No Good Option on Implementation of New NAFTA

Statement of Lori Wallach, Director, Public Citizen’s Global Trade Watch

Note: Today, the Trump administration sent Congress a statutorily required notification that Mexico and Canada “have taken measures necessary to comply with” the terms of the new North American Free Trade Agreement (NAFTA) that are to “take effect on the date on which the agreement enters into force.” The administration also sent Mexico and Canada the required notification that the United States “has completed the internal procedures required” for entry into force of the revised NAFTA. These actions mean the new NAFTA will enter into force and replace the old NAFTA on July 1, 2020.

The current situation is not consistent with the hard-fought labor standards improvements in the new NAFTA given Mexican workers being pressured to continue laboring in NAFTA-supply-chain factories despite serious health risks, continuing uncertainty about legal challenges against Mexico’s labor reforms and Mexico’s president announcing COVID-related 50% government budget cuts that could slow the establishment of required new labor rights capacity.

But postponing the agreement’s start will not do anything to improve Mexican workers’ situation, and in fact would delay phase-ins of key improvements in the new NAFTA, such as whacking Investor-State Dispute Settlement (ISDS), strengthening rules of origin and replacing fake “protection” union contracts in Mexico.

Because the old NAFTA remains in place, delaying implementation of the new NAFTA does not create leverage for change. The interests calling for a delay in implementation are those who were happy with the old NAFTA and dislike requirements to include more North American content in cars and the threat of goods that do not meet labor standards being stopped at the border.

The U.S. president should acknowledge that Mexico is not now in compliance with its labor rights obligations under the new NAFTA, because absent major changes, the American public will witness more race-to-the-bottom job outsourcing to Mexico that will expose Trump’s absurd claims about having entirely replaced NAFTA with the “best and most important deal ever.”

Public Citizen will be closely monitoring implementation of the new NAFTA and measuring the actual outcomes against the gains Trump has promised for American workers.