Novel Labour-related Clauses in a Trade Agreement: From NAFTA to USMCA

Abstract

The renegotiated North American Free Trade Agreement (NAFTA), now called the United States–Mexico–Canada Agreement (USMCA), contains two interesting innovations: the requirement of aminimum average wage in the manufacturing of motor vehicles (the Labour Value Content clause)and a detailed prescription for the reform of Mexican labour law. Both could serve as models forfuture labour chapters in trade agreements. The assessment contained in this article is based on theviews of those who demanded renegotiation of the labour-related provisions of NAFTA, expertson labour rights in free trade agreements (FTAs) and ethics criteria. The assessment results in asplit picture. The labour-related provisions came about under ethically problematic circumstancesand their complexity leaves much room for criticism. Yet, the idea of inserting a wage floor in anFTA, as well as monitoring and sanctioning mechanisms for ensuring internationally recognisedlabour rights, merits further consideration for future trade agreements.KEYWORDS: globalisation; industrial relations; competitiveness; trade agreements; outsourcing

Biden’s Foreign Economic Policy: Crossbreed of Obama and Trump?

“…First, there was Trump's aggressive rhetoric toward Mexico, which meant that he did not have to fear criticism of the renegotiation from right-wing, xenophobic groups; second came the involvement of US unions, which have been the biggest critics of free trade agreements since the late 1960s. A clause reforming Mexican labor law, a sophisticated right of appeal in the event of labor law violations, and tightened rules of origin convinced most US unions, and thus also the Democratic congresspersons associated with them, to approve the treaty (Scherrer 2020).…”