NAFTA (North American Free Trade) re-negotiations are underway with Canadian Prime Minister Justin Trudeau visiting Washington and Mexico over the last week in an apparent effort to manage U.S. President Trump’s growing protectionist proclivities. The Canadian Prime Minister has called for stronger labor rights and environmental standards. He has also advocated for chapters protecting the rights of women and indigenous peoples. Improved labor standards means not just improved working conditions for Mexican workers but also better wages—this latter aimed at reducing the imbalance between Mexico’s cheap labor market and those of its northern neighbours, a disparity held to be in part responsible for the flow of American and Canadian firms southward. Trudeau’s pronouncements indicate recognition that NAFTA has not adequately taken into the account the interests of those who have been the “losers” in the agreement.
NAFTA renegotiations are in full swing. The second round is currently underway in Mexico City with the main issue emerging as differential labor standards among the three countries. The main concern on the part of Canadian and U.S. negotiators and their respective trade union movements is the much lower wages and poorer working conditions in Mexico as compared to the other two countries. The argument of course is that lower pay and poor working conditions in Mexico are at the root of the flow of jobs southward, putting downward pressure on labor standards in the U.S. and Canada and swelling corporate profits. The argument that NAFTA has been a bad agreement for working people in all three countries is a compelling one. That being said, can a renegotiated NAFTA agreement do anything much to address workers’ plight in Mexico? Some observers are optimistic, even seeing Trump’s push for better wages and working conditions as potentially positive for Mexican workers. However, I have my doubts.
On July 17, the Trump administration released a document outlining its negotiating objectives for the renegotiation of the North American Free Trade Agreement (NAFTA) between the United States, Canada, and Mexico. The first round of the renegotiations will begin on August 16. While the U.S. administration claims that it has no deadline for the completion of talks, the reality is that the 2018 Mexican presidential election could make the achievement of U.S. goals considerably more difficult. However, renegotiations are very likely to be fraught with difficulties even before the new Mexican administration takes office in late 2018.
Lack of employment opportunities has been a longstanding feature of most Latin American countries, including Mexico, and one of the key reasons for historically high levels of poverty, deprivation, corruption, crime, and political violence. Lack of sufficient decent employment is now a widely recognized problem in the United States—one of the crucial issues in the election of Donald Trump was the loss of jobs, particularly in the manufacturing sector.