2-28-18 7:14 AM EST | Email Article
By Jacob M. Schlesinger 

U.S. Trade Representative Robert Lighthizer and aides have been consulting with American unions and congressional Democrats over the past few weeks to assemble new proposals aimed at boosting Mexican workers' rights and wages in talks to overhaul the North American Free Trade Agreement.

The intensifying consultations with labor are part of a gambit to reshape trade politics by winning big Democratic support for the administration's approach to the Nafta talks, which resumed this week in Mexico City. The Democrats' votes would be needed to win approval for any new deal, given the criticism the administration's blueprint for remaking Nafta has drawn criticism from big business.

Big labor hasn't been happy either with every aspect of the Trump approach. But while U.S. negotiators have largely ignored complaints from the Chamber of Commerce and its allies, they are actively working with the AFL-CIO and its backers to try to satisfy their demands.

"I have trust and confidence in Bob Lighthizer," says New Jersey Democratic Rep. Bill Pascrell, a long-time advocate for stronger labor protections in trade pacts. "He knows I wasn't satisfied with what they've proposed and I feel our position has been appreciated by him. I'm giving him the benefit of the doubt."

In a recent meeting with Mr. Pascrell and other lawmakers, Mr. Lighthizer made a point of mentioning a January letter signed by 183 House Democrats -- 95% of the total -- demanding a new, stronger labor-rights proposal than the original drafted by the administration last fall, Mr. Pascrell says. They say low Mexican wages and weak labor protections give the country an unfair competitive production cost advantage in drawing manufacturers from the U.S.

The Trump administration's renewed focus on beefing up labor rights points to an evolving strategy in the negotiations. President Donald Trump and aides have in recent weeks softened threats to blow up the agreement, following fierce lobbying from agriculture, business, and congressional free-traders warning of economic calamity if the 24-year-old pact collapses.

That indicates the talks, once slated to wind up in March, are likely to continue well into this year and possibly beyond -- as long as Trump officials are satisfied with what they consider progress at the current seventh round of talks slated to end Monday, and possibly another in Washington at the end of the month.

But the White House is holding fast to a definition of "progress" that has rankled business groups and both Mexico and Canada, one that tries to recast the agreement in ways long demanded by U.S. unions, who blame Nafta for encouraging outsourcing.

Over the next week, American negotiators are hoping to advance proposals embraced by organized labor that would weaken legal protections for multinationals investing abroad, and tighten rules requiring a higher portion of cars be made in the region. Officials from all three countries also aim to complete chapters on less-controversial issues, like food safety and digital trade.

The renewed attention to Mexican labor rights injects a new level of tension in the talks, especially with cross-border ties already frayed amid the dispute over President Trump's demand that Mexico pay for a border wall. That spat prompted Mexican President Enrique Peña Nieto last week to scrap a planned Washington visit.

Mexican officials say they are addressing labor issues on their own through constitutional reforms. Mexico's chief negotiator, Kenneth Smith Ramos, said in a recent speech that Nafta "is not an instrument through which salaries can be modified." He added in an interview that a vibrant Nafta "contributes to better-paying jobs" through market forces because pay in export sectors is "35% higher than... in the rest of the economy."

Mr. Pascrell and Michigan Democratic Rep. Sandy Levin, another long-time union backer courted by Mr. Lighthizer, countered with a statement calling Mexican wages "the central issue" in the talks, adding that "failure by Mexico to stop suppressing its workers' wages" would be "a death knell for any deal passing Congress."

Business groups and Republicans are skeptical of the Lighthizer strategy of winning big Democratic support for new trade agreements.

"Historically, at the end of the day, Republicans tend to carry these trade agreements in Congress," says Texas GOP Rep. Kevin Brady, who chairs the House Ways and Means Committee overseeing trade. The Trump effort is made more difficult by union antipathy to much of the rest of the president's agenda -- including policies aimed at weakening union bargaining power in the U.S., even while seeking to strengthen them in Mexico.

Still, many union officials say they have gotten a more sympathetic hearing from Trump trade officials over Nafta than they got from Democratic President Barack Obama's aides negotiating the Trans-Pacific Partnership, which most unions and Democratic lawmakers opposed -- and which Mr. Trump terminated shortly after taking office.

Mr. Lighthizer's 2017 calendar shows two meetings with AFL-CIO President Richard Trumka, as well as separate ones with the leaders of the Teamsters, steelworkers, and auto workers unions. Mr. Lighthizer arranged for those men and three other union presidents to meet last week with Mr. Trump at the White House to bolster his hand in internal administration debates shaping the direction of Nafta demands. The union leaders, in a joint statement, called the meeting "very productive," and the president ended it by inviting them for a tour of the Oval Office.

But the administration has so far failed to deliver on the core U.S. labor demand that local unions get more power in other countries, which could be enforced through complaints filed by the U.S. to an arbitration panel. Nafta was the first major trade pact between a developed and developing country, and its modest labor protections -- included in a vague, unenforceable side agreement -- have been branded by U.S. unions as the original sin of the globalization era, one they see encouraging U.S. producers to relocate in search of cheaper labor made more accessible by trade deals.

The initial Trump Nafta labor chapter proposal submitted in September was similar to TPP language that many Democrats said lacked sufficient teeth. Trump aides agreed to try again in consultation with unions and Democrats -- a contrast to their refusal to alter proposals openly opposed by business groups.

Those talks are still ongoing. Trump aides last week floated new language that would toughen enforcement of labor rights in some areas, and also demand Mexico do more to curb labor violence, an issue underscored by recent labor leader assassinations there.

The unions and Democrats "looked at it and said, it's a nice try, thank you, but it doesn't quite do it, please don't table this," says one person familiar with the discussion. Within a few days, an administration official notified the unions they would go back to the drawing board, "acceding to our demand, apparently" that person said.

William Mauldin contributed to this article.

Write to Jacob M. Schlesinger at jacob.schlesinger@wsj.com


(END) Dow Jones Newswires

February 28, 2018 07:14 ET (12:14 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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