Many readers will know that the United States called for the very first panel under the USMCA Rapid Response Labor Mechanism (RRM) at the end of August. One month in, the panel has been busy. This post briefly summarizes the panel’s work so far and makes a few preliminary observations.
As a reminder, the situation before the panel involves a mine owned by Grupo México in Zacatecas, Mexico. On May 15, the AFL-CIO, the United Steelworkers, and a Mexican union filed a petition with the United States alleging a denial of workers’ rights at the mine. Following an investigation, the United States requested that Mexico review the situation.
On July 31, Mexico reported to the United States that it had determined that no denial of rights existed at the mine. According to Mexico, the situation was not covered by the USMCA because (1) the alleged denial of rights occurred prior to entry into force of the USMCA and did not implicate legislation that complies with Annex 23-A of the USMCA, and (2) the San Martín mine is not a “Covered Facility” within the meaning of Article 31-A.15 of the USMCA.
As required by the USMCA, the Mexican Section of the Secretariat selected the panel members by lot and the following panel members began their work on August 30: Gary Cwitco (chair), Kevin Kolben, and Lorenzo Roel. Cwitco is a union representative from Canada; Kolben is a business school professor in New Jersey; and Roel is the president of the National Labor Commission of the Business Coordinating Council in Mexico.
The USMCA requires that a panel within five business days of its constitution “confirm that the petition: (a) identifies a Covered Facility; (b) identifies the respondent Party’s laws relevant to the alleged Denial of Rights; and (c) states the basis for the complainant Party’s good faith belief that there is a Denial of Rights.”
Let’s just acknowledge how quick of a turnaround that is for a panel facing a very complex – let alone novel – set of proceedings. And those are not insignificant determinations. Those are, in fact, the fundamental points of dispute between Mexico and the United States.
The panel, faced with very short submissions from both sides, and this very short deadline, adopted a “prima facie”-styled decision in which it “confirmed” the petition. [“Confirmation” is an unusual concept in this space, styled somewhat as a jurisdictional stage of the proceedings but again with very little to work with, something the panel acknowledged.] On September 6, the panel stated:
- The panel finds that the petition . . . meets the prima facie requirements of Article 31-A.6 and the petition is hereby confirmed.
- The panel also notes that nothing in this confirmation prejudges arguments that the Parties may make with respect to any issue before the panel including but not limited to: Whether or not the San Matín [sic] mine is a covered facility within the meaning of Article 31-A.15; (2) Whether or not the alleged Denial of Rights is covered by the USMCA; and (3) The substance of the allegations.
On September 12, the panel met with the parties via Zoom. On September 14, the panel announced a schedule in which it required Mexico to submit a document describing Mexico’s investigation by September 28. (No document is yet available on the Secretariat website.) The panel has given the United States seven days to reply to that document following its translation into English. There will be further written replies from both sides.
Most importantly, the panel has indicated that it will hold an in-person “verification hearing in Mexico City”. The panel will allocate two days for oral arguments and the hearing will be open to the public. No date is set yet. We’ll see if the panel adopts the same practice as many of the Chapter 31 panels with a public livestream of some sort.
There is a particularly contentious labor and political history surrounding the San Martín mine that this blog post does not have space to address. Suffice it to say that this situation is complicated – which is why making it the first to go to a panel surprised some observers. But there may be advantages to sending this situation, raised by organized labor in the United States, to a panel following Mexico’s rejection. Doing so lets the panel make the final call on further action.
Now, back in 2019 when the RRM was first announced, it appeared the text left many unanswered questions about just how the panel process would or could work. This first panel is now facing these questions. For example:
- What rules apply to the RRM proceedings? The panel so far has adopted the Chapter 31 Rules of Procedure, at least in part (notably Articles 26 and 27 of those Rules deal expressly with RRM proceedings, while others of the Rules sometimes make reference to the RRM and sometimes do not). Most of those are designed for more traditional state-to-state disputes, but likewise could apply to the RRM, which is an annex to Chapter 31, to fill in gaps as they arise in the proceedings. The match is not a perfect one though, and we’ve already seen the panel depart as necessary.
- How do workers groups – or others – participate, if at all? Interestingly, the panel has invited non-governmental entities that are directly involved in the dispute to submit briefs.
- What does “verification” mean? Does it mean panels will go to facilities? Under what authority and with what protection? The U.S. government decided the San Martín mine was in too dangerous a location for it to allow its staff to visit. It appears the panel has dispensed with the possibility that it could get there at least in this instance, although Mexico has asked the panel for clarification. In a communication on September 18, Mexico asked the panel to indicate whether it will visit the mine, and also whether it will engage in some form of discovery.
As this panel gets underway, there may be others in the wings. One especially challenging RRM situation to watch is that involving Mas Air, which tests the application of the RRM to the services sector. Without the threat of higher tariffs or the immediate suspension of liquidation, what power does the U.S. government have to exert over Mas Air? Those are questions that I would expect the government agencies involved have asked and answered as they go down this road. We’ll have to wait and see what sources of authority they have selected.
