By Gerard Di Trolio
Everyone has a take on the new United States-Mexico-Canada Agreement (USMCA).
Trump likes the way it sounds.
Trudeau thinks it will grow the middle class.
Conservative leader Andrew Scheer thinks Canada gave up too much and that he would have somehow managed to get a better deal out of Trump. Scheet is short on the specifics of how he would have done it in the face of aggressive American negotiators.
Meanwhile, unions have had mixed responses.
CUPE slammed the deal saying that while the elimination of Chapter 11’s investor-state dispute settlement (ISDS) for Canada was a positive development, Trudeau failed to live up to his own progressive promises and that the deal now puts programs like pharmacare at risk because the Canadian government caved on pharmaceutical patents.
USW criticized the deal for not doing anything about Trump’s steel and aluminum tariffs on Canada.
But Unifor was satisfied that automotive jobs would be protected through making cars exempt from tariffs and that by 2023, 40 per cent of a car’s parts must be made by workers earning $16 per hour.
Union sectionalism would rear its ugly head though with Unifor criticizing USW over allegedly supporting steel and aluminum tariffs from their U.S. headquarters. However USW HQ has been against extending those tariffs to Canada. But overall, USW HQ has taken a more conciliatory tone towards the USMCA than their Canadian section.
It’s still a bad deal
Despite some modest gains in certain sectors that labour can be content with, the deal should be rejected overall.
Not surprisingly, the Trudeau government caved on their promise of ensuring greater Indigenous rights, gender equality and labour protections in the USMCA.
There’s no repeal to right-to-work laws in the United States. That demand was only ever going to be a bargaining proposal that the Canadians would eventually take off the table to try to make gains elsewhere.
The Labour Chapter in the USMCA is practically unenforceable. It uses the ILO Declaration of Fundamental Principles and Rights at Work as its framework. No tribunal with any teeth for USMCA labour issues has been established. And all the ILO tribunal can do is issue rulings that international law has been violated. And Canada has been ruled against on many occasions by the ILO with zero repercussions, not even as much as the federal or a provincial government acting the least bit embarrassed.
On that basis, the promise of the USMCA to make it easier for Mexican workers to join unions is going to require a skeptical wait-and-see approach.
Mexico sold out
But what is definitely a negative for Mexico is that it is now the only country in the deal subject to ISDS.
Some may take this has outgoing President Nieto selling Mexico out, as he signalled a willingness to secure some sort of free trade deal at all costs. In return for retaining the ISDS, the Mexicans have a new short chapter entitled Recognition of the Mexican State’s Direct, Inalienable, and Imprescriptible Ownership of Hydrocarbons which seems to be nothing more than cover that Nieto can use to sell the deal to his people.
But with Mexico’s first left wing president in nearly 80 years, Andrés Manuel López Obrador, coming to power in January, keeping Mexico subject to ISDS is as much about protecting the Mexican’s ruling class’ investment in neoliberalism, as much as it is about protecting U.S. corporate investment in Mexico.
Retaining the ISDS will certainly box in López Obrador’s government from enacting progressive legislation. For example, his party had campaigned in the past to halt further privatization in Mexico’s energy industry.
Despite some minor changes that governments can sell to their workers as protecting jobs, the USMCA further entrenches neoliberalism on a continental level.
First there is the already discussed ISDS and Mexico.
Second, there is a new chapter entitled Macroeconomic Policies and Exchange Rate Matters. Which seeks macroeconomic and exchange rate policies to be market based.
This has been an under reported part of the USMCA that could have serious future effects on any type of progressive economic intervention by governments.
Meanwhile, a lot of attention has been grabbed by the Canadian government’s softening on supply management. Consumers are right to be concerned about milk with hormones hitting store shelves here.
But the gains from deregulating farming is overstated. Deregulation in New Zealand which has been long lauded for increases their food exports, still sees consumers in that country pay more for milk than Canadians. Recent deregulation has hit Australian dairy farmers hard and U.S. dairy farmers have also been suffering lately, with many farmers south of the border asking for a supply management system similar to Canada’s. Keeping an eye on farmers’ conditions and dairy prices is something that needs to be done by fair trade activists as the market opens up, but the precedents don’t look good.
During the negotiations for this deal, we witnessed both impressive demonstrations of international solidarity, and national labour movements tailing their governments. This bifurcated approach to politics can’t last.
Only in auto, can we say that jobs have probably been saved. Of course nothing in this deal prevents further automation or car companies demanding concessions in wages and benefits.
Sectionalism is going to screw over all workers in the long run. That’s why the labour movement needs come together to continue to fight against the bosses and build international solidarity that can exert real pressure. For example, unions should raise their voice about the clause requiring Canada and Mexico to consult with the U.S. before signing trade deals with “non-market economies” which is code for China. Canadian and Mexican workers should resist U.S. imperial posturing.
If resistance is mild and limited to press releases, politicians will continue to tinker at the edges and claim a great new deal while continuing to deepen and protect neoliberalism at the expense of everyone else.