Sen. Tammy Baldwin and U.S. Trade Representative Jamieson Greer.
Al Drago | Graham Sloan | Bloomberg | Getty Images
A group of Democratic senators plans to submit a series of demands to U.S. Trade Representative Jamieson Grier ahead of this summer’s mandatory joint review of the U.S.-Mexico-Canada Agreement.
In a letter led by Sen. Tammy Baldwin (D-Wis.) and shared exclusively with CNBC before being sent late Wednesday, 15 Democratic senators told Greer “that any changes to the agreement must deliver meaningful and measurable benefits to American workers.”
The USMCA, signed during President Donald Trump’s first term, is scheduled for review on July 1. Although President Trump initially touted it as “the fairest, most balanced, and beneficial trade deal we’ve ever signed,” he has taken a turn for the worse in recent days, imposing tariffs on Mexico and Canada during his second term.
Greer also said in December testimony to Congress that “rubber-stamping the deal is not in the national interest,” meaning the deal could require significant changes to be reapproved or disapproved and put into an annual review cycle.
Democrats are pushing for new labor provisions in the deal, asking Mr. Greer to use the review to “lift all boats by ensuring that both Canada and Mexico are fully compliant with their labor commitments.”
The letter writers focused on seven priorities they wanted the review to address. First, we will move our business to Mexico. They argued that the USMCA is insufficient to keep businesses in the United States, pointing to manufacturing wages in Mexico and creating wage disparities that lead to offshoring.
“With Mexican auto and electronics manufacturing workers still earning just $3 to $5 an hour, and Mexican manufacturing workers still being paid less than in China, U.S. companies continue to move offshore at an alarming rate, using the threat of offshoring to drive down U.S. wages,” the senators wrote.
The lawmakers also called on Mr. Greer to push Mexico to enforce its labor laws, arguing that his failure to do so “has harmed Mexican workers and contributed to persistent wage disparities with U.S. workers that have led to offshoring.”
Democrats also called on Mr. Greer to find new ways to enforce the ban on products made with forced labor, which they say all parties have failed to do.
“The joint review should identify concrete actions that all three parties can take to improve enforcement, including regular public reporting on enforcement data and protocols for sharing information supporting enforcement actions,” they wrote.
One of the Democratic Party’s demands is to address Chinese investment, which was an issue during President Trump’s recent visit to Beijing. They argued that Chinese companies were setting up manufacturing facilities to circumvent strict U.S. trade laws, and specifically called for curbs on Chinese investment in Mexico.
“It is important that the review of the agreement addresses this loophole and prevents its use as a backdoor into the North American economy by third parties, especially our adversaries,” they wrote. “Fighting China’s unfair trade practices requires global cooperation, and this review can provide a model for how countries can work together to counter this threat.”
Another way Democrats have proposed countering China’s expansion into the North American supply chain is to introduce new rules of origin requirements in additional areas. China’s penetration of parts for industrial products such as automobiles has recently become an issue in Washington.
