Labour makes NAFTA pitch in Mexico City

MEXICO CITY — Everyone talks about a new NAFTA that will help the working class: Donald Trump was elected on it, the Canadian government calls it a priority and the Mexican government says it’s open to improving labour conditions.

Labour leaders want to hold them to their word.

Hundreds of people gathered in a street rally organized by unions in Mexico City, while across town negotiators from the three countries huddled in a hotel Friday and began the second round of negotiations for a new North American Free Trade Agreement.

A Canadian auto-workers leader addressed the crowd as people cheered and chanted slogans amid a sea of banners and street-food vendors peddling Mexican delicacies. Jerry Dias of Unifor derided the original NAFTA as a corporate scam, where companies shifted jobs to Mexico, then kept wages low there.

He shouted out a series of suggested improvements: Easier unionization rules for Mexico; the end of a Mexican practice where auto companies insist upon a long-term contract guaranteeing low wages before building a plant; a higher minimum wage in Mexico; an end to right-to-work laws in the U.S.; and an international mechanism to enforce new NAFTA labour standards.

“It’s our time to fix the wrongs of the past,” Dias said.

“The promise of NAFTA — that it would improve the standard of living for workers in all three countries — that was a lie….. The Mexican workers that work in your auto plants can’t afford to buy the cars that you build. And that is an absolute disgrace.”

He asked the crowd through a Spanish-language interpreter whether people agreed that if workers in Canada and the United States earn $35 an hour, perhaps a Mexican worker might make the equivalent 525 pesos an hour.

Many in the crowd burst out laughing when they heard the latter number. A salary that high is inconceivable for the average Mexican factory worker. Speakers at the event shared stories about intimidation of labour and even the murder of Mexican workers.

Several heaped scorn on their own national government, deriding it as corrupt and indifferent to working people.

“It’s the end of a six-year term marked in blood, in political pressure, in reforms that hurt the Mexican people,” said Gonzalo Martinez of the national education workers’ union, referring to national elections next year, as a new left-wing populist party leads the polls.

A woman in the crowd said most Mexicans didn’t feel NAFTA’s benefits. Indeed, while wages have generally gone up in Canada and the U.S. since 1993, they have stagnated and even declined in Mexico.

“We don’t see it,” said Patricia Perez of the Institute of Social Investigations, which researches working conditions at Mexico’s National Autonomous University.

“Things are worse in the fields. Agriculture workers feel abandoned.”

She said many earn the minimum of about $6 per day. Auto workers are better off, she conceded.

And that’s an important distinction. Supporters of NAFTA point to it all the time. While Dias is correct that Mexican salaries haven’t grown overall, stats also show that the workers seeing the biggest gains are in parts of the economy exposed to trade.

That includes the auto sector.

One industry representative rejected the idea of a silver-bullet solution. A sudden, dramatic growth in labour costs would simply risk moving production to Asia, leaving all of North America worse off, said Flavio Volpe of Canada’s auto-parts manufacturers’ association.

He said Canada and the U.S. have maintained their overall auto work force, and what’s moved to Mexico are low-skilled tasks — like stitching seat belts and making windows: “You can quote me on this one: nobody in southern Ontario is going to be making seat belts and windows,” Volpe said.

The fact these jobs are in Mexico — and not Asia — is good for Canada, he said: it creates spinoff effects up north, as vehicle parts criss-cross the border.

As for using a trade deal to increase wages, one Mexico analyst says that’s hard to do. That’s because any salary increase, or new labour rules, would have to be enforced by the national government — and Mexico’s has a poor track record.

Duncan Wood says there’s a simpler solution: demographics.

He pointed out that Mexico’s population growth has plummeted in recent decades, and is now barely one-third its pace of the 1970s. Young workers will soon find themselves in higher demand, he said.

“The first thing is to recognize that Mexico’s demographics are changing,” said Wood, of Washington’s Wilson Center.

“This question of having a lot of cheap labour is going to solve itself, in the medium term.”

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