Novel Labour-related Clauses in a Trade Agreement: From NAFTA to USMCA


  • Christoph Scherrer University of Kassel



The renegotiated North American Free Trade Agreement (NAFTA), now called the United States–
Mexico–Canada Agreement (USMCA), contains two interesting innovations: the requirement of a
minimum average wage in the manufacturing of motor vehicles (the Labour Value Content clause)
and a detailed prescription for the reform of Mexican labour law. Both could serve as models for
future labour chapters in trade agreements. The assessment contained in this article is based on the
views of those who demanded renegotiation of the labour-related provisions of NAFTA, experts
on labour rights in free trade agreements (FTAs) and ethics criteria. The assessment results in a
split picture. The labour-related provisions came about under ethically problematic circumstances
and their complexity leaves much room for criticism. Yet, the idea of inserting a wage floor in an
FTA, as well as monitoring and sanctioning mechanisms for ensuring internationally recognised
labour rights, merits further consideration for future trade agreements.
KEYWORDS: globalisation; industrial relations; competitiveness; trade agreements; outsourcing