Advancing worker-centred trade in the 2026 CUSMA review

Maquila Solidarity Network, “Will CBA legitimation votes eliminate protection contracts,” June 15, 2023: https://www.maquilasolidarity….‘>⁵ Under this process, the incumbent union was required to schedule a legitimation vote, with at least 10 days notice to the affected workers. This process was to be combined with new union democracy procedures aimed at ending the decades long prevalence of protection unions in Mexico.

Although it is estimated that in that four-year period about 30,000 collective agreements were subject to legitimation votes of varying quality, it is likely the case that fewer than 20 per cent of existing contracts have gone through this process. Moreover, the legitimation processes that did occur came under heavy criticism, reflecting prior corrupt practices.

The question that arises is what will happen to the 80 per cent of collective agreements that have not been legitimated. The answer appears to be that all of those collective agreements are nullified and the workers covered by those agreements shall find themselves without collective bargaining coverage. Moreover, there have also been numerous challenges and problems in respect to the administration of the new labour reforms in Mexico, including the certification of vote results and the speed with which applications are addressed.

More generally, the ongoing implementation of Mexican labour law reforms, which form a key context to the rapid-response mechanism cases filed so far, have led to improvements in labour rights in Mexico, but have been subject to significant, continuing and systemic barriers to effective implementation.

The Mexican labour law reforms have had much more limited positive impact than what was hoped for. Mexican independent trade unions have reported systematic problems in labour adjudication procedures, lack of funding from the state in the implementation and adaptation to the new labour relations regime, and continued influence of company union federations and compromised labour relations actors, including adjudicators.

In short, Mexico still faces many challenges in the field of labour rights, particularly in connection with the rights to freedom of association and free collective bargaining.

Labour cases brought in the United States

Since CUSMA took effect on July 1, 2020, the vast majority of the complaints under the labour chapter have been filed by the United States against Mexican facilities under the rapid-response mechanism. Canada has filed one case involving a Mexican facility, and there have been no cases filed against Canadian or U.S. facilities for reasons already mentioned.

As of April 10, 2024, the United States had accepted 22 cases for review alleging a denial of workers’ rights in Mexico, triggering the RRM mechanism.

United States Trade Representative, “FACT SHEET: The USMCA Rapid Response Mechanism Delivers for Workers,” April 10, 2024: https://ustr.gov/about-us/poli…‘>⁶ It is not possible to summarize all 22 cases here, although there are a number of good sources that have done so including the United States Trade Representative web page.

United States Trade Representative, “Chapter 31 Annex A; Facility-Specific Rapid Response Labour Mechanism,” not dated: https://ustr.gov/issue-areas/e…‘>⁷. The Maquila Solidarity Network has also prepared an excellent summary of all cases filed up to December 2023.

Maquila Solidarity Network, “What have rapid response labour complaints achieved for Mexican workers,” December 11, 2023: https://www.maquilasolidarity….‘>⁸ Of the 22 cases accepted to April 2024, five had not yet been resolved or litigated and were in the process of being investigated as this report was concluded.

Of the cases accepted for review by the U.S., several patterns emerge. First, a substantial majority of the cases, including the first eight, have come from the Mexican auto or auto parts sector. In the last year or so, a number of cases have emerged from other sectors of the Mexican economy. One case came from the rubber sector (Goodyear) and another from the broader manufacturing sector (mining and construction equipment-maker Caterpillar). In addition, one case has been accepted from the garment sector, one from the airline sector, and one case from the service sector (a call centre in Hidalgo Mexico). Finally, a case accepted in February 2024 emerged from the food processing sector in Mexico.

Second, the facts of the cases also reveal certain common elements. The substantial majority of the early cases (12) involved freedom of association disputes between authentic trade unions and protection unions connected to the Confederación de Trabajadores de México (CTM). Seven of those cases revolved around disputes related to legitimation votes connected to the labour law reform process. Nine of the early cases led to successful election results for authentic trade unions in Mexico either through the legitimation vote process or a certification vote.

Finally, of the 17 cases that have so far been concluded, 12 have been resolved through formal settlement agreements, while two have been concluded following successful election results (many cases involved both agreements and successful election results). Further, according to an April 10, 2024 press release from the United States Trade Representative: “Eleven cases included backpay to workers, nine included reinstatements of workers…, and many resulted in successful negotiations for higher wages, workers’ rights trainings, and improved policies at the facilities.”

USTR, “FACT SHEET: The USMCA Rapid Response Mechanism Delivers for Workers,” April 10, 2024: https://ustr.gov/about-us/poli….’>⁹

Only two cases so far have not been resolved and resulted in RRM dispute settlement panels being appointed. The first case involves the complaint by the Mexican Mining Union (Los Mineros) over a longstanding strike at the San Martin Mine operated by Industrial Minera Mexico (IMMSA). That panel heard several days of evidence culminating in two days of submissions from the U.S. and Mexican administrations in Mexico City on February 28 and 29, 2024. The second RRM review panel, requested by the U.S. in mid-April 2024, involves the case at the Hidalgo-based call centre.

On May 13, 2024, the first RRM dispute settlement panel issued its determination in the San Martin Mine case.

USTR, “USMCA Rapid Response Labor Mechanism Panel Releases Determination Regarding Grupo México Mine; Biden-Harris Administration Will Continue Seeking to Enforce USMCA Labor Obligations and Advance Workers’ Rights,” May 13, 2024: ​​https://ustr.gov/about-us/poli….’>¹⁰ The panel found that it did not have jurisdiction over the dispute, which dates back to 2007. Specifically, the panel found that a denial of rights under the RRM can only be applied to events that took place after the entry into force of CUSMA (July 2020) and that are subject to the 2019 amendments to Mexican federal labour law. The panel found that the events alleged by the United States did not meet those criteria.

However, the panel rejected Mexico’s argument that the San Martin Mine was not a “covered facility” because it allegedly does not export product directly to the U.S. The panel found instead that the mine produced goods that compete with U.S. exports into the Mexican market, which was sufficient for a finding under CUSMA Article 31-A.15(ii) that the mine was a covered facility.

While this initial panel decision is disappointing in that it found that the RRM did not apply to disputes that commenced prior to 2020, the panel emphasized that the San Martin mine dispute was “highly unusual and unlikely to repeat itself.”

MEX-USA-2023-31A-01, p. 61: https://ustr.gov/sites/default….’>¹¹

It is worth noting that only one case has been brought under the main dispute resolution mechanism under Chapter 23 of CUSMA. In March 2021, a complaint was filed in Mexico against the U.S. government for failing to enforce its labour laws against sex-based discrimination for migrant worker women on temporary labor migration visas, violating its obligations under Article 23 of CUSMA. The complaint was filed by a coalition of organizations led by the Centro de los Derechos del Migrante.

That case concluded with the signing of a memorandum of understanding in January 2023 between the U.S. and Mexican governments which included key provisions protecting migrant workers including the prohibition of discrimination in recruitment, making gender-related data publicly available, increasing access to justice for migrant workers, and ensuring they receive their contracted compensation.

The Frankische RRM case brought in Canada

In sharp contrast to the considerable activity under the RRM in the United States, only one case has been brought pursuant to the Canada-Mexico RRM mechanism in Annex 31-B. That case, which was filed in Canada by Unifor on behalf of the Mexican union SINTTIA, involved a clear denial of rights connected to SINTTIA’s campaign to organize the workers at the German industrial pipe manufacturer, Frankische.

SINTTIA was seeking to displace the incumbent protection union following a highly dubious legitimation vote. During the SINTTIA campaign, the employer and the incumbent CTM union engaged in intimidation, coercion and terminations of SINTTIA supporters. SINTTIA filed an application with the Mexican Labour Board in November 2022, but by March 2023 no progress had been made. As a result, the complaint under Annex 31-B was filed in March 2023, and was accepted for review by the Canadian government on March 13, 2023.

The Canadian government then proceeded to negotiate a resolution to the complaint. It reached an understanding with Frankische in May 2023, paving the way for a representation vote on June 26, 2023, which was won by SINTTIA. SINTTIA was recognized as the legitimate bargaining agent, and the Canadian government closed the file in July 2023.

Assessing CUSMA labour provisions to date

There were expectations that the substantially amended labour chapter in CUSMA, together with the new rapid-response mechanism, would represent a considerable step forward in the enforcement of labour rights compared to NAFTA. Based on the initial experience over the first number of years, it is fair to conclude that some of the expectations have been met.

Most notably, when and where it applies, the RRM has proved to be a relatively expeditious and effective mechanism for enforcing labour rights in certain circumstances in Mexico. Of the cases filed so far, many have led to positive results for Mexican workers seeking to assert their right to freedom of association and collective bargaining, leading to several successful organizing campaigns, representation votes and negotiated collective agreements.

In light of the early success of the RRM, U.S. officials have noted that the RRM mechanism could become a new template for the enforcement of labour rights under bilateral and multilateral trade agreements.

Oliver Ward and Margaret Spiegelman, “Former USTR general counsel: RRM needs adaptations for use in other agreements,” Inside US Trade, April 15, 2024.

In September 2023, Tomoya Obokata, UN special rapporteur on contemporary forms of slavery, said he was “deeply disturbed by the accounts of exploitation and abuse shared with me by migrant workers,” in a statement ending his 14-day visit to Canada: https://www.ohchr.org/en/press…‘>¹³The scope of complaints and the scope of application to economic sectors should be expanded to better reflect the integration of North American economies.

We also wish to identify a third concern from a uniquely Canadian perspective. It is no accident that there have been 22 cases filed in the United States and only one RRM case filed in Canada. In part, this discrepancy flows from the primacy of the economic relationship between the U.S. and Mexico. However, Canada and Mexico also have a significant trading relationship, and Canadian economic actors have significant operations in Mexico in, for example, the mining and auto parts sector. Further, Canadian unions, supported by the Canadian government, have invested significant resources in capacity building in Mexico in solidarity with the Mexican union movement.

In the U.S., a substantial infrastructure was created when the RRM was implemented to ensure that these cases could be received, evaluated, investigated and, if necessary, litigated. Moreover, significant consultative bodies were created in the U.S., in collaboration with the labour movement, to ensure that this new mechanism was used to the fullest extent possible.

The Canadian government has not made any similar efforts, either to create the infrastructure or the consultative bodies. The Canadian government’s role has largely been limited to funding important union projects in Mexico—but that has led to only one case being filed. Canada should share more of the burden and show stronger commitment to the cause of improving labour rights in Mexico and in the North American region.

Recommendations

Implement meaningful Canadian enforcement measures to comply with the prohibition on the importation of goods produced using forced or compulsory labour found in Article 23.6. Include specific obligations regarding the resources devoted to enforcement agencies and practices, and enhanced reporting and transparency obligations.

Expand the application of the RRM to include labour rights violations in Canada and the U.S. by amending the conditions by which claims under the mechanism can be filed for an alleged denial of rights at facilities located in the United States and Canada.

Confirm and expand economic sectors to which the RRM applies. At the moment only those sectors involved in manufacturing goods, supplying services, or mining are defined as “priority sectors” covered by the RRM. The priority sectors should be confirmed and expanded to include energy, the broader service sector, agriculture and migrant workers.

Expand the definition of a “denial of rights” under the RRM from just freedom of association and collective bargaining rights to include discrimination on the basis of gender or sexual orientation or gender expression, gender-based violence, child labour, health and safety, and derogations from minimum standards of work.

Clarify the meaning and intent of footnote 2 in Annexe 31-B (the Canada-Mexico RRM annex) to confirm that the RRM applies to a denial of rights at any covered facility covered by any domestic legislation. This recommendation is important given that the RRM panel in the San Martin Mine case found that the identical footnote in the U.S.-Mexico annex (31-A) limited the application of the RRM to only a denial of rights that is subject to the 2019 Mexican labour law reform.

Clarify and promulgate more specific criteria and requirements for remediation agreements that resolve RRM complaints, including content (damages, etc.), timelines, and requirements for consultation with stakeholders.

Create a Canadian consultative body, similar to the Independent Mexico Labour Expert Board (IMLEB) in the United States, which would provide a dedicated contact point and expert independent advice and guidance to the Canadian government in respect of CUSMA labour matters.

A significant barrier to Mexican labour reform is lack of capacity and support for plant-by-plant organizing in Mexico. The Canadian government could assist with measures and resources to engage in co-operative capacity building under Chapter 23 of CUSMA to help Mexico strengthen labour law enforcement and inspection systems to encourage labour law compliance. Canada could also help fund an arms’ length oversight committee with a mandate that includes data collection and training to improve labour law enforcement in Mexico.

1. Polaski, S., Nolan Garcia K., Riouz, M., “The USMCA: A “New Model” for Labor Governance” in Gagne G & Rioux M, eds., NAFTA 2.0 (Toronto: Palgrave Macmillan 2022), pp. 147-148.
2. Laura Macdonald, “Gender and Regionalization in North America: From NAFTA to CUSMA and Beyond?” International Journal, Vol. 77, Issue 3 (December 15, 2022): https://journals.sagepub.com/d....
3. These reforms began prior to the CUSMA negotiation, as a condition of Mexico entering the Trans-Pacific Partnership (TPP) negotiations in 2016.
4. Estimates vary, but during this period there may have been 140,000 registered collective agreements, a substantial portion of which were unknown or unenforced in any material sense.
5. Maquila Solidarity Network, “Will CBA legitimation votes eliminate protection contracts,” June 15, 2023: https://www.maquilasolidarity....
6. United States Trade Representative, “FACT SHEET: The USMCA Rapid Response Mechanism Delivers for Workers,” April 10, 2024: https://ustr.gov/about-us/poli...
7. United States Trade Representative, “Chapter 31 Annex A; Facility-Specific Rapid Response Labour Mechanism,” not dated: https://ustr.gov/issue-areas/e...
8. Maquila Solidarity Network, “What have rapid response labour complaints achieved for Mexican workers,” December 11, 2023: https://www.maquilasolidarity....
9. USTR, “FACT SHEET: The USMCA Rapid Response Mechanism Delivers for Workers,” April 10, 2024: https://ustr.gov/about-us/poli....
10. USTR, “USMCA Rapid Response Labor Mechanism Panel Releases Determination Regarding Grupo México Mine; Biden-Harris Administration Will Continue Seeking to Enforce USMCA Labor Obligations and Advance Workers’ Rights,” May 13, 2024: ​​https://ustr.gov/about-us/poli....
11. MEX-USA-2023-31A-01, p. 61: https://ustr.gov/sites/default....
12. Oliver Ward and Margaret Spiegelman, “Former USTR general counsel: RRM needs adaptations for use in other agreements,” Inside US Trade, April 15, 2024.
13. In September 2023, Tomoya Obokata, UN special rapporteur on contemporary forms of slavery, said he was “deeply disturbed by the accounts of exploitation and abuse shared with me by migrant workers,” in a statement ending his 14-day visit to Canada: https://www.ohchr.org/en/press...