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CUSMA has shown it can defend labour rights, but is it enough to bring lasting change to Mexican workers?

This July marked the second anniversary of the new Canada-United States-Mexico Agreement (CUSMA), the renegotiated North American Free Trade Agreement (NAFTA).

October 26, 2022

10-minute read

Over the agreement’s brief lifespan, Mexican workers, supported by international allies, have used CUSMA’s new labour protections to rack up some impressive public victories. Combined with recent Mexican labour reforms, decades-old patterns of abuse and exploitation are finally being seriously challenged.

CUSMA contains groundbreaking provisions to support labour rights in the region, especially in Mexico. The provisions build on and were developed to reinforce a 2019 Mexican labour reform aimed at addressing historic patterns of corruption and abuses within the Mexican labour movement and political system. These abuses drove down wages across North America and meant that Mexicans failed to benefit from increased regional trade in the decades following NAFTA.

Old-style corrupt unions were controlled by the Confederación de Trabajo Mexicano (CTM), an organization with close ties to the state and elite interests. Mexico’s labour reforms offer workers a real chance to vote for democratic unions instead—a right that CUSMA attempts to lock in and enforce, as we’ll discuss below. The presence of a new, left-leaning government in Mexico, led by President Andrés Manuel López Obrador’s Morena party, has helped ensure the government lives up to these commitments rather than dragging its feet.

These victories, after decades of stagnation of labour standards in the country, have led many to call the new CUSMA provisions a game changer, promising a new model for improving labour rights. But workers across the region also continue to face enormous challenges. Notably, the gap in wages and working conditions between lower-wage Mexico and higher-wage Canada and the United States has barely moved in key sectors, including in auto manufacturing.

CUSMA and the Mexican labour reform

CUSMA came into effect in July 2020. Unlike the old NAFTA, this new agreement includes a labour chapter designed to better enforce workers’ rights and punish violations. In the old trade pact, labour rights were contained in a NAFTA side accord, which was effectively unenforceable because countries and firms could not be subjected to trade sanctions for failing to hold up labour standards.

CUSMA’s upgraded labour chapter requires Canada, the United States and Mexico to uphold basic labour standards recognized by the International Labour Organization (ILO). It also includes new provisions that require all three countries to take measures to ban the import of goods produced by forced labour, address violence against workers exercising their labour rights, and ensure that migrant workers are protected under labour laws.

Despite these positive changes, most labour complaints under CUSMA will still be handled in formal state-to-state dispute settlements. In the past, these disputes have often taken years to resolve, required political will to move claims forward, and focused on the country in which the alleged violation occurred rather than directly targeting the companies engaging in the abuse.

However, thanks to Democrats in the U.S. Congress who refused to sign the first iteration of CUSMA negotiated by the Trump administration, the final agreement includes a creative new way to resolve disputes over labour violations. It’s called the Facility-specific Rapid Response Labour Mechanism (RRLM).

The RRLM allows workers in trade-dependent sectors to lodge complaints related to a denial of their rights to free association and collective bargaining. The mechanism permits a rapid response to allegations of violations of workers’ rights by an individual employer at a specific facility—an approach that breaks from pre-existing trade-related labour enforcement tools.

In its use so far, this rapid response tool is proving to be effective at holding employers and Mexico’s corrupt protection unions to account, ushering in significant change to some of the country’s largest and most significant workplaces.

Outcomes of initial Rapid Response Labour Mechanism complaints

At the time of writing, the U.S. government has considered six individual cases filed through the Rapid Response Labour Mechanism, resulting in five formal complaints targeting violations in Mexico.

So far, each of the complaints has also led to a formal resolution within a period of about two months, and without recourse to economic sanctions.

General Motors (Silao)

The first and most highly publicized RRLM case involved allegations of vote tampering and worker intimidation at the General Motors truck assembly complex in Silao in central Mexico. Many of the 6,500 workers scheduled to participate in a collective agreement legitimization vote faced harassment, threats and voter suppression efforts from the incumbent CTM-affiliated union.

A formal complaint filed by the U.S. through the RRLM on May 12, 2021 led to a negotiated remediation settlement with Mexico. That settlement included commitments to a re-vote at the facility, along with greater public scrutiny and monitoring.

The second vote resulted in a resounding rejection of the CTM-backed protection contract (more than 90% of eligible workers cast a ballot). This defeat delegitimized the incumbent union, creating space for a grassroots workers’ organizing effort, culminating in the election of a new, independent union, Sindicato Independiente Nacional de Trabajadores y Trabajadoras de la Industria Automotriz (SINTTIA), with a strong democratic mandate.

In the intervening months, SINTTIA successfully negotiated a new collective agreement with General Motors for workers at the Silao plant, delivering impressive wage gains, bonuses, work hours and scheduling improvements, and provisions to address harassment in the workplace.

Tridonex (Matamoros)

The second case to be resolved under the RRLM involved 4,000 auto parts workers employed by Tridonex in the northern Mexican border city of Matamoros.

Workers at the plant alleged that both the company and the incumbent CTM union denied their right to freedom of association and collective bargaining, among other violations. The company dismissed claims that the independent Sindicato Nacional Independiente de Trabajadores de Industrias y de Servicios (SNITIS) held bargaining rights for workers at the plant.

Within two months of the U.S. filing its rapid response complaint with Mexico, the company agreed to a remedial action plan to resolve the matter. Included in that plan was a commitment to acknowledge SNITIS’s claim of representational rights, along with a commitment to allow for a free secret-ballot vote. The company also agreed to remain neutral and allow inspectors, including international observers, to monitor the vote at the facility, and offered compensation to the 154 workers who were terminated in the course of this labour dispute, with full severance and back pay.

Unsurprisingly, workers voted overwhelmingly (86%) in favour of SNITIS as their union of choice—a clear rejection of their incumbent CTM union. Union founder Susana Prieto called the moment ushered in “a new era” for unions in Mexico.

Panasonic (Reynosa)

Similar to the two prior disputes, workers at a Panasonic-owned auto parts plant in Reynoso (and members of the SNITIS union) filed a petition with the U.S. claiming that their employer signed an illegitimate collective agreement with a rival union (Sindicato Industrial Autónomo de Operarios en General de Maquiladoras de la República Mexicana, or SIAMARM). According to the petition, the company then undertook to deduct union dues from workers’ paycheques on behalf of the illegitimate union while terminating SNITIS supporters.

Shortly after the U.S. filed a formal complaint to Mexico under the RRLM, an agreement was struck with the company on July 14, 2022, coordinated by the Mexican government. The agreement included a commitment from Panasonic to renounce the illegitimate collective agreement and reimburse workers for dues deducted. The company also agreed to recognize SNITIS as the legitimate bargaining representative for workers at the facility and to reinstate 26 of the terminated workers, with back pay.

Teksid Hierro (Frontera)

The fourth complaint initiated through the RRLM involved auto parts supplier Teksid Hierro, a subsidiary of global automaker Stellantis. Through a petition jointly submitted by the United Auto Workers and Sindicato Nacional de Trabajadores Mineros, Metalúrgicos, Siderúrgicos y Similares de la República Mexicana (the Miners union), the workers alleged that the company denied them their right to an independent union, favouring, instead, relations with CTM. The company went so far as to fire supporters sympathetic to the Miners.

Shortly after the U.S. filed its complaint, the company voluntarily recognized the Miners union, agreeing to rehire 36 workers who were previously fired, with back pay. This representational dispute at Teksid between the Miners union and CTM extends as far back as 2014, marking one of the longest active representational disputes in Mexico.

Manufacturas VU (Piedras Negras)

The fifth and most recent complaint under the RRLM surfaced from a joint petition by Mexican groups La Liga Sindical Obrera Mexicana (La Liga) and Comité Fronterizo de Obreras (CFO) to the U.S. on July 21, 2022. The workers in this case alleged the company denied them the right to organize the union of their choice, while affording special treatment to a CTM-backed union instead.

In response to the U.S. complaint, Mexican authorities undertook efforts to supervise a fair and neutral representation vote at the auto parts facility in Coahuila, a northern border state, on August 31, 2022. The vote resulted in workers choosing the independent union La Liga, and, at the time of writing, were preparing for their first round of collective bargaining with the company.

Notably, most of the workers at this plant are women, and La Liga and CFO are both women-led unions that are committed to feminist approaches. This case demonstrates the potential for Mexican labour reform and the CUSMA RRLM mechanism to combat the traditional male-dominated culture in the Mexican labour movement.

Renewing international labour solidarity

Apart from establishing new and timely enforcement tools, CUSMA also led to new forms of support from trade unions and non-governmental organizations in Canada and the United States for promoting labour freedom and democracy in Mexico.

The U.S. Bureau of International Labor Affairs (ILAB) has, so far, committed some US$50 million to projects in Mexico as a direct result of CUSMA and has pledged to spend an additional $130 million in technical assistance and cooperation over the next four years. The $50 million has gone to partners like the AFL-CIO’s Solidarity Center and the Partners of the Americas.

The Canadian government, through Employment and Skills Development Canada (ESDC), has also pledged some $10 million CDN to Canadian actors. Unifor has received funding for a four-year project to support its counterpart in Mexico, the Centre for Labour Research and Trade Union Advice (CILAS). With this support CILAS, which has worked for years to support the independent labour movement in Mexico, is establishing a network of six worker centres in industrial cities in Mexico to promote workers’ understanding of their rights. CILAS was also very active in supporting the SINTTIA workers in Silao to win recognition and achieve a collective agreement.

Another multi-year project supported by ESDC includes five partners in Canada: the Steelworkers Humanities Fund, the Canadian Labour Congress, the Public Sector Alliance of Canada, the Canadian Union of Public Employees, and Centre International de Solidarité Ouvrière. These Canadian groups are supporting four Mexican organizations: the Border Workers Committee, the Network of Women Trade Unionists, the Miners union, and the Authentic Workers Front. The work of these organizations includes such activities as worker education, public forums, radio shows on labour issues, all of which put a strong focus on gender issues.

Both Canada and the United States have also posted new labour attachés in Mexico to monitor and support labour standards, assist with cases brought under CUSMA’s labour chapter and the RRLM, and to build capacity in the Mexican government and new labour institutions.

Overall, these efforts are supporting longstanding ties between democratic labour activists in the three countries, building state capacity, and helping to eliminate forced labour, child labour and gender discrimination, and to enforce the new labour laws.

Where do we go from here?

The RRLM reinforces the Mexican labour reform, which was included in the constitution in 2019. Prior to this reform, Mexican workers suffered systematic violation of their rights in a corporatist system supported by the state, corporations, and “official” unions. Under this system, workers weren’t aware of their rights and were often subjected to “protection contracts” which, in effect, protected employers against workers forming democratic and independent trade unions.

Contracts contained minimum legal requirements regarding wages and social benefits. In exchange, the unions received dues from the companies—usually 2% of payroll—often without workers even being aware that they were “represented” by a union. Independent labour activists were often subject to reprisals and strikes undertaken by independent unions were declared illegal. The system also entrenched sexist norms and male domination in the labour movement.

The new labour law lays out several key elements to support a democratic labour relations system, including free, direct and secret votes for union leadership, the creation of new labour justice tribunals and gender parity in union leadership, among many other important reforms.

The law also established a deadline of May 2023 for the legitimization of Mexico’s entire catalogue of collective agreements following these new guidelines. Given that only about 5,000 of some 80,000 contracts have been ratified so far, it is extremely unlikely that Mexico will meet its self-imposed timeline. It is not clear what happens after that date. We can anticipate considerable confusion and possibly some chaos unless timelines are extended.

As effective as the RRLM has been, it has also been used in only a fraction of legitimization cases—often in the largest industrial workplaces, with independent unions and advocate groups playing an active role. So far, only a small fraction of current collective agreements (the vast majority of which are protection agreements) have been rejected by workers through the legitimization process.

That means thousands of existing CTM-controlled workplaces are being greenlit under the labour reform, with little public scrutiny. Further, millions of Mexican workers have no recourse to the RRLM, including those working in services, because they’re not in trade-facing industries as designated in CUSMA. This suggests that while the RRLM is a useful tool, it is not, in itself, a guarantee of a successful labour reform.

Apart from funding mentioned above, and the work of two new labour attachés, no complaints have been launched by Canada against Mexican plants under the RRLM. Despite its public commitment to “progressive” and “inclusive” trade policies, Canada has let the Biden administration carry the torch in challenging deep-rooted gaps in industrial democracy in Mexico.

There is concern that the coming years will result in a breakdown in the political alignment over labour standards that has defined U.S.-Canada-Mexico relations in the last several years. The possibility of a Morena party defeat in 2024 and a resurgent Republican Party in America might stall whatever momentum has been built. In that scenario, Canada might need to serve as torchbearer under the rapid response mechanism—a role it has been reluctant to play so far.

There are still big challenges ahead in combating the historical inequities in Mexican society and in the North American region, and in finding ways to make trade agreements work better for workers.

Topics addressed in this article

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