I want to thank Kathleen Claussen for succinctly summarizing last week’s Second USMCA Rapid Response Labor Panel. Many of us missed the panel discussion while participating in the fantastic ASIL International Economic Law Interest Group Biennial Conference (my kudos to the organizers).
Professor Claussen points out the Mexican government’s concern that “Some of the workers expressed the expectation of obtaining benefits that go beyond the powers of these panels.” If one were to look at the Biden administration’s characterization of the USMCA Rapid Response Mechanism (RRM), one could understand why expectations in Mexico have become, perhaps, a bit exaggerated. Under a headline How has [the RRM] empowered workers?, the Biden administration’s USTR notes:
These cases have directly benefited over 36,000 workers:
- provided nearly six million dollars in backpay and benefits to workers,
- ensured wrongly terminated workers were reinstated, and
- helped secure free and fair elections in which workers selected independent unions to represent them.
The RRM tool had become “so effective in delivering real results to workers that the U.S. has seen a significant increase in petitions.”
The Biden administration’s accomplishments in returning workers to their rightful positions under Mexican labor laws (meaning they have the job, salary, and opportunity to vote for unions without discrimination or interference) are laudable. However, I am not sure that suggesting to workers that they will become empowered through financial gains was foremost in the minds of the USMCA’s negotiators [if you’re interested in the mindset of the USMCA’s RRM negotiations, you will likely enjoy Bob Lighthizer and the late Kevin Middlebrook’s respective accounts].
Rather than read the minds of the USMCA’s negotiators, I’d like to weigh in on the views and expectations of Mexican workers. This is not to suggest that I, from my perch in the United States, have any more business representing the views of Mexican workers than did the Biden administration. On the contrary, I was so uncomfortable with the way the U.S. government was characterizing Mexican workers that I asked two researchers in Mexico, Alex Covarubias-V and Cirila Quintero Ramírez, to conduct an empirical investigation to ask the workers, themselves, what they thought about the Mexican labor law reform, the USMCA RRM, and the role of the U.S. government in empowering them.
The RRM Empirical Study
We document our methodology, key findings, and recommendations here. Our questionnaire distinguished workers at auto facilities in Mexico who had faced an RRM case (“RRM Workers”) from workers at auto facilities that had not faced an RRM case (e.g., “Unionized Non-RRM Workers” or “Non-RRM Workers”).
Instead of explaining all 69 pages worth of findings, below are some key points related to the views and expectations of the workers we spoke with in the Mexican auto sector (chosen due to its central importance under the USMCA).
An important takeaway from the findings is that significant discrepancies exist in the awareness and expectations of RRM Workers and Non-RRM Workers. As the Biden administration explained, the former category of workers has received considerable workplace gains. Those workers had also received shopfloor training on their labor rights and enforcement possibilities. By sharp contrast, the latter category of workers was relatively unfamiliar with their labor rights, the USMCA, or the RRM, and had incredibly low expectations of the U.S. government and the RRM. That discrepancy helps explain, however, why Mexican workers may be so interested in RRM panels. The USMCA and its RRM have created a regime whereby benefits are only accrued through ex post enforcement, rather than ex ante training and empowerment. Like it or not, the fates of Mexican workers seem to hinge on U.S. and panel intervention.
Key Finding #1: Most Workers Don’t Have High Expectations; They Don’t Know the USMCA Exists
The Mexican government worries that workers’ expectations are too high about what the USMCA RRM panels can accomplish. Presumably, it only spoke with RRM workers (workers at facilities that had participated in an RRM). Of the workers we spoke with, only 21% of non-RRM workers had any idea that the RRM existed, or that they could use it. That sharply contrasts with the 70% of RRM workers who were aware of it. Furthermore, when we explained to the non-RRM workers what the RRM was (and how they could anonymously raise complaints about violations of their freedom of association and collective bargaining rights), slightly less than half told us they’d be willing to use it.
Key Finding #2: Most Workers Aren’t Aware that the U.S. Government is Monitoring and Enforcing Their Labor Rights, Although Most Are Okay with That Role
Like the above, most of the workers we spoke with were unaware that the U.S. government was monitoring and enforcing their labor rights under the RRM, while most of the RRM workers knew about it. What surprised me, however, was that most workers approved of that role when we explained it to them.
Key Finding #3: Most Workers Assume the U.S. Government has Mixed Motives
We wanted to dig a little deeper into what workers expected would come out of the USMCA RRM, so we asked them what they thought the U.S. government was trying to accomplish by using the Mechanism. We offered them a series of non-exclusive options concerning U.S. government motivation. Our two most popular options were that the U.S. government was using the Mechanism to (1) protect workers in Mexico; and (2) protect workers in the United States. This parallel is indicative of labor provisions in trade more broadly; that is, a government can enforce labor-rights commitments in trade instruments to strengthen working conditions and raise wages in a foreign country for altruistic and protectionist purposes, given the link between wages, working conditions, production costs, and competition.
The workers’ responses also showed that some workers were a little less trusting of the U.S. government’s motives. Nearly half told us they thought the United States hoped to raise the costs of production in Mexico and exercise power over Mexico.
Despite those mixed reviews, most of the workers we spoke with in the Mexican auto sector expressed their hope that the U.S. government would put more pressure on its factory to respect labor rights.
Response to the Mexican Government
If the Mexican government is concerned about workers’ expectations, it should devote more time and resources to educating them. Educate them on their rights under the labor law reform, their collective bargaining agreements, the USMCA, and its RRM. We found that most non-RRM workers had not received this necessary training. It’s no surprise, then, that its workers are placing their hopes in a foreign government and are allowing themselves to have high expectations for the labor panels. Until the Mexican government takes up the gauntlet, empowerment in Mexico will continue to rest on enforcement measures in trade, and that seems to benefit only some categories of workers while creating foreign dependencies.
Thinking to the Future
The Trump administration helped create the RRM, so it is no surprise (or should be no surprise) to see its USTR continue to use the Mechanism as aggressively as the Biden administration. Assuming that the USMCA continues to exist (that assumption’s doing a lot of work, I know), we should consider how it and the RRM should be reformed to effectuate the parties’ objectives. While I am happy that Professor Claussen and others are thinking of the panel side of things, it is equally important that we think of ways to reduce Mexico’s dependency on USMCA enforcement to educate and empower its workers. There are several avenues to explore, from how training is carried out, to whether U.S. labor attachés follow formal procedures when visiting facilities, and how and whether workers and unions should have a voice in remediation plans.
Many of us are working on these issues, and if you are interested in joining the conversation, please reach out: [email protected].
