Mexico’s Auto Industry Seeks USMCA Labor Mechanism Reform

The Mexican automotive industry is pressing for changes to the labor dispute mechanisms under USMCA, requesting that Mexico be able to file labor complaints in both the United States and Canada.

“The automotive sector has been the primary focus of the Rapid Response Labor Mechanism (MLRR) in Mexico, and our experience demonstrates that it can be an effective tool to promote compliance with USMCA labor commitments,” wrote Rogelio Garza, Executive President, AMIA, in a letter to US Trade Representative Jamieson Greer.

According to AMIA, Mexican automakers have cooperated with authorities and implemented corrective measures in all cases, enhancing transparency and worker rights. “In some instances, experiences derived from the automotive sector have become important references for other industries,” Garza added.

AMIA emphasized the need for balance in applying the MLRR. “It is essential that the MLRR be truly trilateral, in the sense that Mexico can also file complaints in the United States and Canada, and that its implementation be equitable,” Garza said. He stressed that labor rights promotion should go beyond punitive measures, calling for education, awareness, and capacity-building initiatives to accompany the mechanism.

The organization also urged that the MLRR be used exclusively for legitimate labor purposes and as a measure of last resort, avoiding misuse as a tool to create trade barriers or coercive actions that could undermine North American commercial collaboration.

AMIA’s letter further called on the United States to respect parallel letters regarding Section 232, National Treatment, Market Access for Goods, and the dispute settlement panel on rules of origin under USMCA. “While we recognize that a trading partner may raise security concerns regarding trade and investment, we are concerned that, to date, the United States has not complied with the original parallel letters related to the automotive sector, which clearly state that Mexico must be excluded from any tariffs imposed under Section 232 up to the specified amounts,” Garza noted.

“The Rapid Response Mechanism should be activated to remedy valid labor claims and not presume violations each time a request is filed. It should be the responsibility of the applicant to provide sufficient evidence demonstrating that a violation occurred and that it impacted trade or investment between the parties.”

Similarly, ANPACT highlighted that the mechanism has been used by the United States against Mexico in 39 cases, over 80% of which involve the automotive sector. ANPACT called for clarifying procedures regarding customs clearance delays, the scope of corrective measures and penalties, and strengthening panelist criteria to ensure integrity, predictability, and legal consistency in the mechanism.