AFL-CIO to File Complaints Against Mexico Under New Trade Pact

September 3, 2020 Updated: September 3, 2020

WASHINGTON—The largest federation of unions in the United States, the AFL-CIO, will file two complaints under the new U.S.–Mexico–Canada Agreement this month to enforce labor rights in Mexico, which may result in additional tariffs or other import restrictions on Mexican factories.

“We have tremendous concerns with Mexico’s ability to enforce federal laws,” Richard Trumka, president of AFL-CIO, told reporters on Sept. 3 at a virtual roundtable hosted by the Christian Science Monitor.

He said that within the next 30 days, the labor federation would file two cases to prevent labor violations in Mexico, which would include using USMCA’s “rapid response labor mechanism.”

The mechanism provides a new enforcement tool that tasks an independent panel to investigate alleged violations. If a violation is found and is not remedied, the United States could impose penalties or block imports from Mexican plants involved in labor violations.

“If we’re able to block products from coming in, it will get their attention real fast,” Trumka said. “And they will understand they’re going to have to change and comply with the law or their products won’t get to come into the country.”

USMCA, which replaced the NAFTA agreement, entered into force on July 1, opening a fresh era in North America free trade. Known as T-MEC in Mexico, the accord has strong labor provisions and promotes investment in the North American supply chain.

Labor provisions of the new agreement hold Mexico accountable for improving workers’ rights, and the agreement gives the United States new enforcement authorities.

Mexico passed a labor reform measure that guarantees collective bargaining and freedom of association for labor. However, the problem arises in Mexico as some companies block the implementation of reform at the state level, according to Trumka.

Old protectionist unions are working closely with employers to try to prevent it, he said. This creates a challenge for Mexican President Andres Manuel Lopez Obrador to implement the reforms nationwide.

Prominent labor lawyer Susana Prieto was arrested for three weeks in June by the State of Tamaulipas in Mexico. And two labor advocates were also kidnapped and tortured, Trumka said.

“That’s a clear violation of the agreement,” he added.

He said the labor group is in the process of working together with the U.S. Trade Representative to monitor and garner facts for those two cases.

The USMCA comes at a crucial time, since it may encourage U.S. companies to bring their production closer to home and advance economic decoupling from China. The pandemic has further accelerated the need to reshore supply lines to the United States, or nearshore to Mexico and Canada, according to trade experts.

“This agreement is a great option to produce, create jobs, and foster trade without having to go so far away from our homes, cities, states, and nations,” Lopez Obrador said during his visit to the White House in July.

He pitched Mexico, saying his country has an “extremely valuable” asset, which is its “very young, creative, and responsible labor force.”

The agreement contains new “rules of origin” on autos, which incentivize production in North America. It also promotes the use of high-wage labor, which is expected to make U.S. and Canadian workers more competitive vis-a-vis Mexican workers.

Speaking at the event, Trumka also said Democratic presidential nominee Joe Biden is doing well in the labor-strong states of Pennsylvania, Michigan, and Wisconsin. In May, Trumka announced that AFL-CIO endorsed Biden for president, and he said that the labor group would focus on attracting voters to the former vice president in those three states, which were key to Trump’s 2016 win.

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