[CTC] Labor reform debate heats up in Mexican Congress; NAFTA compliance in question

Fri Mar 22 12:13:25 PDT 2019

Labor reform debate heats up in Mexican Congress; USMCA compliance in question
Inside US Trade
March 22, 2019 at 1:46 PM

As Mexico's government works to implement a package of labor reforms called for in the U.S.-Canada-Mexico Agreement, several different proposals are under consideration in the Mexican Congress -- and opposition in the business community is mounting.

The legislation viewed as the “official” bill put together by the ruling Morena party, which was introduced on Jan. 3, was drafted with assistance from the Mexican labor secretariat. Inside U.S. Trade first reported on the December 2018 draft of the legislation in January.

Another bill was introduced by deputies of the Morena party on Jan. 15. That legislation is supported by the National Union of Workers (UNT), which has worked closely with the AFL-CIO on several labor petitions, including a Jan. 2018 complaint opposing last year's constitutional reform implementing legislation introduced by the Partido Revolucionario Institucional.

Two other bills, one introduced by the PRI on Jan. 23 and another by a deputy from the Social Encounter Party (PES) -- characterized as a small right-wing faction of President Andrés Manuel López Obrador's party -- could roll back the labor reforms called for in USMCA. Language in those bills is aimed at retaining the non-independent structure or labor arbitration boards; they would not prevent the implementation of so-called protection contracts. Those agreements are signed between companies and company-dominated unions without workers' consent.

A U.S. union representative with knowledge of Mexican labor issues said it was unlikely that either of those proposals ended up in the final bill because neither party backing them is in the majority -- and “because they are so far out of whack with the labor annex that it would be a complete retreat from what the past government ... negotiated into the agreement.”

However, the proposals backed by worker-controlled unions in Mexico and the labor secretariat fall short of the demands called for in USMCA in three key areas, the union representative said.

An annex to USMCA's labor chapter says Mexico must adopt legislation establishing “an independent entity for conciliation and union collective bargaining agreement registration” and “independent Labor Courts for the adjudication of labor disputes,” among other requirements.

“There are some big gaps between what the [USMCA] annex requires and what is in the legislation. This is before we even get to issues of enforcement,” the union representative added. Many Democrats are concerned that Mexico will not fully implement its labor obligations and have said the deal includes an inadequate enforcement mechanism to hold the country accountable.

One “gap” involves what the union representative called core U.S. concerns -- protection contracts, which have not been adequately addressed in any of the proposals.

“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,” the union representative asserted.

In addition to the contracts issue, the bills under consideration are sparking concern over rules for representation during union elections, with the source saying that “it's almost impossible to get a fair election.” On the last day of the Peña Nieto administration, a corporate-backed coalition boycotted a union vote, causing a labor arbitration board to suspend the vote entirely.

“Since then, [the union] hasn't had a new one. That’s kind of the reality on the ground and that really hasn’t changed because they are all waiting for the legislation, but it underscores why the election rules along with the contract votes are so important,” the union representative said.

The final key concern, the union representative continued, is whether “the institute that is going to handle the contract registration process really be independent and not tripartite."

As AFL-CIO and the UNT noted in their 2018 complaint to the Labor Department under the North American Agreement on Labor Cooperation, once protection contracts are signed, “it is extremely difficult to form another union in the workplace and sign a new, legitimate collective bargaining agreement.”

“When workers do attempt to rid themselves of an employer-dominated union through a recuento election, the employer, the employer-dominated union and the government collude to intimidate the workers through delays, verbal threats, physical violence and dismissal. The elections are often set up to ensure that the democratic union loses the election,” the complaint states.

If the government coalition “sticks together,” passing adequate labor reform shouldn't be a problem, the union representative said. “It seems like that would be unlikely simply because the government has enough votes to pass this legislation; they have an absolute majority in both Houses.”

But pressure from the private sector is growing, the union representative said.

“There is a lot of the business pressure, there is a lot of money.... So, you can come up with scenarios by which the government would have difficulty maintaining the majority or would have to make significant concessions in order to get it,” the union representative contended.

Corporate pressure “is coming on pretty heavy,” the union representative added, “and we are not even that far into the discussion because it still has to go through the House and then get to the Senate, where there will undoubtedly be some heavy debate as well.”

The Mexican government “has not put in a proposal that was strong enough to begin with and now is in a situation where it could be further eroded by some of the internal pressure or deal-making,” the source added.

Last week, Mexican Senator Napoleón Gómez, chairman of the Senate Labor Committee, told U.S. labor leaders that the government's reform proposal had to be bulked up -- and noted efforts from “corporate enemies” seeking to undermine the legislation.

“Even the government's reform proposal falls short of requiring that workers have the right to ratify their contracts, as required by the USMCA labor annex,” Gómez said during the AFL-CIO's executive council meeting in New Orleans. “And our corporate enemies and their political allies are working hard to weaken the reform legislation even further. That's why democratic unions in Mexico, the U.S. and Canada must fight back now.”

Gómez, who is vice chairman of the Senate economic committee and a member of its energy, mining and foreign relations committees, pushed for three demands the groups must seek in any new legislation from Mexico. Among them was that the reform law “fully comply” with USMCA's labor annex and a requirement that companies must certify compliance with labor rules to export goods under trade deals.

“Companies already have to certify that they comply with trade rules to export under NAFTA. Why not make them comply with labor rights as well?” he asked. Unions in Mexico must also be strengthened and employers “violating workers' rights” should be punished, the senator added.

Last week, the U.S. trade officials met with Mexican Economy Minister Graciela Marquez and Labor Minister Luisa María Alcalde Luján to discuss USMCA and Section 232 issues.

One source told Inside U.S. Trade that the “general sense” following the meetings was that Mexico is moving in the right direction, adding the two sides discussed interpreting USMCA's labor annex in a manner consistent with the pending legislation. “What it comes down to is whether what Mexico will pass at the end of April will meet USTR's needs,” the source said, adding Mexico will pass something by the end of April. “Whether that is going to be sufficient for labor in the U.S. and ultimately Democrats remains to be seen.”

López Obrador met with White House adviser Jared Kushner this week in Mexico City, where the two discussed USMCA. The Mexican leader said at a press conference that the two countries “reaffirmed our commitment” to get the deal passed. He also said Mexico would like to “uphold the terms of the agreement to prevent any disagreement.” -- Isabelle Hoagland (ihoagland at iwpnews.com <mailto:ihoagland at iwpnews.com>)

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