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1 1 (January 10, 2020)

handle is hein.crs/govbfyw0001 and id is 1 raw text is: 01;0i E.$~ & p\w -- , gnom goo mppm qq\ , q 'S I 11LIANJILiN, Updated January 10, 2020 USMCA: Labor Provisions The proposed U.S.-Mexico-Canada Agreement (USMCA), signed in late 2018, requires implementing legislation that must be approved by Congress before it can enter into force. Implementing legislation for USMCA was introduced in the House of Representatives (H.R. 5430) on December 13, 2019, and in the Senate on December 16, 2019 (S. 3052). The House approved the bill on December 19, 2019. The Senate Finance Committee reported the bill out of committee on January 7, 2020. Upon ratification, the USMCA would replace the 1994 North American Free Trade Agreement (NAFTA). Labor issues were a major congressional concern throughout the USMCA negotiations and remained an issue after the three countries concluded the agreement in September 2018. In response, the U.S. Trade Representative (USTR) and some Members of the House of Representatives negotiated changes to the USMCA; most of the changes were dedicated to labor modifications. USTR then negotiated the amendments with Canada and Mexico. Historically, U.S. labor advocates have expressed concern over free trade agreements (FTAs) with developing countries, due to those countries' relatively lower wages and labor standards, and have sought stronger labor provisions in U.S. FTAs. Proponents of FTAs such as NAFTA argue that they help improve standards, build capacity to support worker rights in developing countries, and enhance economic development and growth. In the long run, FTAs help reallocate resources to more efficient industries, support higher-paying U.S. jobs, and, according to most economists, have a net positive effect on the U.S. economy. At the same time, trade liberalization can have adjustment costs in certain industries and regions of the country. The U.S. International Trade Commission estimates that, if implemented, the collective bargaining commitments made by Mexico in USMCA would increase Mexican union wages and help reduce wage disparity. NAFTA's labor provisions are in a side agreement containing 11 guiding principles pertaining to worker rights. Other provisions involve technical assistance, capacity building, and separate dispute procedures, along with a labor cooperation mechanism. Full dispute resolution procedures apply only to a country's persistent pattern of failure in trade-related cases to enforce its own laws regarding child labor, minimum wage, and occupational safety and health. Issues such as freedom of association and the right to organize are limited to ministerial consultations. ,, SM CA The proposed USMCA includes components of more recent U.S. FTAs that strengthen labor provisions and provide recourse to the same dispute settlement mechanism as other parts of the agreement. Unlike NAFTA, it requires parties not only to enforce their own laws, but also to adopt and maintain laws on core worker rights related to the International Labor Organization (ILO) 1998 Declaration on Fundamental Principles and Rights at Work. The USMCA also commits parties to * not waive or otherwise derogate from labor statutes or regulations to promote trade and investment; * not fail to effectively enforce labor laws through a sustained or recurring course of action or inaction (with the exception of worker violence) in a manner affecting trade or investment between parties; and * promote compliance with labor laws through appropriate government action, such as appointing and training inspectors or monitoring compliance and investigating suspected violations. The USMCA also prohibits imports of goods made by forced labor, and adds new commitments related to violence against workers, migrant worker protections, and workplace discrimination. It maintains standard U.S. FTA language that each party would retain the right to exercise reasonable enforcement discretion and to make bona fide decisions on the allocation of enforcement resources. Additionally, it specifies that the labor chapter shall not be construed to empower another party to undertake labor law enforcement in the territory of another party. USMCA Protocol of Amendment: Key Labor Changes Some Members of Congress criticized the original text of the USMCA chapters on labor and dispute settlement (DS) and negotiated with the Administration to amend the agreement. Key changes include the following: * Prevention of panel blocking in dispute settlement. Ensures the formation of a panel in dispute cases where a party refuses to participate in the selection of panelists. * In a Manner Affecting Trade and Investment. Shifts the burden of proof by stating that an alleged violation affects trade and investment, unless otherwise demonstrated. * Rapid Response Mechanism. Adds a new rapid response mechanism to provide for an independent panel investigation of denial of certain labor rights at covered facilities, as opposed to a government inspection. * Mexico's Labor Reform Monitoring. USMCA implementing legislation creates a new interagency committee, labor attaches, and reporting requirements to Congress on Mexico's implementation of labor reforms. * New or amended provisions on Rules of Procedure for DS, forced labor, and violence against workers. Me.ica , Lakb or,,,-- R , -,, After several years of domestic debate and constitutional reforms in 2017, on May 1, 2019, Mexican President ~fl:O~

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