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AFL-CIO Now

Mexico Entering Trans-Pacific Trade Agreement

Today, the United States Trade Representative announced that Mexico will be invited to join the negotiations for the Trans-Pacific Partnership Free Trade Agreement (TPP). Although the United States already has extensive trade relations with Mexico through the North American Free Trade Agreement (NAFTA), AFL-CIO President Richard Trumka says, Mexico’s inclusion in the TPP could have significant impacts on workers in both countries.

The ultimate impact, however, depends entirely on the rules agreed to in the TPP regarding labor, investment, rules of origin, and environment, among other key issues. To the extent that key TPP provisions represent improvements over NAFTA rules, Mexico’s accession has the potential to benefit working families both here and in Mexico. To the extent that weaker rules prevail, workers will continue to pay a high price for the job displacement and regulatory erosion caused by NAFTA and other trade agreements, while corporations will continue to benefit. 

For example, Trumka said, under NAFTA, an automobile must have a minimum regional value content of 62.5 percent to receive tariff benefits. This standard provides an incentive for automakers to create and maintain auto sector jobs in North America—but if the TPP contains a lower regional value content for autos, the TPP will provide the opposite incentive and lead to lost jobs and further downward pressure on wages. 

Neither American nor Mexican workers can afford another corporate-directed trade agreement. Good jobs, secure labor rights, and rising standards of living for all workers must guide the TPP negotiations.

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