Unfinished business: Centering workers’ rights and fair competition in the USMCA joint review

The growing U.S.-Mexico trade deficit reflects the reality that Mexican workers in the manufacturing sector continue to make, on average, just a tenth of what their counterparts in the U.S. earn. Despite changes to Mexican labor laws and the positive impact of the Rapid Response Mechanism, few Mexican workers enjoy their right to freedom of association and collective bargaining in practice. Employer controlled “protection unions” continue to thrive and violence against supporters of independent unions remains common. Mexican labor institutions remain underfunded, and the government has proposed slashing the budget of the agency charged with implementing key aspects of its labor law reforms.

To address these challenges the 2026 joint review must be more than a box ticking exercise—it must identify concrete revisions to address offshoring while raising wages and standards for workers in Mexico. It must review and strengthen the agreement’s rules of origin across the board, but particularly in the auto sector where the labor value content (LVC) provision has failed to raise wages and standards in North American auto supply chains. The parties must also eliminate the use of “alternative staging regimes,” which auto multinationals have used to sidestep the agreement’s rules of origin.

More broadly, the parties must increase cooperation to meet the economic and security threats posed by China and other non-market economies. Duty free access to the U.S. market has made Mexico an attractive location for Chinese companies looking to sidestep U.S. tariffs imposed to address pervasive state subsidies, dumping, intellectual property theft, and other unfair trade practices. Negotiations should start with Mexico agreeing to match the border measures that the U.S. and Canada have adopted to address unfairly traded Chinese EVs, steel, and aluminum. The USMCA cannot be a backdoor for the circumvention of our trade remedy laws.

A clear area of concern is the lack of concrete progress towards achieving USMCA’s commitment to stop the import of goods produced with forced labor. While all three countries have passed laws or adopted regulations banning the importation of forced labor goods, Canada and Mexico have done little to enforce the ban in practice. This is unacceptable and all three parties must deepen their cooperation and dedicate sufficient resources to ensure the North American market is closed to goods made with forced labor.

The parties should also consider adding new commitments to address issues that have become a higher priority since the agreement was negotiated, including critical minerals, semiconductors, and electric vehicles. These could include new cooperation mechanisms to address supply chain disruptions, incentives for high road labor and environmental practices, and screening mechanisms to ensure incoming Chinese investments do not pose a threat to strategic North American supply chains.

Finally, all three parties should commit to providing additional funding to build the capacity of Mexican workers to claim their rights under Mexico’s historic labor law reforms. While important progress has been made, the job is far from done and is essential to creating a more level playing field for North American workers.

As we look ahead to the joint review, the AFL-CIO’s support for extending the USMCA cannot be taken for granted. Much depends on the political will of the parties to address the agreement’s shortcomings with an eye toward creating more sustainable and resilient supply chains. We look forward to the challenge ahead to make this agreement deliver dignity and fair competition for workers across North America.