The USMCA: A “New Model” for Labor Governance in North America?

Abstract

The North American Free Trade Agreement (NAFTA) put the North American countries on a new path of transnational labor governance by including labor provisions in a preferential trade agreement (PTA). This path led to a second generation of PTAs, albeit with major modifications, dealing with labor issues. The renegotiation of NAFTA has marked yet another step in this institutional trajectory by updating the labor provisions to reflect changing political and economic realities. The United States–Mexico–Canada Agreement (USMCA) includes new obligations, mechanisms and processes, updating the North American Agreement on Labor Cooperation (NAALC) as it incorporates features of the intermediate generation of labor chapters and reaches beyond. In this chapter, we survey the process from the NAALC to the USMCA. A first section describes the NAALC and its balance sheet on enforcement. A second section summarizes the changes to labor chapters negotiated by the United States and Canada in a second generation of PTAs. A third section addresses the political tensions that motivated further changes in the USMCA—as well as setting limits for their reach. A fourth section compares three generations of labor cooperation linked to PTAs in North America and concludes that the novel aspects of the USMCA have the potential, yet untested, to remedy some labor rights violations through trade mechanisms. If successful this could help translate trade growth into an upward convergence of living standards in North America.