WASHINGTON – A worker-centered trade policy rejects trickle-down trade and holds accountable those corporations that maximize their profits through exploitation. Under the Biden-Harris Administration, the Office of the United States Trade Representative (USTR) has been taking unprecedented steps and using new enforcement tools to crack down on companies that have offshored jobs to avoid U.S. labor standards and worker protections.
In doing so, we are leveling the playing for those companies that have remained invested in their workers, communities, and the U.S. economy, and beginning the work of reversing decades of trade policy that has pitted American workers against exploited workers in other countries.
The Biden Administration continues this vital work today, with USTR Ambassador Katherine Tai announcing three new enforcement actions under the United States-Mexico-Canada Agreement’s Rapid Response Labor Mechanism. In these cases, the United States and Mexico were not able to agree on a plan for the full resolution of workers’ concerns at their facilities. Therefore, the Biden Administration has taken the next step in ensuring workers’ rights are protected by requesting that dispute settlement panels be established to resolve each case. More information about these actions can be found at the following links: Pirelli Neumaticos, Bader de Mexico, and Industrias Tecnos.
How are we holding corporations accountable?
USTR has been aggressively asserting U.S. rights under: (1) the United States-Mexico-Canada Agreement’s Rapid Response Labor Mechanism; (2) the U.S. prohibition on the import of goods made by forced labor; and (3) the Uyghur Forced Labor Prevention Act of 2021. The Biden-Harris Administration continues its commitment to preventing companies that exploit and violate the basic rights of workers from accessing the U.S. market. All three of these trade enforcement tools focus on individual companies and shipments of goods, leveraging the power of U.S. market access to ensure that global supply chains respect fundamental workers’ rights.
More information on how the Biden-Harris Administration is using each of these tools is below:
In doing so, we are leveling the playing for those companies that have remained invested in their workers, communities, and the U.S. economy, and beginning the work of reversing decades of trade policy that has pitted American workers against exploited workers in other countries.
The Biden Administration continues this vital work today, with USTR Ambassador Katherine Tai announcing three new enforcement actions under the United States-Mexico-Canada Agreement’s Rapid Response Labor Mechanism. In these cases, the United States and Mexico were not able to agree on a plan for the full resolution of workers’ concerns at their facilities. Therefore, the Biden Administration has taken the next step in ensuring workers’ rights are protected by requesting that dispute settlement panels be established to resolve each case. More information about these actions can be found at the following links: Pirelli Neumaticos, Bader de Mexico, and Industrias Tecnos.
How are we holding corporations accountable?
USTR has been aggressively asserting U.S. rights under: (1) the United States-Mexico-Canada Agreement’s Rapid Response Labor Mechanism; (2) the U.S. prohibition on the import of goods made by forced labor; and (3) the Uyghur Forced Labor Prevention Act of 2021. The Biden-Harris Administration continues its commitment to preventing companies that exploit and violate the basic rights of workers from accessing the U.S. market. All three of these trade enforcement tools focus on individual companies and shipments of goods, leveraging the power of U.S. market access to ensure that global supply chains respect fundamental workers’ rights.
More information on how the Biden-Harris Administration is using each of these tools is below:
I. The United States-Mexico-Canada Agreement’s Rapid Response Labor Mechanism (RRM)
The bottom line: the Biden-Harris Administration takes on union-busting in Mexico
The RRM scrutinizes the compliance of facilities in Mexico in respecting workers’ freedom of association and collective bargaining rights, as required by the USMCA and Mexican law. Companies determined to be violating workers’ rights face penalties that include being barred from the U.S. market.
A new innovation incorporated in the USMCA, USTR has invoked the RRM 31 times since 2021. These RRM cases have, to date, directly benefited nearly 42,000 workers in facilities across traded industries, including automotive, garments, mining, food manufacturing, and services (such as call centers and airlines). As a result of these cases, companies have paid nearly $6 million in backpay and benefits to affected workers.
The RRM empowers U.S. workers by confronting and remedying unfair incentives for companies to offshore jobs. USTR has brought RRM cases against companies including Volkswagen, Goodyear, and General Motors.
The United States and Mexico have been able to resolve most cases collaboratively, but when more is needed to protect workers’ rights, USTR has taken the issue to dispute resolution panels for review. USTR has requested six panels to date. Recent examples of cases where corporations have undermined labor standards include a gold and silver mine, Camino Rojo, where the company has interfered in workers’ efforts to join the union of their choice, and a tire manufacturer, Pirelli Neumaticos, which has failed to provide its workers the benefits required by a sectoral agreement applicable throughout Mexico’s rubber industry. While USTR remains committed to collaborating with the Government of Mexico to resolve denials of rights, moving forward we will continue to request dispute resolution panels when necessary to protect workers’ rights to freedom of association and collective bargaining.
A fact sheet with more information on the USMCA RRM and all of the actions the Biden-Harris Administration has taken with this tool is available here.
II. U.S. Prohibition on the Import of Goods Made by Forced Labor
The bottom line: the Biden-Harris Administration commits to penalizing forced labor in global supply chains as a moral and economic harm
i. The Forced Labor Import Prohibition Under Section 307
The RRM scrutinizes the compliance of facilities in Mexico in respecting workers’ freedom of association and collective bargaining rights, as required by the USMCA and Mexican law. Companies determined to be violating workers’ rights face penalties that include being barred from the U.S. market.
A new innovation incorporated in the USMCA, USTR has invoked the RRM 31 times since 2021. These RRM cases have, to date, directly benefited nearly 42,000 workers in facilities across traded industries, including automotive, garments, mining, food manufacturing, and services (such as call centers and airlines). As a result of these cases, companies have paid nearly $6 million in backpay and benefits to affected workers.
The RRM empowers U.S. workers by confronting and remedying unfair incentives for companies to offshore jobs. USTR has brought RRM cases against companies including Volkswagen, Goodyear, and General Motors.
The United States and Mexico have been able to resolve most cases collaboratively, but when more is needed to protect workers’ rights, USTR has taken the issue to dispute resolution panels for review. USTR has requested six panels to date. Recent examples of cases where corporations have undermined labor standards include a gold and silver mine, Camino Rojo, where the company has interfered in workers’ efforts to join the union of their choice, and a tire manufacturer, Pirelli Neumaticos, which has failed to provide its workers the benefits required by a sectoral agreement applicable throughout Mexico’s rubber industry. While USTR remains committed to collaborating with the Government of Mexico to resolve denials of rights, moving forward we will continue to request dispute resolution panels when necessary to protect workers’ rights to freedom of association and collective bargaining.
A fact sheet with more information on the USMCA RRM and all of the actions the Biden-Harris Administration has taken with this tool is available here.
II. U.S. Prohibition on the Import of Goods Made by Forced Labor
The bottom line: the Biden-Harris Administration commits to penalizing forced labor in global supply chains as a moral and economic harm
i. The Forced Labor Import Prohibition Under Section 307
The United States has one of the most powerful trade tools in the world to hold companies accountable for egregious labor rights violations in their supply chains. The forced labor import prohibition under Section 307 of the Tariff Act of 1930 prohibits the importation of products that are mined, produced, or manufactured, wholly or in part, by forced labor, from any company, anywhere in the world. While this global prohibition has been on the books for almost 100 years, a significant loophole was closed only in 2016.
Under the Biden-Harris Administration, Customs and Border Protection (CBP) has issued 11 Withhold Release Orders (against companies in six different countries as well as specific fishing vessels) based on a reasonable indication of forced labor in the supply chain, and four findings (against companies in two different countries and a fishing vessel) where forced labor in the supply chain was determined. These Withhold Release Orders and findings covered a wide range of supply chains, including disposable gloves, furniture, garments, palm oil, tomatoes, seafood, silica-based products, and sugar.
USTR under the Biden-Harris Administration has built a record of collaboration with trading partners to eliminate forced labor in supply chains globally. For example, under the USMCA, Canada and Mexico committed to establish their own forced labor import prohibitions. In addition, in 2021, the Group of 7 Trade Ministers issued a communiqué expressing a shared desire for member countries to work together, along with businesses, to combat this forced labor in supply chains. Under the United States–Japan Partnership on Trade, the Task Force to Promote Human Rights and International Labor Standards in Supply Chains was launched to increase cooperation to combat violations of labor standards and enhance traceability in the supply chains. Additionally, under the United States–European Union Trade and Technology Council, USTR collaborated with the European Union to implement stakeholders’ recommendations on combatting forced labor in supply chains through the U.S.-EU Trade and Labor Dialogue.
ii. The Uyghur Forced Labor Prevention Act (UFLPA)
The UFLPA is an additional tool that USTR, as a member of the U.S. Forced Labor Enforcement Task Force, has used to prevent goods made by forced labor in the Xinjiang Uyghur Autonomous Region (Xinjiang) from entering the U.S. market.
The UFLPA enhances the enforcement of Section 307 with respect to goods made in Xinjiang, or by an entity on the UFLPA Entity List. Due to the significant risk that these goods are produced in whole or in part with forced labor, the UFLPA presumes that these goods are prohibited from entering the United States. In order to overcome the presumption, an importer must provide robust evidence demonstrating that forced labor was not used in its supply chain.
In other words, if cotton produced in Xinjiang is used in a major brand’s t-shirt, that t-shirt can be prohibited from entering the U.S. market. If there are component parts of a car that are produced in Xinjiang or by a named entity on the UFLPA Entity List, that car can be denied entry as well.
Since the UFLPA was signed into law in December 2021, the FLETF has added 75 entities to the UFLPA Entity List. Since the start of the enforcement of UFLPA in June 2022, the United States has reviewed shipments valued at more than $3.6 billion.
More information about the FLETF and UFLPA can be found here.
