12.19.19

Cantwell Strengthens Labor Enforcement in USMCA

Cantwell pushes new tools, education and training to build capacity for - and enforcement of - labor standards in USMCA

WASHINGTON, D.C. – U.S. Senator Maria Cantwell (D-WA), a senior member of the Senate Finance Committee, fought for important new tools to strengthen labor enforcement in the United States-Mexico-Canada Agreement (USMCA) passed today by the House of Representatives. Those provisions include educating Mexican judges and labor officials about worker rights, digitizing and reviewing collective bargaining agreements, and combatting child labor and forced labor. In the agreement, Cantwell also secured $240 million in funding to help support the implementation of these reforms.

“Capacity building and labor enforcement go hand-in-hand. Workers need to know our rights in order to achieve them. We thank Senator Cantwell for pushing for funding for these initiatives in the USMCA,” AFL-CIO President Richard Trumka said.

Specifically, Cantwell’s provisions would provide U.S. technical assistance through the U.S. Department of Labor over four years to support reforms of the Mexican labor justice system, worker-focused capacity building, and efforts to reduce child labor, forced labor, and human trafficking in Mexico. The bill will also provide support over eight years for additional U.S. government capacity to monitor compliance with labor obligations under the USMCA.

The inclusion of these provisions comes after Cantwell urged the United States Trade Representative (USTR) to support this critical assistance, introduced legislation to provide technical assistance for trade enforcement programs, and worked with congressional leaders to ensure it was included in the deal.

Cantwell also worked with Finance Committee Ranking Member Ron Wyden (D-OR) and Senator Sherrod Brown (D-OH) to provide for the creation of a new mechanism – and the resources needed to implement it – for monitoring, verifying, and enforcing labor rights in Mexico that are required by the USMCA and designed to level the playing field for American workers.

The USMCA deal passed today also includes important updates to boost Washington state exports, including agricultural, dairy, and technology products.

“This agreement gives us duty-free access for our apples, dairy, and technology in Mexico. Given that Mexico is our number one export market for apples, this will mean an even bigger export growth opportunity than the current market, which is about $250-300 million a year. And if we want our trade agreements better enforced, we need two things: tools to better track and measure Mexico’s enforcement, and the capacity in Mexico to strengthen training of judges and labor officials and educate workers about their rights so it can be a stronger partner on compliance,” Senator Cantwell said.

Included in the agreement are provisions that would benefit Washington state exports by:

  • Implementing new digital trade provisions. The North American Free Trade Agreement (NAFTA), which was negotiated and signed during the early days of the internet, does not contain digital trade provisions. The USMCA would add new digital trade provisions to prohibit customs duties on digital products transmitted electronically, such as videos, music, e-books, software, and video games. It also contains provisions on cross-border data flows and restrictions on data localization requirements.
  • Increasing access to the Canadian market for U.S. dairy producers. These provisions are estimated to increase U.S. dairy exports to Canada by 20%, or more than $314 million per year.
  • Removing barriers for wine, spirits, and beer. The three countries agreed to non-discrimination and transparency commitments for the sale and distribution of wine, spirits and beer, and labeling and certification provisions to avoid technical barriers for wine and distilled spirits. The agreement also addresses market access issues for Washington state wines in British Columbia and Quebec.
  • Ending the threat of tariffs. The agreement will end the threat of tariffs on key Washington state exports. Last year, Mexico imposed retaliatory tariffs on a range of agricultural goods, including 20% tariffs on apples and potatoes, in response to U.S. tariffs on steel and aluminum. While the tariffs were in place, Washington state apple exports to Mexico fell by more than 29%, while potato exports to Mexico dropped by 21%.

Other important provisions, such as the duty-free access to Canada and Mexico for U.S. agricultural exports that was first achieved under NAFTA, are maintained in the USMCA.

“Mexico and Canada are top export markets for Pacific Northwest apples, pears, and cherries. Passage of the United States-Mexico-Canada Agreement is essential to ensuring that growers retain duty-free access and stability in the rules of trade, so that they can continue to be successful in shipping their top-quality fruits to our northern and southern neighbors. We appreciate Senator Cantwell’s support for this high priority trade agreement,” said Mark Powers, President of the Northwest Horticultural Council.

Trade with Canada and Mexico is critical for Washington state, the third-highest exporting state in the country. In 2018, Washington state exported roughly $9.3 billion in goods to Canada and $2.2 billion in goods to Mexico, helping to create more than 330,000 jobs statewide. From 2013-2016, Mexico was the top international market for Washington state apples, buying an average of 12.3 million cartons per year, with Canada second at 6.3 million cartons a year.

Cantwell has prioritized trade throughout her time in the Senate. In 2015, she worked to create the Trade Enforcement Trust Fund, which provides resources for enforcement actions and helps agencies in charge of enforcing international trade agreements build capacity with trading partners on environmental, labor, intellectual property, and other issues. Since its creation, the Trade Enforcement Trust Fund has been used to prevent the export of illegally harvested logs from South America, to challenge European subsidies for the development of commercial aircraft at the World Trade Organization, and to stop limitations on wheat exports to China. 

Earlier this month, Cantwell called on the USTR to support the inclusion of capacity building funding in the USMCA. Cantwell has also been a strong proponent of the Export-Import Bank – she helped secure a seven-year reauthorization of the bank in the spending bills passed by Congress this week – and a champion of the small businesses supported by its activities.

 

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