Future of NAFTA 2.0 Could Turn on Labor Rights

Scott Sinclair Director of the Trade and Investment Research Project, Canadian Centre for Policy Alternatives

The next phase, legislative approval, is a foregone conclusion in Canada (where the Liberals have a parliamentary majority and Conservative support) and Mexico (where the newly elected president and his allies control the Senate and can count on support from opposition senators).  But that is not the case in Washington. Under “fast-track” rules mandated by legislation, the USMCA must be approved, with no amendments, by a simple majority in both chambers of Congress.

Although Congress cannot amend the deal, it can insist on commitments about how the USMCA is to be implemented. In effect, these could amount to changes. Furthermore, if the White House anticipates a negative vote in the soon-to-be Democratic-controlled House of Representatives, the U.S. administration might come back to Canada and Mexico demanding textual revisions, interpretive side letters and/or new assurances about how the deal is to be implemented in each country.

The USMCA’s labor provisions are certain to be a key area of ongoing discussion and contention.  The incoming Democratic leadership in the House and labor allies have expressed a clear need for stronger assurances on the enforcement of labor rights. Such a development might even be welcome to the Canadian and new Mexican governments.

On the other hand, a group of 40 Republican legislators (most of whom were re-elected) have threatened to vote against the deal because the labor chapter forbids discrimination based on sexual orientation and gender identity. Removing or even diluting such fundamental human rights would be a difficult, perhaps politically impossible pill for the Trudeau government to swallow.

The USMCA labor provisions represent an improvement over previous free trade agreements, but those agreements set a low bar. The original NAFTA, for example, contained no binding provisions protecting labor rights or standards. NAFTA’s labor side agreement, negotiated by the Clinton administration to secure congressional approval of the trade deal, was toothless and ineffective.

Posted In: Allied Approaches

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