NAFTA

Donald Trump rose to power in the 2016 election by attacking anti-worker, neoliberal trade deals like the North American Free Trade Agreement (NAFTA). Railing against widespread worker suffering, he vowed to negotiate a NAFTA that put “America first.” Right now, progressives have no powerful response to this kind of right-wing nationalism.

But NAFTA doesn’t have to undermine worker power and fuel right-wing nationalism. Progressives need a new strategy that uses NAFTA to implement global labor standards that halt the race to the bottom.

NAFTA and Neoliberal Globalization

NAFTA is an aggressively neoliberal deal designed to eliminate tariffs, enforce corporate intellectual property laws, and open new markets for international investment. Signed in 1992 by Canada, Mexico, and the United States, the pro-corporate deal undermines worker power by fueling the global race to the bottom. The resulting suffering in working-class communities has spurred reactionary nationalism, contributing to the recent rise of right-wing leaders like Donald Trump and Steve Bannon. To build global power, progressives must respond to this trend with a clear and powerful vision of how NAFTA can be used to implement international labor standards that protect workers instead of corporations.

NAFTA’s main provisions are enforced through a system of international courts and ruling bodies with the power to fine and sanction member states. But in contrast to fully enforceable “free trade” provisions such as Investor-State Dispute Settlement, labor and environmental provisions lack any real power. Only child labor cases, minimum wage disputes, or health and safety violations can trigger trade sanctions or fines. But no complaint has ever gone beyond the initial consultation phase of dispute settlement or resulted in fines and sanctions on the offending country or corporation. As a result, provisions against even these major violations are effectively toothless.

Not only are NAFTA’s labor provisions effectively unenforceable, they lack any concrete standards governing wages and labor conditions. Rather than setting actual international standards, they contain aspirational guidelines which depend upon each member country’s existing labor laws. These guidelines give the deal the appearance of defending workers while actually doing nothing to ensure that they are protected. While NAFTA members can in principle be sanctioned for failing to enforce their existing minimum wage laws, the agreement contains absolutely no requirements governing what those minimum wage laws must say. As a result, NAFTA has enabled corporations to run roughshod over workers in all three member countries. This is especially true in Mexico, where the minimum wage is far lower than in the US and Canada, and wages have remained stagnant since NAFTA was signed in 1992.

At its core, NAFTA is a deeply neoliberal agreement that only pretends to protect workers. Because the agreement lacks enforceable labor standards and prohibits tariffs, it incentivizes international corporations to relocate production to whichever country offers the lowest labor costs. This destroys workers’ bargaining power, forcing American, Canadian, and Mexican workers into a fierce race to the bottom. If workers in any one country stand up alone for fair wages and working conditions, they can be easily replaced by cheaper workers in another. All too often, this fuels animosity between workers of different countries, leading them to vent their legitimate anger at each other rather than the corporations that are robbing them.

Economic Nationalist Backlash

Because NAFTA one-sidedly pursues corporate interests, the workers whose livelihoods it has undermined are justifiably outraged. While warranted, this backlash has often taken the form of economic nationalism, with calls to “buy American” and demands that governments engage in trade protectionism. Only in such a volatile political climate could Donald Trump rise to power. During his campaign, Trump aggressively attacked NAFTA, combining xenophobic rhetoric with an appeal to the real suffering of workers who had lost their jobs because of the deal. This pattern isn’t limited to North America. With economic inequality skyrocketing around the globe, this form of toxic right-wing nationalism is surging worldwide.

We on the left rightly oppose the way that right-wing nationalists divide workers on the basis of race, gender, and nationality. But we have less-often challenged their fundamental economic assumptions. Under these assumptions, the only way for workers to advance economically is for their countries to remain globally competitive. This means that workers in one country can only gain at the cost of those in another. Progressives too frequently fall into this mindset, responding to neoliberal globalization with nationalist calls for a return to protectionism and the abolition of international trade deals, including NAFTA.

Yet protectionism can only lead to a vicious global economy in which each state struggles with the others in a zero-sum game to secure adequate markets and resources. This is not a world in which workers win, but one in which they fight against one another over portions of a shrinking economic pie. To avoid this trap, we must recognize that international trade is not inherently harmful, but a global economy that allows corporations to freely abuse and exploit workers is.

A Progressive Nafta

Multinational corporations and the transnational economic bodies they control certainly are our opponents as we seek to create a just society. But they also represent the grounds on which our fight for a more humane future must be waged, precisely because they are the institutions responsible for managing neoliberal society at the global level. Only by taking control of these institutions can we stop the global race to the bottom. By implementing international progressive labor standards, we can build the international solidarity and global power necessary to create a world in which workers no longer need to make endless concessions in order to stay competitive.

Adding labor standards to NAFTA is a critical first step. In order to actually stop the race to the bottom, these standards must be both concrete and enforceable. Recognizing that labor-cost imbalances are the fundamental factor driving the global race to the bottom, our central goal must be the establishment of wage and working condition standards, including a living minimum wage. Our aim is not immediately to impose a US- and Canada-level minimum wage on Mexico, but to ensure that no worker in any member country is being paid poverty wages. A regional minimum wage can be fixed to the cost of living in each country, using a technique such as the Anker living wage methodology. Such minimums will need to be enforced by a strong NAFTA labor body with the power to impose sanctions on countries and corporations which refuse to respect them.

A NAFTA minimum wage will set a floor below which the race to the bottom cannot continue, raising incomes for the lowest 20 percent of the income distribution and limiting the incentives for corporations to devastate communities in search of lower-cost labor. A minimum wage will also raise standards of living, stimulate the regional economy, and produce a virtuous cycle of more equitable growth as well-paid workers spend more money. Importantly, this will not only benefit workers in countries with the lowest minimum wages. Recent studies on the “ripple effect” of domestic minimum wage increases suggest that implementing an international minimum wage will increase wages for workers in all countries.

To make NAFTA progressive, we need a number of labor standards in addition to a minimum wage. We must push for stronger regulations governing working time, working conditions, and identity-based discrimination, ensuring safe and fair employment for all. We cannot compromise on the importance of the right to collective bargaining, which is a critical way for workers to build power and resist exploitation. NAFTA must also include rules requiring fair taxation to support a strong social safety net and environmental regulations to secure a safe and stable future. Finally, progressives must demand strong and democratic NAFTA provisions that enable workers and activists to hold multinational corporations accountable in every member country.

Winning these protections would be a victory for all workers, securing safe and stable jobs, a clean environment in which to live and prosper, and power to prevent these gains from being taken away. But this payoff can only be achieved through global power rooted in international worker solidarity that resists the divisive forces of both neoliberalism and economic nationalism.

How We Win

Making NAFTA progressive will not be easy, but it can be done. Shortly after the US election, the Trump administration began to renegotiate NAFTA with the nationalist goal of reducing the American trade deficit with Canada and Mexico. Although Trump is unlikely to voluntarily listen to progressives, he cannot unilaterally dismantle NAFTA or pass a renegotiated version without a vote in Congress. This presents a strategic opportunity. Assuming Republicans do not gain a significant number of seats in next year’s US midterm election, Trump will not have enough votes to easily pass a new NAFTA. He will also face significant tensions within the Republican Party between its neoliberal and nationalist wings. This means that he will almost certainly need Democrats to pass a renegotiated deal.

A Congressional vote on NAFTA will almost certainly not happen before 2019. To get to a vote, Trump must navigate tensions in renegotiation talks, upcoming national elections, and US laws governing trade deals. This gives progressives time to build political power. We must strategically lobby Democrats in Congress, demanding that they publicly pledge to vote against any version of NAFTA that lacks strong and enforceable labor standards. Our first task is to build a strong core of progressive lawmakers who have shown a clear commitment to progressive causes. Next, we need to identify Democrats who are vulnerable to progressive challengers and make NAFTA a core issue in their primary campaigns. Ultimately, our goal should be to realign the entire Democratic Party, making a strong stance on global labor standards the new default position.

The caucus structure of the Democratic Party offers a particularly strategic way of effecting this shift. By convincing a few leaders we can make strong and enforceable wage and labor standards a precondition for any Democrats to vote yes on a new NAFTA.

At each stage we must be oriented towards the goal of building a strong coalition that can pass a progressive NAFTA. This coalition will in turn put pressure on the Trump administration to get wage standards into NAFTA rather than risk coming to an agreement only to see it fail in Congress. After many broken campaign promises, Trump needs to pass a renegotiated NAFTA to maintain his credibility. If we succeed, we can force him to pass one on our terms.

The political will to win a progressive NAFTA exists. During the negotiations, Canada has heeded union voices in demanding that progressive labor standards be added to NAFTA.  In the US, the AFL-CIO has called for “strong labor rules with swift and certain enforcement.” Lawmakers including Bernie Sanders, Elizabeth Warren, and the Congressional Progressive Caucus have spoken out against NAFTA’s attacks on workers and in favor of a progressive agreement. Already, US Representatives Jan Schakowsky and Danny Davis have pledged to vote no on NAFTA if it does not include global wage standards.

All of these individuals and organizations oppose NAFTA as it currently stands, but they lack a unifying vision of what NAFTA can and must become. Our goal must be to provide this vision and organize the people and resources necessary to make it a reality. Faced with Trump’s threats to withdraw from NAFTA, business groups are panicking and willing to make concessions. While Trump’s right-wing nationalist administration battles with Congressional neoliberals and corporations, progressives have a critical opportunity to step into the gap with our vision of a better future. Now is the time to press the attack. To win a better world for any of us, we must unite across borders and fight for a NAFTA that protects workers in every country.

The Campaign: Coming Soon in 2017

Justice Is Global is gearing up to provide the tools and resources we need to build a powerful progressive internationalist movement. Just some of what we have planned for 2017:

[P]rogressives now have a historic opportunity to rewrite the rules of global trade to put people and the planet first.
— Tobita Chow, Chair & Global Economic Justice Organizer, The People's Lobby
  • Tools to lobby your representatives for the Justice Is Global jobs and progressive trade platform.
  • Translations of our resources into multiple languages.
  • A series of analyses from progressive internationalist leaders on how we got where we are and what we need to do now.
  • Social media toolkits to spread the campaign online.
    A platform that unites local and global action by connecting leaders and groups around the world.
 

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