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The Rapid Response Labor Mechanism of the US–Mexico–Canada Agreement

Published online by Cambridge University Press:  26 September 2024

Chad P. Bown  and
Kathleen Claussen
Chad P. Bown*
Affiliation:
Peterson Institute for International Economics, Washington, DC, USA
Kathleen Claussen
Affiliation:
Georgetown University Law Center, Washington, DC, USA
*
Corresponding author: Chad P. Bown; Email: [email protected], web: www.chadpbown.com
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Abstract

The US–Mexico–Canada Agreement (USMCA) introduced a new compliance institution for labor rights in trade agreements: the facility-specific Rapid Response Labor Mechanism (RRM). The RRM was developed to tackle one particular thorn in the side of North American integration – labor rights for Mexican workers – as it had had detrimental, long-term political–economic consequences for the US–Mexico trade relationship. This article reviews the unique political–economic moment in the United States and Mexico that prompted the creation of this tool. It describes how the RRM works and the considerable financial and human resources the US and Mexican governments deployed to operationalize it. The article then reports a number of stylized facts on how governments used the RRM during its first three years, largely in the auto sector. It proposes paths of potentially fruitful political–economic research to aid understanding of the full implications of the RRM and concludes with preliminary lessons as well as a discussion on the potential for policymakers to assess facility-specific mechanisms for labor or other issues, such as the environment, in future economic agreements.

Keywords

USMCARRMlaborauto industryunionscollective bargainingdispute resolutionF13
Type
Special Issue Article
Information
World Trade Review , Volume 23 , Special Issue 3: Symposium: Dispute Settlement Inside and Outside of the WTO , July 2024 , pp. 335 - 362
Copyright
Copyright © The Author(s), 2024. Published by Cambridge University Press on behalf of The Secretariat of the World Trade Organization

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