Is a Deal to Pass USMCA in the Works?
By Alan Benjamin
Forgive me if I am a bit cynical when it comes to the Democratic Party and the issue of “free trade” agreements signed by the United States, Mexico and Canada. There’s a good reason for this.
In 1993, the proposed NAFTA agreement faced stiff opposition in the U.S. Congress. The AFL-CIO was urging members of Congress to vote “No” on the grounds that NAFTA would off-shore millions of union-scale jobs to Mexico. Then, at the 11th hour, a labor “side agreement” was reached among the three signatory countries — the North American Agreement on Labor Cooperation (NALC) — that blunted labor’s opposition to the agreement, essentially giving a green light to the Democratic Party leadership and to the Bill Clinton administration to go ahead with NAFTA, which was signed on January 1, 1994. Labor’s protest was reduced to a whimper.
The labor “side agreement” proved to be a sham; it was not worth the paper it was printed on. There were no labor tribunals, no inspectors, no hearings, no funds, nothing. But the damage had been done; the NAFTA agreement was approved — and the destruction of jobs in the United States and Mexico began at dizzying speed, all thanks to Bill Clinton and the Democrats.
I cannot help but wonder if a similar situation is developing here with the US-Mexico-Canada Agreement, or USMCA, promoted by Donald Trump. As things stand now, USMCA is scheduled to be introduced in the Congress this September. Under the rules of the Trade Promotion Authority (TPA) — which is controlled by House Speaker Nancy Pelosi — a vote on USMCA could take place by the end of the year. (The new pact requires ratification from all three nations’ legislatures, and only Mexico’s already has ratified it.)
Why Am I Concerned?
First because Speaker Pelosi is saying different things to different audiences. On the one hand she tells labor gatherings that unless there are fundamental modifications to USMCA, notably the tightening of labor laws in Mexico, USMCA is dead in the water. If the current agreement is voted without amendments, she insists, the Democratic caucus will vote “No” on the agreement.
But Speaker Pelosi’s message to the financial media is quite different.
The Wall Street Journal on July 26 reports that Trump’s top economic adviser, Lawrence Kudlow, “announced that Speaker Pelosi and Trump officials have had productive talks on the [USMCA] trade pact that have led Kudlow to believe that USMCA will pass.” (Up till now, the dominant view has been that USMCA will not pass in 2019 and, in fact, may never pass.)
The WSJ article continues: “Kudlow told reporters Friday that House Speaker Nancy Pelosi (D., Calif.) has been very accommodating to U.S. Trade Representative Robert Lighthizer and others working to get the USMCA ratified in Congress.”
Market Watch on June 18 reports that, “Pelosi has made it clear that Democrats ‘have been on a path to Yes’.”
I am also concerned because of declarations made over the Labor Day weekend by AFL-CIO President Richard Trumka on Christian Science Monitor‘s Meet the Press and on Fox News Sunday. He was asked about USMCA and his upcoming trip to Mexico on September 4, where he will be meeting with Mexico’s Secretary of Labor María Luisa Alcalde and Mexican President Andrés Manuel López Obrador (AMLO).
Trumka told Fox News Sunday that “USMCA is incomplete as written — and that any attempt by the Trump administration to force its passage prematurely would spark nationwide mobilizations by the labor movement.”
At the same time, Trumka insisted that Trade Representative Robert Lighthizer is an “honorable man” and that he [Trumka] and the labor movement “are trying to get to a ‘Yes’ vote on USMCA,” while warning that if Mexico can’t enforce its labor laws, “we won’t have any choice but to urge a ‘No’ vote.”
On the Christian Science Monitor‘s Meet the Press, Trumka was asked what it would take to reach an agreement on labor rights. “It would take swift and certain enforcement mechanisms written into the text,” he replied. But he also lowered the bar, hinting that written assurances by the Mexican government might suffice to pave the way for an acceptable agreement.
Politico magazine (September 3) summarized the purpose of the top-level AFL-CIO delegation as follows: “On Wednesday, September 4, AFL-CIO President Richard Trumka will lead a delegation of labor leaders to meet with President Andrés Manuel López Obrador. The U.S. union leaders will attempt to smooth over labor provisions in the proposed U.S.-Mexico-Canada Agreement.”
“Smoothing over differences” with the aim of “getting to a ‘Yes’ vote” is not what the U.S. labor movement expects or needs. It sounds all too much like the deal-making carried out prior to the NAFTA vote back in 1993. The USMCA must be stopped. What is needed is a “comprehensive replacement” — not an “amended” NAFTA 2.0.
“For Mexican workers, nothing has changed” — Leo Gerard
If you take only the issue of enforcement of labor laws in Mexico, what assurances by the Mexican government — or what language in the body of the agreement — could possibly alter the fact that there are, according to AMLO’s Labor Secretary, 700,000 protection contracts with fake, company unions that need to be reviewed and rewritten? According to United Steelworkers (USW) President Leo Gerard this could take decades.
In his important article titled, “NAFTA Old and New: Deals by the Rich for the Rich,” Gerard writes the following:
“As it is now, labor unions in Mexico frequently are fakes, created and controlled by corporations. The new laws, passed in April, empower Mexicans to form their own worker-controlled labor unions that could negotiate for higher wages and exercise the right to strike without workers suffering violent attacks by authorities.
“For workers to get real unions and labor agreements, the Mexican government will have to actively assure workers’ rights. But right now, Mexico has no budget for implementation and has not even started to hire the hundreds of judges and inspectors that the new law requires or to review some 700,000 current labor agreements to determine their validity. The structure to eliminate fake unions and certify worker-controlled organizations is supposed to be phased in over four years, but corporatists and other opponents already are attempting to thwart the labor reforms with lawsuits and other actions. For Mexican workers, nothing has changed.”
In mid-June AMLO enacted one of the most severe austerity programs in years: the Ley de Austeridad Republicana. Budgets for social spending are being cut. Precarious jobs are being created, often replacing better jobs with healthcare coverage and pensions. To expect that there will be funding for labor inspectors and labor attorneys to rewrite the 700,000 protection contracts — or to thwart the anti-labor lawsuits — is sheer folly. It’s not going to happen, whatever the assurances, written or verbal, and whatever the wording about enforcement mechanisms in the agreement.
Enforcement Mechanisms (for Labor and Environmental Rights) Are Not Enough!
While the inclusion of “swift and certain enforcement mechanisms” are a necessary component of any trade agreement that actually benefits working people in all three countries, inclusion of such amendments alone will not alter the fundamentally anti-labor and anti-Mexican sovereignty provisions contained throughout the USMCA agreement. The simple fact is that USMCA is a corporate trade agreement.
In his presentation to the July 13 Labor Conference Against Privatizations and Deregulation held in San Francisco, Mexican activist Luis Carlos Haro Montoya explained:
“Under USMCA, Mexico’s food sovereignty will continue to disappear. All the pro-corporate ‘structural reforms’ implemented under the aegis of NAFTA will continue unabated under USMCA. The ‘energy reform’ will deepen the capitalists’ drive to privatize Mexico’s oil. The Investor State Dispute Settlement (ISDS) provision has been included in NAFTA , and now in USMCA in relation to Mexico, precisely to prevent Mexico from regaining its energy sovereignty, reversing the privatizations, and repealing all the ‘structural reforms’.”
So long as the “structural reforms” enacted under Peña Nieto are in place (privatization of healthcare, social security, education, and energy, among others); so long as Mexico’s food sovereignty is undermined and its farmlands are unable to sustain the rural population; and so long as the ISDS provision is included in USMCA in relation to Mexico, this treaty will continue to favor the rich and hurt the working-class majority.
A More Effective Strategy to Win Labor Rights: A Cross-Border Labor Solidarity Campaign
There is an urgent need for a well-funded and ongoing Labor Solidarity Campaign by the U.S. labor movement with workers south of the border. Workers in the maquiladora factories in Matamoros defied all anti-union laws and staged the most important strikes in the 55-year history of maquiladoras along the U.S. border. Wouldn’t it accelerate the drive for true independent trade unionism in Mexico if the AFL-CIO, with the USW in the lead, organized a major cross-border campaign to publicize and build support for the Matamoros struggle?
Wouldn’t such a campaign push the U.S. corporations that own these maquiladoras to insist that their Mexican subsidiaries sign collective-bargaining agreements with the newly formed Union of Industries and Services 20/32 in Matamoros?
Shouldn’t the U.S. labor movement also demand that all workers fired for their organizing efforts in Matamoros and Tecate, Baja California, be immediately reinstated, with back pay?
The U.S. labor movement could organize rallies and press conferences at the headquarters and/or offices in the United States of such auto-parts manufacturers as Rockwell Automation, Tridonex/Cordone Industries, Avant Manufacturing, FisherDynamics, or Tricon. Wouldn’t this be an important contribution toward “disengaging the vacuum that pulled factories south,” to quote Brother Gerard.
Most important: Shouldn’t rank-and-file and union leaders in our local unions and labor councils be demanding that our union leaders promote such a campaign?
Affirming the Independence of the Labor Movement in Relation to the Bosses and their Trade Agreements
A number of prominent labor activists have argued that Richard Trumka and Nancy Pelosi are not really in favor of a “Yes” vote on USMCA. They are simply going through the motions to show good faith in negotiations while holding firm to their commitment to enforceable labor and environmental rights. “It’s just a way of putting the onus for a failed agreement on the Trump administration,” they say.
Such an approach disorients the labor movement and could prepare the way to a rotten deal, as occurred in 1993. A far better approach is the one contained in the resolution adopted on November 26, 2018, by the San Francisco Labor Council, AFL-CIO — major excerpts from which are reprinted below. This important S.F. Labor Council resolution concludes as follows:
“The San Francisco Labor Council opposes the ratification of USMCA and urges the labor movement in all three signatory countries to mobilize to stop the approval of USMCA by the legislative bodies in the three countries, and calls on all U.S., Mexican, and Canadian trade unions, along with community organizations and human rights organizations, to insist on a comprehensive NAFTA replacement that improves the rules of trade; ensures the enforcement of trade union rights and collective-bargaining; creates good, high-wage jobs; protects our environment; safeguards our democracies; and benefits our members and all workers in the United States, Mexico and Canada.”
Stopping USMCA, as the San Francisco Labor Council resolution put it, “is the necessary first step, the very pre-condition, to opening new negotiations — with the full input of trade unions, environmental groups, and other community organizations in all three signatory countries — that could lead to a trade deal that benefits working people in all three countries.”
– – – – –
Alan Benjamin is a member of the Editorial Board of The Organizer newspaper and a Steering Committee member of the Labor Fightback Network. For the past 29 years he has served as a delegate from OPEIU Locals 3 and 29 to the San Francisco Labor Council.
* * * * * * * * * *
San Francisco Labor Council Resolution Opposing the USMCA Renegotiated Agreement
(Excerpts from resolution adopted unanimously by the November 26, 2018, meeting of the San Francisco Labor Council)
Whereas, on August 14, 2017, by unanimous vote, the Delegates Assembly of the San Francisco Labor Council adopted a resolution titled, “Cancel NAFTA! Tear Down the Wall of Shame / Not One More Deportation! Support Workers’ Rights and Struggles in Mexico, the U.S., and Canada!”; andWhereas, the S.F. Labor Council resolution noted that over the past 24 years, “NAFTA has been used to pit U.S. workers against Mexican and Canadian workers in order to benefit U.S. transnational corporations”; and
Whereas, the S.F. Labor Council resolution further noted that, “NAFTA has been used to privatize railroads, telecom, oil, and education — and to dismantle Mexico’s agricultural industry — causing the forced migration of tens of millions of people from their homelands in Mexico”; and
Whereas, the S.F. Labor Council went on to denounce the Trump administration for “increasing the militarization of the border of the United States and Mexico, and proposing to extend the Wall of Shame all across this border, thus dividing families and children from their parents and other relatives”; and
Whereas, the Trump administration has pushed through the renegotiation of NAFTA without any input from the above-mentioned unions and organizations; it’s an agreement that does not correct the injustices that workers and our communities have suffered from NAFTA.
The renegotiated US-Mexico-Canada Agreement calls for lifting all tariffs on agricultural products; therefore it will continue and intensify the devastating impact on the peasant sector in Mexico.
USMCA gives U.S. agribusiness conglomerates access to 3.5% of the Canadian dairy market, which is worth $16 billion. This will mean the ruin for thousands of dairy producers, particularly in Quebec. It will also undermine Canada’s sovereignty: Article 32.10 of USMCA impedes Canada’s sovereign right to sign bilateral or multilateral trade agreements involving “non-market economies” — which targets Canada’s trade with China.
USMCA liberalizes and deregulates “financial services,” i.e., it lifts all restrictions on private banking and other private financial entities, handing over broader control to transnational financial capital.
USMCA compels the Mexican government NOT to modify the 2013-14 energy sector privatizing “reforms,” thus ensuring continued transnational control over the hydrocarbon and energy sectors. (In fact, USMCA will prevent Mexico from taking back the railroads, mines, telecom and other industries that were privatized by NAFTA and sold off to the U.S. and other multinationals around the world, as it maintains the Investor-State Dispute Settlement, or ISDS, with Mexico. It will allow the continued privatization of education and public services in the U.S., Mexico and Canada.)
USMCA liberalizes e-commerce and the services sector; i.e., it opens up the Mexican market to this sector.
USMCA protects “intellectual property,” especially of pharmaceutical companies. It will continue to benefit big pharmaceutical corporations by increasing drug prices in Canada and Mexico, and it will place yet another obstacle in the way of achieving a “Medicare For All” single-payer healthcare system in the United States.
USMCA opens Mexico even more to transnational corporations through the deregulation of foreign investments.
Therefore be it resolved, that the San Francisco Labor Council opposes the ratification of USMCA and urges the labor movement in all three signatory countries to mobilize to stop the approval of USMCA by the legislative bodies in the three countries, and calls on all U.S., Mexican, and Canadian trade unions, along with community organizations and human rights organizations, to insist on a comprehensive NAFTA replacement that improves the rules of trade; ensures the enforcement of trade union rights and collective-bargaining; creates good, high-wage jobs; protects our environment; safeguards our democracies; and benefits our members and all workers in the United States, Mexico and Canada.
Be it finally resolved, that the San Francisco Labor Council will submit this resolution to the California Labor Federation for concurrence.
— Submitted by Olga Miranda (SEIU 87), Alan Benjamin (OPEIU 29), Alisa Messer (AFT 2121), Susan Solomon (UESF), Allan Fisher (AFT 2121), Tony Vargas (UFCW 5), Rodger Scott (AFT 2121), Tom Lacey (OPEIU 29)