U.S., Mexico Outline GM Plant Labor Fixes in Trade-Deal First

The U.S. and Mexico outlined a plan to address the denial of workers’ rights at a General Motors Co. pick-up truck plant, the first such strategy under a mechanism in the year-old trade deal between the nations and Canada.

The plan seeks to provide the workers of the facility in Silao, Guanajuato, with the ability to vote on whether to approve their collective-bargaining agreement, or CBA, in free and democratic conditions, and to remediate the denial of their right of free association and collective bargaining, the Office of the U.S. Trade Representative said in an emailed statement Thursday.

The so-called remediation plan comes while USTR Katherine Tai is in Mexico City meeting her counterparts on the one-year anniversary of pact that replaced the North American Free Trade Agreement a year ago and contains rapid-response mechanisms to deal with worker-rights issues. The U.S. in May asked Mexico to review issues at the Silao facility, the first time Washington self-initiated a labor dispute under the new trade pact.

“Reaching an agreement with Mexico on a remediation plan shows the USMCA’s potential to protect workers’ rights and the benefits of a worker-centered trade policy,” Tai said in a statement, using the U.S.’s preferred acronym for the pact. “Fully implementing and enforcing the USMCA not only helps workers there, it also helps American workers by preventing trade from becoming a race to the bottom.”

Under the plan, the union at the plant will hold a new vote on the collective-bargaining agreement by Aug. 20, or else the CBA will be terminated and workers will retain their rights under the CBA.

Mexico’s Labor Ministry will have more than 30 federal inspectors on site for the August vote, more than five times the number from a vote that was suspended in April, USTR officials said on a call with reporters.

The International Labor Organization will send observers.

General Motors welcomed the completion of Mexico’s review of the union’s vote the agreement with the U.S. on a plan to support a free and fair vote next month.

“We look forward to continuing to work with U.S. and Mexican government officials in support of the shared goal to protect workers’ rights” under the USMCA, the company said in a statement.

The plant has more than 6,000 unionized workers and is located about 215 miles (350 km) northwest of Mexico City. Mexican authorities cited irregularities for their decision to shut down a union-led vote there earlier this year.

Workers there say they earn less than $25 a day. That compares with salaries in a range of $18 to $32 per hour at GM plants in the U.S. and Canada. Mexico’s low wages -- and its unions that traditionally look out for employers’ interests ahead of workers’ -- have been targeted in the USMCA.

The end date for the course of remediation is Sept. 20; if the U.S. determines that the denial of rights hasn’t been addressed, the U.S. may request the establishment of a so-called rapid-response labor panel to determine whether there has been a denial of collective-bargaining rights.

If the panel were to determine a denial of rights, the U.S. could impose remedies such as the revocation of free-trade status for the trucks, meaning the vehicles would face a 25% tariff.

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