Haynes Boone Partner Alejandro González authored an op-ed for El Financiero after 48 labor complaints were filed against companies in Mexican territory since 2021, when the Rapid Response Labor Mechanism — the tool that the United States and Canada use to demand that Mexican workers' rights be respected — came into force.
Read the article below.
Forty-eight labor complaints have been filed against companies in Mexico since 2021, when the Rapid Response Labor Mechanism, the tool the US and Canada use to demand that Mexican workers’ rights be respected, came into force.
One number sums up Mexico’s position within the USMCA better than any speech: 48. That’s how many labor complaints have been filed against companies on Mexican soil since 2021, when the Rapid Response Labor Mechanism took effect. In that same period, not a single complaint has been filed against the United States or Canada.
At first glance, the figure suggests that Mexico is simply less compliant than its partners, but the reality is more nuanced: the mechanism was designed with different procedural thresholds for each country. In Mexico’s case, a single complaint is enough to trigger the mechanism, and it falls on the Mexican government to prove no rights violation occurred. In the case of the United States or Canada, there would first need to be a ruling from their own labor authorities, something that, in practice, has never happened. In other words, Mexico can face a complaint far more easily than its two trading partners.
That difference wasn’t a design flaw. When the treaty was negotiated, Mexico competed on the basis of much lower wages and a long tradition of unions that protected companies more than workers. The mechanism was meant to correct that imbalance. The problem is that, five years later, that reality has changed considerably: the minimum wage has nearly tripled in real terms, specialized labor courts and conciliation centers have been created, and collective bargaining agreements must now be ratified by workers through a free and secret vote, among other significant reforms.
The USMCA review, which recently got underway in Mexico City, comes at a time when the gap between those changes and their effective implementation is particularly visible. A group of US senators has already warned that Mexico’s reforms aren’t enough unless they translate into concrete results for workers. And it’s no coincidence that the automotive sector, including companies such as General Motors, Volkswagen de México, Goodyear, Pirelli, and Grupo México, accounts for most of the complaints: it’s also the sector where the treaty already directly penalizes low wages by requiring that a significant share of each vehicle’s value be produced at facilities where workers earn at least $16 an hour.
All of this opens up a real possibility: that the next stage of negotiations won’t be limited to monitoring labor rights, but will begin to demand more directly that wages in certain industries move closer to those in the United States. There’s no formal proposal on the table yet, but the conversation is already heading that way.
For Mexico, the challenge is no longer just proving it did its legislative homework, which, for the most part, has already been done, but proving that those reforms have produced tangible, positive changes and thereby putting itself in a position to demand that the mechanism treat all three countries equally.
For companies with operations or suppliers tied to exports to North America, the message is more immediate: it’s worth reviewing in advance how exposed they are to a complaint under this mechanism, making sure their union processes are well documented, confirming they meet the wage requirements applicable to the automotive sector, and having a rapid response plan ready in the event that a complaint is filed, rather than improvising one after the case has already escalated.
The ongoing review will probably not change the treaty’s rules or Mexico’s wages overnight. Still, the trend observed so far in the mechanism’s application suggests the review process will focus not only on Mexico’s compliance record, but also on whether the mechanism’s procedural design still reflects the current economic conditions of all three countries. Companies that understand this shift before their competitors will have an edge going forward.
Read the full article on El Financiero here.
