AMLO insists on banning outsourcing after agreement with business sector

The President also referred to the agreement that the INE approved on overrepresentation in the lower house. Photo: (Yucatán a la mano)

Mexico’s government said it reached a deal with union and business leaders on a controversial bill to ban outsourcing in a move that seeks to close tax loopholes.

The group agreed during a meeting at the National Palace in Mexico City on Monday to forbid the outsourcing of personnel to third-party firms, except for specialized work outside a company’s main economic activity, and to implement a new profit sharing model, the labor ministry said in a statement.

President Andres Manuel Lopez Obrador said the “important” deal was reached after Monday’s encounter among union heads, business chamber leaders and top lawmakers, without providing details. Business lobby CCE said in a separate statement that profit sharing will be limited to avoid “possible distortions in capital-intensive companies.

Outsourcing was one of several friction points between the government and Mexico’s business elite, who have slowed investments after interventionist policy moves by Lopez Obrador such as the cancellation of a new airport in Mexico City and, more recently, legislative measures aimed at rolling back some market energy reforms.