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🗞️ DOL Awards $23.4M to Strengthen Mexico Labor Enforcement Under USMCA

DOL awards $23.4M to strengthen Mexico's labor law enforcement under USMCA, targeting wage suppression and unfair labor practices that undercut American workers ahead of 2026 trade agreement review.

onthelaborfront

12 Jan 2026 — 4 min read

The U.S. Department of Labor announced on January 12, 2026, the award of more than $23 million to strengthen labor law enforcement in Mexico and ensure U.S.-Mexico trade benefits American workers. The funding will be distributed through two awards: $15.4 million to Partners of the Americas and $8 million to Creative Associates International. Both organizations will work with Mexico's government, private sector, and workers to enforce labor laws and ensure compliance with the United States-Mexico-Canada Agreement (USMCA) labor provisions.

The initiative, administered by the Bureau of International Labor Affairs (ILAB), implements USMCA labor enforcement provisions by holding Mexico accountable to its labor commitments. The projects focus on key USMCA priority sectors in Mexico that compete directly with U.S. businesses, where weak enforcement can undercut American jobs and wages. The goal is to strengthen enforcement and empower workers to report violations, including through the USMCA Rapid Response Mechanism (RRM).

The USMCA, negotiated under the first Trump administration and entered into force in July 2020, strengthened NAFTA's labor provisions with new enforcement mechanisms. The agreement passed with strong bipartisan congressional support (House: 385-41, Senate: 89-10), reflecting broad consensus on the need for enhanced labor protections. The agreement requires Mexico to adopt and maintain core labor standards as recognized by the International Labor Organization, including freedom of association and the right to collective bargaining. Mexico enacted comprehensive labor reforms in May 2019 that aligned with these commitments, creating independent labor courts and establishing procedures for democratic union elections.

The Rapid Response Mechanism is an innovative enforcement tool unique to the USMCA that allows expedited enforcement of workers' rights at specific facilities. As of September 2024, the U.S. had invoked the RRM at least 27 times at Mexican facilities across various industries including automotive, garments, mining, food manufacturing, and services. These cases had directly benefited over 36,000 workers through backpay, reinstatements, and other remedies.

Perspectives on the RRM's effectiveness vary among stakeholders. While U.S. officials and labor advocates point to successful remediation agreements, some analysts have raised concerns about the speed of enforcement, resource constraints in Mexican labor authorities, and whether the facility-specific approach adequately addresses systemic issues. Additionally, tensions have emerged between the U.S. and Mexican governments regarding the scope and use of the mechanism, with Mexican officials expressing concerns about potential interference with domestic sovereignty and the capacity to respond to increasing complaint volumes.

The timing of this funding announcement is significant as it comes ahead of the mandatory 2026 USMCA review. The agreement includes a built-in six-year review process that begins in July 2026, at which point parties must decide whether to extend the agreement for another 16 years or trigger annual reviews. Labor enforcement has emerged as a critical issue in advance of this review, with stakeholders calling for stronger mechanisms and expanded coverage.

However, challenges remain in implementing Mexico's labor reforms. While federal enforcement has made progress, state-level labor authorities often lack resources, expertise, and political will to proactively enforce labor laws. Small and medium-sized enterprises that are key to export supply chains have struggled to navigate the 2019 labor reform requirements. The legitimation process for collective bargaining agreements revealed that as of late 2023, only 30,526 of 139,000 contracts had met the new democratic standards, leaving over 100,000 contracts without effect.

Partners of the Americas, founded in 1964 under the Alliance for Progress, has over 30 years of experience implementing U.S. government-funded labor programs. The organization previously managed the Mexico Awareness Raising Project (MAP), which promoted information about Mexico's 2019 labor reform in key sectors including mining, auto assembly, auto parts, steel/aluminum, and electronics. Creative Associates International, founded in 1977, provides training and capacity-building programs designed to benefit American workers through improved labor standards abroad.

The $23.4 million investment represents part of ongoing U.S. efforts to support USMCA implementation. USMCA implementing legislation initially allocated $210 million to ILAB for USMCA-related activities, with $180 million for technical assistance projects over four years and $30 million for monitoring compliance over eight years. The Department of Labor has previously announced multiple funding opportunities targeting specific Mexican sectors and labor issues, including forced labor and child labor in agriculture.

Key Points

$23.4M in funding: DOL awards $15.4M to Partners of the Americas and $8M to Creative Associates International
USMCA enforcement focus: Projects target labor practices that suppress wages and give unfair trade advantages
Rapid Response Mechanism: Strengthens worker ability to report violations through USMCA's facility-specific enforcement tool
2026 review timing: Funding comes ahead of mandatory USMCA six-year review beginning July 2026
Priority sectors: Targets key industries that compete directly with U.S. businesses
Track record: As of September 2024, U.S. had invoked RRM at least 27 times, benefiting over 36,000 Mexican workers
Varying perspectives: While officials cite successful remediation, some analysts raise concerns about enforcement speed and resource constraints
Implementation challenges: State-level Mexican authorities often lack resources for proactive enforcement
Legitimation progress: As of late 2023, only 30,526 of 139,000 collective bargaining agreements had met new democratic standards