USMCA and the Rapid Response Labor Mechanism: A new approach to cross-border governance of labor rights

Abstract

This paper explores the motivations for and implications of the unprecedented labor provisions of the US Mexico Canada Agreement (USMCA), notably the labor reforms required of Mexico and the Rapid Response Labor Mechanism (RRLM) now available to remedy labor rights violations at the level of the firm as well as the level of the state. The paper reviews the economic and political context of the US demand to renegotiate the labor provisions of the North American Free Trade Agreement (NAFTA), describes the renegotiation processes and explores Mexico’s economic and political motives to reach a settlement. It outlines the main new labor obligations and enforcement mechanisms that resulted and summarizes the experience with them to date. It then evaluates the changes in terms of effectiveness, legitimacy and sovereignty in the Mexican political context. The article concludes by reflecting on the agreement’s potential as a model for future trade agreements.

Keywords: Trade, labor, cross-border labor governance, Mexico, USMCA, RRLM

JEL Classification: F13, F16, F53, F66, J5, J8, J52, J58, J88, K31