First USMCA report raises ‘serious concerns’ on Mexico labor law implementation

The first report from an independent body set up to monitor compliance with the United States, Mexico, Canada Agreement (USMCA) raised “serious concerns” about Mexico implementing its new labor laws.

“The Board has identified a number of serious concerns with Mexico’s labor law enforcement process that we believe must be addressed promptly,” said the report by the Independent Mexico Labor Expert Board, issued Wednesday.

The report stopped short of determining that Mexico was not in compliance with its obligations under the treaty, noting that the COVID-19 pandemic had caused a serious delay in implementing a key labor law.

While recognizing some of the efforts by Mexican President Andrés Manuel López Obrador’s government, the report said, “it must be acknowledged that many of the changes promised to improve the lives of workers, in terms of union democracy, freedom of association and collective bargaining, remain to be implemented.”

The law was set to allow for easier labor organization and create new government infrastructure to oversee the efforts, including breaking up so-called protection contracts.

Those “unions” are actually controlled by employers, rather than workers, and block real collective bargaining, and represent the majority of the country’s private sectors unions. Private sector unions themselves only account for 10 percent of the country’s 23 million formal employees.

“This has meant that millions of Mexican workers have worked extremely long hours (the longest among OECD countries) for very low wages (the lowest average wages among OECD countries), often in hazardous working conditions and with no effective means to vindicate their rights at work,” the report noted.

The independent oversight panel was a central enforcement provision in the USMCA, which replaced the decades-old North American Free Trade Agreement. Democrats and American Unions pushed hard for enforcement provisions, which they said were a model for future trade deals.

The idea behind stronger enforcement was to ensure that Mexico didn’t gain a trade advantage by exploiting labor, thus “punishing” the U.S. for stronger labor protections.

Rep. Rosa DeLauro (D-Conn.), the chair-elect of the House Appropriations Committee who was a negotiator in the USMCA Trade Working Group, said the U.S. should keep up pressure on Mexico to follow through on its reforms.

“The report highlights much of what we already know to be serious issues with the treatment of workers in Mexico and raises concerns that much of what was agreed upon under USMCA, such as the rights of Mexico’s workers to unionize and bargain without fear of retaliation, has yet to be implemented,” she said.

DeLauro added that she would work with the incoming Biden administration “to conduct oversight and ensure Mexico upholds its end of the bargain.”