Nearshoring brings jobs to Mexico and the US seeks to protect labor rights

The trend is further testing a North American trade agreement, known as USMCA, in place since July 2020.

The pact has stricter labor standards than its 1994 predecessor and underpins new Mexican laws empowering workers to push for better wages and conditions after years of stagnant wages and company-friendly union contracts.

Three years after the agreement entered into force, according to experts, some workers have begun to benefit from it, but there is still a long way to go before it has a general impact.

“Hopefully this will ensure that Mexico doesn’t become a dumping ground for companies looking for cheap labor and lax regulations,” said Thea Lee, US Assistant Secretary for International Labor Affairs, which oversees USMCA compliance.

The official said in an interview with Reuters that Mexico was working to meet its commitments, backed by a leadership interested in helping workers.

The new regulations in Mexico favor companies that assume higher ethical standards, he said.

“Maybe 20 years ago it was okay for a multinational to throw up its hands and say, ‘We have no idea what’s in our supply chain, what the labor conditions are,'” he added. “That doesn’t seem to be acceptable anymore,” she stressed.

Mexico has made progress in improving labor courts, resolving worker grievances more quickly and making it easier to organize unions, but it needs to do more, Lee said.

“Our hope is that Mexico is well prepared to take advantage of nearshoring (…) if they continue on the path to actually building working labor institutions, where workers can have confidence,” he said.

Since 2020, several US labor lawsuits in Mexico have paved the way for independent unions to win pay raises and even expand. Lee said such examples inspire workers who in the past may have feared threats or dismissal for trying to organize.

Four more cases are under review: in a textile factory, an auto parts plant, a Goodyear tire plant and a mine owned by the Grupo México conglomerate.

However, one employer facing two TMEC complaints, US-based VU Manufacturing, which produces auto interior parts including armrests and door trim in the northern city of Piedras Negras, recently laid off dozens of workers. workers just months after a new union, La Liga, pushed for better wages.

VU did not respond to a request for comment.

Lee said the company risks sanctions if it doesn’t uphold an agreement around workers’ rights. But La Liga members have already been fired and they fear the company is trying to discourage organizing, said union leader Cristina Ramírez, who lost her job.

“It’s very disappointing and very frustrating for us,” Ramirez said. “We wanted to fight for an improvement for all workers,” she added.