Mexico outlines labour reforms amid USMCA trade

Mexico has outlined the steps the country is taking to implement a number of labour reforms as part of its efforts to ensure the successful ratification of the new United States-Mexico-Canada (USMCA) trade agreement.

In a letter to Richard Neal (D-MA), chairman of the House Ways and Means Committee, Mexican President Andrés Manuel López Obrador said the labour reforms that are currently underway, and whose implementation will be complete in four years under a new law, will “put Mexico at the forefront of labour rights in Latin America and will guarantee union democracy and the rights of union members as has not been done in more than three decades.”

The letter comes on the heels of Neal’s Congressional Delegation to Mexico City earlier this month, and follows that of Richard Trumka, president of the American Federation of Labour and Congress of Industrial Organisations (AFL-CIO), who met with Mexican counterparts and President López Obrador in September.

The NAFTA-replacement USMCA was agreed with Canada and Mexico on 30 September 2018 and was officially signed by the presidents of the three countries on 30 November 2018. But while the Trump Administration is working to ratify the trade pact in 2019, upcoming election cycles mean it is unlikely to happen this year.

Strong labour commitments are a key component in the USMCA. The US has repeatedly griped about Mexico’s labour conditions and has reiterated calls for provisions for workers to form trade unions as well as for higher wages, saying low wages have enabled the country to compete unfairly with the US and Canada.

In May, Mexico announced a complete overhaul of its labour relations after the Mexican Senate approved a new labour bill. Under the reforms, workers will be free to choose which union to join and will be able to elect their union leaders through an individual, free, secret and direct ballot.

Now, López Obrador says “as a further sign of my government’s interest in ratification of the USMCA” he has called on the Mexican government to take three specific actions.

These include seeking an increase the initial amount budgeted to implement the labour reforms approved last May.

He has also outlined a “three-stage timetable” for transitioning to a new system of labour justice. The first stage will begin on 1 October 2020 and includes ten states, while the second will begin on 1 October 2021 with respect to 11 more states, and the last stage is due to begin on 1 May 2022 for the remaining 11 states.

“The reform is being phased in gradually because it represents a far-reaching transformation that will result in benefits for Mexico’s workers,” he said.

Meanwhile, to ensure, compliance, López Obrador has instructed the relevant authorities to “engage in a frontal attack on impunity in labour issues, especially those related to the freedoms of labor unions”.

He also highlighted recent increases in the minimum wage as well as plans to continue increasing wages by at least two percentage points above the inflation rate each year.

In a statement upon reviewing the letter, chairman Neal said: “I’m very pleased with Mexico’s demonstration of good faith and the details President López Obrador has shared regarding Mexico’s plans and strategy for implementation. Given the high labour and enforcement standards Democrats require from the new NAFTA agreement, I am eager to receive further details from USTR regarding the Trump Administration’s preparation to meet our priorities.”

By Beth Wright