Washington, D.C. — July 1, 2022 is the second year anniversary of implementation of the revised North American Free Trade Agreement (NAFTA). The pact, also known as the United States-Mexico-Canada Agreement (USMCA), went into effect after congressional Democrats refused to approve a 2018 NAFTA 2.0 deal signed during the Trump administration. Additional renegotiations led to the establishment of enhanced labor standards and a novel enforcement system, the Rapid Response Mechanism (RRM), as well as elimination of extreme new intellectual property monopoly rights for pharmaceutical corporations to charge high prices for medicines throughout North America. USMCA labor terms required reforms to Mexico’s labor laws that were enacted in 2019, but are not yet fully implemented with an October 2022 deadline looming. Rethink Trade, which has worked with independent Mexican unions to win workers’ rights cases using the RRM and deliver gains for workers, issued the following statement ahead of the USMCA anniversary:

“USMCA’s workers’ rights enforcement system has been a critical tool for supporting Mexican workers and independent unions struggling to unroot a decades-old system of employer-coopted “protection” unions that devastated workers’ rights and suppressed their wages to attract foreign investment. Today, thanks to the RRM, thousands of workers at the General Motors’ facilities in Silao and a Panasonic’s plant in Reynosa are represented by independent and democratic unions freely chosen by the workforce which have already negotiated better wages and conditions for them,” said Daniel Rangel, Rethink Trade’s research director, who has been co-counsel on several RRM cases. “Still, much work remains to transform the handful of RRM victories into the broad overhaul of Mexican labor relations that is needed to raise wages throughout Mexico and the region. The continued denial of labor rights at the Matamoros Tridonex plant, which follows a protection union’s frivolous lawsuit to delay certification of an independent union, shows the ongoing challenges.”

“The successful labor cases under the revised NAFTA show the gains to be achieved by having better rules in U.S. trade pacts, but many aspects of the USMCA replicate the old, failed NAFTA model so any trade deals the Biden administration negotiates will require major improvement to deliver on the president’s promise of a new worker-centered U.S. trade policy,” said Lori Wallach, director of Rethink Trade. “The recently-announced Americas Partnership for Economic Prosperity could be a means to renegotiate our existing NAFTA-style agreements throughout the Americas to add real labor and environmental standards and enforcement, remove extreme pharmaceutical corporation monopoly powers that limit affordable access to medicines and remove the investor-state dispute settlement regime that has been used to attack public interest safeguards.”

BACKGROUND ON USMCA RRM CASES: As of June 2022, the United States government has asked Mexico to review four cases of violations to the rights of freedom of association and collective bargaining under USMCA’s rapid response mechanism. Mexico has accepted the U.S. requests to review allegations in each case.

In two cases, General Motors and Panasonic, independent unions were able to win workers’ representation after U.S. government action and have already negotiated better wages and working conditions for employees at these workplaces.

However, in the case against Tridonex, a Matamoros subsidiary of Philadelphia-based Cardone auto parts firm, justice has not yet been achieved. Independent union, Sindicato Nacional Independiente de Trabajadores de Industrias y de Servicios Movimiento 20/32 (SNITIS), won a February 28 union election and the right to represent workers. A rigged local labor court that remains in operation as Mexico’s 2019 labor reforms are slowly implemented has refused to certify this outcome and, instead, suspended certification of the new union due to frivolous litigation by the defeated union.

The fourth and most recent U.S. enforcement action targets another auto parts plant, Teksid, which is a Stellantis-subsidiary plant located in border state, Coahuila. There an independent union has fought with Teksid management for years over the corporation’s refusal to recognize the independent union, Sindicato Nacional de Trabajadores Mineros, Metalúrgicos, Siderúrgicos y Similares de la República Mexicana, as the workers legitimate representative. Mexico is currently reviewing the complaint. A fifth petition was filed before the U.S. government on June 17, 2022 by Mexican groups against VU Manufacturing, another auto parts plant in Coahuila.

Rethink Trade provided technical assistance and joined SNITIS in filing the petition against Panasonic Automotive Systems S.A. de CV on April 18, 2022 and supports this Mexican independent union in the Tridonex case. The Rethink Trade legal team, when previously employed at Public Citizen, also joined with SNITIS and U.S. unions in filing the Tridonex case.

Rethink Trade is a program of the American Economic Liberties Project.

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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.