Many other chapters in the USMCA have implications for access to medicines and other aspects of pharmaceutical policy, such as pricing and reimbursement, the assessment of safety and efficacy, and the ability of countries to support a viable generic medicines industry [
4]. These parts of the text remain unaltered by the amendments, representing a lost opportunity for wider reforms to the US trade negotiating template.
Labour
Labour provisions within the USMCA were a major US congressional concern throughout the negotiations and will remain an issue in the implementation phase of the agreement. Concerns center on the enforceability of labour obligations and are also directly related to the outcome of the USA-Guatemala labour case under the trade agreement between the US and Central American states (CAFTA-DR). In this case, a dispute panel concluded that Guatemala had not breached CAFTA-DR labour provisions, as argued by the USA, even if the country had failed to effectively enforce its labour laws, as required by the agreement [
5].
If, during the Protocol negotiations, the US Congress complained that the USMCA’s labour provisions lacked effective enforcement measures, Mexico was upset that the USA planned on sending five of its own labour inspectors to Mexico to ensure its compliance with the new rules, regarding this as an affront to sovereignty. Although all intergovernmental agreements imply some surrender of autonomous sovereignty, the US plan to rely on its own inspectors undermined the premise of the agreement's labour provision being the result of a joint determination. The Protocol largely assuages both concerns with the introduction of two Annexes (USA-Mexico and Canada-Mexico) that elaborates new procedural rules for a ‘Rapid Response Labor Mechanism’. This Mechanism creates and empowers an independent panel to undertake labour inspections. In the case of a suspected violation, inspection panelists will be drawn from among nine ‘experts in labor law and practice’, three each from both countries and three jointly agreed upon who are non-nationals of either country (Protocol 31.A.3). Both countries may have observers during verification of any claims of non-compliance (‘denial of rights’) by ‘a covered facility’ (a specific workplace), although only if both countries agree to do so (Protocol 31.A.7). The Mechanism also allows for the imposition of sanctions if the panel finds that a firm has not done enough to correct an issue (Protocol 31.A.4). As of mid-January 2020, however, discussions continue between the USA and Mexico over what much of this language means in practice [
6,
7].
The Mechanism, however, does respond directly to concerns that the dispute panel in the USA-Guatemala case only included trade experts, and not labour ones [
8]. Further, under the new Rapid Response Labor Mechanism, complaints can be filed directly against individual companies. This is in contrast to language in other trade agreements that specifies that violations can only be filed over governmental breaches of obligations. In this way, it seems that the bar for raising labour complaints has been lowered.
The USMCA requirement that a failure to comply with the chapter’s obligations applies only if it affects trade or investment between the countries remains. The responsibility to demonstrate such a failure, however, shifts from the complainant to the respondent country (Protocol 4.A.ii), with a dispute panel assuming the failure affects trade or investment unless the respondent country can demonstrate otherwise. This will make it easier for countries to initiate a complaint. In the case of protecting workers from violence, reference that any failure to do so must be of a ‘sustained and recurring course of action or inaction’ has been deleted (Protocol 4.E). Deleting this requirement lowers the threshold of what is needed to show that a violation with respect to violence, threats, and intimidation in a workplace is occurring. It also responds to another main concern from critics of the USA-Guatemala Panel Report: that there was not enough conceptual clarity around the language of a ‘manner affecting trade’ and ‘sustained and recurring course of action or inaction’.
The obligation to prohibit forced or compulsory labour has been strengthened by deleting the option that parties could do so ‘through measures it considers appropriate’ (Protocol 4.D). This appears to broaden the basis on which a complaint about forced/compulsory labour could be made. Finally, the lengthy and cumbersome process of consultations prior to initiating a formal dispute is eliminated by removal of a Free Trade Commission as part of the dispute settlement process (Protocol 7.A).
On balance, these Protocol amendments to the labour chapter could represent movement forward, broadening the bases to initiate a complaint and exchanging trade experts for labour experts in the make up of dispute panels. Given that the USA typically sets the template for labour provision language found in trade agreements, these changes are not insignificant, though their true force will ultimately depend on how the Protocol is implemented by the three states.
Environment
Several of the same changes to the labour chapter have been made in the environment chapter, including reversing the burden of proof that trade and investment was affected by a violation from complainant to respondent and eliminating the Free Trade Commission, thereby shortening the period before a dispute might be initiated. It also improves some language in some of the seven multilateral environment agreements (MEAs) referenced in the chapter, clarifying when failure to abide by an MEA is ‘in a manner affecting trade or investment between the Parties’, thereby increasing scope to make a complaint. If there is a conflict between any provision in the USMCA and any obligation under an MEA to which a country is party, the MEA obligations prevail (Protocol 1.A.1). Still absent from the list of MEAs, however, is the Kyoto Protocol.
Including reference to the Kyoto Protocol/climate change was an explicit ask from Canada in initial trade negotiations. It was also an ask of more than 110 House Democrats, who sent a letter to the president just a few months prior to the Protocol Amendment urging that the renegotiation “meaningfully address climate change” and “include binding climate standards and be paired with a decision for the United States to remain in the Paris Climate Agreement” [
9].
Dispute resolution
More details are provided of how a roster of potential dispute panelists will be selected, specifying that each country can designate ten qualified individuals (hence thirty in total) for three-year terms (Protocol 7.C.1). Importantly, no country can block the re-appointment or selection of new roster members as terms expire. This was a concern, particularly for Canada, given that the Trump administration has refused to accept new nominations to the WTO’s appellate body, essentially eliminating its ability to enforce its dispute panel decisions. Trump’s WTO strategy reportedly intends to remove the USA ‘from the shackles of international trade rules’ in order to ‘use the power of its large market to force other countries to bend to its will’ [
10]. The USMCA Protocol at least diminishes this outcome, insofar as formal dispute panels are concerned.