[CTC] Mexican Lawmakers Approve Pro-Labor Changes

[Arthur Stamoulis]

https://www.wsj.com/articles/mexican-lawmakers-approve-pro-labor-changes-11555021083
Mexican Lawmakers Approve Pro-Labor Changes
New bill clears obstacle to ratifying U.S.-Mexico-Canada Agreement
 
By Robbie Whelan and Juan Montes
Updated April 11, 2019 6:49 p.m. ET

MEXICO CITY—Mexico’s lower house passed a landmark labor reform on Thursday that empowers unions to bargain more effectively on behalf of workers and clears one of the last obstacles to ratifying a deal signed last year to replace the North American Free Trade Agreement <https://www.wsj.com/articles/u-s-mexico-and-canada-sign-pact-to-replace-nafta-1543581929?mod=article_inline>.
Lawmakers approved 417-1 the enabling legislation of a 2017 constitutional change giving workers the right to elect union leaders in direct elections with secret ballots, among other pro-labor changes. Lawmakers from President Andrés Manuel López Obrador’s ruling Morena party and Mexico’s main opposition parties voted in favor.

The bill now goes to the Senate, which plans to approve it by the end of April, said Ricardo Monreal, the majority leader in Mexico’s Senate. Mr. López Obrador’s Morena party and its allies have an outright majority in both houses of congress, all but guaranteeing passage.

The overhaul is meant to comply with labor requirements laid out in the U.S.-Mexico-Canada Agreement, or USMCA, a trade deal signed by all three countries last November after more than a year of negotiations and a signature achievement of the Trump administration.

The new law is aimed at ending the practice of “protection unions,” in which labor leaders close to management ratify contracts without consent from the workers. The AFL-CIO and others say this practice has depressed wages in Mexico, costing American workers millions of jobs and hurting their competitiveness.

The bill comes after intense pressure from trade unions in the U.S. and Canada, which vowed to block the ratification of the USMCA unless Mexico began implementing its promised legal changes. Mexico had agreed to pass the legislation by the end of 2018, but it didn’t happen, leading some labor activists to question whether Mexico’s new government was getting cold feet about the changes.

Mario Delgado, the head of Mr. López Obrador’s party at the lower house, said the labor bill fulfills all the requirements demanded by the U.S. government. “Mexico is honoring its commitment. This paves the way for the ratification of the trade deal,” he said.

The bill includes a table comparing the commitments made by Mexico in the agreement and the specific articles of the bill to meet those commitments.

Earlier this month, Richard Trumka, president of the AFL-CIO, the largest federation of labor unions in the U.S., made it clear the group wouldn’t support the Nafta replacement deal until Mexico enacted the overhaul.

Last week, House Speaker Nancy Pelosi also threatened to hold up a vote on the new trade deal unless Mexico showed it would implement the changes.

The USMCA seeks to curb Mexico’s labor advantage by strengthening worker protections and bringing Mexican wages more in line with the rest of North America.

“We lost a million jobs to Nafta, and the wage gap…we’re never going to change that unless Mexican workers have the right to organize actual unions that do actual bargaining,” said Benjamin Davis, director of international affairs for the United Steelworkers, an AFL-CIO member.

The new government of Mr. López Obrador, which took office in December, had already signaled that it wanted to strengthen worker protections. But U.S. labor groups objected to earlier versions of the legislation primarily because a draft submitted in January didn’t mandate direct, free elections of union leadership.

They also wanted to streamline the process of organizing union elections in Mexico and put dispute resolution fully under a newly created autonomous agency rather than having employers, workers and government representatives on dispute-resolution panels. The agency will also register all labor contracts in a transparent platform.

Existing labor contracts will have to be “legitimized” in secret union votes, according to the bill.

Some in the Mexican government worry the changes might increase labor conflict, a top government official said. The recent strikes in Matamoros, a border city where some 90 assembly plants accepted higher wages after a wave of strikes <https://www.wsj.com/articles/strikes-at-low-wage-plants-signal-revival-of-labor-demands-in-mexico-11550087620?mod=article_inline>, were seen by some government officials as a warning.
But last week, Mr. López Obrador said his government was committed to implement in full the trade deal agreed between Mexico, the U.S. and Canada last November.

Mexico’s ratification of the USMCA would likely happen in the second half of the year, said Mr. Monreal, the senator, in parallel to U.S. and Canada’s congresses.

Both Canada and Mexico are demanding the U.S. to lift tariffs on steel and aluminium. The deal in Mexico only faces an up-or-down vote in the Senate.

Write to Robbie Whelan at robbie.whelan at wsj.com <mailto:robbie.whelan at wsj.com> and Juan Montes at juan.montes at wsj.com <mailto:juan.montes at wsj.com>

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826




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