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Rapid Response Labor Mechanism | Trading Room

Rapid Response Labor Mechanism

As a result of the AFL-CIO’s request, the U.S. government activated the Rapid Response Labor Mechanism on June 9, 2021 for alleged violations of freedom of association and collective bargaining rights committed by TRIDONEX. 

Following the request, the Mexican government conducted an internal investigation based on the provisions of Annex 31-A of the MEFTA. In this regard, the Ministries of Economy (SE) and Labor and Social Security (STPS) concluded that «since the facts were prior to the entry into force of the Agreement, there was no denial of workers’ rights».

However, the U.S. government reached an agreement with TRIDONEX (subsidiary of Cardone Industries) in which the company commits to:

  • Provide each of the more than 154 workers laid off from the plant with severance pay and 6 months of back pay, to reach a total of at least 9 months of pay. 
  • Support the right of its workers to determine their union representation without coercion, protecting its workers from intimidation, harassment and receiving election observers during any voting.
  • Provide training to all workers on their rights to collective bargaining and freedom of association.
See the complete list of commitments here.

Additionally, the Government of Mexico has agreed to help facilitate the company’s worker rights training, oversee any union representation elections at the plant, and investigate any claims of worker rights violations reported by employees at the plant.

Sources: El Economista, USTR, El Financiero.

Investment in Batteries and Semiconductors

Mexico is interested in attracting investment in semiconductors, pharmaceuticals, aerospace and, research and manufacturing areas. 

According to Secretary of Economy Tatiana Clouthier, these sectors are of strategic importance. On the one hand, the Secretary maintains that the opportunity for collaboration with the private sector lies in the strengthening of value chains, that is to say, with greater national content, incorporating more small and medium-sized companies in their supply chains.

Shortage of semiconductors

It is important to note that semiconductors are used by different key sectors for Mexico such as automotive, telephony, IT, among others and any disruption in their supply chain could cost companies millions, as was evident during the Covid-19 pandemic. 

Source: The Economist

México Primer Socio Comercial de los Estados Unidos

After the first 6 months of 2021 Mexico keeps the crown as United States first trading partner, with a 14.7% share of total U.S. trade, followed by Canada with 14.5% and China with 13.9%. 

Total trade flow between Mexico and the United States accumulated 320 billion dollars from January to June

However, despite the good results in the aggregate figures, Mexico ranks second in both exports and imports. 

In the first six months of the year, exports from the United States to Mexico to our country totaled 133 billion 529 million dollars. China surpassed Mexico in this area with 229.6 billion dollars. 

On the other hand, U.S. imports from Mexico amounted to 186.440 billion dollars and represented 13.8%. Mexico was surpassed by Canada with 148.9 billion dollars. 

Economic Recovery

In spite of everything, it is important to highlight that trade between both nations grew 32.2% compared to the same period in 2020. 

Likewise, this trend will be boosted by the economic recovery of the United States and the USMCA.

Fuentes:El financiero, Milenio 

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