Labor Department awards $23.4 million to strengthen labor enforcement in Mexico and support U.S. workers

Public information indicates that the two ILAB‑funded projects will not run direct factories themselves but will support Mexico’s institutions, employers, and workers in USMCA‑linked sectors. According to the Labor Department’s funding description for this line of work, typical activities include:

• Working with state labor authorities in Mexico to strengthen labor inspections and enforcement of existing labor laws and to engage proactively with employers and workers on unfair labor practices. • Providing compliance assistance, model policies, and training to companies—especially small and medium‑sized enterprises—to help them understand and comply with USMCA labor obligations (for example, freedom of association and collective bargaining rules). • Educating Mexican workers about their labor rights, helping them organize, build collective bargaining skills, and learn how to file complaints or seek remediation when their rights are violated, including through mechanisms like the USMCA Rapid Response Mechanism.

The Department’s news release and related funding announcement describe these as the core functions of the projects, but they do not publicly break down which specific tasks will be done by Partners of the Americas versus Creative Associates International or list detailed workplans for each award.

Available federal records show these are cooperative agreements (a type of grant) administered by the Bureau of International Labor Affairs, not procurement contracts.

• A related ILAB opportunity for this same line of work in Mexico (“Leveling the Field for American Workers in U.S.-Mexico Trade,” FOA‑ILAB‑25‑43) specifies the funding instrument as a cooperative agreement under Assistance Listing 17.401 (International Labor Programs), which is the same program cited for ILAB’s international labor‑rights projects. • A separate ILAB award record for Creative Associates’ Mexico trade‑sector labor project (“Enhancing Labor Rights in Mexico’s Trade Sectors,” award 26K75IL000028) explicitly lists the instrument as a cooperative agreement and identifies ILAB as the awarding agency. • The FOA for this portfolio sets a 54‑month project duration from the award date and describes it as a discretionary cooperative agreement; such ILAB awards normally require standard grant‑style narrative and financial reporting (at least annual progress reports and a final evaluation report), but the publicly available documents do not spell out line‑by‑line reporting deadlines for these specific awards.

The January 2026 press release itself describes the funding as “awarded” but does not use the terms grant, cooperative agreement, or contract or provide exact reporting schedules.

The Bureau of International Labor Affairs (ILAB) is a branch of the U.S. Department of Labor that handles international labor issues. Its core functions are to:

• Monitor and investigate labor conditions and abuses abroad, especially where they affect U.S. workers or trade. • Enforce labor provisions in U.S. trade agreements (like the USMCA) in coordination with the U.S. Trade Representative. • Manage international technical‑assistance projects, often through cooperative agreements with NGOs, to strengthen labor laws, enforcement, and workers’ rights in partner countries.

In practice, for projects in Mexico, ILAB designs and funds the project (through competitive cooperative agreements), oversees the implementing organizations (such as Partners of the Americas and Creative Associates), coordinates with Mexico’s government and U.S. embassies, and tracks whether the projects are helping Mexico meet its labor commitments under the USMCA. ILAB remains the U.S. government’s main point of contact on international labor issues with Mexico and Canada under the agreement.

The USMCA Rapid Response Mechanism (RRM) is a special enforcement tool that lets the U.S. (and, on paper, Canada and Mexico) respond quickly when workers at a specific factory or facility are being denied basic labor rights.

Key steps:

1. Complaint/petition – Unions, workers, or others can submit a petition alleging that a particular facility in Mexico is denying freedom of association or collective bargaining rights.
2. Initial review – ILAB and the Office of the U.S. Trade Representative review the petition. If they find “credible evidence” of a denial of rights, the U.S. formally asks Mexico to review the facility.
3. Mexico’s review – Mexico’s government investigates whether the facility is violating workers’ rights under Mexican law and reports back.
4. Panel process – If the U.S. is not satisfied with Mexico’s response, the case can go to a Rapid Response panel of independent labor experts that examines evidence and decides whether there is an ongoing denial of rights.
5. Targeted trade remedies – If the panel confirms a violation, the U.S. can suspend preferential tariff treatment, block imports, or impose other trade penalties on that individual facility’s exports, until the violations are remedied.

This facility‑specific, relatively fast process is intended to give workers a practical way to challenge violations in export‑oriented plants in Mexico and to deter companies from using anti‑union tactics to cut labor costs.

The January 2026 news release only says the projects will focus on “key USMCA priority sectors in Mexico that compete directly with U.S. businesses” and does not list the specific industries.

However, USMCA labor‑enforcement documents and ILAB reports show that U.S. enforcement under the Rapid Response Mechanism in Mexico has so far concentrated on a recurring set of export‑oriented sectors, including:

• Automotive and auto‑parts manufacturing (by far the largest share of Rapid Response cases). • Electrical/electronics and industrial manufacturing facilities. • Mining and metals processing. • Agriculture and food processing, including produce packing and related supply chains.

Because these are the sectors repeatedly identified by ILAB and USTR as “USMCA priority sectors” and as the main focus of existing Mexico labor‑rights enforcement work, they are the most likely targets of the new projects. But the Department of Labor has not yet published a definitive sector list tied specifically to the $23.4 million in awards described in the article.

The Department of Labor’s public documents do not provide a detailed, project‑specific measurement framework for these awards, but the related funding announcement and ILAB mission statements indicate how success is generally assessed.

According to the FOA for ILAB’s Mexico “Leveling the Field for American Workers in U.S.-Mexico Trade” project, the overarching goal is to reduce wage suppression and unfair labor practices in key Mexican trade sectors so U.S. workers can compete on a “level playing field.” This implies tracking, at minimum:

• Enforcement outputs in Mexico: number and quality of labor inspections, investigations, sanctions, and remediation actions in targeted sectors. • Employer behavior: uptake of compliance programs, adoption of policies aligned with USMCA labor obligations, and reductions in documented unfair labor practices. • Worker outcomes: increased knowledge of labor rights, more effective use of complaint channels (including RRM petitions), and evidence of improved wages and working conditions in the sectors covered. • USMCA enforcement activity: use of the Rapid Response Mechanism and other USMCA tools, which ILAB and USTR track through published RRM case statistics.

ILAB’s broader mandate is to increase American job and wage growth by combating abusive labor practices abroad that undercut U.S. workers, so project evaluations typically examine whether labor‑rights improvements in partner countries reduce the use of low‑wage, anti‑union practices in export industries that compete directly with U.S. firms. No numeric targets specific to the $23.4 million projects are publicly available.

Neither the January 2026 news release nor publicly posted grant documents state that Mexico’s government or private firms must adopt specific new laws or policies as a formal condition of receiving these U.S.‑funded projects.

Instead, the structure is:

• ILAB funds U.S. and international nonprofits (like Partners of the Americas and Creative Associates) through cooperative agreements to provide technical assistance in Mexico. • The related ILAB funding announcement describes activities such as supporting state labor authorities to enforce existing laws more effectively, helping employers comply with current USMCA labor obligations, and educating workers on how to use existing complaint and enforcement mechanisms. • Separately, under the USMCA itself and its Rapid Response Mechanism, Mexico is already legally obligated to maintain and enforce certain labor standards; if it fails, the U.S. can bring cases and impose trade remedies on non‑compliant facilities, regardless of these technical‑assistance projects.

So while the projects are designed to encourage and support stronger enforcement and better employer practices in Mexico, there is no public indication that the grants themselves are conditioned on Mexico enacting particular new policy or enforcement changes beyond those it has already committed to under the USMCA.