US seeks trade panel to resolve labor conflict at Mexican mine

WASHINGTON/MEXICO CITY (Reuters) -The U.S. government said on Tuesday that it has requested its first dispute-settlement panel invoking labor rules under a trade pact with Mexico, in an effort to resolve a long-running workers’ conflict at Grupo Mexico’s San Martin mine.

The United States in June asked Mexico to review allegations of worker-rights abuses at the mine under the U.S.-Mexico-Canada Agreement (USMCA), but Mexico said the matter did not qualify for review under the trade deal.

In a statement, the Office of the U.S. Trade Representative (USTR) said it disagrees with the Mexican government’s determination.

“It is appropriate to request a panel to verify the facility’s compliance with Mexican labor laws,” the USTR said.

Companies have closely watched U.S. labor complaints play out since the 2020 start of the USMCA, which replaced NAFTA. Under the agreement, companies can be sanctioned if they fail to swiftly resolve labor complaints.

Mexican union The Miners has argued that Grupo Mexico violated an extended workers’ strike when it resumed operations at San Martin, which contains lead, copper, zinc and silver, and negotiated with a group of workers who did not have the right to represent the workforce.

Mexican law does not allow companies to operate normally while a strike is in place, the U.S. said in a letter to Mexican officials, arguing workers “are being denied the right of free association and collective bargaining.”

Those rights are key tenets of the USMCA, which aims to improve workplace conditions in Mexico.

Grupo Mexico, a top global copper producer, said in a statement on Tuesday that the panel would show “once and for all” that the company has not violated the law or impeded workers’ rights.

“For the San Martin mine it is important to put a final period to this chapter that unfortunately has hurt many workers and their families for more than 15 years,” Grupo Mexico said, adding that “no strike continues (at the mine) since the will of the workers is to continue working.”

Mexico’s labor and economy ministries did not reply to requests for comment.

In a separate dispute, Mexico rejected last week a U.S. request for review at Grupo Yazaki’s auto components factory, saying it did not find substantial evidence that worker rights were denied.

(Reporting by Daina Beth Solomon in Mexico City and Paul Grant in Washington; Additional reporting by Brendan O’Boyle in Mexico City; Editing by Dan Whitcomb, Andy Sullivan & Shri Navaratnam)