USTR Asks Mexico to Probe Labor Rights Violations Using USMCA Rapid Response Mechanism in Response to Petition From Mexican Independent Union and Rethink Trade

Washington, D.C. – Rethink Trade welcomes the launch of this enforcement action against Panasonic Automotive Systems de Mexico S.A. de C.V. by the U.S. Trade Representative (USTR) in response to a petition documenting the corporation’s denial of workers’ guaranteed labor rights at its Reynosa, Mexico auto parts facility. Use of the Rapid Response Mechanism (RRM) in the United States-Mexico-Canada Agreement (USMCA shows USTR’s commitment to improving workers’ rights in the global economy as it implements President Biden’s new worker-centered U.S. trade policy. Mexican workers denied their fundamental right to organize and bargain for better wages and conditions have won RRM cases against GM and Tridonex in the past year.

“We hope that action from the U.S. government using the Rapid Response Mechanism leads to a long overdue intervention from the Mexican government to end Panasonic’s outrageous abuses of its employees’ rights and compels Panasonic to negotiate in good faith for a fair new contract with the independent union, SNITIS, that represents these workers,” said Daniel Rangel, an attorney with Rethink Trade who petitioned for a case to be initiated. “Panasonic’s resolve to support an illegitimate union and fraudulent contract shows the lengths some multinational corporations operating in Mexico are willing to go to obstruct workers’ ability to unionize to demand better wages and working conditions.”

“Neither SNITIS nor other minority unions will rest until justice is achieved. The government of Tamaulipas cannot keep unlawfully undermining freedom of association and union democracy and we commend the U.S. government for helping us to keep in check corporations that benefit from labor rights violations in Mexico,” said Susana Prieto Terrazas, labor leader and member of the Mexican Congress. “Fighting against the CTM means facing a titan, but there is no small adversary and independent Mexican unions grow stronger day-by-day due to workers’ rejection of corrupt unions because of their betrayal, embezzlements, robbery and exploitation.”

The USMCA RRM petition that USTR moved on today was filed on April 18, 2022 by Sindicato Nacional Independiente de Trabajadores de Industrias y de Servicios Movimiento 20/32 (SNITIS) and Rethink Trade. Tensions escalated at Panasonic’s Reynosa plant leading to an April 21-22 union election. Panasonic fired workers who supported independent union SNITIS and tried to impose an unapproved collective bargaining agreement made with a contested “protection” union linked to the notorious CTM federation that is tied to a conservative political party.

Despite a threatening environment created by the CTM union and its reported attempts to influence the outcome of the election by bribing workers in exchange for votes, Panasonic’s workforce voted overwhelmingly in favor of independent union SNITIS. SNITIS received 1,200 votes while only 390 eligible workers casted their votes for CTM.

Yet, in violation of its obligations under Mexico’s 2019-reformed Federal Labor Law, Panasonic still allows CTM staff to go into the plant and continues to transfer workers’ union dues to the protection union. Before the vote, the company had circulated a CBA signed with the CTM union, filed it with the local Conciliation and Arbitration Board – which did not have the legal authority to accept it – and colluded with the CTM to demand that workers endorse the bogus contract. Even after the outcome of the vote was certified by Mexican federal authorities, Panasonic has shown no intention of rescinding the illegal contract signed with the CTM union.

“This complaint raises serious allegations about the actions of the employer, the CTM union, and the local labor authority that should be investigated immediately,” said Ben Davis, United Steelworkers’ Director of International Affairs.

“USTR Tai helped create this new labor rights enforcement tool during the renegotiation of NAFTA when she was the lead trade lawyer in the House of Representatives and now as USTR can deploy it to enact the president’s worker-centered trade policy,” said Lori Wallach, Director of Rethink Trade at the American Economic Liberties Project.

BACKGROUND: In October 2021, workers rejected an existing labor contract at Panasonic’s Reynosa facilities during the USMCA-required legitimization process. A dire labor conflict erupted as the firm began colluding with an employer-captured “protection” union, affiliated to the Confederación de Trabajadores de México (CTM), and local authorities to try force a new CBA on workers that they have not approved. That contract was negotiated by the CTM union that does not lawfully represent them.

After workers voted down the preexisting CBA last fall, SNITIS filed for a certificate to represent the Panasonic employees and negotiate a new contract. The CTM union, Sindicato Industrial Autónomo de Operarios en General de Maquiladoras de la República Mexicana (SIAMARM), also petitioned to do so. Since two unions were disputing the right to represent the workers, Mexican federal authorities called for a union election to be held on April 21 and 22, 2022.

After the vote, which SNITIS resoundingly won, Panasonic announced that “it respected and supported its employees’ right to free association and looked forward to working with SNITIS once it is officially registered as the factory’s new union.” Yet Panasonic continues to interact with the protection union as if it had won the election even after SNITIS was recognized as the legitimate representative of the workers by the government. Find links to video of CTM officials threatening the independent union and more about the recent vote, here.

For all press inquiries please contact: rshapiro@economicliberties.us.

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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.