New Labor Trade Fights May Rest On Diplomacy, Not Legalese

International Trade Partner Carlos Véjar spoke with Law360 about two landmark labor cases filed in May that will test a new enforcement tool under the United States-Mexico-Canada Agreement (USCMA). The tool, also known as the rapid response mechanism, is a dispute settlement provision designed specifically for labor issues and allows for trade sanctions against companies if workers are denied the rights of free association and collective bargaining. The cases concern alleged anti-union violations at two Mexican factories owned by U.S. companies, and through the mechanism, the U.S. and Mexico can either resolve the issues bilaterally or pass the dispute to a panel. With many in the legal community waiting to see how the cases will play out, Mr. Véjar emphasized that the point of the mechanism is to improve labor conditions instead of creating adversarial proceedings.

"Success in my mind could only be obtained if the Mexican authorities guarantee compliance with their labor obligations in favor of the Mexican workers' rights," he commented. "Suspending benefits or enforcing adversely against Mexican exports may prove the system works but is not effective to resolve the most relevant question, which are the workers' rights."

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