The US government has filed 16 complaints under USCMA’s Rapid Response Labor Mechanism (RRM), three of which include global corporations headquartered in Asia, specifically two Japanese and one Chinese company.
You Should Care Because: Even though this mechanism was put in place between Mexico and the United States and Mexico and Canada, it has a substantial impact on Asian and European enterprises operating in Mexico.
The Big Picture: The United States-Mexico-Canada Agreement (USMCA) established a new compliance institution: the facility-specific Rapid Response Labor Mechanism (RRM), which was designed to address labor rights violations for Mexican workers by regulating companies' ability to import goods from Mexico to the United States and Canada.
By the Number: Japan, Korea, and China are the fifth, eighth, and ninth largest investors in Mexico, with 1,272, 2,000, and 1,289 enterprises in Mexico, respectively, with a substantial share of manufacturers engaged to the automobile industry.
HRPA’s Take: As more corporations consider investing in Mexico, they must be cautious regarding the implementation of RRM, potential penalties, and the changing labor situation in Mexico.