Rep. Levin Says Labor Changes in New NAFTA Not Enough to Gain Most Democratic Votes

Democrats will be crucial to ratifying a new NAFTA if House Republicans lose the majority in November, whether the deal includes Canada or not. U.S. Trade Representative Robert Lighthizer has said repeatedly that he expects significant numbers of Democrats to support the new NAFTA. Changes he won from Mexico should be good for domestic manufacturing, he believes, between bringing labor provisions into the body of the agreement and changing auto rules of origin to encourage manufacturing in the U.S. (and Canada, if it decides to join the deal).

But Michigan Democrat Sandy Levin says Lighthizer is not on track to get those votes. Levin is retiring from Congress this year, but the former Ways and Means Committee chairman reflects the views of a large trade-agreement skeptic caucus. "The deal with Mexico is not yet in real terms completed, because in order for the May 10 kind of language to be real, there has to be action on the ground," he said -- meaning, the Mexican legislature has to implement a constitutional amendment that changes labor laws in Mexico. Currently, the majority of unions are company-sponsored, known as "protection unions," and many on the left in both Mexico and the U.S. say that has suppressed Mexican industrial wages. "May 10" is shorthand for the right to collective bargaining (see 1705090026) and other elements of the International Labor Organization's declaration of fundamental rights.

Lighthizer, in a closed meeting Sept. 27, told Levin that the ILO language is in the new labor chapter. Levin, who was an author of the May 10th agreement, said Lighthizer is wrong to think Mexico's labor standards will be raised just because of that language. "It is vital for those workers, but also for American workers in terms of their jobs -- and wages -- that that situation be remedied," Levin said. He said that the new Senate in Mexico, which took office Sept. 1, has to vote to improve labor standards before Democrats will trust that things will change. "If that isn't remedied, I don't think NAFTA can pass, and there'll be very few Democratic votes. Very few. What Democrat is going to vote for a continuation for another 25 years of the status quo...? The majority of us voted 'no' to start with, 25 years ago."

Levin said changes to Mexico's labor laws are even more critical now, since so much manufacturing that was once done in the U.S. has moved to Mexico. He pointed to Delphi, a major auto parts manufacturer, which once had 70,000 workers in the U.S. and now has about 60,000 in Mexico. In Canada, where labor unions also are troubled by manufacturing shifts to lower-wage plants in Mexico, Unifor President Jerry Dias says enforceability looks good in the U.S.-Mexico pact, and the problem of protection unions is solved. "He says that," Levin acknowledged. "I know him well -- he's wrong. He's just very wrong."

The Office of the U.S. Trade Representative is expected to release text on the U.S.-Mexico agreement before the end of the day Sept. 30, because President Donald Trump and the outgoing president in Mexico want to sign a new deal on Nov. 30, the last day before the new Mexican president is inaugurated.

House Ways and Means Chairman Kevin Brady, R-Texas, told reporters Sept. 28 that "it's not clear yet what time table Canada has in these negotiations. What I do know is that we're not going to short-cut our ... very open, very transparent trade process. We want the American public and lawmakers and local businesses to be able to view these agreements with plenty of time to give their input."

Levin said the text that is coming out is not even complete, because all the chapters have not been closed with Mexico. He said Lighthizer's message to Congress members was not clear about how Canada could come in "and the rules aren't entirely clear. He emphasized the problems with Canada and essentially said the agreement with Mexico was done. I think that isn't correct."

Brady continued to ask for a three-party replacement for NAFTA, while echoing the administration line that Canada needs to concede more to get a deal. "I hope Canada stays at the table, I think there's strong support for three countries seamlessly working together. However, America's trade disputes with Canada have been serious and long," he said. "I know the administration does not want to move forward without addressing these trade issues in a substantive way. So I'm hoping Canada steps it up and steps to the table in a big way."

The House is in recess until after the election, and Brady did not commit to holding a hearing on the U.S.-Mexico deal during the lame-duck session. Brady diverged from USTR, however, in his view that Section 232 tariffs on steel and aluminum should be lifted on the NAFTA countries once they agree to a new NAFTA. "We don't have a time table from the administration on that," he said, on when USTR might get the tariffs resolved in North America. "Certainly reaching an agreement with both Mexico and Canada provides an opportunity for ... an early lift of those tariffs, and I think that discussions with the EU, which are accelerating, provides an opportunity to lift those tariffs as well."

Trump has pointed to Section 232 tariffs on autos as leverage to get his way in the U.S.-Canada negotiations. Rep. Mike Kelly, R-Pa., who owns an auto dealership, did not express opposition to car tariffs, and suggested that Trump needs the leverage in response to a question from International Trade Today. "As a dealer, there was never a year that went by there wasn't a price increase, and it had nothing to do with tariffs," he said. "I would love to see prices stay down because every time there's a price increase, we lose the opportunity to sell somebody something. Understanding all that, listen, we're in some really strong negotiations right now. "