<html><head><meta http-equiv="Content-Type" content="text/html charset=utf-8"></head><body style="word-wrap: break-word; -webkit-nbsp-mode: space; -webkit-line-break: after-white-space;" class=""><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 14pt; font-family: Arial, sans-serif;" class=""><a href="https://www.wsj.com/articles/mexicos-president-elect-prepares-labor-overhaul-to-empower-workers-1536704229" style="color: purple;" class="">https://www.wsj.com/articles/mexicos-president-elect-prepares-labor-overhaul-to-empower-workers-1536704229</a><o:p class=""></o:p></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 14pt; font-family: Arial, sans-serif;" class=""> </span></div><h1 style="margin-right: 0in; margin-left: 0in; font-size: 24pt; font-family: 'Times New Roman', serif; margin-bottom: 6pt; vertical-align: baseline;" class=""><span style="font-size: 30pt; font-family: 'Escrow Condensed';" class="">Mexico’s President-Elect Prepares Labor Overhaul to Empower Workers<o:p class=""></o:p></span></h1><h2 style="margin: 0in 0in 0.0001pt; font-size: 18pt; font-family: 'Times New Roman', serif; vertical-align: baseline; outline: 0px;" class=""><span style="font-size: 15pt; font-family: Retina; color: rgb(102, 102, 102); letter-spacing: -0.1pt; font-weight: normal;" class="">No more secret agreements between union bosses and employers, future labor minister says<o:p class=""></o:p></span></h2><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif; vertical-align: baseline;" class=""><span style="font-size: 7.5pt; font-family: Arial, sans-serif; color: rgb(51, 51, 51);" class=""><img apple-inline="yes" id="3C96F2FF-95CD-49E0-AE9E-4D5D3BF4ECF8" height="188" width="288" apple-width="yes" apple-height="yes" src="cid:image003.jpg@01D44A10.A5F78020" class=""><o:p class=""></o:p></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif; vertical-align: baseline;" class=""><span class="wsj-article-caption-content"><span style="font-size: 10.5pt; font-family: Retina; color: rgb(102, 102, 102); border: 1pt none windowtext; padding: 0in;" class="">Luisa María Alcalde, tapped to be Mexico’s next labor minister, says new laws will aim to ban the so-called protection agreements that labor lawyers say have long worked to suppress wages in the country. </span></span><span class="wsj-article-credit-tag"><span style="font-size: 10.5pt; font-family: Retina; color: rgb(102, 102, 102); text-transform: uppercase; border: 1pt none windowtext; padding: 0in;" class="">PHOTO: </span></span><span class="wsj-article-credit"><span style="font-size: 10.5pt; font-family: Retina; color: rgb(102, 102, 102); text-transform: uppercase; border: 1pt none windowtext; padding: 0in;" class="">JOSE PAZOS/NOTIMEX/NEWSCOM/ZUMA PRESS</span></span><span style="font-size: 10.5pt; font-family: Retina; color: rgb(102, 102, 102);" class=""><o:p class=""></o:p></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif; vertical-align: baseline;" class=""><i class=""><span style="font-size: 13pt; font-family: Exchange; color: rgb(51, 51, 51); border: 1pt none windowtext; padding: 0in;" class=""><o:p class=""> </o:p></span></i></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif; vertical-align: baseline;" class=""><i class=""><span style="font-size: 13pt; font-family: Exchange; color: rgb(51, 51, 51); border: 1pt none windowtext; padding: 0in;" class="">By</span></i><span style="font-size: 7.5pt; font-family: Exchange; color: rgb(51, 51, 51);" class=""> </span><span class="name"><i class=""><span style="font-size: 13pt; font-family: Exchange; color: rgb(0, 128, 195); border: 1pt none windowtext; padding: 0in;" class="">Juan Montes</span></i></span><i class=""><span style="font-size: 13pt; font-family: Exchange; color: rgb(51, 51, 51);" class=""><o:p class=""></o:p></span></i></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif; vertical-align: baseline;" class=""><span style="font-size: 12pt; font-family: Arial, sans-serif; color: rgb(51, 51, 51);" class="">The Wall Street Journal, Sept. 11, 2018 6:17 p.m. ET<o:p class=""></o:p></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif; vertical-align: baseline;" class=""><span style="font-size: 12pt; font-family: Arial, sans-serif; color: rgb(51, 51, 51);" class=""> </span></div><p style="margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif; margin-bottom: 12.75pt; vertical-align: baseline; outline: 0px; word-wrap: break-word;" class=""><span style="font-size: 13pt; font-family: Exchange; color: rgb(51, 51, 51);" class="">MEXICO CITY—Mexican President-elect Andrés Manuel López Obrador is preparing legislation to overhaul the country’s collective-bargaining system to improve wages and help Mexico comply with labor-rights provisions of a recent trade agreement with the U.S., a top aide said Tuesday.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif; margin-bottom: 12.75pt; vertical-align: baseline; outline: 0px; word-wrap: break-word;" class=""><span style="font-size: 13pt; font-family: Exchange; color: rgb(51, 51, 51);" class="">Mr. López Obrador aims to effectively ban so-called protection agreements, or collective contracts signed by union leaders and employers without worker consent, by requiring unions to show they have the backing of at least 30% of workers before signing a contract, said Luisa María Alcalde, who has been tapped to be labor minister when Mr. López Obrador takes office Dec. 1.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif; margin-bottom: 12.75pt; vertical-align: baseline; outline: 0px; word-wrap: break-word;" class=""><span style="font-size: 13pt; font-family: Exchange; color: rgb(51, 51, 51);" class="">“Those contracts are rotten from the outset,” she said in an interview. “It is time for Mexican workers to decide by themselves who should represent them.”<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif; margin-bottom: 12.75pt; vertical-align: baseline; outline: 0px; word-wrap: break-word;" class=""><span style="font-size: 13pt; font-family: Exchange; color: rgb(51, 51, 51);" class="">Perhaps as important, Ms. Alcalde said existing protection agreements would also have to be legitimized in coming years by way of secret ballots among workers. Nine out of 10 collective-bargaining contracts signed in Mexico are agreed without the consent, and sometimes without the knowledge, of a company’s workers, experts estimate.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif; margin-bottom: 12.75pt; vertical-align: baseline; outline: 0px; word-wrap: break-word;" class=""><span style="font-size: 13pt; font-family: Exchange; color: rgb(51, 51, 51);" class="">Mr. López Obrador, a leftist who won the July 1 presidential election by a landslide, campaigned on promises to improve the lot of workers in Mexico, where average monthly wages are around $315.<o:p class=""></o:p></span></p><div style="margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: 'Times New Roman', serif; vertical-align: baseline; outline: 0px; word-wrap: break-word;" class=""><span style="font-size: 13pt; font-family: Exchange; color: rgb(51, 51, 51);" class="">The administration of U.S. President Donald Trump has also insisted that a revamped North American Free Trade Agreement include <a href="https://www.wsj.com/articles/trumps-nafta-rewrite-holds-promise-for-labor-unions-1535653247?mod=searchresults&page=1&pos=1&mod=article_inline" style="color: purple;" class=""><span style="color: rgb(0, 128, 195);" class="">measures to increase Mexico’s low wages</span></a>, which Mr. Trump sees as unfair competition.<o:p class=""></o:p></span></div><p style="margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif; margin-bottom: 12.75pt; vertical-align: baseline; outline: 0px; word-wrap: break-word;" class=""><span style="font-size: 13pt; font-family: Exchange; color: rgb(51, 51, 51);" class="">Mexican government data show manufacturing workers in Mexico earn $2.30 per hour on average, while U.S. factory workers make about $21.50 an hour.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif; margin-bottom: 12.75pt; vertical-align: baseline; outline: 0px; word-wrap: break-word;" class=""><span style="font-size: 13pt; font-family: Exchange; color: rgb(51, 51, 51);" class="">The preliminary trade agreement reached between the U.S. and Mexico in late August, which will serve as the basis for a new Nafta if Canada agrees on terms with the U.S., includes enforceable labor provisions.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif; margin-bottom: 12.75pt; vertical-align: baseline; outline: 0px; word-wrap: break-word;" class=""><span style="font-size: 13pt; font-family: Exchange; color: rgb(51, 51, 51);" class="">One provision would allow the U.S. to impose trade sanctions if Mexico fails to enact labor reforms that ensure basic worker rights such as effective access to collective bargaining, according to two people with knowledge of the deal. Mexico also agreed to approve new labor legislation consistent with the trade deal.<o:p class=""></o:p></span></p><div style="margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: 'Times New Roman', serif; vertical-align: baseline; outline: 0px; word-wrap: break-word;" class=""><span style="font-size: 13pt; font-family: Exchange; color: rgb(51, 51, 51);" class="">“This is a game-changing reform. Protection contracts are a huge burden for the country, and [worker] representation will bring a better distribution of wealth,” said Álvaro Altamirano, a labor lawyer who has worked for <a href="http://quotes.wsj.com/XE/XETR/VOW3" style="color: purple;" class=""><span style="color: rgb(0, 128, 195);" class="">Volkswagen</span></a> and <a href="http://quotes.wsj.com/XE/XETR/NSU" style="color: purple;" class=""><span style="color: rgb(0, 128, 195);" class="">Audi</span></a> in Mexico.<o:p class=""></o:p></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: 'Times New Roman', serif; vertical-align: baseline; outline: 0px; word-wrap: break-word;" class=""><span style="font-size: 13pt; font-family: Exchange; color: rgb(51, 51, 51);" class=""> </span></div><div style="margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: 'Times New Roman', serif; vertical-align: baseline;" class=""><span style="font-size: 13pt; font-family: Exchange; color: rgb(51, 51, 51);" class="">A dysfunctional collective-bargaining system in Mexico <a href="https://www.wsj.com/articles/nafta-talks-target-stubbornly-low-mexican-wages-1503999002?mod=article_inline" style="color: purple;" class=""><span style="color: rgb(0, 128, 195);" class="">has kept wages depressed for decades</span></a>, and labor conditions haven’t significantly improved for millions of workers, experts say.<o:p class=""></o:p></span></div><p style="margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif; margin-bottom: 12.75pt; vertical-align: baseline; outline: 0px; word-wrap: break-word;" class=""><span style="font-size: 13pt; font-family: Exchange; color: rgb(51, 51, 51);" class="">Current laws don’t require labor unions to prove they represent workers before signing a collective-bargaining contract. The signatures of the employer and the union leader are enough if an agreement is duly registered before labor authorities.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif; margin-bottom: 12.75pt; vertical-align: baseline; outline: 0px; word-wrap: break-word;" class=""><span style="font-size: 13pt; font-family: Exchange; color: rgb(51, 51, 51);" class="">The planned legislation would complement a constitutional amendment that was enacted in February 2017 but which hasn’t gone into effect because of pending secondary laws. Lawmakers say the legislation would be approved before the end of the year. Mr. López Obrador’s Morena party and its allies have a majority in both houses of Congress.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif; margin-bottom: 12.75pt; vertical-align: baseline; outline: 0px; word-wrap: break-word;" class=""><span style="font-size: 13pt; font-family: Exchange; color: rgb(51, 51, 51);" class="">Ms. Alcalde, the 31-year-old daughter of a prominent leftist labor lawyer, has a masters of law degree from the University of California, Berkeley, as well as a Mexican law degree. Aside from unions needing to prove they represent at least 30% of workers to sign a contract under the new law, she said it would require majority approval if two or more unions fight over a contract. Union leaders will also have to be elected through secret ballots.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif; margin-bottom: 12.75pt; vertical-align: baseline; outline: 0px; word-wrap: break-word;" class=""><span style="font-size: 13pt; font-family: Exchange; color: rgb(51, 51, 51);" class="">The proposed laws, if fully implemented, would raise Mexican wages, improve labor conditions and help increase companies’ productivity, Ms. Alcalde said. Some business leaders are concerned, however, that the new model may increase labor conflicts and discourage investment.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif; margin-bottom: 12.75pt; vertical-align: baseline; outline: 0px; word-wrap: break-word;" class=""><span style="font-size: 13pt; font-family: Exchange; color: rgb(51, 51, 51);" class="">The legislation would create an independent body to make sure workers are effectively represented. Copies of contracts will be made available on the internet for the first time.<o:p class=""></o:p></span></p><p style="margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: 'Times New Roman', serif; margin-bottom: 12.75pt; vertical-align: baseline; outline: 0px; word-wrap: break-word;" class=""><span style="font-size: 13pt; font-family: Exchange; color: rgb(51, 51, 51);" class="">For years, many companies favored protection agreements because they keep wages low and profit margins high, while avoiding costly strikes. They also help protect companies against strike threats. Such threats, common in Mexico, have often served as a means of extortion by fake unions that don’t represent their workers, labor lawyers say.<o:p class=""></o:p></span></p><div style="margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: 'Times New Roman', serif; vertical-align: baseline; outline: 0px; word-wrap: break-word;" class=""><strong class=""><span style="font-size: 13pt; font-family: Exchange; color: rgb(51, 51, 51); border: 1pt none windowtext; padding: 0in; font-weight: normal;" class="">Write to </span></strong><span style="font-size: 13pt; font-family: Exchange; color: rgb(51, 51, 51);" class="">Juan Montes at <a href="mailto:juan.montes@wsj.com" target="_blank" style="color: purple;" class=""><span style="color: rgb(0, 128, 195);" class="">juan.montes@wsj.com</span></a><o:p class=""></o:p></span></div><div style="margin: 0in 0in 0.0001pt; font-size: 11pt; font-family: Calibri, sans-serif;" class=""><span style="font-size: 14pt; font-family: Arial, sans-serif;" class=""> </span></div></body></html>