[CTC] Despite Democrats’ hope, USTR has not indicated it will push for NAFTA labor standards that go beyond TPP

[Arthur Stamoulis]

Two articles below...


INSIDE US TRADE
Despite Democrats’ hope, USTR has not indicated it will push for NAFTA labor standards that go beyond TPP

January 28, 2018 
MONTREAL -- The U.S. has not tabled a new NAFTA labor proposal that goes beyond an initial offer which largely mirrored what was negotiated in the Trans-Pacific Partnership and has not indicated it would do so in the talks, a move likely to draw the ire of Democrats and jeopardize their support for a final deal, sources and lawmakers here told Inside U.S. Trade.

The U.S. labor negotiating team, these sources said, has not received any political direction from U.S. Trade Representative Robert Lighthizer to push Mexico for more commitments in the talks or advance its initial proposal, which Democratic lawmakers have said was not sufficiently ambitious.

Rep. Sandy Levin (D-MI) told Inside U.S. Trade in Montreal last week that the inclusion of robust, enforceable labor rules in NAFTA was the highest priority for his caucus and would determine whether any Democratic support for a final deal was possible. And Rep. Bill Pascrell (D-NJ), ranking member of the House Ways & Means trade subcommittee, urged the Trump administration to modify the language it has put forward on labor to date and said a new NAFTA deal must include measures requiring that Mexico provide more robust workers’ rights.

Pascrell, Levin and other Ways & Means members from both sides of the aisle arrived in Montreal on Jan. 26 as part of a congressional delegation to the talks here. Democratic members of the delegation met on Jan. 27 with representatives from the AFL-CIO, Teamsters and United Steelworkers; later in the day, they met with Mexican government officials and U.S. private sector representatives. The lawmakers were slated to meet with Lighthizer here on Sunday afternoon.

Pascrell said he had an “interesting discussion” with the Mexican officials. “I did my schtick in the meeting with the Mexicans,” he told Inside U.S. Trade on Jan. 27. “I laid it out very clearly. And that, you know, we've got to have something more than 'we're working on it.’”

He said his support for a retooled deal was contingent on Mexico allowing workers to collectively bargain and seek wage increases, among other things. “If those things aren't in it I'm not going to support it,” he said.

A source close to the talks, however, said that while there “was a lot of discussion” outside the negotiating room on wages and whether Mexico was fighting with the U.S. on the issue, “the odd thing is that when you get down to the details” the U.S. and Mexico “share a lot of views” on the labor chapter.

The source said neither the U.S. nor Mexico has put forward a proposal that addresses wages -- likely because while “the tools available within a trade agreement can have a positive effect on wages,” the “many different factors” that determine wages have to be addressed in Mexico.

And while labor negotiations are always “tough,” the source said, “it would be inaccurate to say that Mexico is in a defensive position and Canada and the U.S. are pressuring. That’s like talking points from 1992. That is not the case at all.”

One labor source here was skeptical, telling Inside U.S. Trade that beefing up labor rules via NAFTA 2.0 will be a tough task for Lighthizer because Trump does not favor policies that boost workers’ rights.

Pascrell concurred, saying that while “Lighthizer is doing his job,” the lawmaker wonders if he is “in charge or is he allowed to do what he wants to do, or is he taking orders? Don't forget: In the beginning they we’re going to blow up the thing.”

In a Jan. 27 tweet <https://twitter.com/USTradeRep/status/957347864191041536%20USTR>, USTR said “one of the United States’ main objectives is to make NAFTA more fair for American workers.”

“The United States has put forward a detailed proposal to replace the original NAFTA’s toothless approach on labor with enforceable provisions to benefit workers across America,” USTR added.

Lawmakers and labor sources, however, have pointed to a disconnect between the Trump administration’s approach to dispute settlement in NAFTA and its plans for enforcing its labor chapter.

USTR, they noted, has pushed to make state-to-state dispute settlement non-binding while simultaneously pledging to include tough, enforceable labor rules in NAFTA. One labor source here told Inside U.S. Trade it was unclear how USTR planned to resolve that conundrum, and added that unenforceable labor rules would make it impossible for Democrats to vote for a new NAFTA.

Levin said the administration understands that NAFTA labor rules must be enforceable but said it was still not apparent how that could be accomplished with the current dispute settlement proposal.

“I think the administration knows when it comes to labor provisions it has to be real, it has to happen and it has to be enforceable,” Levin toldInside U.S. Trade. “They’re not saying ‘let’s leave it open.’ They can’t say that and be credible. That’s what NAFTA 25 years ago was. It was unenforceable.”

“We’ve tried to figure out exactly what the [dispute settlement] proposal is; it’s not clear,” Levin added. The lawmaker said he has raised the issue with Lighthizer multiple times and that the USTR committed to making the labor chapter enforceable.

After meeting with labor groups in Montreal, Pascrell told reporters he was hopeful Lighthizer would improve USTR’s labor proposal but said President Trump’s policies and rhetoric could complicate those efforts.

“I have a great deal of faith in Lighthizer; I think he’s going to try to do the job, he understands the situation,” Pascrell said. “He also has to take signals from the top guy. And the top guy has had many, many signals which have not helped us in negotiations.”

Levin and Rep. Brian Higgins (D-NY) said after meeting with labor groups that they were not satisfied with the U.S. and Canadian efforts on labor so far. “The United States and Canada have not used [their] collective leverage effectively enough to get a good deal for the American worker,” he said.

Earlier this week, Levin fired shots at Canada for proposing labor rules he said would never be agreed to by the other parties. Those include requiring the U.S. to eliminate its state-level right-to-work laws and obligating the NAFTA countries to ratify the eight core International Labor Organization conventions.

Canada’s proposals, Levin said, distract from the fundamental issue: Mexico’s labor standards.

“It’s totally unrealistic,” Levin said in a Jan. 25 interview. “I’ve never met anyone who thinks you can do it through NAFTA. Enough said.”

After his conversation with the Canadian delegation, Levin told Inside U.S. Trade on Jan. 28 he was confident that Canada’s “unrealistic” demands going forward would not be sticking points in the discussions between the U.S. and Canada about addressing Mexico’s labor regime.

The source close to the negotiations called Canada’s labor ideas “more ambitious” than the other two countries’ and described them as “proposals that many times the U.S. is not ready to move forward on.”

Mexican Economy Secretary Ildefonso Guajardo addressed NAFTA and labor on the sidelines of the World Economic Forum in Davos, Switzerland, last week. He touted the deal as “the first one that included environmental and labor issues” but cautioned that structural changes could not be achieved through free trade agreement negotiations.

“I think that we cannot ask trade agreements to solve the development problem or inequality problem,” he said. “It’s domestic policies that have to take care of those challenges.”

“And the best example of this is NAFTA,” Guajardo added. “We joined NAFTA in 1994, but we didn’t open the energy sector for competition. We did not create a strong antitrust institution. We didn’t open up [small and medium-sized enterprises] to the benefits of NAFTA; we did 20 years later. So it’s domestic policies that you have to look at.”

More than 180 House members last week told Lighthizer in a letter <https://insidetrade.com/node/161702> that new NAFTA labor rules must be enforceable and address wages in Mexico, adding that Mexico must make progress on labor issues before Congress votes on a new NAFTA.

The House members also wrote that USTR’s current labor proposal was not robust enough to get their votes and said it must serve only as a “starting point” for the negotiations.

The letter is a clear signal that House Democrats are united in their call for stronger labor rules, which they say is their top priority -- a “make-or-break issue,” Levin said.

A source close to the talks, however, said the lawmakers’ demands do not accurately reflect the realities on the ground and go far beyond what can be tackled on labor through trade negotiations.

“I think that the NAFTA is an element that can be used to improve labor rights; that’s no question,” the source said. “But I believe that the approach that some legislators would probably like to see does not fit with the realities that we have been doing in the past few decades and what we can still achieve.”

Higgins said his vote would be “directly contingent on the ability of the United States and Canada to bring Mexico to a higher level.”

“Regardless of other changes, if a renegotiated NAFTA does not address needed labor reforms in Mexico, American companies will continue to outsource jobs south of our border,” he said in a statement. “Mexico must allow independent unions to form and collectively bargain for higher wages. United States Trade Representative Lighthizer should update and strengthen the language around labor standards in NAFTA, and ensure we can fully enforce higher standards with our trading partners."

“I think if this issue isn’t faced -- at least in the House and I think the same is true of most of the Democrats in the Senate -- I think if this isn’t faced up to they would have immense difficulty getting the votes,” Levin said.

The source close to the talks said the lawmakers’ letter “fails to acknowledge” the reforms that Mexico has undergone in the past decade and also fails to acknowledge that -- while perhaps “it’s not enough” -- “just getting labor in the main agreement is a real improvement.”

Levin claimed that Mexico was moving backwards on labor reforms it was set to enact through a law passed in February 2017 that would bring into force constitutional reforms <https://insidetrade.com/node/151664> to eliminate so-called tripartite conciliation and arbitration boards.

Last week, the AFL-CIO filed a complaint <https://insidetrade.com/node/161720> under the NAFTA labor side agreement about that alleged backtracking. The Michigan Democrat said he had brought up the issue with the Mexican government and urged officials “to step up to the plate” and not “solidify the status quo.” -- Jenny Leonard (jleonard at iwpnews.com <mailto:jleonard at iwpnews.com>) and Jack Caporal (jcaporal at iwpnews.com <mailto:jcaporal at iwpnews.com>)


 
Politico Pro
 
NAFTA labor talks could open fresh conflict in the negotiations
 
By ADAM BEHSUDI <https://www.politicopro.com/staff/adam-behsudi>
01/28/2018 04:52 PM EST
 
MONTREAL — Efforts by congressional Democrats to push for stronger labor standards in Mexico as part of the new NAFTA are opening a new battlefront in the already contentious talks, risking fissures that could further divide the United States from Canada and Mexico.
 
Lawmakers who are in Canada for the talks this weekend say Mexican labor laws purposefully suppress wages and drive U.S. and Canadian jobs south of the border. Addressing that issue will be vital for the Trump administration to generate any Democratic support for the pact, they said.
 
“How can you have a trade deal with a country that doesn’t recognize its own humanity? I don’t know,” Rep. Bill Pascrell <https://cd.politicopro.com/member/51559>, the ranking Democrat on the House Ways and Means Trade Subcommittee, told reporters on Sunday.
 
The strong message on labor is being directed toward U.S. Trade Representative Robert Lighthizer, who has pushed proposals aimed at reshoring jobs by tightening U.S. content requirements on cars and weakening investment protections for companies that set up shop in Mexico.
 
Democrats are now mounting a big push to persuade Lighthizer to consider how Mexico’s labor and wage standards are the real culprit for job migration.
 
“NAFTA’s being renegotiated, in part, largely because of the failure 25 years ago to put labor and environment in the agreement,” Rep. Sandy Levin <https://cd.politicopro.com/member/51482> said in an interview. “It has to be rebuilt on the right foundation.”
 
Levin, a Michigan Democrat, helped organize a letter <https://delauro.house.gov/sites/delauro.house.gov/files/USTR%20NAFTA%20Letter%201.23.2018.pdf> sent to Lighthizer last week in which 183 of the 193 House Democrats bashed Mexico’s efforts at labor reforms and described the current U.S. proposal as only a starting point in the negotiations.
 
The lawmaker’s efforts garnered support last week from a joint complaint <https://www.politicopro.com/f/?id=00000161-2df8-da2c-a963-effbb5710001> by the AFL-CIO and Mexican labor unions.
 
The petition under NAFTA’s current nonbinding labor provisions details how a pending bill in the Mexican Congress could derail progress on the country's labor laws. The bill would implement constitutional labor changes, but it is seen as backtracking on intended improvements to the labor arbitration process and strengthening the ability of company-controlled unions to negotiate "protection contracts" that favor employers.
 
“I have a great deal of faith in Lighthizer,” said Pascrell, who added that he was planning to raise the issue in a Sunday afternoon meeting in Montreal between lawmakers and the top trade official. “I think he’s going to try to do the job. He understands the situation.”
 
After the meeting with Lighthizer, Levin said the USTR "laid out his position, and that is those conditions must be addressed that NAFTA cannot continue to be a source of outsourcing."
 
Lighthizer has recognized Mexico’s labor shortcomings in previous meetings with lawmakers and labor representatives.
 
The top U.S. trade official has also acknowledged that changes are needed to avoid future labor disputes similar to a yearslong process that failed to rule <https://www.trade.gov/industry/tas/Guatemala%20%20%E2%80%93%20Obligations%20Under%20Article%2016-2-1(a)%20of%20the%20CAFTA-DR%20%20June%2014%202017.pdf> against Guatemala over allegations of violations of the labor rules under the separate Central American Free Trade Agreement, sources briefed on those meetings said. These sources spoke on the condition of anonymity because of the sensitivity of the negotiations.
 
A group of senators has pushed <https://www.baldwin.senate.gov/press-releases/baldwin-leads-letter-to-trump-calling-for-strong-protections-for-workers> for the new NAFTA pact to strengthen and clarify that enforcement process, which is included in recent U.S. trade deals and the current TPP-like labor proposal that the U.S. has presented in the NAFTA renegotiation.
 
Still, Lighthizer has not yet given lawmakers any signal that he will offer a revised proposal, nor has he provided an explanation of how enforceable the current U.S. proposal is, Levin said.
 
A push to get Lighthizer to bring his aggressive negotiating style to bear on the labor issue could risk opening new rifts with Canada and Mexico.
 
Levin said he felt as though the Mexican side was in “major denial” of the labor rights problems in the country after he met with the Mexico’s negotiating team on Saturday.
 
The lawmaker, along with other Democrats and U.S. labor unions, wants U.S. negotiators to demand that Mexico agree to a "consistency plan" that would require the country to agree to fully put in place its recent labor reforms. He is also pushing for other improvements before getting any of NAFTA’s trade benefits.
 
The United States was able to pressure Vietnam, Malaysia and Brunei to agree to similar consistency plans in TPP talks, but Mexico, also a TPP participant, resisted, arguing that it was already undertaking a domestic process of labor changes.
 
But Mexico is already pushing back against such demands from U.S. lawmakers in NAFTA talks. Sources close to the talks said the government was “not amenable to any possibility of having a consistency plan linked in NAFTA," similar to its position in TPP.
 
“From the conceptual perspective, NAFTA is an element that can be used to improve labor rights, that’s no question, but I believe the approach that some legislators would like to see does not fit with the realities that we have,” said one source close to the talks.
 
The Mexican side criticized the letter from House Democrats as failing to recognize the reforms the government had already undertaken. Sources briefed on the talks also said Democrats did not credit Mexico for pushing to make labor rules fully enforceable. (Under the existing pact, labor issues are a nonbinding “side letter.”)
 
Mexico is committed to improving NAFTA’s labor rules and shares that goal with the United States and Canada, a source close to the talks said.
 
“It would be inaccurate to say Mexico is in a defensive position and Canada and the U.S. are pressuring,” the source said. “That’s a talking point from 1992.”
 
Ottawa could also complicate efforts to pressure Mexico on labor. Canada has put forward a labor proposal that goes far beyond the initial U.S. one and largely mirrors what Washington put on the table in the TPP talks.
 
Canada not only wants to tackle labor failings in Mexico but also go after U.S. right-to-work laws and demand that the U.S. ratify conventions under the International Labor Organization.
 
Both Pascrell and Levin argue that Canada should refocus its attention on Mexico and join forces with the U.S. on that issue and drop what they view as unrealistic demands on the United States.
 
"Based on my discussions at a high level, I think Canada is basically going to acknowledge that two of three elements of their progressive agenda are not feasible in NAFTA," Levin said.
 
The U.S. labor movement, however, has bristled at what they view as a premature demand by Democratic lawmakers to ask Canada to relent on pushing the United States on the right-to-work issue and International Labor Organization conventions, sources said.
 
One labor source acknowledged that getting Congress to ratify ILO conventions — which cover the right to associate, child labor, force labor and other rights — could be difficult, but added that asking Canada to give up this demand too early could undermine efforts to at least incorporate into NAFTA some commitments from the conventions.
 
Lawmakers say the demand on Canada to soften the proposal is merely a pragmatic approach toward focusing on the real issue of improving Mexico's labor conditions.
 
"We do not have enough votes in the Congress to change that," Pascrell said of Canada's demands on the ILO conventions and right-to-work laws. "I am not supporting right-to-work laws, but I’m being very practical about what we think we can change within the agreement so that it doesn’t blow up."
 
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