What New Trade Rules Mean for Canadian Autoworkers

Message from Jerry Dias

Over the past year, Canada, the United States and Mexico undertook a process to renegotiate the North American Free Trade Agreement (or NAFTA). Since 1994, NAFTA has proven to be a bad trade deal for working people, especially for autoworkers.

Fixing NAFTA’s rules – imagining different models and outcomes for trade – has been a long- standing desire of our union. Unifor approached this renegotiation as a once-in-a-generation opportunity to expose the problems with NAFTA and similar bad trade deals. We also approached this renegotiation by putting forward new ideas and trade provisions designed to help – not hurt – workers and communities.

Our goal was to reimagine what fair trade deals could look like in the 21st century. During this renegotiation process, U.S. President Donald Trump posed an unimaginable threat: major tariffs on Canadian cars and parts exports. For reasons of both history and geography, Canada’s auto industry is closely tied to the U.S. Virtually everything we export is destined for sale in the U.S. market. The mere threat of U.S. tariffs on Canada’s auto sector raised serious questions over future investments and product planning in Canadian facilities.

As you know, a new continental trade deal has been struck – the United States-Mexico-Canada Agreement (or USMCA). It is not an ideal trade agreement by any stretch, nor is it a model of the sort of progressive trade we need in Canada. In fact, it includes elements that should be of concern to Canadians. Unifor will continue its work, advocating for trade policy that puts workers and communities first.

Nevertheless, in certain key areas, this new agreement is an improvement on the original NAFTA, including on rules governing auto trade, and that is in part because of the direct role our union played.

The new USMCA overhauls the rules governing auto trade in North America. Automakers are required to meet far stricter “Made in North America” rules for cars and parts, in order to sell these products tariff-free across borders. Automakers will also be required to build a portion of their cars and parts in high-wage facilities (instead of simply exploiting the wages of Mexican workers, earning as low as $1 USD per hour), a measure designed to safeguard work in US and Canadian facilities.

Most importantly, the new USMCA effectively eliminates the threat of U.S.-imposed auto tariffs on Canada. Should the United States choose to impose national security tariffs on cars and parts in the coming months, up to 2.6 million vehicles and $32 billion worth of auto parts exports, will face no penalty. To put this in perspective, Canada exported 1.8 million vehicles to the United States in 2017, and just less than 2.2 million at our peak. We feel confident to have secured protections for all existing capacity, as well as future growth in the industry. I can safely say that our union helped secure the strongest possible terms of protection against potential U.S. auto tariffs.

Let me be clear: these new trade rules, alone, will not deliver needed investments to our auto facilities, nor will they secure our wages, benefits and jobs. They are a welcome improvement, not a solution. As many analysts predict, our industry is prone for a downturn – one we hope is limited. Our job, as always, is to use our collective power and solidarity to ensure Canadian autoworkers – those inside and even those outside our union – have good jobs and a stable future within this vital industry.

More information on the USMCA will be made available in the coming weeks. For additional details about the new terms of auto trade, visit: www.unifor.org/peoplestrade.

Auto leaflet Updated

Thank you for your ongoing support and solidarity.

Jerry Dias,
Unifor National President


Posting authorised by,

Tim McKinnon, GM Unit Chairperson
On behalf of the Bargaining Committee
Paul Dortono, Doug Wark, John Rakich, Trevor Longpre, Ken Naldjieff