[CTC] AFL-CIO has ‘serious doubts’ that labor rules in NAFTA will be effective

Fri Nov 2 08:31:50 PDT 2018

Inside U.S. Trade

AFL-CIO has ‘serious doubts’ that labor rules in USMCA will be effective 
11/01/2018
Labor provisions in the U.S.-Mexico-Canada Agreement, while an improvement over the original NAFTA, are unlikely to make a “meaningful difference” for North American workers, the AFL-CIO said this week.

The labor group, in pre-hearing comments <https://insidetrade.com/node/164865> submitted to the U.S. International Trade Commission, said the new deal’s lack of “labor-specific monitoring or enforcement provisions (such as an independent secretariat or certification requirements)” were of concern to the largest federation of unions in the U.S. The AFL-CIO reiterated that it had yet to take a final position on USMCA and added that it would welcome some changes.

“While there are positive provisions in the renegotiated NAFTA, including improved labor and investment terms, both the labor rules and enforcement tools should be improved,” the AFL-CIO said in Oct. 30 comments. “There are also provisions in the agreement that undermine the interests of workers and consumers, as a result of provisions including pharmaceutical monopolies, financial services, and regulatory practices.”

Most importantly for the AFL-CIO, the deal lacks rules that would “create greater confidence” the labor chapter would be “swiftly of certainly enforced,” the comments state. Accordingly, it has “serious doubts that the improved rules will make a meaningful difference to North American working families without additional provisions, assured funding, and implementing language.”

The International Brotherhood of Teamsters, meanwhile, was much more sanguine about the new deal.“We conclude that the new NAFTA is a better deal for American workers and our members than the original NAFTA,” the group wrote in Oct. 30 comments.

“However, we must withhold our support until the Commission has published its analysis pursuant to Fast Track and until the administration presents the 116th Congress with implementing legislation that fulfills the promise of the progress made at the negotiating table on our priority issues, especially the protection of workers’ rights under the Labor Chapter,” the Teamsters added.

The Teamsters lauded USMCA language aimed at reforming Mexican labor laws “to ensure workers’ rights to secret ballots in union elections, which will strengthen collective bargaining which, in turn, will create necessary (but not sufficient) conditions for higher wages.” The group also said the increased regional value content and labor value content requirements for autos “will benefit North American workers in vehicle production by putting upward pressure on wage rates.”

The AFL-CIO urged the ITC to “demonstrate that improvement in rules regarding workers’ rights alone will have no impact without effective enforcement; to scrutinize the auto rule of origin to provide a reliable analysis of its potential impacts; and to examine the negative effects of locking excessive pharmaceutical monopolies into NAFTA.”

The group also took aim at provisions included the labor annex and urged the ITC to be skeptical that the language could “effectively promote changes” to Mexico’s laws and practices.

The annex <https://insidetrade.com/node/164564> says Mexico must adopt legislation “in accordance with Mexico's Constitution” by Jan. 1, 2019. That legislation, among other items, would establish “(i) an independent entity for conciliation and union collective bargaining agreement registration and (ii) independent Labor Courts for the adjudication of labor disputes.”

But the AFL-CIO said the U.S. should look at the history of Mexican policies “that purposely undermine wages and obstruct the rights of workers to organize and bargain collectively.”

“The USITC should not assume that the mere presence of such obligations will effectively promote changes to law and practice,” the submission states. “Although the incoming Mexican president has signaled strong support for labor reform, Mexico has not yet enacted the legal changes required, much less put them into practice.

Accordingly, the group recommends “withholding trade benefits for Mexican firms until such time as these obligations have been fulfilled.”

The labor union also addressed language crafted to fix what led to the first and only U.S. loss in a labor dispute settlement case filed under a free trade agreement.

The May 10 Agreement -- struck between congressional Democrats and the Bush administration in 2007 -- has been used as a foundation for labor chapters in free trade agreements. It says FTA parties must show that a labor violation occurred because of a “sustained or recurring course of action or inaction” and in a “manner affecting trade or investment between the parties.” The USMCA includes footnotes clarifying the definitions of those pillars, as Inside U.S. Trade reported in April.

But the AFL-CIO says the text “retains objectionable limitations” outlining the ways in which a violation must occur under an FTA, though it believes the clarifying footnotes are a step in the right direction.

“While the text retains the objectionable limitations that labor violations under the agreement must be in a ‘manner affecting trade or investment’ (which likely excludes much of the public sector) and occur in a ‘sustained or recurring course of action or inaction’ (which excludes egregious but one-time acts such as murder or torture), the footnotes clarifying these standards are welcome improvements,” the submission states.

The AFL-CIO also lamented “strict” language in the USMCA’s Good Regulatory Practices Chapter, which the group claims “locks in current executive orders regarding how the United States creates regulations in general -- preventing this and future Congresses from improving our processes for creating and modifying regulations unless those changes conform to the strict rules promulgated in the Good Regulatory Practices Chapter.”

The USMCA is the first trade agreement to ever include an entire chapter on good regulatory practices, but the AFL-CIO said some of its regulatory language is “short sighted.”

“The idea of locking in not only current rules, but current methods of creating new rules, is not only short sighted, it interferes with the right of citizens to use the levers of democracy to make different choices,” the group wrote. “Imagine if the U.S. government of 1878, 150 years ago, had attempted to lock in through an international agreement not only certain regulations, but the processes to create those regulations. Such a scheme would have interfered with the passage of fundamental laws such as the 1906 Food and Drugs Act and the 1938 Federal Food, Drug, and Cosmetic Act.”

The chapter includes review mechanisms including “mechanisms to conduct retrospective reviews of its regulations in order to determine whether modification or repeal is appropriate,” according to USMCA.

The labor union also says intellectual property provisions -- such as Articles 20.F.13 and 20.F.14 -- could “undermine access to affordable medicines” and are “poised” to extend “economically inefficient monopolies and price-gouging.”

Those provisions, the AFL-CIO continued, “require countries to establish periods of test or other data exclusivity for chemical and biologic drugs that could lead to delays in the introduction of generic competition.” The expansion of IP exclusivity for biologics to 10 years “would primarily benefit those who seek to delay domestic market access to lower cost prescription alternatives and would prevent the United States from changing its domestic exclusivity period to less than 10 years.”

Public comments and hearings beginning on Nov. 15 will be used to inform an ITC study on the economic impact of the USMCA, which is due within 105 days of the president’s signing of the deal.-- Isabelle Hoagland (ihoagland at iwpnews.com <mailto:ihoagland at iwpnews.com>)

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.citizenstrade.org/pipermail/ctcfield-citizenstrade.org/attachments/20181102/604ef770/attachment.html>