NAFTA renegotiation

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ghariton
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NAFTA renegotiation

Post by ghariton » 04 Sep 2017 22:26

Second round of talks took place the last three days. Since the outcome of the renegotiation (if any) could affect us all as investors, I thought it might be useful to keep track of proposals and counterproposals.

Here's a Canadian proposal that caught my eye:
Canadian negotiators are demanding the United States roll back so-called "right to work" laws – accused of gutting unions in some U.S. states by starving them of money – as part of the renegotiation of the North American free-trade agreement. The request is part of a push by Ottawa to get the U.S. and Mexico to adopt higher labour standards under the deal.

<snip>

Jerry Dias, the leader of Canada's largest private-sector trade union, said Ottawa's negotiators are: pushing Mexico on its corporate-sanctioned unions, which are accused of negotiating collective agreements unfavourable to workers; agitating for both countries to offer a year of paid family leave, as Canada does; and targeting American right-to-work laws that allow workers in unionized shops to refuse to pay dues, draining money from unions.

"I'm very pleased with the position the Canadian government is taking on labour standards," Mr. Dias, president of Unifor, told reporters outside the talks. "Canada's got two problems: The low wage rates in Mexico and the right-to-work states in the United States."
Interesting. If Canada does get to dictate labour relations policies to the U.S., I would avoid U.S. equities, shifting my money to China and other developing world countries.

George
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Re: NAFTA renegotiation

Post by ghariton » 05 Sep 2017 00:30

Of course, our government putting forward positions that they know will be rejected by the U.S. may just indicate that our government has concluded that the renegotiation will fail. In that case, the positions on labour, gender rights, etc. may just be for domestic consumption, to try to attract potential NDP voters.

If so, we should start seriously making plans for the failure of NAFTA. The consequences could be (1) no change -- business as usual (2) the U.S. withdraws from NAFTA and the predecessor FTA, and we fall back on WTO rules. If the latter, what are the consequences for Canadian investors?

ISTM that North American auto manufacturers will be placed at a serious disadvantage vis-à-vis imports. Sell GM, Ford and Chrysler? Buy Toyota and Honda?

George
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Re: NAFTA renegotiation

Post by Shakespeare » 05 Sep 2017 01:05

I certainly think they expect these positions to be rejected. I suspect their attitude is "let's renegotiate if we can else let Trump try to cancel and Congress decide." There certainly seems no point in bending over backward to appease the man. Efforts will go to getting Congressional support for continuation. Also, attempt to appease Trump would be a complete political failure both here and in Mexico.
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Re: NAFTA renegotiation

Post by Koogie » 05 Sep 2017 09:21

I certainly hope the Americans counter and demand that we adopt right to work legislation.
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Re: NAFTA renegotiation

Post by ghariton » 05 Sep 2017 13:48

Koogie wrote:
05 Sep 2017 09:21
I certainly hope the Americans counter and demand that we adopt right to work legislation.
Agree.

George
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Re: NAFTA renegotiation

Post by adrian2 » 05 Sep 2017 13:58

ghariton wrote:
05 Sep 2017 13:48
Koogie wrote:
05 Sep 2017 09:21
I certainly hope the Americans counter and demand that we adopt right to work legislation.
Agree.

George
+1!
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Re: NAFTA renegotiation

Post by Descartes » 05 Sep 2017 15:23

redacted
Last edited by Descartes on 07 Sep 2017 09:04, edited 1 time in total.
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Re: NAFTA renegotiation

Post by Koogie » 05 Sep 2017 17:25

Descartes wrote:
05 Sep 2017 15:23
The right-to-work legislation seems to me typical of American politics: a cynical corporate maneuver that panders to the short-sighted greediness of the little guy while actually weakening his long-term benefits. Kind of like drumming up opposition for the Affordable Care Act.
A false equivalency but I believe you knew that. Why do unions (and their sympathizers) feel so threatened by such a simple concept ? Not everyone wants to join a union. There are also many disgruntled people across this country who are forced to pay union dues to politically active unions who fund all kinds of idiotic political agendas they disagree with.

We live in a free society, people should have choice. Why be afraid of that ?
Descartes wrote:
05 Sep 2017 15:23
Americans would never demand this type of legislation from Canada because it would make Canadian industry more competitive by allowing it to screw over its employees and thus reduce costs further.
Bias confirmed. :roll:
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Re: NAFTA renegotiation

Post by OhGreatGuru » 05 Sep 2017 17:37

Koogie wrote:
05 Sep 2017 09:21
I certainly hope the Americans counter and demand that we adopt right to work legislation.
You can actually propose this right after Labour Day?

In any case, I suspect it is a case of the US trying to impose its anti-labour legislation on Canada, rather than Canada telling the US they have to get rid of theirs. The USA vaguely identified "Labour Laws" as one of their issues before negotiations started.

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Re: NAFTA renegotiation

Post by OhGreatGuru » 05 Sep 2017 17:44

Descartes wrote:
05 Sep 2017 15:23
... Americans would never demand this type of legislation from Canada because it would make Canadian industry more competitive by allowing it to screw over its employees and thus reduce costs further.
Actually, they would, because many of our big businesses are American subsidiaries. And their US management is not at all happy that their Canadian employees have rights and benefits. They would like them all brought down to the American level.

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Re: NAFTA renegotiation

Post by Koogie » 05 Sep 2017 17:48

OhGreatGuru wrote:
05 Sep 2017 17:37
You can actually propose this right after Labour Day?
In any case, I suspect it is a case of the US trying to impose its anti-labour legislation on Canada, rather than Canada telling the US they have to get rid of theirs. The USA vaguely identified "Labour Laws" as one of their issues before negotiations started.
Absolutely. Good ideas should be enacted as soon as possible. Especially ones which are pro-choice and therefore pro-worker.
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Re: NAFTA renegotiation

Post by Rysto » 05 Sep 2017 18:29

Koogie wrote:
05 Sep 2017 17:25
A false equivalency but I believe you knew that. Why do unions (and their sympathizers) feel so threatened by such a simple concept ? Not everyone wants to join a union. There are also many disgruntled people across this country who are forced to pay union dues to politically active unions who fund all kinds of idiotic political agendas they disagree with.

We live in a free society, people should have choice. Why be afraid of that ?
Because of the free rider problem. People who don't pay union dues still benefit from the wages and benefits collectively bargained by the union.

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Re: NAFTA renegotiation

Post by Mordko » 05 Sep 2017 18:45

adrian2 wrote:
05 Sep 2017 13:58
ghariton wrote:
05 Sep 2017 13:48
Koogie wrote:
05 Sep 2017 09:21
I certainly hope the Americans counter and demand that we adopt right to work legislation.
Agree.

George
+1!
+1

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Re: NAFTA renegotiation

Post by Mordko » 05 Sep 2017 18:52

Fundamentally, this is the issue of freedom. The fact many companies force you to pay your own money to am organization you oppose beggars belief.

Add to this the economic destruction closed shop cause - the effects can be observed by comparing the auto industry fortunes in Alabama and Detroit.

Of course our government didn't believe for a second that either Mexicans or Americans will be sufficiently dumb to consider such demands seriously. Purely an internal play - sucking up to the unions and NDP voters.

Sadly, the damage could be real. Assuming this administration pulls out of NAFTA, US Senate may well decide to stick to it anyway. Our Federal government isn't helping our case by behaving as lunatics worthy of the current US administration.

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Re: NAFTA renegotiation

Post by ghariton » 05 Sep 2017 20:38

Rysto wrote:
05 Sep 2017 18:29
Because of the free rider problem. People who don't pay union dues still benefit from the wages and benefits collectively bargained by the union.
Misleading. I don't have the numbers (because unions are very secretive) but I suspect that a very small portion of union dues go to negotiating contracts. The vast majority goes to administration (including junkets of all kinds, "educational" leave for union leadership, and so on) and political action, pursuing policies that are decided by the leadership and that the membership must support financially, like it or not.

If free rider problem is real, then let the unions give a detailed accounting of their costs of negotiations and let them collect that (and only that) from compelled payments by workers. The rest of the dues, as well as membership should be entirely voluntary.

Alternatively, let individual employees opt out of the union process altogether. The contract negotiated by the union would cover only union members. People who opt out would be responsible for negotiating their own salaries and benefits. That would be better anyway. Mass bargaining made sense when there were vast numbers of identical jobs, e.g. assembly lines. Today, when work is much more individualized, the logic of mass bargaining is much, much weaker.

As for safe working conditions, those are now governed by statute. We don't need the unions for that any more.

George
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Re: NAFTA renegotiation

Post by Descartes » 06 Sep 2017 09:13

redacted
Last edited by Descartes on 07 Sep 2017 09:04, edited 1 time in total.
"A dividend is a dictate of management. A capital gain is a whim of the market."

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Re: NAFTA renegotiation

Post by Koogie » 06 Sep 2017 09:51

Descartes wrote:
06 Sep 2017 09:13
I'm neither afraid nor in a union nor interact with anyone in a union unless it is my kids' teachers.
However, I'll try to connect the dots for you since you seem to lack a sharp pencil.
As charming and polite as ever.
Descartes wrote:
06 Sep 2017 09:13
1. why were unions originally created?
To protect worker safety and improve working conditions for the working poor. As George
has explained above, those conditions hardly exist in Canada anymore and protections for
workers are generally guaranteed by legislation now anyway.
Descartes wrote:
06 Sep 2017 09:13
2. why do companies generally oppose unions (e.g. Walmart)?
Same reason many of us in the general public oppose them. They are inefficient throwbacks
that have generally outlived their purpose. Well done to throw in the Walmart bugbear though.
Descartes wrote:
06 Sep 2017 09:13
3. why would unions feel it necessary to influence government policies?
For their own further enrichment, one supposes. Although, again, we don't know because unions
are not required to disclose their financials and bitterly fight transparency.
Descartes wrote:
06 Sep 2017 09:13
4. why would the "right-to-work" legislation be formed and promoted by companies?
See #2.
Descartes wrote:
06 Sep 2017 09:13
5. finally, which would compel you, as a company, to improve the working conditions and wages of your employees:
a) the employees act as one in defending their conditions and wages
b) some of the employees may try to defend their conditions and wages but some will not and just be grateful for a job
One needs to set aside annoyances about compulsory union dues and concerns about the governance of some unions (in the same way we need to set aside our annoyances about taxes and the governance of some of our towns, provinces or country).
You can try to dodge the main issue but it is still at the heart of the matter. If unions do such wonderful work, as you insist, surely given free choice people will still opt to join them, correct ? And if they choose not to, perhaps, just perhaps, unions aren't as wonderful as you claim they are ? Again, why be afraid of giving workers choice ?
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Re: NAFTA renegotiation

Post by Descartes » 06 Sep 2017 12:36

redacted
Last edited by Descartes on 07 Sep 2017 09:04, edited 1 time in total.
"A dividend is a dictate of management. A capital gain is a whim of the market."

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Re: NAFTA renegotiation

Post by Koogie » 06 Sep 2017 17:36

Descartes wrote:
06 Sep 2017 12:36
You win.. or rather, I give up which is probably the same to you. :)
Once again, as charming and polite as ever. :roll:
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Re: NAFTA renegotiation

Post by Shakespeare » 06 Sep 2017 18:47

Why don't you two get a room somewhere? :evil:
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