From Race to the Bottom to Worker Power on the Road
A breakthrough organizing win from Rethink Trade points to a better way to enforce trade rules across borders.
By Daniel Rangel, Research Director, Rethink Trade
Earlier this winter, a groundbreaking access agreement was signed between a scrappy Mexican labor union and a major trucking company hauling millions of dollars’ worth of Hyundai products across the Mexico–U.S. border. The deal was made possible by a labor enforcement complaint that we at Rethink Trade filed with the Mexican truck drivers’ union, and it marks a major victory for a five-year movement seeking to transform a sector long plagued by labor abuses and corporate misconduct. Less noted at the time, but equally as important, it also offers up a promising new way to curb corporations’ demands that Mexican truck drivers illegally handle fully domestic U.S. runs.
For decades, corporations have leveraged the billions of dollars in cross-border trade between the United States and Mexico to not just underpay Mexican truck drivers, but to pressure them into engaging in what’s called cabotage—that is, when truckers registered in one country handle fully domestic shipments in another. This is prohibited under U.S. law, but bottom-line business incentives and relative powerlessness of low-paid Mexican drivers often lead companies to ignore the regulations. Union contracts with stronger protections for workers might well change the underlying dynamic.
The 2,000-mile land border between the United States and Mexico and the massive trading relationship that connects the two countries mean that nearly 6 million commercial trucks enter the United States from Mexico each year. On any given day, roughly 16,300 truck drivers cross the border hauling auto parts, electronics, produce, and many other goods destined for the U.S. market.
Under the U.S.–Mexico–Canada Agreement (USMCA), drivers with a commercial license and a valid U.S. visa may cross the border and transport goods to destinations anywhere in the United States. They may also pick up cargo in the United States for delivery abroad. What they cannot do, however, is engage in domestic trucking—in other words, they cannot transport cargo between two points within the United States.
While this system appears straightforward and efficient, the imbalance in the U.S.–Mexico trade relationship leads to incentives to break the rules. Far more Mexican goods move north than U.S. goods move south. In 2025, Mexico exported $873 billion in goods to the United States, while U.S. exports to Mexico totaled $338 billion—resulting in a bilateral goods trade deficit of roughly $535 billion from the U.S. perspective.
That imbalance is widely viewed as an issue linked to the broader race to the bottom in wages and labor standards set in motion under NAFTA, the USMCA’s predecessor. But there is another problem that is less widely understood – and that brings us to the issue of cabotage.
A large bilateral trade deficit means that more truckloads travel from Mexico into the United States than in the opposite direction. As a result, when a trucking company sends a shipment from Monterrey to Chicago, it can be difficult to find cargo moving from the Midwest back to Mexico. In practice, this leaves trucks and drivers stranded in U.S. territory for days, waiting for a return load that makes the trip south economically worthwhile.
As a result, trucking companies are often tempted to require drivers to undertake domestic trips within the United States to reposition trucks efficiently and make the eventual return to Mexico more profitable. Compounding their incentive to push truckers to break the law: it’s the drivers, not the trucking companies, that bear the brunt of the risk when cabotage laws are violated. If Mexican truckers are stopped by U.S. authorities while engaging in domestic transport, they could be arrested and lose their visas—and, consequently, their livelihoods.
But refusing management’s orders is not without consequence: drivers may be left stranded for days without travel expenses or, in many cases, fired and blacklisted within the industry. So many take the risk and hope they won’t get caught. U.S. officials and industry stakeholders have long complained about this abuse, yet it has persisted. The American Trucking Associations (ATA) has called for stronger enforcement against illegal cabotage, including meaningful penalties—such as fines, disqualification, or loss of operating authority—for carriers that repeatedly violate the rules.
The problem is that enforcement has historically fallen disproportionately on drivers rather than the corporations directing the conduct. While holding companies accountable must be part of the solution, empowering workers to defend themselves through collective action offers a more structural and lasting remedy.
This brings us back to the groundbreaking access agreement signed between Sindicato de Transportistas de las Cadenas de Suministro (SITRABICS) and Transportista Kamu S. de R.L., a Hyundai trucking services supplier. (An access agreement, to be clear, grants union organizers access to workers and formally recognizes the union’s right to represent employees at the company on an individual basis. It is not a preliminary collective bargaining agreement (CBA). It’s an agreement that facilitates organizing so that the union can comply with the requirements of the law to eventually have a CBA.)
When a group of truck drivers working for this company and several affiliated firms began organizing in 2021, they did so, in large part, in response to a range of abuses, including illegal cabotage, wage irregularities, inadequate health coverage during international trips, and pay far below U.S. standards. (At the time, while a U.S. truck driver earned roughly 60 cents per mile, a Mexican driver hauling goods along the same routes earned just 32 cents per mile – hence the temptation by American firms to illegally use the Mexican truckers on fully domestic runs.)
Management responded to workers’ demands, as most corporations do: they fired the union leaders and launched a union-busting campaign, ensuring that the remaining workers did not continue the organizing drive. The fired workers filed reinstatement lawsuits in Mexican courts, but real leverage only came after a complaint was submitted under the USMCA’s Rapid Response Mechanism (RRM). The RRM allows unions, groups of workers, and other groups to target specific workplaces that deny freedom of association and collective bargaining rights. If violations are confirmed and not corrected, trade penalties can follow—including the loss of tariff benefits or even access to export markets.
The union RRM complaint—which we filed along with SITRABICS—forced the company to confront the allegations and, ultimately, remedy the abuses. In addition to signing the access agreement, the company agreed to reinstate and pay back wages to two union leaders who have returned to the workplace and now hold union licenses to organize their coworkers. Moreover, SITRABICS’s secretary general decided to pass on reinstatement and instead get severance in order to have more time to organize more cross-border trucking facilities.
The RRM is far from perfect, but its focus on specific workplaces—and the trade penalties it can trigger—has fueled dozens of union campaigns in Mexico. In the case against Transportista Kamu, authorities concluded that a formal union access agreement was necessary to repair the damage caused by the company’s labor abuse.
Among SITRABICS major goals is to narrow the wage gap with U.S. drivers and defend its members when they are pressured to engage in cabotage. A single driver stranded in a remote part of the United States is highly vulnerable to management’s demands to take on domestic trips—even if doing so puts their visa at risk. But when drivers are backed by an independent union—and, ideally, protected by the collective guarantees of a union contract—they can push back. Closing the wage gap also undercuts the labor arbitrage that currently incentivizes these abusive practices.
It is time to think more creatively and consider whether promoting cross-border labor solidarity and supporting union organizing in Mexico could offer a more effective strategy to curb these practices. That is why SITRABICS’s first agreement with a major transportation company is so significant. It sets a precedent for broader organizing and stronger protections for drivers across the sector. Importantly, this victory would not have been possible without the intervention of both the U.S. and Mexican governments and their willingness to require meaningful remediation from the company. This is what coordinated enforcement should look like: governments working together to protect workers while safeguarding fair competition.