Mexico didn’t foist NAFTA on the United States, despite President Donald Trump’s constant claims that the U.S. loses “so much money” on the deal. We did it to ourselves, and we did it deliberately.
Corporations wanted to create in Mexico a low-wage haven where they could shift production, expecting us to happily buy the imported goods built with cheap Mexican labor-while exporting our jobs.
Trump’s new trade pact, the United States-Mexico-Canada Agreement, includes sweetheart deals for the oil, gas and pharmaceutical industries that create huge problems for consumers. But it also perpetuates the original NAFTA’s core problem, the one the president himself has talked about most: shifting U.S. production to Mexico.
If Mr. Trump is unwilling to tackle the central flaw of what he has called “the worst trade deal in history,” his won’t be any better.
Before NAFTA, we did not have a significant trade deficit with Mexico. In the NAFTA world, we have run a stubborn $100 billion deficit year in, year out. According to the Economic Policy Institute, by 2013 NAFTA had displaced 852,000 U.S. jobs, mostly in the manufacturing sector.
How bad is it right now? Let’s focus on autos, the biggest sector overall and the one most important to Michiganders. U.S. auto imports from Mexico continue to break records, doubling between 2011 and 2018. They jumped again in the first quarter of this year. In total, four-fifths of cars that Mexico exports are exported to the U.S.
When manufacturers-like General Motors in Warren, Michigan-close up shop to move plants to Mexico, there are fewer jobs for American workers. And where opportunities do exist, wages must compete with the $1-$2 per hour wages in Mexico. GM now makes nearly a quarter of the cars it sells in the U.S. in Mexico, and that number is only poised to grow.
We can protect American workers by stopping the flow of U.S. jobs south of the border. But to do that, any new trade regime must raise the standard of living for Mexican workers. The deeply entrenched Mexican system of fake unions and so-called protection contracts must be replaced by real worker power through authentic unions and actual collective bargaining.
A new Mexican law stipulates that the protection contract system will end, and all workers will be allowed to vote for authentic unions and bargain freely. They say they will reopen all protection agreements within four years. On the one hand, one might say four years is a long time to wait for justice. On the other, how could a country with Mexico’s resources facilitate what is estimated to be hundreds of thousands of new elections and contract negotiations in four years?
The infrastructure and resources are simply not there. The U.S. National Labor Relations Board oversaw 1,250 elections in 2018. How can we expect Mexico to oversee many times that many cases, in more complicated circumstances, with far fewer resources?
On top of that, sadly, the first real-world efforts by Mexican workers to exercise their rights since the passage of the labor law reform showed overwhelming evidence of corruption and intimidation.
If things continue this way, the suppression of wages in Mexico is likely to continue unabated. But the president can change that. He can reopen the United States-Mexico-Canada agreement and set higher standards to protect workers’ rights and put a stop to the shockingly low wages that corporations have exploited for too long.
The president has made the premature and short-sighted decision to begin the administrative process to seek Congressional approval of his trade deal. That’s on top of the reckless announcement of his intention to place tariffs on Mexican goods as retribution for migrants passing through the country.
These actions reek of a political fight that’s more about energizing partisans than protecting American jobs. If he is serious about ending the steady flow of U.S. jobs to Mexico and winning approval from Members of Congress whose votes he needs, he will reopen the agreement and make sure that good jobs stay in America.
Commentary by Democratic Congressman Andy Levin, who represents Michigan’s 9th district. He is vice chair of the House Education and Labor Committee.