of NAFTA.
 
Now, midway through the fast-track negotiations, it appears Trump has come full circle again.
 
Trump's White House picnic featured charcoal made in Mexico He repeated his warnings last Wednesday that he might terminate the pact and said he was open to doing a bilateral deal with either Canada or Mexico if three-way negotiations fail.
 
The key demands from Team Tru00mp that are nonstarters for Mexico and Canada include a sunset clause that would require NAFTA to be renewed every five years and an automotive rule of origin that would require 85% of car parts be supplied from within the North American region, up from 62.5%. In addition, Trump wants 50% of car parts to come from the U.S.
 
“That means a car built in Mexico couldn’t enter the U.S. without a tariff unless 50% of it includes American-made content,” said Wilson. “That to Mexico doesn’t sound like a free trade agreement, it sounds like protectionism.”
 
Canada and Mexico also want their companies to be able to bid on more U.S. federal and state government contracts, but this is at odds with Trump’s “Buy American” agenda.
 
The U.S. Chamber of Commerce — which is a strong supporter of keeping NAFTA — says some of Trump’s demands are “poison pill proposals” that could torpedo the talks.
 
Labor leaders in the U.S. have made it clear they are supportive of a NAFTA overhaul — but only if it helps eliminate the wage gap with Mexico and includes Canada’s long-shot demands for labor reform.
 
United Auto Workers President Dennis Williams said last week that negotiators must realize that NAFTA “has failed working people in all three countries.”
 
Renegotiations will only be successful if the “crippling” auto trade deficit with Mexico is addressed, he said.
 
Like many labor leaders who have blamed NAFTA for America’s disappearing manufacturing sector, Williams said there were “thousands” of U.S. jobs lost to Mexico.
 
“In 1993, the U.S. had an automotive trade deficit with Mexico of $3.5 billion. By 2016, that deficit had grown to $45.1 billion. For auto parts, the U.S. deficit with Mexico was $100 million in 1993; it was 200 times larger by 2016, at $23.8 billion,” Williams said.
 
At the same time, the average wage for a Mexican auto worker has stayed at $3 an hour, he added.
 
“Mexican workers are not to blame for NAFTA’s failures. . . . If multinational corporations remain in the driver’s seat, NAFTA renegotiations will not succeed and working people will continue to suffer. We cannot let that happen,” he said.
 
With News Wire Services.
October 17, 2017