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Could NAFTA 2 Have Some Bite?

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Well this is certainly interesting:

Every now and then, there is something new under the sun. This month, it’s a pro-worker trade policy—a first for the federal government in at least 40 years.

This notable turn began on May 11, when the AFL-CIO, SEIU, and a Mexican union lodged a complaint against multiple auto parts factories in Matamoros, across the Rio Grande from Brownsville, Texas. The plants’ management had been firing workers who were seeking to form an independent union (by last count 600 of them), and had gotten state authorities to jail Susana Prieto Terrazas, the workers’ lawyer, on fictitious charges.

The Mexican company that runs the plants is a subsidiary of U.S.-based Cardone Industries, which in 2016 laid off 1,300 workers in its Philadelphia brake factory and transferred the work to Matamoros. Cardone, in turn, is controlled by Toronto-based Brookfield Asset Management. This continental chain of command made it an appropriate target for invoking the provisions of the U.S.-Mexico-Canada Agreement (USMCA, the successor to NAFTA, enacted last year), which included language inserted by Democrats intended to break the status quo for labor rights in Mexico.

The common practice in Mexican factories has been to have management make a deal with a pro-management union, denying workers any say in the process. Not for nothing are such unions called “protection unions.” In most such workplaces, employees don’t know which of these “unions” represents them or what their contract actually says. In the USMCA, Sen. Sherrod Brown (D-OH) and others added language requiring Mexico to allow workers to decide by election which union would represent them. The provision also established a “rapid response” mechanism when formal labor complaints are lodged, so the review of the Matamoros abuses is already proceeding apace.

The real revolution in trade accords, though, came two days later, on May 13, when the U.S. trade representative’s office initiated another complaint under USMCA, this one against a General Motors factory in the central Mexican state of Guanajuato that turns out Chevy Silverados and Sierra pickup trucks. There, workers were voting in an election to determine whether the factory’s protection union would remain in place, an election that the protection union itself was running. When it became clear that the protection union was losing, it started tossing out ballots that were opposed to its continuing tenure. As soon as the complaint was lodged, the Mexican government declared the election invalid and said a new one would be held.

What was groundbreaking about this action was that this was the first time that the government itself had initiated a complaint. Previously, through all the years of the Clinton, George W. Bush, and Obama administrations, the government only lodged complaints after a union made its case to the USTR urging action—a case the USTR did not have to accept. But nothing was stopping the USTR from initiating such complaints itself during previous administrations: The federal government “has had the power all along; it just never used it,” says Mark Levinson, the chief economist for the Service Employees International Union.

I want to plug Levinson here a bit, who gave a talk at my school a few years ago as part of a series on inequality and it turned out that he had written the amazing labor rights provision for Cambodian workers in the 1990s that actually demonstrated that the U.S. government could create a race to the top in the garment industry. I wrote about this a good bit in Out of Sight. Having him on board pushing for these suits is hugely important. And as he points out, the U.S. government has had the ability to do this for years. It just hasn’t–including the Obama administration.

Biden simply takes these labor issues more seriously than any president since Truman, if not FDR. And it really matters.

This is definitely worth following and I will be doing so.

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