In today’s Foreign Affairs, Miriam Sapiro and Todd N. Tucker highlight how the Biden-Harris Administration uses trade to serve the American worker. Sapiro and Tucker tout the Administration’s dedication to a worker-centered trade agenda by crafting policy “that both champions high labor standards and establishes a means to enforce them.”
By working to “fight unfair competition and reduce incentives for companies to offshore jobs,” the Biden-Harris Administration has shown that “trade policy can help build a stronger and more resilient U.S. economy—one that works better for all.”
Read excerpts below:
Foreign Affairs: How Trade Can Serve the American Worker
[Miriam Sapiro and Todd N. Tucker, 10/23/24]
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Elements of a more positive trade agenda, however, have started to develop in recent years, almost under the radar. Rather than focusing purely on punitive, unilateral action, an emerging bipartisan consensus emphasizes the importance of improving U.S. trade partners’ labor practices to start to level the playing field. Stronger labor standards abroad and increased investment in critical sectors at home can help protect American workers from unfair competition while enabling the United States to maintain its technological edge and expand its export base.
This approach to trade is more than rhetoric: it is being put into practice in the U.S.-Mexico-Canada Agreement, the successor to the North American Free Trade Agreement (NAFTA). The USMCA was negotiated during the Trump administration, but the Biden administration, in particular, has used the deal’s novel enforcement mechanism to fight for labor law reforms to the benefit of workers in both Mexico and the United States. In doing so, the administration has demonstrated that trade obligations can advance critical policy goals. Biden’s successor will have plenty of trade leverage—the incentive of continued access to the $3.8 trillion U.S. import market, the largest in the world—to push for higher standards in policy areas beyond labor and with trading partners beyond Canada and Mexico. By working with U.S. partners in this way, the next president can not only secure stronger protections for American workers but also drive economic growth and keep the United States—rather than China—at the helm of global economic leadership.
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The central provision of this new model was a Rapid Response Labor Mechanism, or RRM, which enabled the United States to penalize private companies operating in Mexico that were denying their workers fundamental labor rights, such as freedom of association or collective bargaining. If the companies did not resolve the problem, the United States could bar their products from entering its market. This mechanism is unique in international trade law: as the scholars Kathleen Claussen and Chad Bown have explained, the difference between the RRM and mechanisms in other binding trade agreements is that “the RRM targets companies for their social harms rather than countries for their regulatory failures.” The spirit of the mechanism is reflected in the text of the USMCA, where the signatories “recognize the goal of trading only in goods produced in compliance with” the agreement’s labor provisions.
The USMCA entered into force on July 1, 2020, but the Trump administration never used the RRM. Since Biden took office in 2021, however, the United States has brought nearly 30 complaints alleging that factories in Mexico denied labor rights to workers. U.S. Trade Representative Katherine Tai—who had helped lead development of the RRM when she worked on the House Ways and Means Committee—and her team initiated the first complaint in May 2021. […] Use of the RRM, however, was far from an imperialist imposition of U.S. values on a trading partner: the petitions were often filed at the behest of Mexican workers, and the Mexican government saw the tool as a way to advance its own domestic labor reform agenda.
The RRM has so far worked more effectively than earlier mechanisms to address labor violations. […] As AFL-CIO President Liz Shuler has described it, these cases often result in “concrete wins for Mexican workers in the form of authentic union representation with higher wages, benefits, and the reinstatement of illegally fired union supporters.” And critically important, such enforcement helps American workers by undermining the rationale for outsourcing jobs to Mexico.
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The USMCA showed it is possible to craft a trade agreement that both champions high labor standards and establishes a viable mechanism for enforcing them. If labor rights can remain at the center of its trade policy, the United States can start to rebalance a playing field that has too often been tilted against American workers.
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The USMCA’s labor rights enforcement mechanism sets a benchmark for future progress by providing a model that can be adapted to address other challenges and modified to work with other trading partners. Combined with broader efforts to boost U.S. competitiveness, trade policy can help build a stronger and more resilient U.S. economy—one that works better for all.
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