Posted: Tuesday, 11 August 2009

Guadalajara, Mexico
August 9/10, 2009

The North American Free Trade Agreement (NAFTA) has, to a significant extent, defined the relationship between the three North American nations over the last fifteen years. NAFTA was sold on the promise that it would bring more and better jobs and faster growth to the region and reduce emigration from Mexico to the United States and Canada. While trade and investment flows did increase, NAFTA did not create more net trade-related jobs and those that it did were very often less stable, with lower wages and fewer benefits. Instead, increased trade largely benefited the corporate elite in all three countries. Income inequality has also grown in the region. We believe that the trade liberalization and investors' rights provisions contained in NAFTA were an important contributor to these results.

These difficult social and economic conditions have been exacerbated by the current economic crisis which was precipitated by neo-liberal policies and the deregulation of international finance. Further, the global recession is likely to be long and painful. However, the current crisis does provide an opportunity to reassess prevailing economic doctrines, arrangements and institutions and work for common prosperity through the implementation of a continental strategy for economic and social development. These problems must be addressed through an open and participatory process which includes workers and unions.

Our governments will need to undertake measures to address the economic crisis, such as directing fiscal stimulus to meet national priorities, including rebuilding our infrastructure and making a transition to clean renewable energy sources, re-regulating the financial sector, passing labor law reform, strengthening public services, reducing inequality and solving the protracted housing crisis. We will also need concerted international economic policy coordination, and the U.S., Canada and Mexico can play an important role in that regard both regionally and globally.

We believe in the potential for the people of North America to strengthen common ties and participate in broadly shared economic prosperity. Fixing the flaws in NAFTA is only one part of the challenge we face. We also need to work together to address a number of pressing issues, which include labor law reform, migration and development and the promotion of the rule of law.

Labor Law Reform and Enforcement: With respect to the most fundamental of the ILO core labor rights, freedom of association and the right to organize and bargain collectively, the United States, Mexico and Canada are out of compliance with their international obligations due to substantial restrictions on the right to organize and bargain collectively, both in law and practice. All the North American countries must ensure that workers can exercise their most basic and fundamental rights or face appropriate sanctions.

We are concerned that the reform legislation proposed by the Calderón government points in the opposite direction - towards further reductions of workers' rights and wages. The Mexican government must end practices that limit workers' right to freely choose their representatives, including employer-controlled "protection contracts," government refusal to recognize independent unions and elected leaders, firings of workers who advocate union democracy, and declaring strikes to be illegal. In the United States and Canada, recognition of basic labor rights entails card check certification and first contract arbitration. For this reason, passage of the Employee Free Choice Act is essential, as it would contribute to further demand-driven recovery in the U.S. through expanded organizational and collective bargaining rights for U.S. workers. This increase in U.S. demand would also be a plus for the Mexican and Canadian economies.

If NAFTA is to contribute positively to the regional promotion and enforcement of labor rights, several substantive changes must be made to the North American Agreement on Labor Cooperation. First the common obligation should be -- at minimum -- the adoption of domestic laws and regulations that are in total compliance with the International Labor Organization's (ILO) core labor rights, as well as the effective enforcement of those laws and regulations. Enacting the legal reforms mentioned above would be a positive and significant step in that direction. Second, the dispute resolution procedures must be overhauled so that a dispute concerning a violation of any of the agreement's labor obligations are resolved fully, fairly and expeditiously and with appropriate remedies. Finally, each government must demonstrate the political will to act upon the findings and recommendations that result from the dispute settlement process. Failure to act upon those recommendations should be subject to immediate and dissuasive fines or sanctions.

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