U.S. Trade Head to Meet With UAW This Week Over New Trade Deal

U.S. Trade Representative Robert Lighthizer will be in Michigan this week to meet with union leaders from United Auto Workers in a bit to gain their approval for the Trump administration’s new North American free trade deal. Lighthizer is scheduled to meet with union officials in Dearborn on Tuesday to answer questions about the United States-Mexico-Canada Agreement (USMCA) while simultaneously drumming up support.

The USMCA deal suggests increasing existing requirements for North American content for vehicles, stipulating that 40 percent of a vehicle’s overall content be manufactured in areas paying at least $16 an hour, while also encouraging Mexico to tailor its labor rules to allow unions to wield legitimate collective bargaining powers.

According to Reuters, Lighthizer said that the USMCA was “clearly better than” the North American Free Trade Agreement (NAFTA) at at a congressional hearing from last week, adding that Congress would have “no credibility at all” with China or “on any deals with your other trading partners” if it didn’t pass.

From Reuters:

Many Democrats argue the agreement needs improvements to ensure that higher labor and environmental standards can be fully enforced before they can support it. The pact has been billed as requiring Mexico to change its labor laws to allow unions with true collective bargaining power a fairer chance to form, a provision aimed at pushing up Mexican wages.

And many Republicans, as well as companies and farm groups, say the administration must agree to drop tariffs on aluminum and steel imports from Canada and Mexico before the agreement can move to a vote.

The American Automotive Policy Council announced it was supportive of USMCA and urged Congress to get the ball rolling on turning it into law on Friday. But the UAW, has been more tentative in its backing. In November, UAW President Gary Jones said the trade proposal didn’t go far enough to discourage companies like General Motors from relocating production to take advantage of lower labor costs in other parts of the world.

“Before the ink hit the paper, General Motors has already signaled that the ‘New’ NAFTA (known as USMCA) is not strong enough, as it stands today, to deter them from moving products and taking advantage of low cost labor,” Jones said. “Quite simply, the ‘New’ NAFTA needs more input and more work. We were hopeful that this new agreement would rein in the corporate greed that has bled manufacturing in the United States. Unfortunately, as GM’s idling of plants in Ohio, Michigan and Maryland this week showed — the ‘New’ NAFTA, as it stands now, is not strong enough to protect American workers.”

The UAW supports provisions to improve working conditions and wages in Mexico, citing violence against strikers and unfair wages for auto workers it believes stems from a “lack of basic rights.” While altruistic on its surface, critics have claimed that the UAW knows doubling the average wages of Mexican auto workers (they currently stand at around $8 an hour) would make it a less tempting option for domestic automakers looking for a place to manufacture new product — giving Canada and the United States a presumed advantage.

However the UAW also has suggestions of its own, likely to be discussed with Lighthizer on Tuesday. Among them is a push to take the proposed $16 minimum wage regarding regional content requirements to $24 an hour for final assembly, engines, transmissions, axles, vehicle frames, battery systems, and R&D — with remaining components and materials being set at $17 an hour.

[Image: General Motors]