NAFTA hearings start with Democratic lawmakers urging strong labor rules

A construction worker hammers atop a construction project as the sun sets in Encinitas, California

By David Lawder

WASHINGTON (Reuters) – Two Democratic congressmen on Tuesday called on the Trump administration to demand strong labor provisions in its renegotiation of the North American Free Trade Agreement to reverse chronic wage erosion in Mexico.

At a public hearing in Washington tied to the imminent trade talks, U.S. representatives Sander Levin and Bill Pascrell, both members of the House Ways and Means Committee, said improved labor rights in Mexico was their top NAFTA priority.

“U.S. wages are being driven down by the depressed wages in Mexico,” Levin said in testimony. “Why? Because the entire Mexican labor system is designed to prevent workers from obtaining their rights and bargaining for better wages and working conditions.”

Levin, citing a wage figure of about $2 an hour for Mexican auto plant workers versus about $28 for the United States, said that NAFTA must be modernized to ensure that Mexican workers have a true right to collective bargaining, replacing the current Mexican system of labor conciliation and arbitration boards. Negotiated in the early 1990s by the United States, Canada and Mexico, NAFTA lacks enforceable labor provisions.

Levin and Pascrell said that new labor standards must have an enforcement mechanism that ensures full implementation of provisions before a new trade deal goes into effect.

Pascrell also sharply criticized the Trump administration for failing to spell out clear and specific objectives for the NAFTA renegotiations, which are due to start on Aug. 16.

“We in Congress – and the American public and the companies and stakeholders that make up the American economy – are completely in the dark when it comes to what the administration intends to do, why, and for whose benefit.”

Pascrell also called for “major reforms” to NAFTA’s dispute resolution mechanism. Trump administration officials also have criticized the system, which it says is biased against U.S. interests.

The hearings, which also will include testimony from dozens of industry groups and companies on their hopes for the talks, will take place through Wednesday at the International Trade Commission in Washington.

The U.S. Trade Representative’s office, which will take the lead role in the negotiations, is expected to publish more detailed NAFTA negotiating objectives around mid-July.

(Reporting by David Lawder; editing by Grant McCool)