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3-nation overhaul on trade kicks in

Provisions in newpact far from met by ANA SWANSON THE NEW YORK TIMES | July 2, 2020 at 2:07 a.m.

WASHINGTON -- President Donald Trump's promised rewrite of trade terms between the United States, Canada and Mexico officially took effect Wednesday. But while the president claims victory in reworking the North American Free Trade Agreement, putting its provisions into practice is far from done.

Company executives, government officials and union leaders around the continent have been scrambling to comply with the United States-Mexico-Canada Agreement, which overhauls a trade deal that has governed commerce among the three countries for more than 26 years.

The Trump administration and other supporters have welcomed the revised pact as providing much-needed changes to previous trade rules, including bigger incentives to manufacture products in North America, new guidelines for digital trade and stronger labor protections for Mexican workers.

But many of the deal's requirements, like expanding worker rights or opening up the flow of agriculture trade, have not been fully met, or still need to be phased in over the coming months and years.

Industries as varied as automobiles and agriculture are still struggling to understand recent guidelines from the U.S. government and certify that their products satisfy the trade deal, which requires some industries to buy more materials and components from North America and provide the government detailed information on their sourcing and wages.

The three-country pact, which was reached after more than two years of negotiations, sought to change Mexico's labor rules to ensure that workers had the freedom to form unions and bargain for better wages. But those changes are still winding their way through the Mexican legal system, under threat from powerful companies and politicians.

U.S. labor leaders warn that the deal's protections for workers -- which made it a model trade agreement in the eyes of Democrats and were largely responsible for winning their support -- could still falter.

WORK JUST BEGINNING

Michael Wessel, staff chairman of the Labor Advisory Committee that counsels the administration on trade issues, said that while much public attention had focused on the drama of negotiating the agreement, "the really hard work of making the provisions effective, ensuring that workers' rights are advanced and that the competitive landscape changes is ahead of us."

"Making sure we don't lose sight, and action, on the changes that need to be implemented, monitored and enforced will be a day-by-day fight," Wessel added.

In a congressional hearing on June 17, Robert Lighthizer, the U.S. trade representative, said he had pushed to have the agreement go into effect on July 1, even during a pandemic, so that the new rules could be enforced. In a sign of how fraught the new trade deal could be, Lighthizer said the United States was looking at a number of issues "that are quite troubling."

Like many Democrats, Lighthizer has criticized past trade agreements for both enabling U.S. factories to move overseas and lacking tools to crack down on those who would violate the rules. Over months of negotiations with Canada, Mexico and congressional Democrats, Lighthizer forged a coalition and worked out changes to the trade deal that won bipartisan support.

HURDLES WITH MEXICO

That included sweeping changes to Mexico's labor system, which would try to break the corrupt unions that help many companies control their workers in Mexico, and replace them with freely organized unions that could negotiate better wages and working conditions. That in turn would benefit U.S. workers, by giving them a more level playing field to compete.

Lighthizer pointed to Mexico's refusal to accept U.S. biotech products -- like genetically modified corn and other crops -- as one area where the United States could bring a case under the new trade deal. Mexico's labor changes and treatment of U.S. media companies are also garnering scrutiny.

Lighthizer also indicated that the United States, which won access to Canada's dairy market as part of the deal, was monitoring that sector for potential violations of the agreement. And the administration is considering renewing tariffs on Canadian aluminum exports.

Another new part of the agreement that was crucial for winning the support of Democrats and labor leaders was its "enforcement provisions," which give governments, unions and workers the ability to report violations of the agreement, and to try to seek redress.

One of these systems allows the countries to bring cases against one another about labor rights or a wide variety of other issues. Another fast-acting, labor-specific system allows unions, workers and other parties to report labor violations, which may lead to factory inspections and even products from the offending company being blocked at the U.S. border.

"We've always talked about agreements that don't have teeth, and this one has some teeth," said Ben Davis, director of international affairs for the United Steelworkers union. "Maybe not a full mouthful, maybe not as sharp as we need it, but it has some teeth, and we're all waiting to see how that plays out."

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