Risk of sanctions to GM, Silao, if the process is not satisfactory to the US

Note published on August 17 in El Financiero, Economía [Economy] Section by Felipe Gazcón.
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Should the North American unions and the government of the United States be dissatisfied with the process for the remediation of the voting process for the legitimation of the Collective Bargaining Agreement, the Silao General Motors Company could suffer sanctions by the North American trade authorities, warned Beatriz Leycegui, a partner at SAI Derecho y Economía.

Also a former Sub-secretary of Foreign Trade, she explained that the sanction could consist in denying GM of Silao the right to preferential treatment in exports to the United States. In that case, the zero tariff of the Treaty would no longer apply to them and exports from GM would not be recognized as originated within the USMCA area and they would have to pay the tariffs paid by countries outside the Treaty.

“And should there be recidivism, they could even deny access to their exports”, she explained.

“It is a State-State mechanism, the Office of the United States Trade Representative (USTR) would be the one presenting the case; if the panel, under the quick mechanism resolves that there is a violation, then those are the sanctions that the United States government could impose on those products coming from that plant”, she underlined.

Workers at the GM plant in Silao will participate today and tomorrow in the process for legitimating their collective bargaining agreement. Experts considered that the United States and Canadian unions will have little margin for complaints in regard to the results of the vote for legitimating the collective bargaining agreement.

“With so many national and international observers that will be present … I believe that the minimum formalities associated with the voting process will be complied with. I believe that it will be very hard to argue that there was coercion in the voting process”, said Óscar de la Vega, of the De la Vega & Martínez Rojas Abogados Firm.

Eusebio Hidalgo, executive director of the legal Firm Ansley Consultores, considered that the surveillance scheme is sufficiently robust to prevent any deviations.