Kuttner on TAP: Caterpillar Treading on Workers

A prime reason why progressive Democrats supported the Trump-era U.S.-Mexico-Canada Agreement (USMCA), as a bipartisan improvement on the old North American Free Trade Agreement, was that it added labor standards. Specifically, it added a Rapid Response Mechanism to help Mexican workers assert rights to organize and join unions. In extreme cases, the RRM even allowed U.S. customs officials to seize shipments of goods that had been shipped from Mexican factories that violated worker rights.

The mechanism was a splendid case of labor solidarity in action; by raising labor standards in Mexico, it would protect labor standards in the U.S. and slow down the global race to the bottom. That was the idea, anyway. And in a few notable cases, U.S. government complaints and threats of action have enabled Mexican workers to organize independent unions.

But in a high-profile case involving Caterpillar Tractor, which has some 20,000 workers in Latin America, the U.S. government has refused to proceed, despite documented evidence of company blacklists. After a worker is fired for trying to join a union, he or she is blacklisted from getting any other job with another company. A pro-union worker in the HR department of Caterpillar’s subsidiary even found a literal blacklist of names.

The UAW, United Steelworkers (USW), the AFL-CIO, their Mexican affiliates, and Rethink Trade have petitioned the U.S. government to proceed with complaints and remedies for Mexican workers. But the petitions, which provide extensive detail, have been rejected twice. Why, you might ask, does “the most pro-union administration in U.S. history” blow off a thoroughly documented complaint from some of its closest union allies?

It’s a good question. The answer seems to be that the Labor Department legal bureaucracy has gotten hold of the case and is demanding a level of evidentiary proof far beyond anything contemplated by USMCA. The other major player, the Office of the U.S. Trade Representative, seems unwilling to pick a fight with the Labor Department. It’s the kind of slow roll that you’d expect from a Republican administration seeking to shield a giant multinational.

The White House has been busy with other matters, but it’s time for the Biden-Harris administration, at the highest levels, to overrule the bureaucrats. Mexican workers for Caterpillar make about $3 an hour, about one-tenth of what U.S. Caterpillar workers earn. If this kind of crude union busting is permitted, it’s one more invitation to outsourcing.

Daniel Rangel Jurado, research director of Rethink Trade, told me, “Vulnerable workers risk much by cooperating with RRM investigations. If companies like Caterpillar face no consequences despite these efforts, it erodes trust in the mechanism and the USMCA’s labor protections, while emboldening corporations that refuse to respect workers’ rights or provide fair wages and conditions.”

One way to break through the bureaucratic logjam is for the U.S. government to file a “state-to-state” complaint, charging Mexico with failing to enforce its own labor laws in violation of USMCA. Yesterday, Vice President Kamala Harris addressed the American Federation of Teachers, pledging strong support for unions and promising to fight for enactment of the PRO Act, removing obstacles to worker organizing.

There is a law already on the books—USMCA—that is supposed to make it a little easier for Mexican brothers and sisters to organize and join unions. All the Biden-Harris administration needs to do is enforce it.