By Wendy Fry
The American Federation of Labor (AFL) and Congress of Industrial Organizations (CIO) said they are still planning to file labor complaints against Mexico within the coming weeks under the new U.S.-Mexico-Canada trade agreement’s (USMCA) labor enforcement mechanism.
The organization acts as an umbrella group for U.S. labor unions and has enormous political power in the United States. Its president, Richard Trumka, said in September the organization would file complaints under the “Facility-Specific Rapid Response Labor Mechanism” that could eventually halt exports from individual factories found in violation of Mexican labor rights laws.
The Facility-Specific Rapid Response Labor Mechanism (RRLM) in USMCA establishes an entirely new approach to labor dispute settlement in free trade agreements by which an ad hoc international dispute settlement panel can make a determination as to whether a specific facility is complying with local labor laws in Mexico.
“We have tremendous concerns with Mexico’s ability to enforce their laws,” Trumka said in September in defense of the new enforcement mechanism. Trumka’s comments were partially prompted by the arrest and detention of Mexican labor attorney and activist Susana Prieto in Tamaulipas in 2020.
A spokesman for the organization said the lawsuits and complaints, which were still being readied as of recent, would be the first under the agreement’s new multinational approach. But the strategy is part of a larger movement in the U.S. and European Union toward toughening up labor protections by including them in global trading rules – a process that has so far proven impossible because of its potential to disrupt supply chains.
The USMCA, which replaced the 26-year-old NAFTA as the free trade agreement, was implemented on July 1, 2020.
The deal set out sweeping labor reforms for Mexico to implement. And the new “rapid-response mechanism” allows for the independent experts to assess whether factory workers have been denied the right to organize — and if they have, to use targeted trade restrictions against that company.
Specifically, the AFL-CIO wants to target border factories it believes are denying workers the right to organize and collectively bargain for higher wages and better working conditions.
“We think when we do the rapid response (case) and if we’re able to block products from coming in, it will get their attention real fast and they will understand that they will have to change and comply with the law,” Trumka said.
The AFL-CIO initially wanted to be able to send American inspectors into Mexican factories where they believed workers weren’t being given their full union rights.
Mexico strongly opposed that idea, saying it would violate Mexican sovereignty. But in the end, Mexico agreed to the new rules on the condition the inspectors weren’t just Americans but consisted of multinational three-person inspection teams that would include both Mexican and American independent labor experts.
The trade deal’s enforcement mechanism works like this: The U.S. can file a complaint to Mexico if it suspects that a specific factory is denying its workers their union or workers’ rights.
If Mexico agrees that there is a problem at the factory, the Mexican government has 45 days to solve the problem.
But if Mexico doesn’t solve the problem, the U.S. can demand the creation of this panel made up of three independent labor experts to investigate. The experts will be permitted to visit the facility in question, and to request documents and any other evidence it deems necessary to make a determination, according to the terms of the agreement.
Experts said there are limits to how effective this strategy may prove to be because any overuse of the legal mechanism would risk unwarranted disruptions in the supply chain, which would most severely impact auto parts supply chains and U.S. companies. Also, the threat of the strategy could undermine the very stability trade deals are aimed at generating.
Maquiladoras, as the thousands of foreign-owned factories in northern Mexico are known, are not built for extended work stoppages.
The factories, which avoid most tariffs because their finished products are for export only, have boomed since the 1994 North American Free Trade Agreement, drawing hundreds of thousands of workers from southern Mexico and Central America to rapidly industrializing border cities for jobs that typically pay many times less than similar positions in the United States.
Mexico’s leftist government doesn’t want to be perceived as hostile to labor unions but neither does it want to allow interference from the United States in its governance. Mexican President Andres Manuel López Obrador’s administration has long portrayed itself as the worker-friendly government and determined to improve quality of life for working class Mexicans.
Forexample, the leftist president has recently taken up a crusade against outsourcing by championing a bill which would ban companies from subcontracting jobs to third-party firms. Some 4.6 million workers throughout Mexico are currently employed as subcontractors in the formal employment sector. AMLO – as he is affectionately known – said companies misclassify their workers as subcontractors to avoid paying year-end bonuses and other benefits.
In late January, hundreds of maquiladora factory workers in Matamoros on the border with Brownsville, Texas initiated a strike demanding a bonus of 10,157 pesos (US$514) and a 15 percent wage increase. The next day, the strikers tried to return to work, but some were denied entrance.
The labor battle broke out after Lopez Obrador decreed the minimum wage in Mexico’s border zones should be doubled, apparently unaware that some union contracts at the maquiladora plants are indexed to minimum wage increases and the fact that practically most workers salaries are already well over the double minimum wage threshold.
Some strikers at the auto-parts factories Trico Componentes, Dura Automotive Systems, Robertshaw and Novalink (also makes electronics and clothes) have reported being fired after the strikes. At Konsberg Automotive, management agreed to the bonus, but has reportedly refused to pay 34 workers who participated in the strike.
In the state of Baja California, home to the twin industrial cities of Tijuana and Mexicali, state labor officials have been investigating what they say are noncompliant factories daily. The arm of the state government often receives anonymous tips from workers on Facebook.
State Labor Secretary Sergio Moctezuma Martinez said in April investigators closed a U.S.-owned factory that had been operating illegally and had chains on its doors to prevent its roughly 800 workers from leaving.
A spokeswoman for the company, Georgia-based Cooper Lighting, said in a statement that the chains were a temporary solution because locks on doors to the factory floor were broken. She said the doors were closed during each shift “to ensure the safety of our workers.”
Management in maquiladoras fear strikes, inspections and threats of new foreign-led labor enforcement threatens the very existence of their industry, which has attracted more than 5,000 mostly foreign-owned plants to the border region and generated more than 2 million jobs by paying very low wages.
The AFL – CIO has been threatening to file their complaint since at least September and so far, no such paperwork has emerged. If their complaints are submitted, it may be one the first USMCArelated tasks that the new Mexican Minister of Economy will have to oversee.
Tatiana Clouthier, newly ap pointed as Minister of Economy, was previously the vice-coordinator of the president’s MORENA political party in the Chamber of Representatives, and she was the coordinator of AMLO’s presidential campaign in 2018.