[CTC] Sources: Mexican labor legislation unlikely to pass by USMCA deadline

[Arthur Stamoulis]

Inside US Trade 

Sources: Mexican labor legislation unlikely to pass by USMCA deadline 
12/13/2018

Mexican legislation to establish labor reforms called for in the U.S.-Mexico-Canada Agreement is unlikely to be passed before a Jan. 1 deadline included in the pact, leaving sources and lawmakers questioning whether the timing of the deal’s entry into force might be impacted.

Key Democratic lawmakers have pinned their support for the pact on whether adequate labor reforms are implemented in Mexico – and can be enforced under USMCA. Last week, after a meeting with U.S. Trade Representative Robert Lighthizer, House Minority Leader Nancy Pelosi (D-CA) cited the Mexican legislation as a key issue for her caucus.

“As I reiterated to USTR Lighthizer, while there are positive things in this proposed trade agreement, it is just a list without real enforcement of the labor and environmental protections,” she said in a Dec. 6 statement <https://insidetrade.com/node/165200>. “We are also still waiting for Mexico to pass its promised law on the wages and working conditions of Mexican workers competing with American workers.”

An annex to USMCA’s labor chapter <https://insidetrade.com/sites/insidetrade.com/files/documents/2018/oct/23%20Labor.pdf> says Mexico must adopt legislation establishing, among other things, “(i) an independent entity for conciliation and union collective bargaining agreement registration and (ii) independent Labor Courts for the adjudication of labor disputes.”

The deal says the bill must be passed by Jan. 1, adding that “entry into force of the agreement may be delayed until such legislation becomes effective.”

The legislation must also enshrine an “effective system” for union leader election verification and require that the aforementioned independent entities verify collective bargaining agreements in order to meet the necessary legal standards, the pact states. A requirement that collective bargaining agreements must be struck via “exercise of a personal, free, and secret vote” should also be a part of the legislation, the annex states.

After reviewing a draft of the legislation under consideration in Mexico, one source said it was an “open question” whether the bill met all of the requirements included in labor annex. The legislation would implement constitutional labor reforms that were adopted by the Mexican government in February 2017.

The “even bigger question,” however, is whether the legislation will move by the Jan. 1 deadline, the source said, citing a rapidly approaching holiday recess. Also unclear is whether changes are still being made to the draft, the source added, noting that administrative formalities, such as a schedule for introduction and a committee meeting date, were still not set, and suggesting the process might “bleed over at least into January.”

“Is it still open to changes? Are we interpreting it right? The bottom line is there are a ton of open questions but I would say the smart money is probably on that this will take a little bit longer than the deadline,” the source said.

Another source said while the implementing legislation could be introduced any day in Mexico’s Congress, a vote likely would not be held until January.
President Andrés Manuel López Obrador’s party, known as the MORENA party, holds a majority in the Mexican Congress, which the source said was one reason for improvements to the legislation as compared to an implementing bill introduced earlier this year <https://insidetrade.com/node/162463> by the Partido Revolucionario Institucional. The PRI version of the implementing bill would have rolled back needed labor reforms by retaining the non-independent structure of labor arbitration boards; it also would not have prevented the implementation of so-called “protection contracts,” which are collective agreements signed between employer and unions without workers' consent. That bill was not approved <https://insidetrade.com/node/163000> by the Senate’s labor committee.

Sen. Sherrod Brown (D-OH) said on Wednesday that while he had not seen Mexico’s draft legislation, he had spoken with Lighthizer earlier that day about USMCA labor standards. Brown said he did not believe the deal was ready for a vote in Congress.

“We shouldn’t be voting on NAFTA 2.0 until we see what their labor law looks like that they promised,” Brown told Inside U.S. Trade. “I met with Lighthizer again today, and the labor chapter is generally good, [but] it’s not strong enough and there’s not nearly the enforcement mechanism there needs to be. And I told Lighthizer that it means getting back to the table <https://insidetrade.com/node/165256>. They’ve got to figure it out.”

Lighthizer on Sunday said he envisioned a USMCA vote would be held “within the next few months.” He has long maintained a significant number of Democrats will back the pact.

Rep. Sander Levin (D-MI), who is retiring, said his office is reviewing the draft Mexican legislation. He added that a Democratic-led House likely would halt USMCA's passage if labor enforcement wasn't significantly bolstered.

“We are waiting for a translation but also more of an interpretation because, I think at this point, we are a long way from having an effective way to address the basic issue,” he told Inside U.S. Trade, adding he didn’t think it was “ever likely” that the legislation would be completed by the end of the year.

“Their Congress isn’t so different from ours. It’s one thing to introduce something and it’s another thing to pass it. And there’s going to be, I think, considerable resistance to any basic changes. And so, I think everybody – Mexico and our administration – needs to face up to the basic reality and that is Mexico has this … unique structure that leaves workers out in the cold making a couple bucks an hour of take-home pay. As long as that isn’t addressed effectively, I don’t think the NAFTA reconfigure can pass because it will feel, in reality, like ‘here we go again,’” he said.

Newly elected lawmakers, Levin continued, are likely to resist voting for USMCA without enforceable labor standards and promises from Mexico.

“I think the election has intensified the need to face up to the issue because I don’t think many of the new members – they are not going to vote for something that doesn’t really assure change,” he said. “And I’ve talked to [Rep. Richard Neal (D-MA)] and [Rep. Bill Pascrell (D-NJ)] just today again and I am persuaded that this is the critical issue that needs to be confronted.”

Neal is expected to chair the House Ways & Means Committee in the 116th Congress, while Pascrell is a leading candidate to take over as chairman of the trade subcommittee. – Isabelle Hoagland (ihoagland at iwpnews.com <mailto:ihoagland at iwpnews.com>)

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826




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