Tensions over sharp differences in labour standards
MEXICO CITY:Tensions over sharp differences in pay between Mexican workers and their Canadian and United States counterparts surfaced on Sunday as negotiators discussed labour market rules in talks to overhaul the North American Free Trade Agreement (Nafta).
Canada’s biggest private-sector union said Nafta should be scrapped if Mexico cannot agree to better labour standards, clashing with Mexican business leaders who argued that workers rights were a matter for each country to resolve internally.
Mexican political and corporate leaders firmly resist demands to bring wages into line with US and Canadian levels, arguing the big cost advantage the country enjoys over richer peers should decrease as economic development advances.
Labour union leaders in the two wealthier nations say laxer labour standards and lower pay in Mexico have swelled corporate profits at the expense of Canadian and US workers, making resolution of the issue a major battleground of the Nafta talks.
Jerry Dias, national president of Canadian union Unifor, said Nafta had been a “lousy trade agreement for workingclass people” and that the union was pushing his government to walk away from the talks if it could not secure them a better deal.
“If labour standards aren’t a part of a trade deal, then there shouldn’t be a trade deal,” Dias said here on the sidelines of a second round of negotiations to update the 1994 trade agreement among the three countries.
Worker pay is a sensitive issue in Mexico, a country riven by sharp inequality and which has struggled for years to alleviate poverty, which affects well over 40 per cent of the population.
Bosco de la Vega, head of Mexican farm lobby, the National Agricultural Council, said more trade, not intervention in labour markets, was the best way for the region to grow economically.
“Mexico can’t interfere in the labour market issue in the US and Canada. We ask the same: that they don’t interfere in these matters,” he said at the talks.
Mexican business leaders argue that integrating Mexico into North American supply chains has made the entire region more competitive. Recent studies have shown, however, that wages in Mexico have experienced significant downward pressure.
Given Mexico’s higher inflation rates, wages in that country are lower now in real terms than when Nafta took effect, according to a report by credit rating agency Moody’s.
From 2001 to 2015, Mexican hourly wages in US dollars grew only nine per cent, less than in the US and far below the 120 per cent increase in Brazil, said the Moody’s report.