When Ottawa announced a push to add “progressive” chapters to NAFTA on issues ranging from labour standards to the environment and Indigenous relations, many trade experts rolled their eyes.
The move seemed like a symbolic gesture mostly aimed at pleasing the Trudeau government’s domestic supporters, Global News heard from economists last week.
But as the second round of NAFTA negotiations draws to close on Monday, some are starting to think Canada is serious about its demands on labour rights.
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Canadian negotiators led by Foreign Minister Chrystia Freeland staked out a tough stance on the issue, going so far as to ask that the U.S. federal government step in to end state-level right to work legislation, which allows workers the option to choose whether or not to join a union in their workplace.
That’s a specific request, rather than a vague statement about “values,” and one that is clearly in Canada’s national interest, said Lawrence Herman, senior fellow at the C.D. Howe Institute.
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Such laws interfere with market forces that help determine wage levels and may have led to artificially low worker compensation in the U.S. states that adopted them, Herman told Global News.
By targeting the U.S.’s right to work legislation as well as lax labour standards in Mexico, Ottawa is demanding a level playing field, he added.
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Stricter labour rules could help draw investment to Canada’s manufacturing sector
Higher labour standards in the U.S. and Mexico are unlikely to bring back the half million manufacturing jobs Canada has shed over the past 10 to 15 years, said Pedro Antunes, deputy chief economist at the Conference Board of Canada.
Most of those workers were replaced by computers and robots, rather than by cheaper competitors in low-cost jurisdictions. The U.S. has also seen about 20 per cent of its manufacturing workforce disappear over the same period, a loss equivalent to Canada’s in relative terms, according to Antunes.
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Over the last five or six years, though, the U.S. and Mexico have seen a wave of investment dollars flow to the goods-making sector of the economy. Canada, on the other hand, largely hasn’t, he noted.
Canada is not getting its “fair share of the pie,” and “de-unionization in the U.S. had something to do with it,” Antunes told Global News.
Stricter labour rules as part of NAFTA won’t necessarily create a wealth of jobs in manufacturing, which is increasingly becoming about high-skilled tech jobs rather than work on assembly lines, he added. But it would help ensure Canada maintains a healthy manufacturing industry.
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Will Canada gets its way on labour rules?
Both Herman and Antunes told Global News it’s unlikely the U.S. will acquiesce to Ottawa’s demands on right-to-work laws.
Still, Canada might be able to ensure that NAFTA 2.0 includes “better, more concrete, more robust labour provisions,” said Herman.
The template for that would be the labour chapter of the Trans-Pacific Partnership (TPP), a yet-to-be-ratified trade pact among Canada, the U.S. and 10 other countries that border the Pacific Ocean.
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The TPP calls for all signatories to adopt the fundamental labour rights as recognized by the International Labor Organization (ILO), including the right to collective bargaining; the banning of forced and child labour; and the elimination of employment discrimination.
Canada could at least reasonably ask that the U.S. join the nine core ILO conventions it hasn’t yet ratified, Herman said.
He is optimistic about Canada, the U.S. and Mexico being able to find “a fair degree of common ground on these issues.”
All three governments should have an easy time selling strengthened labour protections to their domestic audiences, he noted.
After all, improving the lot of manufacturing workers should play well with U.S. President Donald Trump, too.