Senator Tammy Baldwin and US Trade Representative, Jamieson Greer.
El Drago Graeme Sloane Bloomberg | getty images
A group of Democratic senators will issue a set of demands to US Trade Representative Jamieson Greer ahead of a mandatory joint review of the US-Mexico-Canada agreement this summer.
Led by Sen. Tammy Baldwin, D-Wis., and shared exclusively with CNBC before it was sent on Wednesday, 15 Democrats wrote to Greer to “insist that any revised agreement must deliver meaningful and measurable benefits for American workers.”
The USMCA, enacted during President Donald Trump’s first term, is up for review on July 1. While Trump initially described it as “the fairest, most balanced and beneficial trade agreement that we have ever signed into law,” the president has recently soured on the agreement – imposing tariffs on Mexico and Canada during his second term.
Greer also has, in congressional testimony In December, it said “rubber stamping the agreement is not in the national interest,” meaning the agreement may need to be re-approved or rejected and significant changes may be needed to enter a cycle of annual review.
Democrats are demanding new provisions on the labor front of the agreement, asking that Greer use the review to “lift all boats by ensuring that both Canada and Mexico fully comply with their labor commitments.”
The letter authors targeted seven priorities they would like to see addressed in the review. The first was trade transfers to Mexico. He said the USMCA has failed to retain businesses in the US, pointing to manufacturing wages in Mexico, which he says creates a wage gap that encourages offshoring.
“Workers in the Mexican automotive and electronics manufacturing sectors still earn only $3 to $5 an hour and Mexican manufacturing workers are paid less than those in China, U.S. companies continue offshoring at alarming rates and use the threat of offshoring to drive down American wages,” the senators wrote.
Lawmakers also called on Greer to pressure Mexico to enforce its labor laws, the failure of which she says “has harmed Mexican workers and contributed to the persistent wage gap with American workers that encourages offshoring.”
Democrats also asked Greer to find new ways to enforce a ban on goods made with forced labor, something she says all parties have failed to implement.
“The joint review should identify concrete actions the three parties can take to improve enforcement, including regular public reporting on enforcement data and protocols for sharing intelligence based on enforcement actions,” they wrote.
Addressing Chinese investment, which emerged as an issue during Trump’s recent visit to Beijing, is one of the Democrats’ demands. He specifically called for curbs on Chinese investment in Mexico and alleged that Chinese companies were setting up manufacturing facilities to avoid strict US trade laws.
“It is important to address this loophole in the review of the agreement to prevent its use as a backdoor to the North American economy by third-party actors, particularly our adversaries,” he wrote. “Combating China’s unfair trade practices will require global cooperation, and the review can offer a model for how countries can work together to counter this threat.”
Democrats have suggested introducing new rules of origin requirements for additional sectors as another way to counter China’s edge in North American supply chains. China’s dominance in components for manufactured goods such as autos has recently become an issue in Washington.