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US and Mexican labor unions and, separately, the US Government, have filed the first labor cases under the Rapid Response Mechanism (“RRM”) of the United States-Mexico-Canada Agreement (“USMCA”).  The RRM was a relatively late addition to the USMCA – the result of negotiations between the Trump Administration and House Democrats – and provides for facility-specific review by an independent panel, and remedies, in response to allegations of a “denial of rights” of free association and collective bargaining.  The USMCA is currently the only US free trade agreement to include a mechanism to address alleged labor rights violations at specific facilities in the territories of the Parties.

On May 10, 2021, the American Federation of Labor and Congress of Industrial Organizations (“AFL-CIO”), Service Employees International Union (“SEIU”), Sindicato Nacional Independiente de Trabajadores de Industrias y de Servicios Movimiento 20/32 (“SNITIS”), and Public Citizen announced that they filed the first labor case under the RRM.  The petition alleges that auto parts manufacturer Tridonex, a subsidiary of Philadelphia-based Cardone Industries, has engaged in the following labor violations, including with respect to the current SITPME union that is active as the Tridonex facility:

  • “Tridonex has denied its workers the opportunity to read or obtain copies of the collective bargaining agreement with SITPME.  Tridonex has failed to deposit its CBAs with the Federal Conciliation and Arbitration Board, as required by the Mexican Constitution.”
  • “Tridonex and the SITPME union, acting as an agent of Tridonex, have jointly denied the Tridonex workers the opportunity to ratify their CBA, in violation of Art. 400 Bis of the Federal Labor Law.”
  • “Tridonex and SITPME, acting as an agent of Tridonex, have jointly denied members of SITPME at Tridonex the right to elect their union leaders by personal, free, direct and secret vote, in violation of Art. 358.II of the Federal Labor Law.”
  • “SITPME, acting as an agent of Tridonex, has failed to provide its members with legally-required financial information reports under Art. 373 and Art. 358.IV of the Federal Labor Law.”
  • “Tridonex retaliated against workers who signed petitions to the Local CAB by firing more than 600 workers and compelling them to sign “voluntary” resignations in order to receive severance pay, in violation of Article 47 of the Federal Labor Law, and by denying other workers benefits agreed on through the CBA, in violation of Article 396 of the Federal Labor Law.”

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Continue Reading US and Mexican Unions, Followed by US Government, File First Labor Cases Under USMCA “Rapid Response” Mechanism

As the Biden Administration settles into its second month in office some signals have emerged that have offered insights into the potential direction of US trade policy. Key trade officials, including United States Trade Representative (USTR) Katherine Tai and Commerce Secretary Gina Raimondo, have testified before the Senate as part of their confirmation processes.  The testimonies and responses of both nominees, in combination with the recently released USTR “2021 Presidential Trade Policy Agenda” report, have provided an early blueprint of the President Biden Administration’s position on current trade issues — including USMCA, potential free-trade agreements, US policy towards China, and the climate agenda – and possible new directions.

The international community has been watching these early indicators closely in order to gauge the likely track of US trade policy.   Professionals from Steptoe’s trade group who practice in major jurisdictions around the world weigh in with their take on how those jurisdictions are reacting to these early signals from the US.

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Continue Reading International Responses to President Biden’s Trade Policy Positions

On February 25, 2021, the Senate Finance Committee held hearings on the nomination of Katherine Tai to become the next United States Trade Representative. In her opening remarks, Tai made clear that her first priority would be to help American communities emerge from the pandemic and related economic crisis. With regard to trade specifically, she discussed the importance of a worker-focused trade policy. As part of that policy, she committed to pursuing approaches that “advance the interests of all Americans . . . recognizing that people are workers and wage earners, not just consumers.” In her written responses to questions, Tai elaborated that she would “seek to determine the impact of trade policies on workers’ wages and economic security and take that impact into account as we develop new policy.”

During the hearing, Tai cited several issues as major trade priorities if she is confirmed:

  • China. Developing and executing a “strategic and coherent plan for holding China accountable” to its commitments, including the Phase One Agreement, and “competing with its state-directed economic model,” while still adhering to American values and recognizing the need to work with China “to address certain global challenges”;
  • USMCA. Strongly enforcing the United States-Mexico-Canada Agreement;
  • Supply Chains. Working with trusted partners to build resilient supply chains;
  • Multilateralism. Rebuilding U.S. alliances, re-engaging with international institutions, such as the World Trade Organization, and imparting U.S. values to shape the rules guiding global commerce; and
  • Competitiveness. “[M]aking investments in the American people and U.S. infrastructure in order to enhance U.S. competitiveness, promote U.S. innovation, and build more inclusive prosperity.”

Notably, potential renewal of Trade Promotion Authority was barely mentioned, either in the hearing or in the follow-up questions from members.

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Continue Reading Highlights from USTR-Nominee Katherine Tai’s Senate Confirmation Hearing