[CTC] Seade: NAFTA-compliant labor legislation submitted to Mexico's Congress this week

Fri Apr 5 05:32:08 PDT 2019

Seade: USMCA-compliant labor legislation submitted to Mexico's Congress this week
INSIDE US TRADE
April 04, 2019 at 4:37 PM

New labor legislation designed to comply with requirements outlined in the U.S.-Mexico-Canada Agreement was submitted to the Mexican Chamber of Deputies this week, Mexico's foreign affairs under secretary for North America, Jesús Seade, said on Thursday.

The new legislation submitted on April 2 -- “99 percent” of which resembles a December 2018 bill <https://insidetrade.com/node/166112> put together by the ruling Morena party with the assistance of the Mexican labor secretariat -- contains “certain important adjustments,” Seade told reporters in Washington, DC.

Seade and Mexican Ambassador to the U.S. Martha Bárcena convened the press conference after meeting with the pro-trade New Democrat Coalition and the Congressional Hispanic Caucus.

“The legislation was submitted in December and then frozen for a while because there were some technicalities that we had to revise and consider very carefully,” Seade said. “This was done in a thorough way and completed two days ago … and the legislation has been sent to Congress for passing. The expectation is that it will be done this month.”

Mexican President Andrés Manuel López Obrador said on Thursday that his country “must approve a labor reform in accordance with the agreements that were established” in the deal, according to a translation. Speaking at the Palacio Nacional <https://www.adn40.mx/noticia/cambio-de-poder/nota/2019-04-04-07-32/debe-de-aprobarse-una-reforma-laboral-apegada-a-acuerdos-del-t-mec/>, AMLO said “We don’t want to give any excuse for reopening the treaty negotiations.”

Sources have described what they consider be gaps in the December legislation, particularly language addressing so-called protection contracts. Those agreements are signed between companies and company-dominated unions without workers' consent.

“This practice basically continues and on the ground nothing has really changed, even with the passing of constitutional reform in 2017 -- it's all sort of waiting on this implementing legislation and then the creation of new administrative structures. But if you don’t have that requirement in there that the workers have to see the contract and get to vote on their contract, then you don't overcome the scourge of protection contracts. So, that's a big concern,” a U.S. union representative with knowledge of Mexican labor issues recently told Inside U.S. Trade.

But Seade asserted that the new legislation addresses that issue by including a four-year sunset review to ensure no new protection contracts have been inked and that past agreements have been eradicated.

“So, within that span, all of them have to go through that … system,” he said, adding that now that the law is under consideration is will be easier to make progress toward advancing USMCA. “The main part of the agreement is the labor chapter. It is far-reaching,” he said, contending he is “not uncomfortable” with the amount of attention the issue has received because of how important it is.

The USMCA labor annex says Mexico must adopt legislation in accordance with its constitution, “which provides that, in future revisions to address salary and work conditions, all existing collective bargaining agreements shall include a requirement for majority support, through the exercise of personal, free, and secret vote of the workers covered by those collective bargaining agreements.”

Additionally, “That legislation shall also provide that all existing collective bargaining agreements shall be revised at least once during the four years after the legislation goes into effect. The legislation shall not imply the termination of any existing collective bargaining agreement as a consequence of the expiration of the term indicated in this paragraph, as long as a majority of the workers covered by the collective bargaining agreement demonstrate support for such agreement through a personal, free, and secret vote,” the annex states.

President Trump on Thursday backed off a threat to immediately close the U.S.-Mexico border but threatened to impose tariffs <https://insidetrade.com/node/166196> on Mexican cars if the country did not stop illegal immigration and the flow of drugs into the U.S.

But Seade pointed to a side letter <https://insidetrade.com/sites/insidetrade.com/files/documents/2018/oct/US%20Mexico%20232%20Side%20Letter.pdf> issued with the text of USMCA as assurance that Mexico “is not concerned.” In that side letter, the U.S. agreed to exclude 2.6 million autos as well as all light trucks from Mexico from potential Section 232 tariffs.

“Mexico may have recourse to the dispute settlement procedures in Chapter 20 (Institutional Arrangements and Dispute Settlement Procedures) of the NAFTA 1994 or the dispute settlement chapter of the USMCA, whichever is in effect at the time a dispute arises, only with respect to whether the United States has excluded the number of passenger vehicles and light trucks, and the value of auto parts as set out above, from a measure taken pursuant to section 232 of the Trade Expansion Act of 1962, as amended,” the side letter states.

A more detailed side letter <https://ustr.gov/sites/default/files/files/agreements/FTA/USMCA/Text/MX-US_Side_Letter_on_232.pdf> issued at the deal’s signing on Nov. 30 in Buenos Aires says the U.S. “shall not adopt or maintain a measure imposing tariffs or import restrictions on those goods of Mexico, for at least 60 days after the imposition of a measure” and that the specified auto imports and light trucks will be excluded from any measures following that period.

For those reasons, Seade said: “We are not concerned: What has been agreed on the car industry is firm, is not under threat and we are sticking to that.”

Bárcena, meanwhile, said Mexico looked forward to continuing engagement with the U.S. on ways to address the “root causes” of immigration issues, addressing a slew of questions on Trump’s threat earlier this week to close the southern border.

“What I want to underline is that we want to cooperate. We want to continue to say to everybody that Mexico is willing to have a good relationship, that we need to work with the U.S. [and] there are certain challenges and one of them is migration. If we don’t cooperate and if we don’t see it from a regional basis, we will not address the root causes of migration,” she said on Thursday. -- Isabelle Hoagland (ihoagland at iwpnews.com <mailto:ihoagland at iwpnews.com>)

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826

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