Labor Regimes and Free Trade in North America: From the North American Free Trade Agreement to the United States–Mexico–Canada Agreement

Abstract

This article provides a comparative assessment of the labor provisions in the United States–Mexico–Canada Agreement (USMCA) and the North American Free Trade Agreement. It also evaluates new labor-related requirements incorporated in the rules of origin (ROO) rather than the labor chapter of the newer treaty. The ROO in the USMCA determine a labor value content requirement for passenger vehicles and light and heavy trucks. No previous free trade agreement mandates that a fraction of a product be made by workers earning a specific minimum wage to qualify for duty-free access. The new clause has raised concerns about its enforceability, which this article explores. Private compliance initiatives are presented as a means to strengthen compliance with the new labor regime without disrupting existing regional production networks.