WASHINGTON (Reuters) – The U.S. has said workers at a French-owned auto parts factory in Mexico were denied the right to collective bargaining in violation of a North American trade deal and asked Mexico to investigate.
The U.S. Trade Representative said Friday it has filed a petition under a rapid-response labor provision of the U.S.-Mexico-Canada Agreement on Trade over the Akwel Juarez Mexico plant, which makes auto parts.
The petition alleged that the factory refused to negotiate a collective bargaining agreement and fired employees based on their union membership, according to USTR.
WHY IT’S IMPORTANT
The trade deal aimed to improve wages and working conditions in Mexico and prevent U.S. auto production from moving south of the border.
But President-elect Donald Trump, who signed the trade deal into law, has complained about car imports from Mexico and threatened tariffs of 200% or more on Mexican-made vehicles.
A USMCA “sunset” clause will give Trump the chance to renegotiate or terminate the trade deal in 2026.
BY THE NUMBERS
Mexico has 10 days to agree to a review of the U.S. petition and 45 days to complete the review.
The US has received good cooperation from the Mexican government in enforcing the trade pact. Many of the 30 previous cases have resulted in new Mexican contracts with higher wages, including an 8.5% wage increase at General Motors’ (NYSE:) pickup plant in Silao, Mexico.
If a review panel agrees with the US petition and no corrective action is taken, the US could block imports from the Akwel plant. The company did not immediately respond to an email seeking comment.
IMPORTANT QUOTE
“With more than 40,000 workers who have directly benefited from this tool, today’s action sends a message to Akwel workers that they are not the only ones facing employer interference,” said U.S. Trade Representative Katherine Tai, referring to the labor mechanism.
