[CTC] Trump's NAFTA replacement isn't enough for striking auto workers

Wed Sep 18 07:08:14 PDT 2019

https://www.cnn.com/2019/09/17/politics/nafta-usmca-gm-strike/index.html <https://www.cnn.com/2019/09/17/politics/nafta-usmca-gm-strike/index.html>

Trump's NAFTA replacement isn't enough for striking auto workers
By Katie Lobosco
 09/17/2019

Washington (CNN) President Donald Trump has hardly weighed in on the strike at General Motors <https://www.cnn.com/2019/09/17/business/uaw-gm-strike-how-we-got-here/index.html>, instead offering his own US-Mexico-Canada Agreement as a remedy for what's ailing the auto industry -- but the prospect of the much-touted deal doesn't seem to have convinced workers that their jobs won't move to Mexico.

Nearly 50,000 workers were off the job for a second day Tuesday <https://www.cnn.com/business/live-news/gm-workers-strike-uaw/index.html> as the United Auto Workers union continued to negotiate over wages and health benefits. One sticking point <https://www.cnn.com/business/live-news/gm-workers-strike-uaw/index.html> is bringing back manufacturing jobs that have moved to Mexico.

A UAW source close to the negotiations told CNN that the automaker would not budge on this point. A GM spokesperson said the company has offered to create more than 5,400 jobs and invest $7 billion in the United States.

The USMCA still needs to be approved by Congress. But some of the major changes it would make are meant to address jobs moving to other countries.
"I have a respectful message for all of the United Auto Workers who are currently on strike," Vice President Mike Pence said Tuesday during a speech at the Heritage Foundation.

"As the President said, we hope and trust you'll work out your differences with GM. But while you're at it, if you really want to support our nation's auto workers, the UAW and GM ought to tell Congress to pass the USMCA and make sure there's more auto workers jobs for decades to come," he said.

White House spokesman Judd Deere confirmed Tuesday that administration officials were not involved in the negotiations between the union and GM.
"As President Trump has said, we would like to see a fair and speedy conclusion to these talks," he said.

The President pays close attention to the manufacturing sector, which is an important part of his political base. He met with GM CEO Mary Barra <https://www.cnn.com/2019/09/05/business/trump-barra-gm-fact-check/index.html> earlier this month about her decision to close four US plants.

On Monday, Trump again touted the USMCA at a campaign rally in New Mexico. If passed, the deal would fulfill one of his campaign promises to tear up the North American Free Trade Agreement.

"Unions love it," he said of the USMCA.

But the UAW is far from embracing the proposed trade agreement in its current form.

"It won't stop the shifting of auto production to Mexico and beyond," the UAW said in a blog post in August. <https://uaw.org/will-new-nafta-work-us/>

Auto workers blame NAFTA for sending manufacturing jobs south of the border, where wages are lower.

The USMCA addresses that by requiring more of a vehicle's parts to be made by workers earning at least $16 an hour in order to remain tariff-free. It also adds a provision that would require 75% of a vehicle's parts to be made in North America, up from the current 62.5% rule.

A report from the US International Trade Commission, an independent federal agency, found that the USMCA would have a modest, but positive effect on jobs <https://www.cnn.com/2019/04/18/politics/nafta-usmca-economic-report/index.html>. The study estimated that it would add 28,000 jobs in the auto industry over six years, but also lead to a small increase in the price of vehicles that consumers pay.

But the American Automotive Policy Council, which represents General Motors, Ford and Fiat-Chrysler, criticized the agency's report for underestimating the long-term investments US automakers will make because of the USMCA. A White House report said the auto provisions alone would create 76,000 jobs and lead to $34 billion in new manufacturing investments over a five-year period.

Industry analysts say it would take a long time before companies would move capital-intensive manufacturing plants because of the USMCA's requirements
"We don't think that there are companies that are going to just close their plants in Mexico and move to the United States," said Michelle Krebs, executive analyst at Cox Automotive.

"We think that in many cases they'll just pay the penalties and keep doing what they're doing," she added.

Some Democratic lawmakers are also concerned about whether the wage provisions would be enforced under the trade deal as its written.

"The USMCA's labor and environmental standards and their enforcement are insufficient to stop corporations from continuing to move jobs to Mexico so they can pay employees less and dump toxins," wrote Democratic Michigan Rep. Debbie Dingell in an op-ed piece published Monday in the Washington Post <https://beta.washingtonpost.com/opinions/debbie-dingell-nafta-20-needs-upgrading-before-democrats-approve-it/2019/09/16/4465aad0-d7cc-11e9-ac63-3016711543fe_story.html>.

Though, she added, that the labor-reform laws passed by Mexico earlier this year "are a step in the right direction.”

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826

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