Mexican Mine Dispute not Subject to RRM

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Ambassador Katherine Tai issued a statement Monday regarding the   finding against the United States in a determination regarding a labor dispute at the San Martin lead, zinc, copper and silver mine in the Mexican state of Zacatecas:

The Rapid Response Labor Mechanism (RRM) panel established under the United States-Mexico-Canada Agreement (USMCA) determined that the agreement had no jurisdiction in the decades long labor dispute.

“The RRM was incorporated in the USMCA as part of the renegotiation of the North American Free Trade Agreement in order to stop the type of corporate infringement at issue in this case.  

"The panel’s decision here, which effectively allows Grupo México to continue to violate the San Martin miners’ rights to collective bargaining and freedom of association, is both surprising and disappointing.”

The United Steelworkers union (USW) expressed their dissapointment in the outcome:

“While we appreciate the work of the panel, specifically its ruling that the mine is a Covered Facility under the USMCA rapid response labor mechanism, the fact remains that the strike launched in 2007 by our sister union, the National Union of Mine, Metal, Steel and Related Workers of the Mexican Republic (Los Mineros), has not been resolved. 

“Mexico’s highest court ruled nearly three years ago that the strike by Los Mineros is legal, yet Grupo Mexico continues to operate the mine with replacement workers, excluding the members of Los Mineros from the workplace. 

“We are also concerned by the publication of the Mexican Economy Secretariat’s announcement on social media, prior to its official release, and by the statements to the news media by a member of the panel, prior to the decision being made public. 

“Such actions threaten to undermine the integrity of the Rapid Response mechanism. We hope that Mexico will take appropriate corrective actions.

This ruling is of utmost relevance, since it sets a precedent regarding the non-retroactivity of trade agreements. For Mexico, it is essential to avoid opening up this possibility both in labor disputes and in other commercial disputes,” read a translation of the Spanish-language social media release by the Mexican Ministry of Economy on May 2nd. [WTTL 12140]
 
Background 
 
The United States Trade Representative and the Secretary of Labor co-chair the Interagency Labor Committee for Monitoring and Enforcement (ILC). 

On May 15, 2023, the ILC received an RRM petition from the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), the United Steel Workers (USW), and the Sindicato Nacional de Trabajadores Mineros, Metalúrgicos, Siderúgicos y Similares de la República Mexicana (Los Mineros), a Mexican union. 

The ILC, in response to the petition, determined that there was sufficient, credible evidence of a denial of rights enabling the good faith invocation of enforcement mechanisms.  As a result, the U.S. Trade Representative submitted a request to the Governement of Mexico that Mexico review whether workers at the San Martin mine facility were being denied the right to freedom of association and collective bargaining, because Grupo México resumed operations at the San Martin mine regardless an ongoing strike and engaged in collective bargaining with a coalition of workers despite the fact that Los Mineros holds the right to represent workers for purposes of collective bargaining. 

At the conclusion of its 45-day review period, Mexico disagreed with the United States and found no denial of rights to exist.  The United States disagreed with this determination and, on August 22, 2023, requested the establishment of this RRM panel.

The RRM panel issued its written determination, and on May 13, 2024, the Parties made the determination public.

The panel found the mine is a covered facility for the purposes of the RRM.  However, the panel went on to find that the alleged denials of rights were not brought under Mexican labor laws necessary to fulfill Mexico’s labor-related obligations within the meaning of the USMCA, because, as a matter of Mexican law, the events at issue would likely be subject to labor laws that predate Mexico’s labor reform. 

Therefore, the panel found that it lacked jurisdiction to determine whether a denial of rights occurred at the facility. 

This ruling is of utmost relevance, since it sets a precedent regarding the non-retroactivity of trade agreements. For Mexico, it is essential to avoid opening up this possibility both in labor disputes and in other commercial disputes,” according to a translation of the Spanish-language release by the Mexican Ministry of Economy on May 2nd. [WTTL 12140]

The panel acknowledged that the complex factual and legal history underlying this dispute was “highly unusual and unlikely to repeat itself.”

One panelist wrote a non-dissenting “separate view” to articulate additional facts verified by the panel regarding the background of the dispute.  The panelist recounted evidence showing what appeared to be illegal collective bargaining between the employer and a union that was not the legal representative of the San Martin mine workers.  The panelist registered concern regarding the negative implications of this activity for the workers’ freedom of association and collective bargaining rights.  

The determination of the panel is final.  In connection with the initial U.S. request for review, Ambassador Tai directed the U.S. Secretary of the Treasury to suspend the final settlement of customs accounts related to entries of goods from the San Martin facility.  Ambassador Tai’s letter directing the U.S. Secretary of the Treasury to resume liquidation of entries of goods from the San Martin facility is available here.

A copy of the panel determination is available here.

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