Asiaway Automotive Components' Mexico Division Hit with Rapid Response Mechanism Review

Oct. 25, 2023
By: Hannah B. Kreinik

As part of the United States-Mexico-Canada Free Trade Agreement (“USMCA”), the parties implemented the Rapid Response Mechanism (“RRM”) to assess and resolve labor concerns. We introduced the RRM of the USMCA in this prior article. The US and Mexico are hitting the RRM hard with the latest labor rights allegations arising in the Mexican auto industry. The Chinese-based company Asiaway Automotive Components’ Mexican facility is facing a rapid response allegation due to union disputes.

Asiaway Automotive Components conducts its die casting and machining of aluminum pieces in the Mexican factory, opened this past June. The company has indicated it plans to open an additional facility with 1,700 workers employed across both facilities.

However, the US Trade Representative (“USTR”), Katherine Tai, has requested that Mexico investigate certain unionizing concerns. CTM, a Mexican union confederation, was alleged to be favored over other unions for the Asiaway Automotive Components’ factory. CTM is alleged to negotiate organizing contracts intended to benefit management over labor. Tai has asked Mexico to examine whether workers were deterred from supporting La Liga Sindical Obrera Mexicana union, and the claim that a worker was fired for their support of La Liga Sindical Obrera Mexicana. Mexico has yet to respond to the USTR’s request for a review of Asiaway Automotive Components.

Tai reaffirmed US support of worker’s rights to association and collective bargaining, emphasizing the need for laborers to have the ability to choose their own union organizations. She also mentioned that freedom to associate and collective bargaining continue to be focus areas for the USMCA. Recently, another company, Grupo Yazaki, settled a similar union dispute for their auto factory through the RRM process with Mexico. RRM allegations and investigations may be the next up-and-coming issue surrounding the USMCA. Importers should be aware that growing labor protections in Mexico may impact their supply chains and that reform may be required under the RRM system.

The attorneys at Barnes, Richardson & Colburn can help your company assess its USMCA eligibility or risks for any product.