US, Mexico Disagree on Call Center Resolution

The USTR has requested a Rapid Response Labor Mechanism (RRM) panel under the United States-Mexico-Canada Agreement (USMCA) to resolve a labor dispute at call center operator Atento Servicios, S.A. de C.V. . 
 
In January the USTR asked Mexico to review whether workers at Atento Servicios were being denied the rights to freedom of association and collective bargaining. 

At the conclusion of its 45-day review period, Mexico found a denial of rights had existed, but determined that Atento Servicios had taken the necessary actions to remediate the denial of rights during Mexico’s review period. The United States disagrees with this determination and is requesting establishment of an RRM panel to review the situation.

"In seventeen RRM cases to date, the United States and Mexico have been able to cooperate to successfully address labor rights violations at the Mexican facilities in question," the USTR said in a statement. "We were not able to do so in this matter, however, and the United States therefore has determined that it is appropriate to request a panel to verify the facility’s compliance with Mexican labor laws."

Broader Implications

Like the recent RRM complaint about a zinc mine which ships its output to Japan, a U.S. nexus is tenuous at best.  As Chinese manufacturers build plants in Mexico to address Latin markets, the prospects of sparring with the US Department of Labor may influence investment decisions.

Joshua Kagan of Kelley Drye notes the case gives the USTR a chance to show the RRM has impact.

"The Biden Administration has sought to frame its trade policy as distinguishable from past approaches in a number of ways, but one notable distinction comes from its decision not to pursue negotiation of traditional market access, tariff-lowering, trade agreements. Since typical trade agreement enforcement in cases of non-compliance is conducted by taking away the market access that the agreement conferred, critics of the Biden Administration’s trade policy question whether the reportedly ambitious commitments it seeks in negotiations with Taiwan, Kenya, the EU, the UK, and 13 Indo-Pacific countries are actually enforceable. Without lowering tariffs, the critique goes, how will the U.S. make sure that its ​“worker-centered” trade policy is more than just words on paper?"

Kagan continues, "It may be that the Atento RRM case is about to give us the U.S. government’s answer to that question.

"If the panel agrees with the U.S. government in Atento and permits the U.S. to impose remedies against the call centers involved in the case," concludes Kagan, "we could gain concrete insight into what sorts of trade enforcement remedies it may be contemplating in each of the other trade agreements it is negotiating." 

Atento Services

Founded in 1999 to consolidate Telefónica S.A.’s CRM services into a single group, Atento operates 95 call centers in 17 countries in Latin America, Spain and Puerto Rico.  The company provides spanish-speaking call center services to US consumers.

Both Atento locations in Pachuca offer call center services to BBVA Mexico, a subsidiary of the Spanish bank BBVA Group.  

A copy of the panel request can be found here.