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The New NAFTA, USMCA

Sisters and Brothers,


This week the new United States-Mexico-Canada Agreement (USMCA) was reached, if ratified the deal will replace the twenty-five year old NAFTA accord.


When renegotiations started over a year ago, Unifor chose to lead the fight for ‘A Better NAFTA’. Our leadership team opted not to sit back and offer passive criticism from the sidelines. We were determined to bring our voice to the table. With big ideas on how to change the type of trade agreements that we’ve opposed for 25 years While the USMCA is far from perfect, I believe that we have made a difference in moving the yardsticks forward for working people.


I would like to thank all the members who took to the streets of Montreal and Ottawa during the Canadian negotiating rounds, lobbied their MPPs, or signed online petitions to demand a more progressive trilateral trade agreement. There is no doubt that your voice was heard and reflected in these negotiations.


Traditionally, trade deals have been about profit, not people. Having attended every round of the talks, from Washington to Mexico City to Ottawa and Montreal and back, I can honestly say these negotiations included discussions about people – about workers.


In many respects, the USMCA is historic. It overhauls the rules of auto trade in North America, including new rules designed to safeguard wages. It is the first Canadian trade agreement to have eliminated the hated investor-state dispute system – that provision allowing corporations to sue governments for unlimited sums of money in private tribunals. It establishes stronger, and enforceable, labour standards designed to target Mexican “yellow” unions.  These were all demands put forward by Unifor and our allies.


Some in the labour movement, who chose to remain on the sideline during this long and often bitter negotiation process, have now chosen to come forward to oppose the deal. Let me be clear – the USMCA has many, many flaws that must be addressed but the negative aspects cannot not be viewed in isolation. While there are areas of legitimate concern, the USMCA is an improvement over the original NAFTA with quantifiable gains for workers. We must take these advances and continue pressing for more progressive trade reform.


The agreement is wide-ranging, affecting multiple sectors that employ Unifor members.  There will be further communication on specific industries in the days to come but here are some the key elements.


Labour: 

There is a new, enhanced labour chapter in the USMCA with provisions on gender rights, violence against workers, and references to the ILO Declaration on Fundamental Rights at Work. The chapter also contains a special annex aimed at overhauling Mexico’s corrupt ‘yellow’ union system.


Auto: 

There are significant changes  in the rules governing auto trade, including more stringent “Made in North America” rules as cars must contain 75 per cent North American content (up from 62.5 per cent in the original NAFTA). New “Labour Value Content” rules are included to address the low-wage problem that has led to the direct migration of jobs from Canada to Mexico, requiring a significant percentage of the vehicle to be sourced from high-wage facilities.

Canada also secured a vital side letter that effectively exempts the auto sector from tariffs under Section 232, eliminating the Trump threat to hurt Canadian auto and auto-parts workers.


Culture, media and energy: 

Protections for culture remain intact, protecting Canadian broadcasters and media outlets. The U.S. was unsuccessful in its demands for increased market access and Canadian broadcasters have regained the right to air Canadian ads during the Super Bowl, stemming the loss of millions of dollars of much needed revenue.

Canada also regained sovereignty over our energy sector with the elimination of clauses in the original NAFTA that guaranteed the U.S. access to a set amount of Canadian oil and energy.


Dispute mechanisms: 

Of course, any trade agreement is only as strong as the system that is in place to adjudicate disputes between nations. The USMCA maintains Chapter 19, a provision used to challenge U.S. countervailing or anti-dumping duty decisions, such as the tariffs imposed on Canada’s softwood lumber. Independent panels, not U.S. courts, will continue to resolve trade disputes that arise out of the deal.


While the USMCA contains many positives, there are negatives.


Disappointingly, despite the negotiation of the new trade deal the Trump administration has not lifted its punishing and unjustifiable tariffs on Canadian steel and aluminum. Canada and the U.S. have signed a side letter committing to a 60-day process of negotiation in an attempt to deal with this matter.


While Canada’s supply management system remains intact, the USMCA provides greater market access to U.S. dairy imports. Unifor supports Canadian dairy farmers in the call for fair compensation from the federal government to offset this market shift.


A Canadian concession on data protection rights will result in a rise in the price of pharmaceuticals as generic drugs will take longer to come to market. The anticipated increase in drug prices places new urgency on the need for a national, universal, pharmacare program. Unifor will continue to push the federal government to implement National Pharmacare to ensure that all Canadians have access to the medication that they need.


The USMCA has now begun the ratification process. Further updates will be sent to notify you of any major developments.



Jerry Dias Unifor National President

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