An alert is made, Mexico is at a disadvantage in labor panels

Note published on March 16 in Reforma, Negocios [Business] Section by Verónica Gascón.
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Note published on March 16 in El Norte, Negocios [Business] Section by Verónica Gascón.
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Note published on March 16 in Mural, Negocios [Business] Section by Verónica Gascón.
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Mexico is at a disadvantage in the event of a possible presentation before labor panels because the suspicion of violations of workers’ rights is sufficient for the United States and Canada to file a complaint, warned Ricardo Martínez, a lawyer at the D&M Firm.

“In the case of the United States, it can file a complaint based only on a suspicion. Mexico cannot do this. In the case of Mexico, to be able to initiate a complaint, it is required that there be a resolution by the American Authorities . It would have to be a case tried in the United States or Canada, and we are at a great disadvantage here”, said Martínez in the “Labor Challenges, 2021” forum.

The expert stated that the focus is on companies that export products into the United States; however, the Free Trade Agreement includes a section that speaks of all products.

Some prioritary industries are mining, aerospace, steel, aluminum, call centers, transportation and bakeries, among others.

“For a complaint to be considered as valid, it must be made in regard to a company that exports goods or services into the United States or Canada. Otherwise, there would be no cause for complaint.

“But then, there is another section, which seems open to us, in which it states that a complaint can be filed against any company that manufactures or provides a service that competes with the other two markets; this is incredible, but almost all products will compete”, he pointed out.

He added that the filing of labor complaints must be avoided, because consequences can be extremely serious in regard to commercial trade.

“If the panel decides to impose a penalization, the first violation will cause the suspension of the right to preferential tariffs and customs duties that the company has for its merchandise, which is very serious.

“In the event of a second violation or if Mexico does not comply in making reparations, tariff and custom duties’ rights of a corporate group can be taken away and upon a third violation, which is extremely serious, the entry of said products into the United States will no longer be allowed, which is what is understood as an embargo”, explained Martínez.

In this sense, he said that the United States kept “a very strong weapon” against Mexico with the possibility of resorting to these panels.