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Raising Mexican Wages Key to New NAFTA Deal

Canadian, U.S. teams to pressure Mexico on wage concerns.

by on Oct.31, 2017

U.S. and Canadian negotiating teams agree that wages for Mexican workers are too low.

Despite differences, Canadians and negotiators for the United States apparently agree on one thing — the wages of Mexican workers are way too low under the current North American Free Trade Agreement.

Jerry Dias, president of Unifor, Canada’s largest private sector union, who has become an informal adviser on NAFTA to Canadian Prime Minister Justin Trudeau, said after a meeting with U.S. Secretary of Commerce Wilbur Ross that the U.S and Canada have agreed that addressing the core issue of low Mexican wages is a key to breaking the impasse at NAFTA re-negotiations.

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“There is a clear understanding that Canadian and American workers have both been injured by the siphoning off of manufacturing jobs to Mexico,” said Dias after the meeting “We agreed that Canada and the U.S. must work together to pressure Mexico to drive up wages significantly or face joint retaliatory measures.”

Unifor has previously called on both the Mexican government and on international corporations to end the exploitation of Mexican workers and create a level playing field for workers in all three countries. Dias and Ross believe that a united front is needed to raise Mexican living standards and forge a path to a new trade agreement, Dias added in his statement.

Higher wages could make it harder for Mexico to attract investment from multi-national companies, unions have argued for years.

(NAFTA talks trigger big lobbying efforts by automakers. For the story, Click Here.)

Unifor's Jerry Dias has been talking with U.S. Commerce Secretary Wilbur Ross about NAFTA negotiations.

Unifor stopped work at a General Motors plant in Ontario during a month-long strike recently because of GM’s decision to shift work from Canada to Mexico.

During the meeting, the third between Dias and Ross, key trade issues were discussed including NAFTA, the auto sector and the unfair imposition of duties on Canadian softwood lumber exports to the U.S.

“We had a frank discussion but were unable to find common ground on the softwood lumber issue,” said Dias. “Given the wide difference in our positions I don’t anticipate a resolution to the dispute anytime soon,” he added.

The negotiations on NAFTA are scheduled to resume in Mexico City in mid-November.

(Click Here for details about Trump’s warning against NAFTA talks.)

Automakers have argued since the start of the Trump administration that in its current form NAFTA has helped bolster the North American Auto industry during the past two decades. Mexican government officials have insisted the comparatively low wages in Mexico have helped it remain competitive with China and other countries in Asia.

The unfolding dispute over NAFTA, which the Trump administration has threatened to cripple if it doesn’t get the revisions it wants, has also ignited a debate in Ottawa, involving Trudeau and former Canadian Prime Minister Stephen Harper.

Harper wrote in letter made public that Canada has been too quick to reject American proposals, and has alienated the U.S. by insisting on negotiating alongside Mexico, and by promoting progressive priorities like labor, gender, aboriginal and environmental issues. “I fear that the NAFTA re-negotiation is going very badly,” Harper wrote in the Oct. 25 letter.

Trudeau has responded by saying that Canada will continue to press its own case on revising NAFTA.

(NAFTA talks bog down as sides take a recess. To get more detailClick Here.)

“We have continually made the extremely strong case to the Americans about how important trade with Canada is, how many good jobs in the U.S. depend on trade with Canada, and how we are very much of the view that we can improve and modernize NAFTA in a way that can benefit all three of our countries,” Trudeau told a news conference Monday.

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