Worker-Centric Trade Policy
Contributors
Nancy Tao is a sophomore at Barnard College, Columbia University from New York studying political science and history. Interested in international relations, security issues, and climate policy, she currently works at a climate law firm and has previous experience working with environmental and Asian American advocacy nonprofit organizations. She is dedicated to bridging the gap between climate, race, and education policy and hopes to amplify underrepresented voices in climate advocacy. In her free time, she enjoys museum hopping, cafe hunting, and reading mystery novels.
Key things to know
Worker-centered trade policy shifts the focus of trade agreements and enforcement mechanisms from primarily benefiting corporations to prioritizing the well-being of workers and communities both domestically and globally. It emphasizes the need for trade to protect and empower workers, promote wage growth, and ameliorate economic conditions for all workers.
The Office of the United States Trade Representative (USTR) is an executive agency focusing on the development of U.S. trade policy. It primarily is responsible for coordinating trade agreements, directing investment policy, enforcing trade laws, and representing U.S. interests in international trade negotiations.
Appointed in 2021 by President Biden, Ambassador Katherine Tai became the first Asian-American woman to serve as the USTR. Under her leadership, the Biden-Harris administration advocated for a worker-centered trade framework, establishing a new direction away from the previous administration’s attention on corporate-driven trade policies focused on market access and tariff reductions.
Worker-centered trade policy heavily emphasizes worker’s rights and the eradication of forced labor in global supply chains while simultaneously prioritizing environmental protections alongside equity in trade agreements and enforcement mechanisms. As part of policy during the Biden-Harris administration, workers were granted seats at the development table to promote equitable economic growth, grounding trade in the diverse perspectives of all Americans. These initiatives were made possible through forums such as an AFL-CIO town hall and Ambassador Tai’s traveling to all 50 states, ensuring that workers were involved in the early stages of the trade negotiation process and prioritizing direct engagement with American workers.
Former President Biden’s vision of a new, worker-centered approach to trade policy targets economic growth from the bottom up and the middle out by expanding the middle class, marking a clear departure from the previous administration’s top-down approaches. To achieve this vision, specific tools such as the Rapid Response Labor Mechanism (RRM) was utilized under the United States-Mexico-Canada Agreement (USMCA)—a modernization of the North American Free Trade Agreement (NAFTA)—which allows the U.S. to take targeted enforcement actions against individual facilities in Mexico that violate labor rights.
Additionally, the administration helped to empower worker’s rights through the incorporation of trade advisory committees in which the involvement of labor unions were ensured during the developmental stages of a new agreement. Together, these new approaches aim to provide more economic opportunities for American workers by reducing the power disparity between workers and corporations in global trade conversations.
Case study
US-Mexico-Canada Agreement (USMCA) and the Rapid Response Labor Mechanism
As part of the overarching desire of the Biden-Harris administration’s vision to reorient trade policy to center worker’s rights, U.S. Trade Representative Katherine Tai focused on utilizing trade to empower workers both domestically and abroad. One of the key ways in which this aspiration materialized is through the implementation of the USMCA in 2020. This policy aims to decrease trade barriers, promote freer markets, and incentivize North American production. The USMCA signals the transition from punitive trade policies to positive trade agendas, focusing on improving labor standards abroad and investing in critical domestic sectors to protect American workers from unfair competition while simultaneously ensuring the United States’ ability to heighten its technological competitiveness. While international trade law largely targets host country’s regulatory failures, the RRM allows for the U.S. to penalize private companies for their social harms instead, such as union suppression and unjust worker dismissal.
Even though the USMCA was signed into effect on July 1, 2020 under the Trump administration, it was not until the Biden administration in 2021 when the RRM was first used. The RRM enables the U.S. to punish corporations operating in Mexico that were denying their workers fundamental labor rights, including but not limited to freedom of association or collective bargaining. The U.S., under the RRM, had the choice to bar the company’s products from entering the U.S. market. In other words, the mechanism promotes the trade of goods produced in compliance with the USMCA labor provisions. For example, during the Biden-Harris administration, the U.S. filed nearly 30 complaints alleging that factories operating in Mexico were denying labor rights to workers. USTR Katherine Tai helped to initiate the first complaint in May 2021. The use of RRM has enabled the improvement of labor within Mexico: with most petitions filed on behalf of Mexican workers and unions, these trade provisions generated concrete results, promoting worker representation, higher wages and benefits, and the reinstatement of illegally fired union supporters.
The USMCA contextualizes the way in which trade agreements can prioritize high labor standards and establish viable enforcement mechanisms. More importantly, centering labor rights for trade policy enables American workers by impeding the basis for outsourcing jobs to Mexico.
Potential pitfalls
While worker-centric trade policy aims to generate authentic worker representation and to focus on incorporating worker voices during trade negotiations, some studies have argued that the current scope of implementation is inadequate to represent all levels of workers. Though the Biden administration has presented the policy as all encompassing, scholars present the negotiating table as a conglomeration of big, accredited unions. Those truly vulnerable to economic shocks—often women, immigrants, and workers in the informal economy—remain largely unaccounted for because their vulnerability precisely originates from their lack of union representation.
To combat this challenge, the system requires reimagining: rather than relying on ambiguous criteria for the U.S. to pick and choose when to intervene, a more stringent mechanism requiring the host country to create healthier worker voice and representation should be prioritized to increase the avenues in which non-union workers can express themselves. An example of such repurposing is the frameworks set forth through the International Labor Organization’s Build Better Work program, which can be synthesized and translated into worker-centric trade policy to ensure a multi-stakeholder approach in which all levels of a specific industry are brought together to set labor standards and rights.
Similarly, studies have failed to observe tangible impacts and evidence that working conditions have improved despite the numerous RRM cases that the USTR has launched. Most RRM investigations had workers who were assisted by either U.S. unions or NGOs, highlighting the gap in empowerment between workers that fall within the reach of Biden’s trade policy and the many others that remain overlooked.
Conclusion
Worker-centric trade policy at its core aims to benefit workers internationally while specifically creating a mechanism in which the U.S. can strategically rebalance a labor playing field that is often tilted against American workers. Cheaper labor sources and less stringent labor laws attract corporations, especially American multinationals, to outsource their labor and production in export-oriented nations. Worker-centric trade policy reimagines this dynamic by improving labor rights abroad as a way to protect U.S. labor. It strengthens worker’s rights allowing for higher wages and reduces the advantage that commodity-based nations gain from cheap labor, making it more feasible for corporations to source domestically.
Even though worker-centric trade policy faces challenges around effectiveness and implementation, this ground-breaking approach offers the foundational framework necessary to reshape trade policy—offering a starting point, even if imperfect, for continued progress. While the future of worker-centric trade remains uncertain under the second Trump administration, whose unprecedentedly high tariffs signal an overall shift toward protectionism, this shift also creates new opportunities.
Agreements like the USMCA have been exempt from the recent tariffs and, consequently, have become more attractive to businesses, helping to reinforce labor centered frameworks. Even if the intentions are different, protectionist tools utilized by the current administration can still be leveraged in ways that benefit workers, highlighting the possibility that elements of worker empowerment can persist across varying administrations and policy agendas.
