In a speech today to the AFL-CIO, U.S. Trade Rep. Katherine Tai said the following:
The USMCA agreement is a good example of what can happen when labor is at the table. It’s not perfect, but because we collaborated closely with President Trumka and many of the union leaders here today, we negotiated a better deal for American workers.
Because of our partnership, the USMCA now includes:
- The strongest labor and environmental standards in any agreement ever;
- A new rapid response mechanism that allows us to quickly take action at a specific factory where workers are being denied their rights to freedom of association and collective bargaining; and
- Critical changes to the intellectual property provisions designed to increase access to affordable medicine for regular people.
Unlike previous trade agreements, USMCA passed with overwhelming, bipartisan support. It is proof that consulting – really listening and working with workers, the labor movement, and a broad range of stakeholders – leads to more pro-worker, more meaningful, and more popular policy.
Less than a year after USMCA went into effect, we’re already using its labor enforcement tools. Last month, we asked Mexico to investigate whether workers at a GM facility in Silao were denied their rights during a contract ratification.
This was the first time that the new rapid response tool was used by the U.S. government. It was also the first time in history that the United States proactively initiated labor enforcement in a trade agreement.
The AFL-CIO recently filed a Rapid Response petition alleging workers’ rights had been violated at an auto parts manufacturer. Yesterday, we asked Mexico to review the allegations – the second time we’ve taken this step in the last month.
Under previous agreements, labor petitions could – and did – languish for years without a response from the Administration. But we have acted quickly.
These enforcement actions matter. The Rapid Response Mechanism will help to protect the rights of workers, particularly those in low-wage industries who are vulnerable to exploitation. Because when we fight for workers overseas, we are fighting for workers here at home.
And we’ll do that across the board. Enforcing all of our trade rules is a priority for the Biden-Harris Administration. Those who work hard and play by the rules, you deserve to have the government on your side when faced with illegal and unfair trade practices.
We must apply the same principles at the WTO. Despite a preamble that says “trade…should be done with a commitment to raising living standards and ensuring full employment,” the WTO’s rules actually don’t include any labor standards, and workers are often an afterthought. This needs to change.
The United States recently submitted a proposal to ensure that fighting forced labor is included in any agreement the WTO reaches to prohibit harmful fisheries subsidies. We know that forced labor is a serious problem in the fisheries sector, particularly on distant water fishing vessels. I hope WTO Members will commit to a high-standards, meaningful agreement that includes our common-sense provision and that will contribute to tackling this problem.
This is not just an economic issue. This is a moral imperative, and I ask all of you to help us to build support for our effort. The WTO must show in these negotiations that it can improve the lives of regular people and that it is capable of responding to crises and tackling difficult matters, particularly when it comes to worker abuse.
If the WTO is to be relevant and a force for good, it must be revitalized and modernized. We must take bold steps to fix its negotiating function, commit to greater transparency, and reform the dispute settlement process.
Under the Biden-Harris Administration, we will bring dignity of work – and the empowerment of workers – to the WTO.
Let me offer a few comments on all this.
First, the USMCA was something that succeeded in the politics of a particular moment. President Trump was leading an extremely economic nationalist administration; the free market-oriented Republicans in Congress were afraid to stand up to him and afraid of losing NAFTA; and many Democrats saw an opportunity to expand the scope of issues such as labor rights in trade agreements. But that moment has passed, and I think it's pretty clear that it would be difficult to replicate this kind of agreement in U.S. politics today. If President Biden proposed something that was substantively along the lines of USMCA, I would expect just about every Republican to oppose it.
As to the WTO, while Tai clearly wants to ratchet up the role of labor rights there a bit, she probably doesn't expect those rules to go as far as USMCA labor rules do. Is even a small ratcheting possible? Will India and other countries who usually object to the inclusion of labor rights be willing to go along with any of this? That may depend in part on how the Biden administration approaches this and other WTO issues. For example, Tai said that "[w]e must take bold steps to ... reform the dispute settlement process." If these bold steps include a reasonable U.S. proposal on resolving the Appellate Body crisis, maybe there is scope for some grand compromise. But I have doubts that anything significant on labor rights is possible at the WTO (forced labor in fisheries is narrow enough that perhaps something could be done there), and it's also not clear to me why the focus is on pushing these issues at the WTO as opposed to the ILO.
And finally, there has been a lot of talk from the Biden administration about workers. But one thing missing from the conversation is how the tariffs they have carried over from the Trump administration harm workers (they may help specific industries and workers in those industries, but they harm workers more generally). Tai said this in her speech: "The WTO must show in these negotiations that it can improve the lives of regular people ... ." I've always seen this as the core mission of the WTO's rules that constrain tariffs and tax/regulatory protectionism: Protectionist domestic policy is something demanded by special interests that harms regular people, and through the WTO governments have agreed to engage in less protectionism. For me, the big question about the Biden administration on trade policy is whether they are willing to stand up to interest groups and, in doing so, to promote the interests of regular people. Arguably they have been doing this in the area of intellectual property (although I know that some people disagree with this assessment), but with certain influential industries it seems like they are reluctant.
