Mexican, Canadian, and U.S. Unions' Statement on NAFTA

The North American Free Trade Agreement (NAFTA) has, to a significant extent, defined the relationship between the three North American nations over the last fifteen years. NAFTA was sold on the promise that it would bring more and better jobs and faster growth to the region and reduce emigration from Mexico to the United States and Canada. While trade and investment flows did increase, NAFTA did not create more net trade-related jobs and those that it did were very often less stable, with lower wages and fewer benefits. Instead, increased trade largely benefited the corporate elite in all three countries. Income inequality has also grown in the region. We believe that the trade liberalization and investors' rights provisions contained in NAFTA were important contributors to these results.

Mexican Labor News and Analysis

[On the occasion of the tri-national meeting of North American heads of state in Mexico, major labor confederations of Mexico, Canada and the U.S. put forward their issues in the statement found below.]

The North American Free Trade Agreement (NAFTA) has, to a significant extent, defined the relationship between the three North American nations over the last fifteen years. NAFTA was sold on the promise that it would bring more and better jobs and faster growth to the region and reduce emigration from Mexico to the United States and Canada. While trade and investment flows did increase, NAFTA did not create more net trade-related jobs and those that it did were very often less stable, with lower wages and fewer benefits. Instead, increased trade largely benefited the corporate elite in all three countries. Income inequality has also grown in the region. We believe that the trade liberalization and investors' rights provisions contained in NAFTA were important contributors to these results.

These difficult social and economic conditions have been exacerbated by the current economic crisis, which was precipitated by neo-liberal policies and the deregulation of international finance. Further, the global recession is likely to be long and painful. However, the current crisis does provide an opportunity to reassess prevailing economic doctrines, arrangements and institutions and work for common prosperity through the implementation of a continental strategy for economic and social development. These problems must be addressed through an open and participatory process that includes workers and unions.

Our governments will need to undertake measures to address the economic crisis, such as directing fiscal stimulus to meet national priorities, including rebuilding our infrastructure and making a transition to clean renewable energy sources, re-regulating the financial sector, passing labor law reform, strengthening public services, reducing inequality and solving the protracted housing crisis. We will also need concerted international economic policy coordination, and the U.S., Canada and Mexico can play an important role in that regard both regionally and globally.

We believe in the potential for the people of North America to strengthen common ties and participate in broadly shared economic prosperity. Fixing the flaws in NAFTA is only one part of the challenge we face. We also need to work together to address a number of pressing issues, which include labor law reform, migration and development and the promotion of the rule of law.
Labor Law Reform and Enforcement:

With respect to the most fundamental of the ILO core labor rights, freedom of association and the right to organize and bargain collectively, the United States, Mexico and Canada are out of compliance with their international obligations due to substantial restrictions on the right to organize and bargain collectively, both in law and practice. All the North American countries must ensure that workers can exercise their most basic and fundamental rights or face appropriate sanctions.

We are concerned that the reform legislation proposed by the Calderón government points in the opposite direction, towards further reductions of workers' rights and wages. The Mexican government must end practices that limit workers' right to freely choose their representatives, including employer-controlled "protection contracts," government refusal to recognize independent unions and elected leaders, firings of workers who advocate union democracy, and declaring strikes to be illegal. In the United States and Canada, recognition of basic labor rights entails majority sign up and first contract arbitration. For this reason, passage of the Employee Free Choice Act is essential, as it would contribute to further demand-driven recovery in the U.S. through expanded organizational and collective bargaining rights for U.S. workers. This increase in U.S. demand would also be a plus for the Mexican and Canadian economies.

If NAFTA is to contribute positively to the regional promotion and enforcement of labor rights, several substantive changes must be made to the North American Agreement on Labor Cooperation. First the common obligation should be - at minimum - the adoption of domestic laws and regulations that are in total compliance with the International Labor Organization's (ILO) core labor rights, as well as the effective enforcement of those laws and regulations. Enacting the legal reforms mentioned above would be a positive and significant step in that direction. Second, the dispute resolution procedures must be overhauled so that a dispute concerning a violation of any of the agreement's labor obligations are resolved fully, fairly and expeditiously and with appropriate remedies. Finally, each government must demonstrate the political will to act upon the findings and recommendations that result from the dispute settlement process. Failure to act upon those recommendations should be subject to immediate and dissuasive fines or sanctions.

Migration and Development: The failure of the North American economies post-NAFTA to create the decent jobs necessary to absorb displaced workers and new entrants has forced many into a desperate search to find employment elsewhere. This problem has been particularly acute in Mexico. Even before the crisis, Mexico's economy failed to create enough formal jobs to absorb new entrants into the labor market, and many of the jobs created pay low wages. Mexico's future prosperity depends on creating decent jobs that expand workers' purchasing power, stimulate domestic consumption, and reduce the pressure to migrate.

In the U.S. and Canada on the other hand, employers, with access to a large and poorly regulated workforce of undocumented and temporary migrant workers have undermined all workers by failing to afford the basic labor rights and protections to everyone. In Canada, guest workers are subjected to dangerous working and living conditions, without government over-sight or a comprehensive compliance, monitoring and enforcement system. Meanwhile, the economic crisis has created thousands of internal migrants. We believe that all workers, regardless of immigration status, should be protected by labor laws and able to exercise their fundamental human rights - including the right to unionize. Governments in all three countries should intervene forcefully to prevent wage theft, end ineffective raids, stop abuses by labor recruiters, and offer a clear path to citizenship.

Finally, economic development is a key part of the equation for a more prosperous North America. Together, we need to help stimulate more robust, equitable, and sustained economic growth in all three of our countries. Within the European Union, the Structural and Cohesion Funds provided a substantial transfer of investment funds to generate job growth in less developed regions of Europe. A similar investment fund for Mexico should be provided within the context of a renegotiated NAFTA. However, in exchange, Mexico should agree to changes in laws and institutions to better protect the rights of Mexican workers and allow their income to rise as their economy grows.

Rebuilding our industrial base is essential for maintaining our living standards. As high-wage countries in a globalizing world, we must restore our competitiveness by developing national industrial strategies centered on innovation. This means raising the level of public and private investment, harnessing distinctive technological and organizational capacities and developing the skills of our workers. Further, we need to use government purchasing power and attendant social policy to renew our local economies, creating the conditions necessary for broad social inclusion. We should also be thinking regionally to enhance the long-term competitiveness of these industries vis-í -vis the world market. This will require cooperation, both among governments and between governments, labor, and management, to improve productivity while respecting labor rights and improving wages.

At the same time, we would oppose any new initiative that would prevent local governments or sub-national levels of government from using public money to support national, regional or local development initiatives, as well as any reform which would promote further privatization of services and expand investor rights into those services at the sub-national level.

Rule of Law: Mexican and international human rights organizations have carefully documented the human rights violations in Mexico committed by police and military personnel as well as the high levels of corruption within the judiciary. These state actors have committed horrendous acts of murder, torture, and sexual abuse; however, few have been punished. Murders and imprisonment of union members have gone unresolved. A true commitment to rule of law requires not only the undertaking by the United States to reduce the demand for illegal narcotics and stem the flow of arms to the drug cartels, but also respect for human rights and an end to impunity for Mexican security forces. In all three countries, we believe that true security can only be achieved through social and economic development predicated on human rights.

Without a serious consideration and incorporation of all of these dimensions - repairing the critical flaws in NAFTA, effective and authentic compliance with international labor standards, migration and sustainable development, and human rights and rule of law - the vital and essential security agenda involving our three nations ultimately will not succeed.

In conclusion, the time has come to recalibrate our relationship and focus on a path built upon shared economic growth and sustainable development. We hope that the Leaders Summit serves as an opportunity to lay out a new agenda for North America, one which makes our region competitive, sustainable and just, and our organizations commit to working together to promote that agenda.

Francisco Hernández Juárez, Presidente Colegiado
Unión Nacional de Trabajadores (UNT)

John J. Sweeney, President
American Federation of Labor & Congress of Industrial Organizations (AFL-CIO)

Kenneth V. Georgetti, President
Canadian Labour Congress - Congrès du Travail du Canada (CLC)

This article was published by Mexican Labor News and Analysis, a monthly collaboration of the Mexico City-based Authentic Labor Front (FAT), the Pittsburgh-based United Electrical Workers (UE), and the Resource Center of the Americas.

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