The renegotiation of the North American Free Trade Agreement (NAFTA) happened at a time of upheaval in the so-called rules-based international order. The election of Donald Trump on an anti-NAFTA mandate, the United Kingdom’s withdrawal from the European Union (Brexit), and the failure of the Obama administration’s free trade pact with the EU—and near failure of Canada’s own EU deal, CETA, in part due to its excessive investor protections—exposed simmering antipathy for neoliberal globalization in the West.
In Canada, the Trudeau government responded to public and political concerns about the unequal impacts of trade by promising to devise a “progressive trade agenda.” Global Affairs Canada’s 2017-18 departmental plan spoke of the government’s “increased commitment to openness and transparency, especially in evaluation and reporting” on trade policy, which should “consider issues such as labour, the environment, gender equality, transparency and inclusive economic growth.”1
The policy, later renamed “inclusive trade,” purports to “ensure that the benefits and opportunities that flow from trade are more widely shared, including with under-represented groups such as women, [small and medium-sized enterprises], and Indigenous Peoples.”2 Following Chile and Uruguay, Canada began adding gender chapters to its free trade agreements.3 Canada now performs gender-based analyses (GBA+) of all new trade deals prior to their ratification by Parliament.4
Canada’s underlying assumptions about trade rules have not changed, however. Canada maintains that the “international rules-based order” governed by the World Trade Organization (WTO) and NAFTA “has provided unparalleled prosperity to Canada and others for decades.”5 Canadian trade policy continues to prioritize market access opening for Canadian commodity and agricultural exporters and financial and other services, and strong protections for Canadian extractive firms operating abroad.
South of the border, in contrast, a bipartisan consensus has emerged that free trade has produced destabilizing losses for many and highly unequal gains for others. “Simply put,” writes Trump’s United States Trade Representative (USTR) Robert Lighthizer, “I believe that American trade policy should revolve around helping working-class American families. Enhancing corporate profits, increasing economic efficiency, and lowering consumer prices are important but, in my view, secondary to this goal.”6
The Biden administration has retained the worker-centred trade stance of its predecessor while incorporating racial and gender equity into its trade data collection and reporting requirements for USTR.7 The USTR’s 2022–26 strategic plan outlines “inclusive” processes through which a more equitable trade policy might be developed, including working with “unions, Tribal Nations, state and local government,” and through outreach to “underserved and disadvantaged communities” in policy development, negotiations, and implementation and enforcement of agreements.”8
The same document proposes to identify how trade policy can “contribute towards increasing equity, reducing income inequality, and expanding micro, small, and medium-sized enterprises and their potential to create good U.S.-based jobs through trade.” What’s more, where Trump’s trade reforms and rhetoric focused on U.S. workers largely from traditional, male-dominated sectors, Biden’s USTR Katherine Tai speaks of the value of advancing workers’ rights abroad, so that “we are not pitting our working communities against each other, but instead allowing them to compete fairly and thrive in this global economy.”9
In the NAFTA renegotiations, Canada proposed to add chapters to the new deal on trade and gender and trade and Indigenous Peoples. Neither chapter appeared in the final agreement because of opposition from the Trump administration. Given developments in U.S. trade policy since then, the CUSMA review provides an opportunity to revisit these exclusions and consider other ways in which inclusive elements from Canadian, U.S. and Mexican trade policy could be mainstreamed into the agreement.
Gender and trade
The NAFTA agreement was completely gender blind and lacked any consideration of what the different impacts of the agreement might be on men and women. This was despite the fact that Canadian feminist political economists and activists had drawn attention to these issues during the debates on both the Canada-U.S. Free Trade Agreement (CUSTFA) and NAFTA.
The economic integration which occurred after implementation of these agreements did have clear gender effects, including the loss of economic sectors in Canada that employed a disproportionately female and racialized workforce, like textiles and apparel production. In Mexico economic integration and neoliberal reforms led to the rapid growth of the maquiladora sector (export-oriented factories close to the U.S. border) where women represented a large majority of the workforce, especially in the early years of NAFTA.
Even if the number of male workers in the maquilas has increased over time, women still tend to occupy more poorly paid and precarious positions and are often subject to discrimination, sexual harassment and violence. Protection unions (see the labour rights section of this report) are particularly common in the maquila sector. Women are over-represented in the informal sector, which is not covered by the rapid-response mechanism (RRM) in CUSMA.
Global Affairs Canada lists the following objectives of including gender chapters in Canadian free trade agreements:
- Reaffirm the importance of incorporating a gender perspective into economic and trade issues.
- Reaffirm a commitment to international agreements on gender equality and women’s rights, including the Convention on the Elimination of All Forms of Discrimination against Women.
- Provide a framework for parties to the agreement to undertake co-operation activities on issues related to gender and trade.
- Establish a dedicated trade and gender committee and other institutional provisions.10
Gender chapters draw attention to the unequal impact of trade agreements on men and women and gender-diverse individuals, but they are not legally binding. Most Canadian trade deals do not grant recourse to dispute settlement for matters arising from their gender chapters, meaning there are no sanctions attached to any failure to abide by the commitments therein.11
Many of the contemporary efforts to mainstream gender in existing trade architectures, such as separate gender chapters in regional or other multilateral trade agreements, the 2017 WTO Buenos Aires Declaration on Trade and Women's Economic Empowerment, efforts to promote women’s entrepreneurship, and gender-based analysis (GBA) of trade policies fall seriously short because they fail to acknowledge the importance of social reproduction in the economy or to consult with women’s organizations in devising new strategies.12
Despite the absence of a gender chapter, CUSMA does include limited references to gender in other parts of the agreement. The most significant are found in the labour chapter, as discussed in the labour section of this report. CUSMA includes a commitment to International Labour Organization (ILO) core labour rights, including “the elimination of discrimination in respect of employment and occupation” and “acceptable conditions of work with respect to minimum wages, hours of work, and occupational safety and health.” However, the labour chapter does not include a commitment to equal pay for work of equal value.
Furthermore, Art. 23.9 of the CUSMA labour chapter commits the parties to: “implement policies that it considers appropriate to protect workers against employment discrimination on the basis of sex (including with regard to sexual harassment), pregnancy, sexual orientation, gender identity, and caregiving responsibilities; provide job-protected leave for birth or adoption of a child and care of family members; and protect against wage discrimination.”
In response to backlash from U.S. members of Congress, however, a footnote was added to the article stating: “The United States’ existing federal agency policies regarding the hiring of federal workers are sufficient to fulfill the obligations set forth in this Article. The Article thus requires no additional action on the part of the United States, including any amendments to Title VII of the Civil Rights Act of 1964, in order for the United States to be in compliance with the obligations set forth in this Article.”
This is a questionable claim in light of the many challenges faced by women and LGBTQI+ workers in the United States, and underlines the weakness of the labour provisions with regard to the rights of U.S. or Canadian workers.13 Notably, the CUSMA labour chapter also included protections for migrant rights. As discussed in the section on labour rights, this led to the successful labour chapter dispute regarding the rights of Mexican women migrant workers in the United States.
The Facility-Specific Rapid Response Labour Mechanism (RRM) in CUSMA, described in detail in the labour rights section, only focuses on violation of the right of free association and collective bargaining, and contains no reference to the ILO core labour rights regarding elimination of discrimination in the workplace, which are designed to address gender and other forms of discrimination. Nor does it refer to such issues as sexual harassment and sexual violence in the workplace which are addressed in Mexico’s labour reform.
Chapter 25 of CUSMA, on small and medium-sized enterprises (SMEs), pledges each party to “strengthen its collaboration with the other Parties on activities to promote SMEs owned by under-represented groups including women, indigenous peoples, youth and minorities, as well as start-ups, agricultural and rural SMEs, and promote partnership among these SMEs and their participation in international trade.” This commitment recognizes the fact that women are much more likely to own small businesses than own or be represented in senior management of large corporations, and that SMEs are much less likely to export than larger companies.
Like gender chapters in other trade agreements, however, the commitments in the SME chapter have no sanctions attached to them, and none of the other text of the chapter refers to the specific barriers faced by businesses owned by women, gender-diverse or racialized individuals.
Indigenous Peoples and trade
As settlers, we are not in a position to make recommendations for changing or building on the provisions in CUSMA pertaining to Indigenous Peoples. We will simply make a few observations on the outcome in those negotiations, developments in Canadian trade policy with respect to Indigenous Peoples since then, and the need to broadly consult with Indigenous Peoples across the continent in the six-year review process.
First, we recognize Canadian negotiators’ past efforts to try to include a chapter on Indigenous Peoples’ rights in CUSMA. Though an Indigenous chapter did not make it into the final text of the agreement, Indigenous Peoples’ rights were protected to an extent in Article 32.5 of the exceptions and general provisions chapter, in the preamble to the agreement, in the environment chapter with respect to biodiversity, and in other chapters.
The limits of the general exception for Indigenous Peoples may be tested in the U.S. dispute against Mexico’s GE corn measures (see the dispute settlement section of this report) depending on how the dispute panel handles each side’s arguments. We note that in Canada’s initial submission to that dispute (as a non-disputing party), the federal government reinforces that it is up to each country to determine whether a measure is “necessary to fulfill its legal obligations to indigenous peoples.”14 Depending on the result of the dispute, CUSMA parties may need to clarify the broadest possible scope for the Indigenous Peoples’ exception.
Earlier this year, Canada ratified the 2023 Canada-Ukraine Free Trade Agreement (CUFTA), which includes a full chapter on rights and expectations with respect to Indigenous peoples in Canada and Ukraine. The chapter is in the spirit of Canada’s inclusive trade agenda in that it highlights the desirability of facilitating trade and investment by Indigenous-owned businesses. It also includes a non-derogation clause, as requested by the Assembly of First Nations in the CUSMA negotiations.15 However, nothing in the chapter is subject to dispute settlement, and there is no obligation for the committee on Indigenous Peoples established by the treaty to include representatives from Indigenous nations or communities in either country.
Recommendations
Given the limitations and omissions in CUSMA with respect to addressing gender inequity and Indigenous Peoples’ rights in North American economic relations, Canada should use the six-year review to pursue the following priorities.
Conduct a thorough equity review and gender-based analysis of CUSMA, and consider ways in which an intersectional analysis could lead to better inclusion of provisions designed to address how trade may have negative impacts on women, racialized people and other disadvantaged groups.
Include women’s and LGBTQI+ organizations from the three countries in the CUSMA six-year review process.
Include a gender chapter and develop ways in which the provisions of the chapter can be subjected to dispute resolution.
Remove footnote 15 of the labour chapter, which indicates that the United States has no responsibilities with regard to the language on discrimination in the workplace.
Include the violation of commitments to eliminate discrimination of employment and occupation as grounds for triggering a rapid-response labour mechanism complaint.
Include consideration of the right to equal pay for work of equal value in the labour chapter.
Provide financial support for the gender elements in the Mexican labour reform and for Mexican labour activists’ efforts to organize women workers and provide capacity-building, training and other measures.
Consult with representatives of Indigenous nations and communities in all three countries on all aspects of the six-year CUSMA review.
