The U.S.-Mexico-Canada Agreement: Labor Rights and Environmental Protection



David A. Gantz | Baker Institute

The evolution of labor and environmental rights in U.S. free trade agreements (FTAs) has been a nonlinear process over the last 25 years, beginning with the North American Free Trade Agreement (NAFTA) negotiations in 1991.2 At that time, the inclusion of labor and environmental provisions in U.S. FTAs was not a foregone conclusion; in fact, it was mostly an afterthought. Furthermore, no such provisions are found in the preNAFTA agreements with Israel and Canada. However, the relationship between trade and labor was well established in the United States prior to NAFTA through nonreciprocal programs such as the Generalized System of Preferences,3 the Caribbean Basin Initiative,4 and the African Growth and Opportunity Act.5 The time, therefore, was ripe for addressing labor and environmental issues in U.S. FTAs in 1991.

The two NAFTA “side” agreements on labor and the environment were considered necessary when President Bill Clinton succeeded President George H.W. Bush in January 1993 after NAFTA had been negotiated and signed by President Bush in December 1992, but before it had been submitted to Congress for approval. As a presidential candidate in October 1992, Clinton boldly endorsed NAFTA, but only on the condition that NAFTA’s environmental and labor provisions be strengthened.6 Clinton’s decision was driven in part by the concerns of Congress and other U.S. officials that without labor and environmental provisions, working and living conditions on both sides of the border would deteriorate.7

Following NAFTA, labor and environmental provisions in U.S. trade agreements evolved considerably due to strong congressional pressure reflected in various versions of Trade Promotion Authority (TPA) legislation. This is particularly apparent in the inclusion of labor provisions in the body of subsequent free trade agreements, as well as in the submission of labor and environmental disputes to the same state-to-state mechanism used for trade disputes.8 Given how trade agreements are ratified in the United States—where passage in the House of Representatives typically requires at least 30-40 votes from the Democratic Party, which emphasizes labor rights and environmental protection issues— no president since Clinton has sought to conclude a regional trade agreement without including labor rights and environmental protection chapters.

USMCA report

[To read the original report, click here]

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