Sarah Silbiger/Pool via AP
U.S. Trade Representative Katherine Tai testifies during a Senate Appropriations subcommittee hearing on Capitol Hill, April 28, 2021.
Every now and then, there is something new under the sun. This month, it’s a pro-worker trade policy—a first for the federal government in at least 40 years.
This notable turn began on May 11, when the AFL-CIO, SEIU, and a Mexican union lodged a complaint against multiple auto parts factories in Matamoros, across the Rio Grande from Brownsville, Texas. The plants’ management had been firing workers who were seeking to form an independent union (by last count 600 of them), and had gotten state authorities to jail Susana Prieto Terrazas, the workers’ lawyer, on fictitious charges.
The Mexican company that runs the plants is a subsidiary of U.S.-based Cardone Industries, which in 2016 laid off 1,300 workers in its Philadelphia brake factory and transferred the work to Matamoros. Cardone, in turn, is controlled by Toronto-based Brookfield Asset Management. This continental chain of command made it an appropriate target for invoking the provisions of the U.S.-Mexico-Canada Agreement (USMCA, the successor to NAFTA, enacted last year), which included language inserted by Democrats intended to break the status quo for labor rights in Mexico.
The common practice in Mexican factories has been to have management make a deal with a pro-management union, denying workers any say in the process. Not for nothing are such unions called “protection unions.” In most such workplaces, employees don’t know which of these “unions” represents them or what their contract actually says. In the USMCA, Sen. Sherrod Brown (D-OH) and others added language requiring Mexico to allow workers to decide by election which union would represent them. The provision also established a “rapid response” mechanism when formal labor complaints are lodged, so the review of the Matamoros abuses is already proceeding apace.
The real revolution in trade accords, though, came two days later, on May 13, when the U.S. trade representative’s office initiated another complaint under USMCA, this one against a General Motors factory in the central Mexican state of Guanajuato that turns out Chevy Silverados and Sierra pickup trucks. There, workers were voting in an election to determine whether the factory’s protection union would remain in place, an election that the protection union itself was running. When it became clear that the protection union was losing, it started tossing out ballots that were opposed to its continuing tenure. As soon as the complaint was lodged, the Mexican government declared the election invalid and said a new one would be held.
Nothing was stopping the USTR from initiating such complaints during previous administrations: The government “has had the power all along; it just never used it.”
What was groundbreaking about this action was that this was the first time that the government itself had initiated a complaint. Previously, through all the years of the Clinton, George W. Bush, and Obama administrations, the government only lodged complaints after a union made its case to the USTR urging action—a case the USTR did not have to accept. But nothing was stopping the USTR from initiating such complaints itself during previous administrations: The federal government “has had the power all along; it just never used it,” says Mark Levinson, the chief economist for the Service Employees International Union.
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What’s different this time around is that President Biden has appointed trade officials who take workers’ rights and welfare seriously. They include Katherine Tai, the new U.S. trade rep, who helped write the pro-worker provisions of USMCA while a staffer on the House Ways and Means Committee; and Thea Lee, the new deputy undersecretary for international affairs at the Department of Labor, who was the longtime trade expert for the AFL-CIO (and more recently, the president of the Economic Policy Institute). What’s also different is that the USMCA gave the Mexican government the authority to intervene against specific employers if such intervention was warranted.
These complaints also call into question the political resolve of Mexican President López Obrador. A longtime champion of workers’ interests, he signed legislation in 2019 that gave workers the right to choose their own union, but many state and local governments still do the bidding of the companies and the protection unions in their jurisdictions, as the jailing of Prieto makes clear. Tereso Medina Ramírez, the head of three protection unions that control 146 contracts across Mexico, including that at the GM plant, was also a state senator who led an attempt to weaken the nation’s labor laws in 2018. One longtime student of Mexican labor calls him “the Vito Corleone of protection unions, with all the judges and politicians in his pocket.” In the campaign that has already begun for the rerun election, management and the union are working together to maintain a sweetheart contract for management and dues that don’t require actually representing the workers for the union. The company, with the union’s backing, has threatened to close the plant unless the workers vote to continue the union’s tenure there. If that’s not sufficient, this week they also promised to raffle off 15 new cars to the workers—but only if the union prevails.
Whether López Obrador will move against those state and local officials who still stand athwart workers’ drive to control their unions remains to be seen; thus far, he has avoided such necessary actions. For its part, USTR may need to expand its complaint beyond the ballot shredding in the previous election, to include the ongoing suppression of the efforts by GM workers to get out from under the joint thumb of GM and its protection union.
That said, for the first time since NAFTA was inflicted on American workers, the government is now moving to defend them against some of the grotesqueries of global capitalism. Much better late than never.
