US unions file first complaint against labor law in Mexico under the new NAFTA | Invest news



MEXICO CITY (Reuters) – U.S. labor unions on Monday filed the first labor rights petition against Mexico under a new regional trade pact, vying for a lawsuit against a border auto parts maker denying workers independent representation.

The petition – submitted by the largest U.S. trade union federation, the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) – said that Tridonex workers in Matamoros across from Texas have been prevented from voting for a union of their choice.

The United States-Mexico-Canada Agreement (USMCA), which replaced NAFTA last year, enshrines this right as part of its goal of giving workers more power to demand better wages. It should also prevent more jobs in the US from being destroyed by low labor costs.

Since NAFTA in 1994, which had few enforcement instruments for labor rules, wages in Mexico have stagnated and are now the lowest in the Organization for Economic Co-operation and Development (OECD), a club of 37 developed nations.

Reuters reported last week that hundreds of workers had tried to do so since 2019 have been represented by a new union led by activist lawyer Susana Prieto, but state labor officials have never scheduled an election. Prieto said 600 of their Tridonex supporters were laid off last year in what some workers called retaliation for their union change efforts.

The parent company of Tridonex is Cardone Industries, based in Philadelphia, which is controlled by the Canadian company Brookfield Asset Management.

Cardone said it disagrees with the AFL-CIO’s claims but would address any concerns that may arise in the complaints process.

“We do not believe the allegations in the complaint are correct and welcome a full investigation so that the facts can be disclosed,” the company said in a statement, without further explaining the elements contested.

The current union at Tridonex, SITPME, also rejected the AFL-CIO’s allegations.

“It’s all wrong,” said union leader Jesus Mendoza. “The majority of Tridonex employees work 100% with SITPME.”

Under the USMCA’s Rapid Response Mechanism, companies in Mexico and the United States can face tariffs and other penalties if they fail to guarantee workers’ rights such as freedom of association.

The AFL-CIO’s petition marks the first time that the labor enforcement of the trade agreement is being used and is being closely watched by companies and union activists.

“This is a precedent,” said Cathy Feingold, director of the AFL-CIO’s international division, which campaigned for better regulation of workers’ rights in the USMCA. “It will be a test for this new system.”

The AFL-CIO will send its petition to the U.S. Department of Commerce and Labor, which will have 30 days to review the claim and decide whether to refer the case to the Mexican government for further investigation.

Mexican labor officials would then work with U.S. counterparts to negotiate the terms of the remedy. The entire process, including a final phase to determine possible sanctions and penalties, must be completed within five months.

A US official said President Joe Biden’s administration would analyze cases that fall under the USMCA’s labor regulations.

“We will carefully review the Rapid Response denial of rights complaints filed,” the person said.

Neither the Mexican Ministry of Labor nor the state government of Tamaulipas, where Matamoros is based, responded to requests for comment.

“Most of this could be fixed pretty quickly if the political will is there,” said Benjamin Davis, director of international affairs for United Steelworkers, a member of the AFL-CIO.

Mexican President Andres Manuel Lopez Obrador, who signed labor reform in 2019, has vowed to abolish Mexico’s ubiquitous protection treaties, which critics say put corporate interests above workers’ rights. The abolition of protection treaties is also a goal of the USMCA.

However, the new law is gradually being rolled out across Mexico and changes won’t begin in Tamaulipas state until 2022.

Davis said Mexico still has an obligation to guarantee that reform takes place on the ground.

“The rights start immediately, even if there are no institutions yet,” he said.

The petition was also supported by the Service Employees International Union, which represents Cardone employees in the US, along with the US nonprofit public citizen Global Trade Watch and the Prieto union SNITIS.

Prieto said she hoped that Tridonex employees’ efforts to shed light on their situation could encourage other employees to speak up.

“This is something that could become a boomerang in Mexico,” she said.

(Reporting by Daina Beth Solomon in Mexico City; Additional reporting by David Lawder in Washington; Editing by Leslie Adler, Matthew Lewis, and Lincoln Feast.)

Copyright 2021 Thomson Reuters.



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