WASHINGTON—The U.S.–Mexico–Canada trade pact (USMCA) has strong labor rules, which makes the deal an important milestone for international trade.
Trump succeeded in altering the agreement in ways that Democrats and unions for years have longed for, he argues.
Rules of Origin
The new “rules of origin” on cars is a significant improvement to the old trade agreement, trade experts say.The agreement also requires all partners to comply with International Labor Organization labor-rights standards. The agreement’s labor provisions mainly target Mexico. For example, the agreement requires Mexico to make it easier for workers to have unions and collective bargaining rights. It also states that each party should provide acceptable conditions of work with respect to minimum wages, hours of work, and job safety and health.
These conditions will make Mexican workers less competitive against U.S. and Canadian workers.
‘Worst Trade Deal’
The Economic Policy Institute (EPI), a left-leaning think tank, criticized the old NAFTA as paving the way for American firms to transfer high-skilled, high-wage jobs to Mexico.After months of talks, the United States, Canada, and Mexico agreed on Sept. 30 to sign a new trade deal to “terminate and replace” the 24-year-old NAFTA. With its strong provisions, the USMCA has become a “playbook for future trade deals,” said a senior administration official.
Trump called the deal “a historic win for U.S. manufacturers and American autoworkers who have been treated so badly.”
“I have long contended that NAFTA was perhaps the worst trade deal ever made,” Trump said during a Rose Garden ceremony in the White House on Oct. 1. “We’ve lost so many jobs, over the years, under NAFTA.”
Trump praised the USMCA for having “the most advanced protections for workers ever developed.”
He said it will discourage companies from firing their workers and building cars elsewhere.
“There’s no longer that incentive,” he said. “Those days are over.”
In his speech, Trump also touted the revised U.S.–Korea Free Trade Agreement that was signed last month. He called the previous agreement crafted by the Obama administration “a horrible, horrible deal.”
“When that deal was signed, they said 250,000 jobs will be given—by signing this transaction, and they were right,” Trump said. “They were right: 250,000 jobs to South Korea, not to the United States.”