The US government has claimed that employees at a French-owned auto parts factory in Mexico, operated by Akwel, were deprived of their right to collective bargaining, in contravention of a North American trade deal. The US has urged Mexico to initiate an investigation into the matter.
In a move aimed at enforcing labor rights, the US Trade Representative (USTR) announced last Friday that it had lodged a complaint under the labor provisions of the US-Mexico-Canada Agreement (USMCA). The complaint centered on the Akwel manufacturing unit in Juarez, Mexico, that produces automobile components.
The USTR’s complaint contends that the factory rebuffed efforts to establish a collective bargaining agreement and terminated employees due to their union affiliations.
This issue is significant since the trade agreement was designed to enhance wages and working conditions in Mexico, and to deter US auto manufacturers from relocating to Mexico. However, President-elect Donald Trump, who ratified the trade agreement, has expressed discontent with auto imports from Mexico and has mooted imposing tariffs of 200% or more on Mexican-manufactured vehicles.
Under a “sunset” clause in the USMCA, Trump has the opportunity to renegotiate or withdraw from the trade deal in 2026.
Mexico is required to respond to the US complaint within 10 days and complete a review within 45 days. So far, the US has experienced positive cooperation from the Mexican government in enforcing the trade agreement, including several instances where it has led to new contracts in Mexico with higher wages. One such instance was an 8.5% wage increase at the General Motors pickup truck factory in Silao, Mexico.
Should a review panel concur with the US complaint and no corrective measures are undertaken, the US can halt imports from the Akwel facility. Akwel has yet to comment on the issue.
US Trade Representative Katherine Tai commented on the matter, stating that “With over 40,000 workers who have directly benefited from this tool, today’s action signals to the workers at Akwel that they are not alone in the face of employer interference.”
