Mexican President Andrés Manuel López Obrador’s early July visit to Washington went precisely as planned. It was highly scripted, with press statements that did not deviate from prepared remarks. Even López Obrador’s layover in Atlanta was smooth, with an early arrival into Washington, D.C..
While the purpose was to mark the entry into force of the new United States Mexico Canada Agreement, or USMCA, the trip did come in for some criticism. The Mexican president faced tough questions for visiting the United States in the midst of a political campaign. Leaders of the Democratic Party, who were critical to the final ratification of USMCA, were left off the agenda. U.S. President Donald Trump did take the opportunity to praise Mexico -- a reversal from past statements -- so, did the trip achieve its objective? Are we now further along the path to a more certain trade and investment climate in North America, even amid a global pandemic?
Let’s look back for a moment. After a long and bumpy road, the signing of the USMCA was a rare win for all stakeholders. It was a win domestically, for the sake of bipartisanship and for the labor movement, and it was equally so internationally, showing a successful instance of trilateral cooperation. Ultimately, however, the success of the agreement will be determined by a total commitment to implementation and a sustained, long-lived sense of bipartisan support. Implementation on July 1 was not the end goal but the start, and sustained engagement will be needed to ensure that the historic standards set by the agreement are met. This week’s visit could be a part of that effort, but leaders will need to follow up. For instance, given Canadian Prime Minister Justin Trudeau's notable absence, a trilateral meeting should be set with political leaders across the ideological spectrum. All of them will be instrumental to the longevity of the agreement.
The USMCA differs from its predecessor, the North American Free Trade Agreement, in several ways. The agreement rolls back special arbitration systems for corporations that have drawn condemnation across the aisle for undermining sovereignty and granting excessive power to corporate interests. It aggressively incentivizes the automobile industry to produce more cars in North America. That industry has been hit hard by the coronavirus pandemic, but it could benefit from nearshoring opportunities. The deal also opens Canadian dairy markets to American farmers for the first time. Most significantly, it expands protections for workers and the environment, making the agreement attractive enough to domestic labor movements that it even earned the endorsement of AFL-CIO President Richard Trumka last December.
At the beginning of the negotiation process, the United States, Mexico, and Canada all agreed that the North American Free Trade Agreement needed to be modernized, but they disagreed on how to get there. Further, even after negotiations concluded, Democrats in the U.S. House of Representatives made it clear they would not ratify the USMCA without significant progress on labor and environmental standards.
After nearly a year of building buy-in from key U.S. stakeholders and forging legislative compromises, the USMCA ultimately included major changes in these areas, demonstrating how bipartisanship can improve legislative and policy outcomes. It was an increasingly rare feat in today’s hyperpolarized climate. Still, the true challenge lies in the parties’ goodwill to adhere to the many new standards. The coalitions that allowed the USMCA to be signed and ratified will be equally critical to its implementation.
Though new protections are aimed particularly at workers in northern Mexico’s factories, they could benefit workers in the United States as well, especially as questions around going back to work safely become increasingly urgent. While NAFTA’s labor standards were added to the agreement, the USMCA deals with labor and environmental practices in the main body of the treaty. As a result, issues like the right to organize and collective bargaining are included in the USMCA’s normal procedures for settling disputes. Moreover, the USMCA includes an independent oversight panel empowered to stop shipments from factories found violating labor and environment standards -- a provision House Democrats mandated to ratify the USMCA.
As the United States, Mexico, and Canada work toward meeting the USMCA’s obligations, each country must move forward with the understanding that the agreement was engineered as a lasting, living endeavor, with periodic opportunities for adjustments and evaluation. Committing to the process and maintaining bipartisan support will not only yield long-term results; it will build much-needed resilience and sustainability within the trilateral relationship, allowing the countries to support each other during the post-pandemic recovery.
Ultimately, however, whether the USMCA delivers on its potential hinges on the three countries’ commitment to compliance and consistency, and on the maintenance of support across the political spectrum. We will need a significant, long-term effort with sustained participation from everyone, including the USMCA’s critics. Keeping the bridges between political parties will be essential so that USMCA does not begin to suffer the political pushback that befell its predecessor, NAFTA.
Jason Marczak is the Director of the Adrienne Arsht Latin America Center of the Atlantic Council. He is on Twitter at @jmarczak. María Fernanda Perez Arguello is Associate Director of the Adrienne Arsht Latin America Center of the Atlantic Council. She is on Twitter at @MariaBozmoski. The views expressed are the authors' own.
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