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Moral Outrage Over Low Wages: Canada Joins Trump With Threats of Walking Out on NAFTA

Courtesy of Mish.

The threat of total abandonment of NAFTA took on a second front today as Canada’s biggest private-sector union said NAFTA should be scrapped if Mexico cannot agree to better labor standards.

Please consider Sharp Differences Over Labor Surface at NAFTA Talks in Mexico.

Tensions over sharp differences in pay between Mexican workers and their Canadian and U.S. counterparts surfaced on Sunday as negotiators discussed labor market rules in talks to overhaul the North American Free Trade Agreement.

Canada’s biggest private-sector union said NAFTA should be scrapped if Mexico cannot agree to better labor standards, clashing with Mexican business leaders who argued that workers rights were a matter for each country to resolve internally.

Mexican political and corporate leaders firmly resist demands to bring wages into line with U.S. and Canadian levels, arguing the big cost advantage the country enjoys over richer peers should decrease as economic development advances.

Labor union leaders in the two wealthier nations say laxer labor standards and lower pay in Mexico have swelled corporate profits at the expense of Canadian and U.S. workers, making resolution of the issue a major battleground of the NAFTA talks.

Jerry Dias, national president of Canadian union Unifor, said NAFTA had been a “lousy trade agreement for working-class people” and that the union was pushing his government to walk away from the talks if it could not secure them a better deal.

“If labor standards aren’t a part of a trade deal, then there shouldn’t be a trade deal,” Dias told reporters in Mexico City on the sidelines of a second round of negotiations to update the 1994 trade agreement among the three countries.

Bosco de la Vega, head of Mexican farm lobby, the National Agricultural Council, said more trade, not intervention in labor markets, was the best way for the region to grow economically.

“Mexico can’t interfere in the labor market issue in the United States and Canada. We ask the same: that they don’t interfere in these matters,” he told reporters at the talks.

Moral Outrage Over Free Trade

Are bad jobs at bad wages better than no jobs at all? Should the US demand third world economies pay “living wages”?

If so, and if countries don’t oblige, should the US impose tariffs so the US does not lose jobs to such countries?

This is what I think…

Moral outrage is common among the opponents of globalization–of the transfer of technology and capital from high-wage to low-wage countries and the resulting growth of labor-intensive Third World exports. These critics take it as a given that anyone with a good word for this process is naive or corrupt and, in either case, a de facto agent of global capital in its oppression of workers here and abroad.

But matters are not that simple, and the moral lines are not that clear. In fact, let me make a counter-accusation: The lofty moral tone of the opponents of globalization is possible only because they have chosen not to think their position through. While fat-cat capitalists might benefit from globalization, the biggest beneficiaries are, yes, Third World workers.


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  1. Yes indeed. I'll complete your analysis for you. Fat cat capitalists get even richer, while third world workers get jobs they never had, and the price is entirely paid by the workers in the developed countries who either loose their jobs or are now stuck in jobs with stagnant wage prospects. Screw you.


  2. Hi Tpsquest, 

    Assuming your analysis is spot on, what's the solution?

    Ilene