United States Statement on the Remediation Plan at Manufacturas VU Facility

October 10, 2023

WASHINGTON – United States Trade Representative Katherine Tai today commented on the closure of the Manufacturas VU facility, the subject of a remediation plan negotiated between the United States and Mexico under the United States-Mexico-Canada Agreement (USMCA)’s Rapid Response Labor Mechanism (RRM) to address denials of rights at the facility.
In March of this year, the United States and Mexico announced a remediation plan to address the ongoing denial of rights at the Manufacturas VU automotive components facility in Piedras Negras, Mexico.  The RRM process provides an opportunity for the United States and Mexico to negotiate remediation plans, called courses of remediation, which are detailed agreements between the Parties that include specific commitments to address identified denials of rights.  These agreements provide a path to addressing the violations that underlie a denial of rights, resulting in better labor conditions for workers, compliance with the USMCA, and enabling the facility at issue to avoid economic penalties under the USMCA if commitments are fulfilled.  The United States has negotiated remediation plans with Mexico to address denials of rights in six RRM matters. 
The United States and Mexico have closely monitored the remediation plan at Manufacturas VU.  However, rather than comply with the terms of the remediation plan and ensure it is operating consistent with Mexican labor laws, the United States understands that Manufacturas VU has closed the facility and ended operations in Mexico.  The RRM, including the use of remediation plans, helps to ensure that trade between the United States and Mexico supports the rights of workers and helps to foster a race to the top, preventing companies from gaining an unfair advantage by violating workers’ rights.  The United States will continue to use all tools to promote respect for workers’ rights and make sure that businesses cannot take advantage of trade agreements without complying with local labor laws and respecting workers’ rights to freedom of association and collective bargaining.   
“The United States is constantly working with our partners in Mexico to ensure that our trade is fair and respects workers’ rights,” said Ambassador Katherine Tai.  “The U.S. will continue to monitor the situation regarding Manufacturas VU to verify that the rights of workers previously employed by the company are respected, that outstanding wages are paid, and that neither the company nor any potential successors violate the terms of the USMCA.”
“Over the last two years, the U.S. and Mexican governments have worked out several successful courses of remediation under the U.S.-Mexico-Canada Agreement’s Rapid Response Mechanism. This collaboration has led to significant progress for workers in exercising their rights in Mexico and has supported Mexico’s historic labor reform. The mechanism has resulted in employers taking significant actions to improve labor practices, benefiting workers’ rights in both countries,” said Deputy Undersecretary for International Affairs, Thea Lee. “We note VU’s decision to close its facility without adhering to the agreed course of remediation and we urge the government of Mexico to seek remedies for the affected workers and strategies to prevent retaliation against former VU workers at other facilities.”

The United States Trade Representative and the Secretary of Labor co-chair the Interagency Labor Committee for Monitoring and Enforcement (ILC).  On December 29, 2022, the ILC received an RRM petition from two Mexican labor organizations, LSOM and Comite Fronterizo de Obreras (CFO), alleging workers at the Manufacturas VU automotive components facility in Piedras Negras were being denied the right of free association and collective bargaining.  The ILC reviews RRM petitions that it receives, and the accompanying information, within 30 days.   

The ILC, in response to the petition, determined that there was sufficient, credible evidence of a denial of rights enabling the good faith invocation of enforcement mechanisms.  As a result, on January 30, 2023, the United States Trade Representative submitted to Mexico a request that Mexico conduct its own review.  In connection with the U.S. request, Ambassador Tai directed the Secretary of the Treasury to suspend the final settlement of customs accounts related to entries of goods from the VU facility.  Mexico agreed to conduct a review, and on March 16, 2023, concluded there were ongoing denials of the right of free association and collective bargaining at the facility.  On March 31, 2023 the United States and Mexico announced a course of remediation to remediate the denials of rights.
Read the full course of remediation here.