The US government is considering filing a complaint under a regional trade agreement for alleged labor abuses against an auto parts plant in northern Mexico owned by Stellarisbased in the Netherlands, two Mexican officials told Reuters.
If the US Trade Representative resumes the investigation of Teksid Iron from Mexicoin the border state of Coahuila, would be the fourth labor complaint against a foreign company in the country since the North American trade agreement came into force, T-MEC.
The agreement, signed by Canada, the United States and Mexico, seeks to improve conditions in Mexican workplaces, among other objectives.
The office of the Commercial Representative (USTRfor its acronym in English) and the US Department of Labor declined to comment.
When asked about the possible labor investigation at the Coahuila plant, Stellantis said it respects collective bargaining rights and will comply with local laws. The conglomerate became the fourth largest auto group in the world with the merger last year of PSAmanufacturer of Peugeoty Fiat Chrysler.
Under the stricter rules of the new trade pact, which replaced the NAFTAfactories that violate workers’ rights could lose their duty-free export status.
The companies have been watching these early cases closely to see how the new rules play out.
Teksid, which employs nearly 1,500 people and makes iron foundries for heavy vehicles, has been embroiled since 2014 in a union dispute that labor activists say has prevented workers from being represented by a group of their choosing.
Employee advocates also say some were fired after supporting the group, known as the National Miners’ Union.
US labor authorities told the Mexican government in early May that they were considering opening a complaint at Teksid after the unions denounced the case, according to the head of the Labor Ministry’s Labor Policy and Institutional Relations Unit.
“The United States is reviewing the case,” he explained.
Encinas did not name the unions that raised the issue with representatives from the neighboring country.
The official and the director of the Federal Center for Conciliation and Labor Registration, Alfredo Domínguez, explained that the US authorities had 30 days from the time they received the request to evaluate whether they would continue with the matter under the T-MEC Rapid Response Mechanism.
Earlier complaints were also directed at the automotive sector, with investigations into the US automaker General Motorsthe Japanese conglomerate Panasonic and a US-owned factory Tridonex.
Stellantis operates seven other plants in Mexico spanning assembly, engines and stamping, and last year produced more than 400,000 vehicles in the country.
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