We Have a NAFTA — Er, USMCA — Deal!

Elizabeth Brotherton-Bunch

Elizabeth Brotherton-Bunch Digital Media Director, Alliance for American Manufacturing

The North American Free Trade Agreement (NAFTA) lives — under a new name, anyway.

Leaders from the United States, Canada, and Mexico announced on late Sunday night that they reached an agreement to update NAFTA, the trilateral trade deal that President Trump long has wanted to overhaul. The announcement came just before a self-imposed midnight deadline to get the deal done, and literally at the 11th hour: The White House held a conference call with reporters at 11 p.m. Eastern time.

In typical Trump fashion, the new NAFTA has new branding: It’s now called the United States-Mexico-Canada Agreement, or USMCA.

It’s an exciting development, and one that many astute observers didn’t expect was possible just a few days ago. But don’t break out the champagne quite yet.

While all three USMCA leaders are expected to sign the accord within 60 days — including, crucially, the outgoing Mexican president —Congress also needs to approve the new pact, as do legislative bodies in Mexico and Canada. In the United States, congressional approval isn’t a guarantee, especially if Democrats regain control of the House of Representatives following the midterm elections in November.

Here at the Alliance for American Manufacturing, we are going to reserve our judgment on the new USMCA until we’ve had some time to fully review it. But a few key details about the agreement stand out, as the Washington Post reports:

  • Autos: In order to qualify for zero tariffs, an automobile must have 75 percent of parts made in the U.S., Canada or Mexico. This is a boost from the current 62.5 percent requirement. Starting in 2020, at least 30 percent of the work done on the auto must also be completed by workers earning at least $16 an hour, three times what the typical Mexican autoworker makes. In 2023, that percentage increases to 40 percent for cars.
  • Auto Tariffs: Throughout the negotiating process, Trump threatened to levy big tariffs on autos and auto parts if a deal wasn’t reached. But as part of the new agreement, the U.S. signed “side letters” with Canada and Mexico that will allow them to mostly bypass auto tariffs.
  • Steel: One of the points of contention in the talks was the Trump administration’s Section 232 action on steel imports; Canada wants the U.S. to drop its 25 percent tariff on Canadian steel. In a side letter, the U.S. and Canada agreed that the U.S. "shall not adopt or maintain a measure imposing tariffs or import restrictions on goods or services of Canada under Section 232... for at least 60 days after imposition of a measure." The two countries would then negotiate "an appropriate outcome" over those 60 days. How this all impacts the current tariffs remains unclear, however, and a White House official said Sunday talks are ongoing on a "separate track."
  • Labor and Environment: Improvement in these areas is crucial if the Trump administration hopes to get any support from Democrats and labor unions. The Post notes a few details, including higher safety regulations for Mexican trucks that enter the United States. Mexican workers also are given more ability to organize and form unions.
  • Intellectual Property Protection: Given that the original NAFTA was negotiated in the early 1990s, its intellectual property (IP) regulations were woefully outdated. As such, there are a number of new IP guidelines in the USMCA designed to better protect company trade secrets and other IP.

We’ll have more thoughts and analysis on the USMCA in the coming hours and days, so stay tuned.

And as the effort now moves to Congress, we’ll point out that voters are pretty clear about what they’d like to see out of the new deal: Higher wages, strong alliances, penalties to prevent trade cheating, maximizing the use of U.S. parts in autos and other products, and a reduction in the trade deficit. Whether the new USMCA will be able to deliver remains to be seen, and might just be key to winning congressional approval.

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Reposted from AAM

Posted In: Allied Approaches, From Alliance for American Manufacturing

Union Matters

Get to Know AFL-CIO's Affiliates: National Association of Letter Carriers

From the AFL-CIO

Next up in our series that takes a deeper look at each of our affiliates is the National Association of Letter Carriers.

Name of Union: National Association of Letter Carriers (NALC)

Mission: To unite fraternally all city letter carriers employed by the U.S. Postal Service for their mutual benefit; to obtain and secure rights as employees of the USPS and to strive at all times to promote the safety and the welfare of every member; to strive for the constant improvement of the Postal Service; and for other purposes. NALC is a single-craft union and is the sole collective-bargaining agent for city letter carriers.

Current Leadership of Union: Fredric V. Rolando serves as president of NALC, after being sworn in as the union's 18th president in 2009. Rolando began his career as a letter carrier in 1978 in South Miami before moving to Sarasota in 1984. He was elected president of Branch 2148 in 1988 and served in that role until 1999. In the ensuing years, he worked in various roles for NALC before winning his election as a national officer in 2002, when he was elected director of city delivery. In 2006, he won election as executive vice president. Rolando was re-elected as NALC president in 2010, 2014 and 2018.

Brian Renfroe serves as executive vice president, Lew Drass as vice president, Nicole Rhine as secretary-treasurer, Paul Barner as assistant secretary-treasurer, Christopher Jackson as director of city delivery, Manuel L. Peralta Jr. as director of safety and health, Dan Toth as director of retired members, Stephanie Stewart as director of the Health Benefit Plan and James W. “Jim” Yates as director of life insurance.

Number of Members: 291,000 active and retired letter carriers.

Members Work As: City letter carriers.

Industries Represented: The United States Postal Service.

History: In 1794, the first letter carriers were appointed by Congress as the implementation of the new U.S. Constitution was being put into effect. By the time of the Civil War, free delivery of city mail was established and letter carriers successfully concluded a campaign for the eight-hour workday in 1888. The next year, letter carriers came together in Milwaukee and the National Association of Letter Carriers was formed.

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There is Dignity in All Work

There is Dignity in All Work