Home Stock U.S. trade office says GM Mexico labor case concluded, tariff threat lifted

U.S. trade office says GM Mexico labor case concluded, tariff threat lifted

imageStock Markets3 minutes ago (Sep 22, 2021 05:31PM ET)

(C) Reuters. FILE PHOTO: The new GM logo is seen on the facade of the General Motors headquarters in Detroit, Michigan, U.S., March 16, 2021. Picture taken March 16, 2021. REUTERS/Rebecca Cook/File Photo

By David Lawder and David Shepardson

WASHINGTON (Reuters) -A U.S. labor complaint under the U.S.-Mexico-Canada trade pact over a General Motors (NYSE:GM) plant union vote in Mexico has been successfully concluded, lifting the threat of U.S. tariffs on the factory’s pickup trucks, the U.S. Trade Representative’s (USTR) office said on Wednesday.

The United States opened the case in May after complaints that workers’ rights at a GM pickup-truck plant in Silao in central Mexico were being violated in a vote on whether to keep or scrap their collective union contract.

The result was suspended after Mexico’s labor ministry found irregularities in the process and workers voted in a repeat ballot in August to scrap the contract, opening the door for them to oust one of Mexico’s largest labor groups as their union.

The vote, with safeguards agreed upon by Mexico and the United States to ensure a fair vote, was the first test of labor rules under the USMCA accord that replaced the 1994 North American Free Trade Agreement (NAFTA).

“We will continue to collaborate closely with Mexico to strengthen the legitimization vote process and ensure workers in Mexico can access their rights to freedom of association and collective bargaining,” said U.S. Trade Ambassador Katherine Tai in a statement.

The vote in August marked a defeat for one of the most powerful unions in Mexico, while representing an opening for workers to freely choose independent groups they feel will best fight for their interests.

Labor remedies under USMCA include revoking tariff-free access for the violating factory’s goods. In GM’s case, that could have meant applying a 25% U.S. pickup truck import tariff on Silao-made trucks, likely adding thousands of dollars to each vehicle’s cost.

Tai helped negotiate the labor enforcement mechanism on behalf of Democrats in the U.S. Congress.

GM won key changes to USMCA that allowed it to continue to build hundreds of thousands of high-profit pickups in Mexico for export to the United States annually.

GM did not immediately comment Wednesday.

U.S. trade office says GM Mexico labor case concluded, tariff threat lifted

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