Independent unions in Mexico use the USMCA to stop abuse at multinational plants

The United States-Mexico-Canada Agreement (USMCA), the free trade treaty formerly known as NAFTA (North American Free Trade Agreement), has apparently enabled some of Mexico’s independent unions in their defense of worker’s rights. Since the USMCA came into effect in July 2020, US trade authorities have lodged three complaints against production plants in Mexico for allegedly violating the agreement’s provisions on freedom of association.

New Mexican unions claiming to be independent of government and other interference see the treaty as a useful and quick resource to force some democratization of unions in the country, where worker representation is dominated by a handful of large groups. However, experts say that the USMCA clauses on freedom of association are far from a panacea for defending worker’s rights.

At the Panasonic plant in Reynosa (a city in the state of Tamaulipas in north-eastern Mexico) in October, workers rejected an agreement posed by the Japanese multinational following negotiations with the Confederation of Mexican workers (Spanish acronym CTM) - then in April this year voted overwhelmingly to be represented by new independent union, the 20/32 Movement Union (Spanish acronym SNITIS).

The SNITIS says that not only has Panasonic signed an agreement with the union rejected by the workers, but has also been deducting CTM dues from their salaries. The independent union has thereby filed a complaint to US trade authorities under the USMCA’s Rapid Response Labor Mechanism.

Susana Priero is a labor lawyer, SNITIS leader and deputy for the governing MORENA party in the Mexican national congress.

“I look for whatever recourse there is to defend labor rights,” Prieto tells EL PAÍS, adding that the ability to litigate violations of the USMCA is such a recourse.

“Let’s see how it works out.”

The US accepted SNITIS’ evidence this week and filed the complaint with the Mexican authorities. Under the Mechanism, Mexico has ten days to respond and then 45 to complete an investigation and propose a solution.

The Panasonic case is the third reported by the US in just over a year. All three are related to the automotive industry, the jewel in the crown of the Mexican export sector.

The complaint against the General Motors plant in Silao, which was already being investigated by the Mexican government, led to a repeat vote, in which the CTM was defeated. The second case, against the Tridonex plant in Matamoros, was rejected by Mexico because it preceded the entry into force of the mechanism. In any case, the US pressed to extract certain concessions from the company: severance payments to the dismissed workers and its commitment to respect freedom of association.

The first complaint concerned the General Motors plant in Silao, a city in the central Mexican state of Guanajuato, and also resulted in workers electing a new independent union to represent them. The second case was filed against the Tridonex plant in Matamoros in Tamaulipas state but rejected by Mexico because its content preceded the entry into force of the Mechanism.

The Mechanism is unique among trade agreements that Mexico has signed. The new independent unions particularly value its speed: responses are sought and investigations carried out immediately, and, if, when the investigation is concluded the complainant country does not agree with its conclusions it can convene an arbitration panel that has four months to resolve the matter.

Graciela Bensusán, a labor studies professor at the Autonomous University of Mexico is positive about these timeframes for resolution, noting that “the NAFTA procedures could take years.”

For Kenneth Smith Ramos, who was Chief Negotiator for Mexico when the previous administration of Enrique Peña Nieto signed NAFTA, the new agreement has appropriate consequences for those who breach it. Tariffs may be imposed on the products of plants found to be non-compliant or their export prohibited.

“The possibility of losing access to the US due to labor violations does not exist in any free trade agreement in Mexico. Not even in their wildest dreams did trade unionists [previously] imagine that there would be mechanisms of this nature,” says Smith.

The Mechanism was not part of the original USMCA negotiation. It was added after the treaty was signed following pressure from the Democrats, then in opposition in the US Congress, and agreed to by Mexico.

Experts say that this process has led to an asymmetry between Mexico and its partners within the USMCA. To make a complaint about Mexico, the US or Canada can simply consider that there is a possible violation of the agreement, and the burden of proving innocence then falls to Mexico. But if Mexico wants to make a complaint about its partners, the complaint must have been previously admitted by the labor authorities of those countries. “The dice are loaded against Mexico,” says Bensusán. “The US and Canada preserve more sovereignty.”

More complaints of the type seen at Panasonic can be expected. This week, US Trade Representative Kathterine Tai, said in a letter to Mexico’s economics secretary Tatiana Clouthier that “when concerns arise, we will work swiftly to stand up for workers on both sides of the border.” Smith also cautioned against overuse of the mechanism by parties seeking to block Mexican imports.

The administrative power imbalance between the US and Mexico under the USMCA is not of so much concern to the small independent unions seeking to dislodge the older, state-aligned groups, as Susana Prieto indicates:

“We are going to continue using the USMCA until the companies … respect the law,” says the union leader. Prieto says they may also use the Rapid Response Labor Mechanism to remedy the exploitation of Mexican agricultural workers in the US.

The power of the old unions may still hinder the progress of cases that proceed under the Mechanism, notes Prieto. The complaints against Panasonic, General Motors and Tridonex were possible due to the work of the independent unions; SNITA for example spent eight months collecting evidence against Panasonic.

These conditions are an exception – typically the old unions have blocked such organizing, intimidating workers and having them fired, explains Prieto

“It is difficult for them to dare to raise their voices.”

Graciela Bensusán says the Mechanism functions to dissuade more than punish labor abuses by parties to the USMCA.

“The very fact that it exists is a warning [to them] of what can happen,” says the professor.

Bensusán says that positive changes to labor conditions in Mexico will depend not only on the provisions of the USMCA but on a labor reform that was authorized by Mexico’s national Congress in 2019. The new law mandates that workers elect their union representatives by free vote and that collective agreements are made every two years.

Bensusán says it is through this change in law and policy on the southern side of the US border that Mexican workers will achieve “authentic unionism.”

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