Trump, Trade, and <em>Trabajo:</em> Renegotiating NAFTA's Labor Accord in a Fraught Political Climate

Abstract

Trump, Trade, and Trabajo:Renegotiating NAFTA's Labor Accord in a Fraught Political Climate Lance Compa* I. INTRODUCTION Quitting the Trans-Pacific Partnership (TPP) and demanding renegotiation of the North American Free Trade Agreement (NAFTA)—along with its supplemental labor pact, the North American Agreement on Labor Cooperation (NAALC)—were among the first actions of the new U.S. Administration in 2017.1 NAFTA renegotiations concluded—for the time being—in October 2018 with announcement of the United States-Mexico-Canada Agreement (USMCA) to replace NAFTA.2 Controversial proposals on the bargaining table contained important implications for employment, labor rights, and labor standards in North America. This paper reviews the status of negotiations, the risks of losing the first-ever international instrument linking trade and labor standards (despite its flaws), and the options for preserving and strengthening trade-labor linkage in a new agreement. [End Page 263] NAFTA renegotiation is a moving target, hard to hit in a definitive way given the volatility of the U.S. administration. Throughout 2017 and 2018, each week brought new tweets, new twists, and new threats to undo NAFTA.3 Less than three weeks after celebrating the USMCA, President Donald Trump threatened to cancel it if Mexico did not stop migrants from Central America moving toward the U.S. border.4 When Democrats re-took control of the U.S. House of Representatives in the November 2018 mid-term elections, some Democratic party leaders said they would block approval of the new trade agreement unless stronger labor protections were added.5 The version of this paper published in the Indiana Journal of Global Legal Studies will likely be overtaken by later events. But the hope is that even a partial analysis of the renegotiation process can clarify the potential effects on workers and employers in North America and broaden debates about the relationship between trade and labor rights. Following this Introduction, Part II of the paper looks at NAFTA's labor side agreement and the resulting standards and obligations, institutional structure, and complaint mechanism. It also reviews labor rights advocates' use of the complaint system to advance their interests and a sample of cases to convey the strengths and weaknesses of the system. Part III moves to discussion of the current status of negotiations, continued flaws and failures in the three countries' labor law system, and challenges negotiators face in crafting a new labor accord. It also looks at key elements of post-NAFTA trade-labor agreements with other countries to see how they might influence the renegotiation process. Part IV examines how a renegotiated NAALC accord can fix flaws in [End Page 264] the original and add new features to advance workers' rights. Part V argues for the continuing vitality of the labor agreement and reviews key elements of the labor chapter in the new USMCA. II. LOOKING BACK A. Background At its inception in 1994, NAFTA was the first and only trade pact with a labor dimension. The United States, Canada, and Mexico were each other's largest trading partners. From 1989-1992, the administrations of George H.W. Bush, Carlos Salinas, and Brian Mulroney, all pro-business conservatives, put NAFTA together as a strictly commercial agreement without any reference to labor standards. Those three heads of state signed the continental trade agreement in August 1992. The Canadian and Mexican parliaments approved it in short order, but it took more than a year before the U.S. Congress approved it in November 1993, a year of political change and political battle over NAFTA's social dimensions.6 The three leaders signed NAFTA just as the 1992 U.S. presidential race was heating up. Labor, environmental, and human rights organizations pressured candidate Bill Clinton to repudiate the agreement in his campaign for the presidency. Critics charged that the agreement favored multinational corporations and investors at the expense of workers and the environment. At the same time, Clinton's candidacy relied heavily on financial support from important elements of the corporate and investment banking communities that supported the trade agreement. Clinton responded to both pro- and anti-NAFTA forces and opted to support the pact if supplemental accords dealing with labor and the environment...