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USITC Report Backs Up the Need to Fix New NAFTA to Add Real Enforcement

On April 18, the United States International Trade Commission released its analysis of the likely economic impacts of the new NAFTA (also known as the United States-Mexico-Canada Agreement or USMCA). The report supports the AFL-CIO’s position on the new NAFTA: Congress should not vote on it until it is fixed.

The usual Washington, D.C., pundits will talk a lot about how the report "proves" that the new NAFTA is good for the economy. But they probably won’t talk very much about the most important thing: Does the report provide useful insight on what matters most to workers?

An important caveat: The USITC has a history of wrong predictions. Not just randomly wrong. The USITC has only erred in one direction: to overestimate how great trade deals will be.  

For instance, the USITC predicted the original NAFTA would have small positive effects on wages in the United States and Canada and large positive effects on wages in Mexico. Instead, NAFTA suppressed wages in all three countries. Many U.S. union members saw their workplaces transfer production to Mexico, while others were forced to accept concessionary contracts to keep their jobs. In Mexico today, the minimum wage has less purchasing power than before NAFTA and there is a bigger gap between U.S. and Mexican manufacturing wages. This is because the original NAFTA puts the interests of global corporations ahead of the interests of working people.

Importantly, the new USITC report notes: "The agreement, if enforced, would strengthen labor standards and rights." In fact, it predicts that with enforcement, wages for union workers in Mexico would rise by 17.2%. This prediction may be another wild exaggeration (and even if it is not, a 17% raise on $2.00 per hour is still only $2.34 per hour). But it confirms what the AFL-CIO has been saying all along: A new NAFTA is useless to working people without swift and certain labor enforcement.

With or without NAFTA, America’s working families live in a global economy. We are exposed to international competition no matter what. One great way to increase our leverage to negotiate better pay and benefits is to help workers in other countries—including Mexico—raise their wages and benefits, too. The USITC is right that Mexican wages will only rise if Mexico completes its labor law reform process and all three NAFTA parties work hard to monitor and enforce the labor provisions of the deal.

But enforcement can’t happen unless the text is repaired to make sure that one party can’t block enforcement, unless labor loopholes are eliminated, unless new swift and certain monitoring and enforcement tools are added, and unless adequate, long-term resources are devoted to enforcement. And those changes to the deal can’t happen unless Congress tells the administration that it refuses to vote on the new NAFTA until it is fixed.

Please help us get this right. Call Congress today at 855-856-7545 and tell your representative: No vote until NAFTA is fixed!

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