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A US Win in NAFTA Talks Might Mean Getting Mexican Workers a Raise at Home

Greg Quinn and Eric Martin - Bloomberg
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August 8, 2017

Ten thousand farmers descend on Mexico City to protest against NAFTA (Ruptly TV)

President Donald Trump has gone after Mexicans for stealing U.S. jobs. Now he’s trying to get workers south of the border a pay raise.

It would be in America’s self-interest. Trump wants to stop U.S. companies from moving to Mexico, where workers earn a quarter of what U.S. counterparts make. Closing that gap might convince American firms to stay, which is why U.S. negotiators will push for higher wages and better conditions for Mexican workers when negotiations on revising the North American Free Trade Agreement get underway next week.

With Mexican wages the lowest among the world’s more developed nations, labor reform is a juicy target to meet Trump’s demand to get a better deal for U.S. workers or walk away from the 1994 pact. While Mexican officials are willing to make some changes, jobs and wages will become a sticking point if Trump goes too far and uses the issue as a blunt tool to curb last year’s $64 billion trade deficit in goods. Mexico argues that its lower cost of production has competitive benefits for all of North America.

The Trump administration “will push hard, and I think rightly so, on labor standards,” said Gerardo Otero, a professor at Canada’s Simon Fraser University who has published more than 100 articles or books on Mexico and Latin America. “If Mexican prices increase due to wage increases, there might be a chance of closing the gap.”

NAFTA originally included a side agreement to protect workers’ rights that was never formally incorporated in the deal. The Trump administration said last month that bringing labor provisions into the core of the agreement is a priority. The U.S. already has a head start on the issue, with Mexico agreeing on labor reforms as part of the Trans-Pacific Partnership pact, which Trump withdrew from shortly after taking office. Commerce Secretary Wilbur Ross said in a May interview the TPP shift is a good starting point for the U.S. in NAFTA talks.

Read the rest at Bloomberg

Related: U.S. Trade Battles with Mexico Pose Trouble for Canada at NAFTA Talks (Xinhua)

Related: Mexico Arrives to NAFTA Renegotiations with Historic Trade Surplus (PanAm Post)

Related: Canada v Mexico: Trump Seeks to Divide and Conquer in NAFTA Negotiations (The Guardian)

Related: Mexico's Farmers and Rural Poor Demand Agriculture Be Excluded from New NAFTA Talks (teleSUR)

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