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US and Mexico target GM labor “violations” and test new trade agreements

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Washington — The United States is testing its authority to protect workers under a trade agreement to replace NAFTA and called on Mexico on Wednesday to investigate alleged abuse at General Motors’ factories.

U.S. Trade Representative Katherine Tai said in an April union contract vote at GM’s Silao plant in central Mexico that her office and the Ministry of Labor “showed a serious breach of workers’ rights.” “Visible information” was received.

Mr Thai said he would work with the Mexican government to “prevent race to the bottom” of US and Mexican workers.

The left-wing president of Mexico welcomed this action and joined the new US-Mexico-Canada (USMCA) trade agreement aimed at strengthening Mexican trade unions and delaying the movement of US car production south of the border. Approved the clause.

“That’s a good thing. Previously, trade agreements didn’t look at labor conditions,” President Andres Manuel Lopez Obrador said at regular press conferences.

The Mexican Ministry of Labor has already said it has found “serious fraud” in a union-led vote for ratification of labor contracts by 6,000 members of the GM Silao plant and ordered a new vote within 30 days. Authorities said some ballots had been destroyed.

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Labor remedies under the USMCA include the cancellation of tariff-free access to infringing factory goods. In the case of GM, that could mean applying a 25% US pickup truck import duty on Silao trucks, which could add thousands of dollars to the cost of each vehicle.

GM said it would work with the US and Mexican governments to condemn infringement of workers’ rights, including measures to limit collective bargaining.

The so-called review request indicates the first use of a quick response labor mechanism at the USMCA. This allows countries to target infringement of workers’ rights at specific factories. Thailand helped negotiate labor enforcement mechanisms on behalf of Democrats in the US Congress.

GM has won a significant change in the USMCA. This allowed Mexico to continue to manufacture hundreds of thousands of high-profit pickups each year and export them to the United States.

In a statement, Thailand praised Mexico for “intervening to suspend voting when it became aware of voting fraud,” and U.S. action “allows these workers to fully exercise collective bargaining rights.” It complements Mexico’s efforts to do so. “

Under NAFTA, factory wages in Mexico have stagnated for over 20 years. This is also due to the union system, which made it difficult for workers to organize freely. Mexico’s minimum wage is less than $ 1 an hour, the lowest of any OECD industrial and economic group.

Despite the new USMCA empowerment, domestic labor reforms, and the government’s increase in the minimum wage, Mexican workers are expected to earn far less income than US workers for the foreseeable future.

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Profit Center

GM’s Silao Factory https://www.reuters.com/article/us-trade-nafta-autos/game-of-chicken-gm-bets-on-mexican-made-pickup-trucks-idUSKBN1F42G7 is the northern corner Is the American truck strategy. Produced more than 339,000 Chevrolet Silverado and GMC Sierra full-size pickup trucks in 2019. That was more than one-third of the company’s total of 906,000 units that year.

“We do not believe that GM was involved in the alleged breach or that government-approved inspectors were denied access to the facility, and a third-party company to conduct an independent and thorough review. “The company said. statement.

USTR’s request was for US Trade Representative Joe Biden to visit Dearborn, Michigan, touring Ford Motor Company’s electric vehicle plant and government funding to expand its electric vehicle production and charging infrastructure. It takes place a few days before emphasizing the promotion of the dollar.

Ford manufactures all US full-size pickup trucks in the United States, but the US Automobile Workers’ Union was assembled in the United States because both GM and Ford are investing in the production of electric vehicles in Mexico. We are seeking tax incentives that apply only to EVs.

White House spokesman Jen Psaki said Tuesday whether Biden upheld the EV subsidy limit.

Thailand’s demands warn all automakers, including Ford, Volkswagen and Chrysler’s pro-Stellantis, that the Biden administration will not tolerate past Mexican labor practices that critics have pushed down wages.

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In the case of a workplace breach at a factory exporting to the United States, Lopez Obrador said the two governments would establish and intervene in a dialogue to ensure that rights were respected.

If the United States and Mexico are unable to reach an agreement to resolve the issue, Tai can request the dispute resolution panel to consider the issue, meaning the entire process will take about 90 days from the initial request. To do.

Thailand has demanded that the US Treasury immediately suspend the final settlement of tariff accounts for GM’s Silao Track entry into the US border. This is a move to retain the option to apply tariffs later. (Reported by David Lawder and David Shepardson in Washington, Daina Beth Solomon in Mexico City, edited by Frank Jack Daniel and Matthew Lewis)

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US and Mexico target GM labor “violations” and test new trade agreements

https://financialpost.com/pmn/business-pmn/u-s-and-mexico-target-gm-labor-violations-testing-new-trade-deal US and Mexico target GM labor “violations” and test new trade agreements

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