What's Up with NAFTA, Anyway? Some Frequently Asked Questions

I’ve been getting so many questions about NAFTA, I thought I’d answer a few for everyone.

Why are they renegotiating the North American Free Trade Agreement? I thought NAFTA was bad.

NAFTA is bad. But the reason NAFTA is bad is not because trade is bad, or even that trading with Mexico and Canada is bad. NAFTA is bad because it is a set of rules that gives advantages to employers over workers, multinational companies over local firms, and giant corporations over communities. It has cost jobs and pushed down wages in all three countries.

In particular, NAFTA set up incentives to outsource U.S. jobs (by lowering tariffs on imports from Mexico) without requiring firms that operate there to meet basic international labor standards or minimum protections for the environment. It also incentivized additional outsourcing by creating a private justice system for firms that allows them to bypass local courts and go straight to international tribunals to argue that some health and safety standard or water protection rule or any other action by a host government deprives them of their expected profits. NAFTA’s rules empower global employers, undermine unions, and weaken the ability of local, state and federal governments to be responsive to citizens.

NAFTA does not have to be this way. Its rules can be changed to put working people first. And that requires renegotiation.  

I heard they’re finished renegotiating NAFTA. Are they?

Not really. On Aug. 31, the president sent notice to Congress that he had concluded negotiations with Mexico and intended to sign a deal with Mexico in 90 days (this waiting period is required by the Fast Track law). Canada was not included in this announcement, but can be included in a final deal "if it is willing." Since talks are ongoing with Canada, and Mexico would have to agree to any changes made to accommodate Canada, the renegotiations aren’t really over. That means we have a chance to improve its labor rules and add other things important to workers, such as COOL labeling.

So, is Canada in or out?

The talks are ongoing. AFL-CIO President Richard Trumka and others have made clear Canada should be included, but whether it will be remains to be determined. (Watch a video here.)

Does Congress have to vote on a new NAFTA?  

Yes.  

When will Congress vote?

It seems likely that, assuming a final-final deal is reached this fall, the vote would occur in 2019.  

Will the AFL-CIO support the new deal?

That depends on what the new deal looks like and how close it comes to meeting the 17 benchmarks we set out in June 2017. We don’t expect a new deal to be perfect or to incorporate every one of our recommendations. However, it must include Canada, show meaningful progress on critical issues, including by reducing incentives to outsource, protecting fundamental labor rights and freedoms for working people in all three countries, eliminating the private justice system for foreign investors known as ISDS, promoting greater North American content—particularly U.S. content—in NAFTA-traded goods, and by strengthening enforcement, not just on labor, but on all trade issues, including currency manipulation and misalignment.

On labor in particular, if the deal does not include strong and clear rules that protect working people in all three countries and require Mexico to abandon its "protection contract" system (which keeps wages down and interferes with the right to join unions), and if we cannot be confident that the rules will be swiftly and certainly enforced, it won’t be worth endorsing. A deal that doesn’t get the labor provisions and enforcement tools right won’t protect U.S., Mexican or Canadian workers and won’t reduce outsourcing. A deal that allows abuse and exploitation of working people to continue is just another corporate deal.  

So...where is the text?

Most of the text is available to "cleared advisers" (which includes the AFL-CIO) now. Trumka, and officers of both affiliate and non-affiliate unions who serve as cleared advisers are studying the text right now. Unfortunately, due to the secrecy allowed under Fast Track, the text won’t be available to the public until after Sept. 27, 2018.

Do we know what it is in it?

A bit, but most of the contents are still secret. We know the labor rules are on the right track, but they do not yet include swift and certain enforcement mechanisms. We know there will be changes to ISDS that appear to be in the right direction and changes to medicine rules that appear to be in the wrong direction. And we need to learn a lot more about automobile rules of origin to figure out if they will actually promote high wage U.S. jobs. Look for more information after Sept. 27 at aflcio.org.  

When will we know if the deal meets our standards?

Trumka and other labor leaders said on Aug. 31 that, based on what we know so far, "more work needs to be done" for the deal to meet our standards, including, most importantly, enforcement tools that will ensure that all parties live up to their labor obligations and that Mexico ends it repressive protection contract system. But, since talks are continuing, that means we have an opportunity to get that work done. This is not over and the text isn’t really final. That’s where you come in. We need your help.

How can I help?

You can call or email your senator and tell them to contact U.S. Trade Representative Robert Lighthizer (the U.S. lead on the NAFTA talks) to make clear that in order to get approval in Congress, the new deal must:

1. Include strong and clear labor standards based on the International Labor Organization’s fundamental labor rights and end the protection contract system in Mexico.

2. Include enforcement tools that will make certain that violations are swiftly identified and fixed—or else sanctions will be promptly imposed.

3. Eliminate ISDS (the private justice system for foreign investors) and other incentives to outsource (including in both manufacturing sectors such as auto, aerospace, steel and aluminum and in services sectors such transportation and call centers); and

4. Put working people’s interests ahead of profits, including by eliminating giveaways to Wall Street and Big Pharma and ensuring that we can protect our food supply and provide consumers the information they want about the products they buy.

Call 855-856-7545 to be connected to your senator today!  

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