By Desiree LeClercq in FTA Negotiations, FTAs - General, Globalization, Katherine Tai, Public Views of Trade, Sanctions, Sovereignty, Trade and Development, Trade and Human Rights, Trade and Labor, Trade in Services, Trade Law and International Law, U.S. Trade Policy, U.S. Trade Politics, USMCA, USMCA Dispute Settlement, USMCA Sunset/Review Clause, USTR — 03 Sep 2023

The U.S. “Worker-Centered Trade Policy” is helping some workers in Mexico but not in America

This Labor Day post seeks to shed light on the Biden administration’s “worker-centered” trade policy. It argues that the United States-Mexico-Canada trade agreement (USMCA) misses a critical opportunity to strengthen workers’ rights in America. The agreement’s provisions exclude protections for the most vulnerable workers in U.S. trade sectors and they erroneously protect employers in the U.S. transportation sector. This post urges amendments to the USMCA to protect workers – not just their employers – under a worker-centered trade policy.On August 30, as workers in Europe began to emerge from well-deserved August slumber and workers in America began to look forward to an extra day of rest in celebration of workers’ historic achievements, the Biden administration announced it was seeking a review under the USMCA’s Labor Rapid Response Mechanism (LRRM) concerning the rights of pilots at a Mexico-based airline. President Biden claims that workers’ fundamental rights represent the heart, or center, of its domestic and foreign policies. Although the USMCA is a Trump-negotiated trade agreement, current U.S. Trade Representative Katherine Tai was influential in pushing for the labor provisions in her previous position as chief trade counsel for the House Ways and Means Committee. The Biden administration’s Office of the U.S. Trade Representative (USTR) has invoked the LLRM numerous times to ensure respect for fundamental collective bargaining and associational rights in private facilities in Mexico. Recently, it initiated the first formal panel to litigate those rights. My work points out myriad ways the administration’s worker-centered trade policy risks undermining rather than fortifying workers’ rights abroad. It traces how that policy deprives foreign actors of fundamental due process rights in the name of fundamental labor rights and leaves workers vulnerable to retaliation. On this Labor Day, I shift the focus to workers in the United States.A well-known story by now, the USMCA resulted from fierce bargaining between the President, his executive office, and a Democrat-controlled Congress. Somewhat less known is that, at the midnight hour, as pens hovered in Mexico, Canada, and the United States to put to bed an emotional and lengthy NAFTA renegotiations process, the U.S. administration advanced an amendment quietly nestled in the form of a footnote to an Annex. It has received little attention.That footnote, in Annex 31-A of the USMCA’s Dispute Settlement Chapter, narrows the scope of applicable U.S. facilities subject to enforcement of collective bargaining and freedom of association rights in the United States. It reads as follows:With respect to the United States, a claim can be brought only with respect to an alleged Denial of Rights owed to workers at a covered facility under an enforced order of the National Labor Relations Board.To the uninitiated, that footnote looks innocuous. In theory, domestic legal processes should be exhausted before international mechanisms weigh in. Otherwise, one risks inconsistent findings, fragmentation, and interference with national juridical decisions. The National Labor Relations Board (NLRB) is the U.S. federal agency that administers federal labor law in private facilities. Its findings are not self-executing and thus are not legally final unless and until a Court of Appeals enforces them. Although the expression “enforced order of the National Labor Relations Board” is not defined under U.S. labor statutes, the footnote’s intention to ensure legal finality at the national level before opening the door to international intervention appears relatively straightforward.Nevertheless, until the powers-that-be delete this footnote, workers in America will lack the same fundamental rights protections that USTR provides workers in Mexico. Below, I offer three reasons.

The footnote leaves millions of workers in trade sectors in the U.S. without hope of labor improvements

As I have pointed out before, the footnote excludes the vast majority – if not all – of the facilities in the United States. That exclusion leaves millions of workers in the U.S. private sector without hope of economic pressure under the USMCA.That exclusion is important. U.S. labor law, as interpreted by the NLRB and courts, has long been the subject of international scrutiny. The U.S. administration has proven disinterested in, if not immune to, criticisms by the International Labor Organization (ILO). U.S. representatives at the ILO sometimes respond that the ILO does not understand international labor law as well as do U.S. authorities. Their position is unsurprising given the U.S. government's longstanding refusal to bend to international law or norms concerning workers’ rights.Meanwhile, workers at auto facilities and other trade-related sectors in the United States face sub-optimal rights. Their employers fire them for seeking to unionize, threaten them with discharge, and manipulate U.S. labor law to avoid entering into collective bargaining agreements. Those workers do not benefit from the ILO’s protection. While the USMCA could have lent economic teeth to the ILO’s reputational sanctions, the Trump administration’s footnote cleverly protected corporate America.

The footnote imposes significant remediation delays

Even workers at facilities that arguably fall under the NLRA cannot benefit under the LRRM. Recall that a significant objective of the mechanism is that it is rapid. Rather than wait years for litigation, workers should be able to benefit from immediate injunctions and remedial action. However, under U.S. labor law, cases may take years to wind through the courts. Even if Mexico were to bring a case against a facility in the United States, the case must first go before an NLRB administrative law judge, then the NLRB in Washington, D.C., and then to an appeals court. Section 10(j) of the NLRA “authorizes the National Labor Relations Board to seek temporary injunctions against employers and unions in federal district courts to stop unfair labor practices while the case is being litigated before administrative law judges and the Board.” Those cases acknowledge that time is of the essence. However, they do not produce a Board order for the appeals court to enforce. Consequently, 10(j) injunctions do not qualify as an “an enforced order of the National Labor Relations Board.” Even workers facing significant and immediate threats to their fundamental labor rights cannot benefit from protections under the USMCA.

Not all workers in the United States fall under the National Labor Relations Act

America’s most vulnerable workers are also her most important. They labor in our agricultural fields, fix our roofs in scorching summers, clean our houses, and watch our children. Yet, owing to institutionalized racism that carries into our statutory protections today, agricultural workers, undocumented workers, domestic workers, and day laborers are excluded from the NLRA’s coverage. Notwithstanding the significant labor and human rights violations in agriculture and other invisibilized sectors, their facilities will never face a court-enforced Board order. Those violations either directly implicate trade sectors (agriculture) or indirectly benefit trade sectors (childcare). Excluded when the NLRA’s drafters sought to ensure that racialized minorities could not threaten property owners, those workers are re-excluded and thus re-prejudiced under contemporary trade protections. Policymakers should take notice of how the USMCA reifies racial inequality in America.USTR’s most recent, dawn-of-Labor-Day announcement sheds additional light on the USMCA’s inarticulate and improper footnote. That announcement expresses concern over the bargaining rights of pilots in Mexico’s airline sector. Under the USMCA’s procedures, those workers may soon benefit from international scrutiny, inspections, and prescriptive plans drawn up by American bureaucrats.On the other side of the border, however, workers in the airline sector fail to benefit from equal protections. Under the terms of U.S. labor laws, those workers, too, are excluded from the scope of the NLRA. A separate law, the Railway Labor Act (RLA), covers them. Specifically, it covers freight and commuter railroads, airlines, companies directly or indirectly controlled by carriers who perform services related to the transportation of freight or passengers, and the employees of these railroads, airlines, and companies.Deemed “essential,” workers under the RLA cannot exert their right to engage in a spontaneous work stoppage. Instead, a different Board, the National Mediation Board (NMB), conducts mediation. While a Presidential Emergency Board may review the NMB’s decisions, those reviews are discretionary. In other words, the NMB’s findings do not suffer from the same intermediacy as the NLRB’s decisions.The ILO has expressed concerns with the RLA’s restrictive approach to bargaining. It has also found that national laws like the RLA stipulating compulsory dispute settlement interfere with workers’ fundamental right to bargain. While international labor standards are lenient concerning restrictions on public sector strikes, the ILO clarifies that the government may restrict a strike:in the case of disputes in the public service involving public servants exercising authority in the name of the State or in essential services in the strict sense of the term, namely those services whose interruption would endanger the life, personal safety or health of the whole or part of the population.In 2022, railway workers in the United States sought to bargain hard to improve their collective bargaining agreement. Under the international labor standards above, they should have been able to do so as long as their actions did not endanger “the life, personal safety or health” of the U.S. population. Although inconvenient, their work stoppage would not have been life threatening. President Biden faced criticism within the labor community when he intervened and passed a law imposing a contract agreement that the majority of America’s freight rail workers had voted down. As a result of that agreement, railway workers may benefit from a hefty raise but they lack paid sick days in a compromise they never agreed to and should have been able to protest. Airline workers in the United States face a bleaker situation. They cannot strike despite dwindling crew members and abysmal pay and leave benefits. Notwithstanding their hostile legal environment, airline workers are staging careful pickets to raise public awareness of America’s abusive airline sector. Under the RLA, they may not protest their working conditions during work hours; they can only carry out those concerted activities during the hours they should be resting and spending with family. They cannot rely on the ILO to persuade an otherwise deaf U.S. administration that the RLA deprives them of fundamental labor rights under international law. And they cannot rely on the USMCA’s LRRM because their employers, by statute, will never be the subject of an NLRB order. A Litmus Test?USTR’s recent invocation of the LRRM in the airline sector offers the Mexican government an opportunity to fight for the equality it (perhaps) unknowingly relinquished during the final hour of the USMCA’s negotiations. Following USTR’s recent lead, it could invoke the LRRM to protest the freedom of association and collective bargaining violations in U.S.-based airline companies. The Mexican government has manifold U.S.-based airline companies from which to choose. The Biden administration’s worker-centered trade policymakers should take such allegations seriously and collaborate to ensure an equitable solution. If the USMCA’s torrid labor negotiations (beginning during the TPP negotiations) teach us anything, it is that Congress cares about international standards governing collective bargaining. After all, it demanded that Mexico adopt radical changes to Mexico’s Constitution and labor laws to protect the rights of workers in Mexico to form and join unions and associate freely. The ILO, as mentioned, has aired concerns over how U.S. legislation fails to protect those rights in America. If Congress and the Biden administration refuse to consider the same types of legislative reform in the United States that they demanded in Mexico, their stated intentions to advance a worker-centered trade policy should be critically questioned.Inu Manak reminds me that the parties will soon revisit the USMCA’s provisions as part of its six-year review. Given that Mexican negotiators were given little advanced notice or explanation of the USMCA’s restrictive LRRM scope, and given the Biden administration’s efforts to strengthen workers’ bargaining rights at home, this review offers ample opportunity for the parties to make the agreement more equitable.Workers in America should not have to rely on the Mexican government to champion their rights. The Biden administration and Congress have promised to protect them. The USMCA offers U.S. policymakers the opportunity to turn promises into action. On this Labor Day, let’s hope they seize it.