Today, Richard E. Neal, Chairman of the Committee on Ways and Means of the House of Representatives of the United States, announced that agreements have been reached with Mexico and Canada to the purpose of ratifying the USMCA Free Trade Agreement.
The Representatives of the Democratic Party deem that important amendments were reached, mainly on the subject of labor conventions, such as the following:
- Relating to the enforcement of the agreements on the labor subject, the possibility to block the integration of negotiation panels by the parties was eliminated.
- Evidence rules were established, so that the United States may successfully litigate labor and environment matters, and other disputes that require proof of facts.
Enforcement mechanisms were strengthened to the purpose of:
- Eliminating provisions that difficulted the proof of breaches by the parties in terms of worker protection.
- Assuming the breach of labor standards affecting investment, and the implied government shall produce proof on the contrary.
- Eliminating provisions that prevent the proof of forced labor.
The monitoring of the application of labor law is reinforced. Democratic party congressmen demanded stricter standards to verify compliance with the specific obligations accepted by Mexico in the labor subject.
- The creation of a committee to monitor the enacting of the labor reform in Mexico was resolved.
- An obligation is established to submit reports regularly to the Congress of the United States.
- Parameters are established to measure Mexico’s compliance with the process to apply the labor reforms. Non-compliance with the parameters will result in the enforcement actions included in the agreement.
- The appointment of Labor Attachés, based in Mexico, who will supply information on labor practices in Mexico from the source, was resolved.
As may be observed, these agreements are substantial for Mexican companies. They shall pay attention to due compliance with labor reforms, risking the possibility that their products may be subject to import taxes or banned access to the United States.