AFL-CIO, Global Trade Watch Call on Supporters to Lobby Against New NAFTA Biologics, Labor Provisions

And Wallach, who refused to call the new NAFTA by its new name, the U.S.-Mexico-Canada Agreement, said, that "unfortunately this is not the transformational replacement of NAFTA we’ve all been fighting for."

Wallach advised supporters to "particularly focus on your House of Representatives" as they ask for improvements to the text. "There are broad blocks of Democrats who really have been demanding for decades that this stuff gets cleaned up. There’s an inside team that’s actually receptive and some rascals that need some direct love."

But both Wallach and Celeste Drake, the trade specialist at the AFL-CIO, said even an imperfect rewrite of NAFTA could be worth supporting, even if they're not ready to do so yet. Drake, who called the current text of USMCA "meh," said, "The current NAFTA is so bad that meaningful improvements -- even if they don’t go all the way -- could really make a difference." Wallach and Drake spoke on a Facebook Live video to a few dozen supporters on Nov. 20.

Drake praised the changes to labor standards, designed to improve bargaining rights for workers in Mexico, who currently are largely served by "protection unions" -- which Democrats and the Mexican left say are captive to company interests. "You’ve got to undo this unholy alliance," Drake said, and she's hopeful the Mexican legislature will act to do so.

Of the standards laid out in the new NAFTA text, she said: "They’re decent rules. They’re better than the so-called May 10 rules," which were in the Panama, Central American and Korean free trade deals with the U.S. They're even higher than in the Trans-Pacific Partnership, which the AFL-CIO opposed. "It specifies that freedom of association includes the right to strike. And that’s huge," she said. "It actually says that violence designed to intimidate workers is a violation of the trade agreement."

But, Drake said, unions don't think the standards are as enforceable as they need to be, even though they should be more enforceable than under the original NAFTA, wherein labor was only in a side letter, not in the actual agreement. But, Drake said, unions don't believe the current set-up of labor standards being enforced through state-to-state disputes is good enough, because they say there's no political will in the American government to make these challenges. Unions want language that says the government "shall bring a dispute settlement case" under certain conditions, rather than "may bring." She also suggested some alternative enforcement measures, including some that could bring complications for importers.

"You could have a certification regime," she said, whereby an exporter guaranteed that the goods were made within the labor rules. If it later turned out they weren't, Drake suggested, CBP could retroactively apply tariffs. She also suggested "all of your goods get held at the border until you come in compliance."

Both Drake and Wallach said advocates need to tell Congress to take out the enhanced exclusivity periods for biologics and other intellectual property provisions that they say will delay generic competition and therefore drive up the cost of prescription drugs. "They’re a giant giveaway to name brand pharmaceutical companies. This is an example where the original NAFTA was better," Drake said. "It locks in place the bad policies here and it exports them," Wallach agreed. "That’s gotta get fixed."

Drake said members of Congress may argue that the deal is signed, it's too late to change it. But she said that's not true, and Canada and Mexico are unlikely to push back on changes to the drug patent and exclusivity language. "It’s not like Mexico and Canada were begging the U.S., 'Please make us change our terms around prescription medicine,'" she said. "We’ve got right on our side, we’ve got the majority on our side, we’ve got to go out and do it."

Drake explained that the auto rules of origin, though still not where that needs to be, could help Canada and the U.S. retain a good share of the auto supply chain. The new NAFTA "tries to address roll-up for critical parts; we’re still having discussions about how it works. Gets rid of deeming, so that’s a start." She agreed with a viewer that the $16 an hour labor content rule isn't useful unless it's indexed to inflation, and said she'd made that point to the Office of the U.S. Trade Representative again that day.

But, she said, Commerce Secretary Wilbur Ross is wrong to claim that the changes will lead to millions of auto jobs returning to the U.S. "If you want folks to trust that trade is going to get better, it’s absurd to promise all these factories are going to come back," she said. "What you’re trying to do with a good trade agreement is influence where that next plant gets built. We can’t go back and undo everything that happened in the past, and anybody who makes such promises, it’s just outrageous."

Wallach said that the two changes in the NAFTA rewrite "that seem to have corporate America pissed off at this point [are] the whacking back of [investor-state dispute settlement, or] ISDS and the auto rules of origin." Drake called the scaling back of ISDS "tremendous," and said the two areas where she feels corporations made the most mischief -- indirect expropriations and "fair and equitable treatment" -- will largely be gone. An example of indirect expropriation, she said, is a government made a regulation that would make operating there more expensive.