[CTC] U.S. labor panel: Mexico failing to live up to USMCA commitments

Wed Oct 8 09:09:43 PDT 2025

*Inside US Trade article and UAW release below...*

*U.S. labor panel: Mexico failing to live up to USMCA commitments*

Inside US Trade

By Jason Asenso | October 7, 2025

Mexico has failed to live up to several of its U.S.-Mexico-Canada Agreement
labor commitments, the Independent Mexico Labor Expert Board says in a new
report.

The labor board, created by USMCA implementing legislation to report on the
progress of Mexico's labor reforms, on Monday sent its latest *report*
<https://insidetrade.com/sites/insidetrade.com/files/documents/2025/oct/wto2025_0847a.pdf>
to
Congress highlighting several ways in which it says Mexico has failed to
adhere to USMCA pledges to guarantee and support workers’ rights. The
panel *previously
raised concerns*
<https://www.worldtradelaw.net/document.php?id=usmca/IMLEBReport-20230320FINAL.pdf&mode=download>
about
Mexico’s implementation of its labor commitments under USMCA but had not
before concluded that the country was not in compliance.

“If the purpose of USMCA, and the related 2019 Mexican Labor Law reform,
was to democratize the world of work in Mexico, then independent,
democratic unions are essential to promote the political process of
democratization and to fight inequality in the country,” the report says.

But the labor landscape in Mexico falls far short of that goal, as
described by the board.

The report says Mexico has insufficiently addressed violence against union
organizers and has not sanctioned companies that violate labor laws, among
other “repeated failures” to “fully implement and abide by its commitments”
under USMCA.

“Violence in the workplace in Mexico remains commonplace and systemic” and
the government’s failure to address such violence effectively “undermines
the rule of law and gives employers a tool to suppress wages,” the report
says.

Moreover, USMCA’s Labor Chapter directs the Mexican government to
“effectively address incidents of violence,” it says, citing the agreement.
“Not investigating and prosecuting these crimes emboldens perpetrators to
commit future actions, sending a chilling message to workers, families, and
neighboring communities that this is what can await them if they speak out
against a powerful employer or protection union.”

Mexico’s refusal to sanction companies that violate labor rights also
constitutes a failure to adhere to its USMCA commitments, the labor board
argues. The Mexican Federal Center for Conciliation and Labor
Registration’s “failure to impose sanctions” in response to labor
violations – even though USMCA “explicitly” authorizes it to impose
penalties – represents a key challenge in addressing workers’ rights, it
adds.

The center, established in 2020, has declined to impose sanctions,
“believing that its authority to do so is not clear in the law.” The center
also has refused to impose sanctions in response to labor cases initiated
by the U.S. via the USMCA rapid-response mechanism despite U.S. and Mexican
authorities’ agreements that violations occurred and that sanctions were a
sufficient response, the report adds.

“The combination of the failure to impose sanctions on violators and the
failure to protect workers from violence creates an environment of impunity
in which facilities may judge that they can violate workers’ rights without
consequences,” it says.

*Though the labor board notes several areas of progress, such as
“unprecedented increases in the minimum wage” and growth in the number of
Mexican workers represented by unions*, the report says “significant
challenges remain in administering the new labor relations regime and
ensuring workers’ ability to exercise their rights across all sectors and
employers.”

Such challenges include the center’s budget shortfalls, the report
continues.

Facing significant budgetary constraints, the Mexican government last year *cut
the center’s budget* <https://insidetrade.com/node/183593> by more than 30
percent.

The U.S.’ recent move, meanwhile, to *eliminate grants*
<https://insidetrade.com/node/183280> overseen by the Labor Department’s
International Labor Affairs Bureau, which provides labor education and
legal assistance to democratic unions, alongside the loss of many labor
judges due to judicial elections, also hinders progress, the report reads.

“Without these support structures, given the broader failure of the Mexican
government to fully implement its commitments under the USMCA, the
opportunity for Mexican workers to exercise their fundamental rights to
freedom of association and collective bargaining is severely limited,
effectively rendering Mexico not in compliance with its labor obligations
under USMCA,” it states.

The report also outlines several recommendations for Mexico and the U.S. to
strengthen USMCA’s labor provisions, including a call for an “action plan”
to address labor violations ahead of the 2026 USMCA review. USMCA parties
next year will meet to renew and propose changes to the trilateral pact. If
the sides agree to extend the deal, they can do so for another 16 years; If
not, they can annually negotiate new terms for a decade before USMCA lapses.

The report calls on the U.S. to initiate consultations with Mexico to
“identify and correct its failure to comply with its labor commitments
under the USMCA, especially but not limited to ensuring that workers are
able to organize free and independent unions free from coercion and
employer intimidation, and to agree upon an action plan to remedy such
failures before the 2026 review of the agreement is concluded.”

In addition, the report calls for expanding USMCA labor value content
requirements to “produce upward harmonization of Mexican wages as a
condition for access to the U.S. market.”

Other recommendations include calls to restore ILAB funding to support
Mexican labor institutions and several changes to USMCA’s rapid-response
mechanism.

Three members of the board, Littler Mendelson attorney Stefan Marculewicz,
Morgan Lewis attorney Philip Miscimarra and Charlotte Ponticelli, who
served as deputy under secretary of Labor for international affairs during
the Bush administration, issued a separate statement dissenting from the
rest of the board’s view that Mexico is not in compliance with its USMCA
commitments and not signing on to the recommendations.

“The claimed deficits involve subjective judgments which, for the most
part, extend beyond what the USMCA requires,” the three wrote of their
colleagues’ conclusions about Mexico’s implementation of its labor reforms.
-- *Jason Asenso *(*jasenso at iwpnews.com* <jasenso at iwpnews.com>)

October 7, 2025
UAW Press Release
Contact: Krissi Jimroglou | kjimroglou at uaw.net | 313-518-8822

*Independent Expert Board Finds Mexico Failing to Honor Labor Obligations
Under USMCA Trade Agreement*

*https://uaw.org/independent-expert-board-finds-mexico-failing-to-honor-labor-obligations-under-usmca-trade-agreement/
<https://uaw.org/independent-expert-board-finds-mexico-failing-to-honor-labor-obligations-under-usmca-trade-agreement/>*

For the first time, the Independent Mexico Labor Expert Board (IMLEB), has
found that Mexico has failed to live up to its labor obligations under the
U.S.-Mexico-Canada Agreement (USMCA).
IMLEB is a body created by the US Congress under the USMCA to monitor and
report on Mexico’s implementation and enforcement of necessary labor
reforms. In its new report, submitted to Congress, the Board has determined
that “Mexico is not in compliance with its labor obligations under USMCA.”
“When the United States set out to renegotiate NAFTA in 2019 with the
explicit objective of dramatically reducing the U.S.-Mexico trade deficit
and addressing the failures of NAFTA, there was bipartisan support in
government,” the Board writes in their Conclusion.” Creating a really
fair-trade deal would require a truly transformative agreement. A
successful agreement would need to curb job loss in the US and reduce the
wage gap between US and Mexican workers, which for decades has enabled
hundreds of thousands of layoffs for US workers and heavily suppressed
wages for Mexican workers.
“If a measure of success is a reduction of the wage gap between Mexican
workers and their North American counterparts,” the Board continues, “USMCA
is a failure.”
The UAW applauds the findings of the Independent Mexico Labor Expert Board.
In 2026, the USMCA agreement is up for review. The UAW is calling for a
complete overhaul of our broken trade system. We need a new generation of
trade deals that puts working people first. A fair-trade deal must give
workers a seat at the table, raise the floor rather than race to the
bottom, and enshrine the principle of equal pay for equal work across
borders.
Under the USMCA, corporate America is making record profits gouging
American consumers while US and Mexican workers see stagnant wages and
worsening labor conditions. The USMCA has continued to pit Mexican and US
workers against one another, with terrible consequences for the working
class in both countries, and the deal must be abandoned or rewritten in
2026.
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