Unions Want Full Text of Mexico Agreement

Five labor presidents: 'We are not done yet'

Gary Jones, president of the United Auto Workers / Getty Images
August 28, 2018

The nation's largest labor unions greeted the Trump administration's agreement with Mexico on a free trade deal that focused especially on automobile manufacturing with cautious optimism.

The leaders from the AFL-CIO, United Steelworkers, UAW, Communications Workers of America, and the Machinists union said in a joint statement that they will continue to work with the White House negotiating team to help secure changes to the North American Free Trade Agreement. But the unions, which represent more than 12 million workers, want to see the full text of any agreement before giving their final approval.

"We remain committed to working with the administration to get NAFTA right. Our members' jobs depend on it," the labor leaders said in a joint release. "Any new deal must raise wages, ensure workers' rights and freedoms, reduce outsourcing, and put the interests of working families first in all three countries. … As always, the devil is in the details."

The statement came after the Trump administration announced a bilateral deal with the Mexican government to change some terms of existing trade between the two countries. Much of the trade pact dealt with auto manufacturing, as Detroit has increasingly seen jobs shipped south of the border where workers earn an average of $7.34 an hour making cars and $3.41 an hour in auto parts suppliers. Those wage rates pale in comparison to American autoworkers, who earn an average of $29.62 making cars and $20.81 at parts manufacturers, according to the Bureau of Labor Statistics. The new deal says at least 40 to 45 percent of automobile content must be made by workers earning at least $16 an hour in an effort to boost American manufacturing.

Some auto industry organizations and companies panicked at President Trump's initial threat of large tariffs on imported cars. The Center for Automotive Research warned in April that imposing those costs could move production further away from American shores as companies sought to avoid penalties incurred for making cars in Mexico.

"Average wages in the Mexican automotive and parts industries fall so far short of the North American average that paying the [tariff] for Mexican exports will be the preferred strategy for nearly all manufacturers of vehicles that are not classified as trucks," the report said. "Once manufacturers have to pay the MFN tariff, the work could move even further offshore with an even lower chance of there being any U.S. content in the resulting product."

The agreement tried to offset incentives to move production further offshore by requiring that 75 percent of car contents have to be made in the United States, Mexico, or Canada—though Canada has yet to agree to terms with the United States on trade and negotiations remain ongoing.

The UAW declined to comment on the details of the deal beyond the joint statement.

Trump campaigned on renegotiating NAFTA and against free trade deals. He nixed the Trans Pacific Partnership free-trade deal negotiated by the Obama administration upon taking office. He said in a Monday Oval Office conference that NAFTA had harmed American workers.

"The United States was hurt very badly by NAFTA for many years," Trump said, adding that the pact with Mexico was "a really good deal."

The labor movement had equally harsh language for NAFTA, saying it had "deeply-ingrained flaws" that had a "devastating impact on workers for more than 25 years." The union presidents said the White House should give workers the ability to review the full details of any agreement before they go into effect. Opening up the specifics of these deals to labor representatives would help safeguard against loopholes, as well as ensure their enforcement, according to the statement.

"Working people must be able to review the full and final text and have the confidence not only in the terms of the deal, but its implementation, monitoring and enforcement," they said. "We are aggressively engaged in pursuing an agreement that works for working people in all three countries, and we are not done yet."

The deal with Mexico must be approved by the Republican-controlled Congress before its terms take effect.

Published under: Big Labor , NAFTA , Unions