Key U.S. Labor Leader Says Nafta Replacement Must Include Canada

(Bloomberg) -- The trade deal that President Donald Trump announced this week with Mexico is “headed in the right direction,” AFL-CIO President Richard Trumka said Thursday afternoon. But he said that the deal must include Canada.

“It should be a three-country deal,” Trumka said during an interview on Bloomberg TV. “Canada, the U.S. and Mexico should be together.”

On Monday, Trump said the U.S. and Mexico had reached an agreement to replace the North American Free Trade deal. The deal included higher wages for some Mexican auto workers to discourage U.S. car companies from relocating there. The U.S. is pressuring Canada to strike a deal by week’s end, which is when the Trump administration plans to inform Congress that the president intends to sign a new trade pact with Mexico in 90 days.

Trumka questioned that timeline. “We think it’s more important to get this right than it is to meet some kind of artificial deadline,” he said.

Under the proposed agreement, cars will be required to have 75 percent of their content originate in the U.S. and Mexico, up from 62.5 percent under Nafta. Under the new deal with Mexico, 40 percent to 45 percent of auto content would have to be made by workers making more than $16 per hour, a condition that favors the U.S. and Canada.

Aside from his insistence that Canada be included, Trumka had warm words for the deal so far. “The Mexicans have long pursued a low-wage strategy,” he said, which a Nafta replacement should try to reverse. “We’re encouraged because this agreement is headed in that direction.”

Trumka’s tentative support for the deal highlights the quandary that Trump has created for U.S. union leaders. Trump’s appeal to working-class voters could make it harder for labor to wholeheartedly support Democratic candidates in this fall’s midterms.

Gaspar Rivera-Salgado, project director at the Center for Labor Research and Education at the University of California-Los Angeles, said Trump’s nationalist and protectionist positions play well to some parts of organized labor, such as coal miners and steelworkers. He said the trade deal raised the possibility that national union leaders could endorse Republican candidates, including Trump.

“I think that’s exactly the key political question," Rivera-Salgado said. “That vote is up for a fight.”

Asked if a favorable deal might cause unions to endorse Trump, Trumka said that the deal doesn’t have anything to do with politics. “We want an agreement that no matter who is in the White House, we can enforce it,” he said.

“This has everything to do with economics, and workers’ jobs, and our livelihood,” he said. “We are aggressively pursuing an agreement that works for workers in all three countries. And quite frankly, we’re not quite there yet.”

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