By on March 3, 2019

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]

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9 Comments on “U.S. Trade Head to Meet With UAW This Week Over New Trade Deal...”

  • avatar

    $16/hour? Sloan is smiling down.

  • avatar

    “However the UAW also has suggestions of its own”

    Were I a UAW member, I would shiv my shop steward. Maybe then they’d get it. I’m dubious though.

  • avatar

    Aside from pickups, which six-figure selling vehicles are still made with UAW involvement?

    I can only think of the Escape and Equinox as examples of that.

  • avatar

    Will they have follow up meetings with manufacturers to re-up on worker marginalizing bribes?

  • avatar

    “doubling the average wages of Mexican auto workers (they currently stand at around $8 an hour) ”

    Be critical when talking about mexican auto worker pay.
    $8 with bennies or none? > Very few bennies in Hencho.
    Next, Automakers (VW GM Ford etc) pay much more than the Tier 1 and 2 and 3.
    Furthermore, Tier 1-2-3 employ many more than automakers in total.

  • avatar

    Good luck selling the Trump administration’s kneejerk policies.

    I find that what this administration’s credibility rarely survives contact with details and/or knowledge of a specific domain. I’m a techie and an armchair economist, and Trump’s gang knows far less about either domain than I do.

    If you learned everything you know from Fox News, Trump makes a lot of sense. As soon as you add in some other information source, such knowing your own industry, there are a lot of “hey, wait a minute!?!!!” moments whener you listen to Trump or any member of his administration speak.

    The auto workers do live their industry. I’m sure a Trump administration person will say something that seems completely ridiculous to them if they let that guy speak long enough.

    So, as much disdain as I have for Trump, I can honestly wish them good luck in overcoming this credibility problem — because they’ll need to up their game to sell this, and the Trump administration’s really needs to up their game before they bumble in to another trade war, or a nuclear war, or whatever. America needs them to up their game, so that we can make good decisions as a nation.

    Good luck, guys! America needs you guys to get your stuff together… Please!

  • avatar

    It’s easy to be critical when you’re poor:

    GDP per capita (PPP)(US$)

    United States 59,495
    Germany 50,206
    Australia 49,882
    Canada 48,141
    United Kingdom 43,620
    France 43,550

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