Delay by Mexico in its USMCA labor obligations; the US is watching closely

Notwithstanding the importance of preserving the trilateral agreement with the United States and Canada, it must be acknowledged that it will not be a panacea to reverse the deep decline in the economy, linked to poor public policy decisions.

Investment, which had already decreased due to lack of trust, has fallen even further because of the pandemic and the lack of countercyclical measures by Arturo Herrera’s SHCP [Ministry of Finance and Public Credit].

Additionally, there are serious threats within the USMCA due to Donald Trump’s protectionism. Simply, in labor matters, the aim is to put a full end of the so-called labor dumping we are accused of.

Labor attachés pushed by Democrat Nancy Pelosi are a reality and it cannot be ruled out that controversies will soon arise in relation to Chapter 31 of the treaty.

The magnifying glass, explains labor expert Oscar de la Vega, will focus mainly on the automotive, auto parts, aerospace, bakery, electronics, call centers, mining, steel, aluminum and agriculture sectors.

Even though Mexico has already worked via Luisa María Alcalde´s STPS [Department of Labor and Social Welfare] toward compliance with freedom of association, collective bargaining and respect for labor justice, the pandemic gave rise to 100 days of null progress, which will have a cost.

By this time charro unions, exclusion clauses and all calls to strike not having 30% representativity, like in the US, should have disappeared

The elimination of Conciliation and Arbitration Boards and their substitution by specialized judicial bodies is also pending, a change that implies an extremely high budgetary cost.

The 2021 deadline seems difficult to meet but, despite this, the STPS hopes to start with the new infrastructure in 10 states.

The Federal Center for Labor Conciliation and Registration should also begin to operate by that date, with all collective bargaining agreements in force in the country, a titanic task.

Therefore, in the entry in force of the USMCA tomorrow, there is little to be expected and many threats are foreseen.

Cox delay, next week and $200 million USD

The offer of Spanish Cox Energy still stands and the delay in regard to the initial date, which was Friday, was due to Juan Pablo Graf’s CNBV’s [National Banking and Securities Commission] authorizations. Enrique Riquelme himself, president of the Spanish company, says so. He says that placement in Santiago Urquiza’s BIVA [Institutional Stock Exchange] will take place between Thursday and Friday of next week. It will be of a minimum of $200 million USD. And, indeed, Héctor Madero’s Actinver, the initial structurer and placement leader has left. There were differences when trying to involve Afores [Retirement Funds Administrators], which are not very receptive to renewable energy projects. It was substituted by Edgardo Cantú’s Vector. Committed friends & family will participate.

Constellation and the government are still negotiating

One of the projects canceled by Andrés Manuel López Obrador is that of the Mexicali plant of Constellation Brands, headed by Daniel Baima. A consultation was resorted to to destroy a 1,500 million USD investment. Let me tell you that the last word on the matter remains to be heard, since negotiations still continue, at the risk of an action vs Mexico in the NAFTA.

AMIIF, patents myths and realities

And in the controversy surrounding the 20-year patent on medicines, the AMIIF [Mexican Association of Pharmaceutical Research Industries], chaired by Ana Longoria and headed by Cristóbal Thompson released a document with myths and realities. It shows that no law or treaty has sought to change the abovementioned term. The linking system in place since 2003 in the Health Supplies Regulations has permitted 90 % of the medicines in Mexico to be generic and the “Bolar Clause”, rather than a ruse to prolong a patent, has allowed generic manufacturers, before the clause expires, to prepare studies and paperwork required to market immediately. There is a direct correlation between innovation and social welfare. Switzerland holds the first and second positions in the above cases, while Mexico, unfortunately holds the 56th and 76th positions.

Opinion Article “Nombres, nombres y… nombres” published in El Economoista, Opinión [Opinion] Section by Alberto Aguilar.