Director, Global Employment Policy & Special Initiatives, U.S. Chamber of Commerce
July 24, 2023
Three years ago, the United States-Mexico-Canada Agreement (USMCA) entered into force. Part of that agreement was a new Rapid Response Labor Mechanism (RRM), a facility-specific tool used to enforce compliance with workers’ right to freedom of association and collective bargaining. Over the past three years, the RRM process has been used 12 times, but only now has the Interagency Labor Committee of Monitoring and Enforcement (Committee) published the Final Procedural Guidelines for Petitions Pursuant to the USMCA. The guidelines make a handful of changes to clarify certain aspects of the RRM.
There are three major changes in the final guidelines.
1. Anonymous filings: First, the guidelines now allow for rapid response and labor chapter petitions to be filed anonymously. Previously, petitioners were required to include identification and contact information. While the petitions that have gained the most traction were initiated by U.S. and Mexican labor unions, any individual, such as facility workers, can file a petition. Providing an avenue for petitions to be filed anonymously is a practical way of ensuring that workers have access to effective remedy which is a fundamental component of the UN Guiding Principles on Business and Human Rights. However, the Committee must continue to ensure the petitions are true and correct and that the petitioner has a bona fide interest in the petition and its outcome. Without this assurance, businesses risk being faced with frivolous petitions that can disrupt daily operations and productivity.
2. Domestic relief information: Second, the recommendation for petitions to include information on whether relief has been sought under domestic laws or if the concerns of the petition have been or are being addressed by any international body has been removed. Removing this recommendation seemingly grants the U.S. government greater unilateral remedy powers over covered labor disputes in Mexico.
3. Employers can be consulted during RRM: Third, the final guidelines now allow for employers and employer organizations to be consulted throughout the RRM process. Until now, the Committee was allowed to consult with government officials, labor organizations, non-government representatives, the Advisory committee, and the petitioner. In the U.S. Chamber’s previously submitted comments on the procedures for petitions, we called for the owners of facilities that are the subject of a petition to be able to respond to the allegations. Amending the guidelines to include employers and employer organizations should help ensure that due process is respected throughout the RRM process.
The arrival of the final guidelines comes as the RRM is ramping up. The RRM has been leveraged 12 times times overall, and four times between May and June 2023 alone. The most recent cases allege denial of rights occurred at a mine and a garment facility in Mexico. These are the first instances of the RRM being leveraged toward non-automotive facilities. Even though Mexico’s labor law reform fully went into effect in May 2023, there is little evidence that labor complaints will slow down.
As part of the Build Back Better agenda, the Biden Administration is prioritizing a worker-centric trade policy. As such, U.S. officials are keen to include some aspects of the USMCA labor chapter in the Indo-Pacific Economic Framework for Prosperity IPEF, though their success will likely be limited given the lack of U.S. negotiating leverage in the context of this low-ambition negotiation. Representatives from the AFL-CIO and European Trade Union Confederacy have both expressed support for including the RRM in a forthcoming a critical minerals agreement between the U.S. and EU, which the administration would like to label a “free-trade agreement” for IRA purposes but is likely to bear almost no resemblance to a proper FTA if it materializes. The details of either agreement have yet to be seen.
Regardless of what happens in future trade agreements, the USMCA RRM is in full effect for now. The agreement is scheduled to undergo a “joint review” in 2026 with all three countries needing to agree to renewal. If a mutual agreement isn’t reached, USMCA will expire in 2036.