NAFTA and Labour Rights

I recently spoke at the Standing Committee on International Trade on their study “Priorities of Canadian Stakeholders having an interest in Bilateral and Trilateral trade in North America, between Canada, United States and Mexico”.  I share my notes with you here, although I did ad-lib a bit in the actual committee meeting.

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The labour movement is keenly aware that trade is, and always has been, an important feature of the Canadian economy. Many of our jobs depend on trade. We understand that all governments have an interest in fostering open trade.

Part of the problem we now face is that distributional impacts of trade and investment agreements have long been ignored. We are told that trade deals will have winners and losers, but not to worry – we can compensate the losers. In my opinion, the failure to compensate those who have been affected by negative trade shocks has led to growing inequality, and a nationalist sentiment in many developed nations.

More than 20 years after signing on to the North American Trade Agreement (NAFTA), the ways it has failed working Canadians are very clear. Canadians were told that NAFTA would create good jobs, shared prosperity, and a better future for working people. Instead, far from generating good jobs and prosperity, NAFTA has undermined secure, well-paid employment and devastated manufacturing and processing industries and the communities that depend on them. While there has been increased trade and economic growth, large corporations and investors have gained the most, leaving workers behind. NAFTA doesn’t just govern trade, but empowers foreign investors to sue Canadian governments, threatening public services and limiting the ability of governments to regulate in the public interest. This so-called free trade agreement has not fostered fair or balanced trade.

One of the critical gaps in NAFTA is labour rights. While NAFTA was one of the first trade agreements to incorporate a side agreement on labour and environmental rights, it was weak and non-enforceable. A stronger labour chapter, building on the recent labour chapters found in CETA and TPP, would be an improvement for labour rights in North America.

This alone will not be enough. The scope of national labour legislation has become inadequate to protect workers in an era of globalization, and we are facing significant governance gaps. A lack of transparency and asymmetrical relationships in supply chains, combined with competition from low income nations for foreign investment and jobs, actually undercuts the ability of free trade to be ‘fair’.

We see this in post-NAFTA Mexico. NAFTA was supposed to raise wages and working conditions in Mexico, lift workers out of poverty, and increase domestic demand. Instead, wages have stagnated, inequality has increased, and whole sectors have been wiped out.

Only about 1% of Mexican workers belong to a democratic union. Most workers are covered by ‘protection contracts’ – agreements between the company and company approved union. Workers don’t even have the right to see their collective agreement. If workers try to vote in a democratic union, the results are often ignored, or even worse, union organizers face harassment and threats.

What are some of the solutions? The federal government recently announced its intention to ratify ILO convention 98 on the Right to Organize and Collective Bargaining. Neither Mexico nor the United States has ratified this convention yet. We should encourage the United States and Mexico to ratify all eight core labour conventions.

None of the three North American nations have ratified the ILO governance convention 81 on Labour Inspections. This is a key convention that ensures that workers have access to the rights that we have all agreed to, and that employers who violate those rights face consequences.

Other responses include:

• passing legislation on due diligence for Canadian companies operating abroad, similar to legislation that has recently been passed in France;
• working on a framework for transnational bargaining;
• working within the ILO, OECD Guidelines for Multinational Enterprises (MNEs), and strengthening Canada’s national contact point.

We are glad to hear the Canadian government state publicly that it is willing to walk away from a deal that is not in Canada’s best interest. It is time to take a new approach to trade that puts the interests of working people and the environment first.