Note published on May 10 in El Sol de México, Finanzas [Finance] Section by Bertha Becerra.
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Mexico could face the suspension of tariff preferences, sanctions on products and services and a blockade on the import of goods.
In the event that there is, in fact, a violation to labor rights, the sanctions that could be imposed by an arbitration panel in the first labor complaint against Mexico under the new trade agreement, the USMCA, are the suspension of tariff preferences derived from said trinational agreement; the imposition of sanctions on products and services and the blockade on the import of goods produced at the work center.
This was stated by Héctor de la Cruz, a lawyer specializing in Labor Law, who explained the phases and criteria that this first labor complaint within the framework of the trade agreement between Mexico, the United States and Canada (USMCA) will entail for the country, in the event that a violation to labor rights does exist.
The largest federation of unions in the United States, the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), announced that it will file the first labor complaint against Mexico under the new USMCA trade agreement before the Office of Commerce and Labor Affairs of the United States in Washington.
The AFL-CIO petition establishes that workers at an auto-parts plant in Matamoros, Tamaulipas, were denied independent union representation in violation of the treaty.
“In this phase, the US authority will have a period of 30 days from the receipt of the complaint to determine whether the complaint includes the minimum criteria that presuppose the existence if a denial of rights in the work center, in this case, the auto-parts plant, Tridonex.”
He explains: “If the complaint is admissible, a request to review the case will be formally submitted to the Mexican government.”
Mexico will have 45 days, from the receipt of the request to review, to give an answer, in which it determines whether or not there is a denial of rights and, if applicable, propose a reparation plan.
In the event of a violation of labor rights and if the parties do not reach an agreement on the reparation plan, the United States may request the creation of a panel to determine whether there is a denial of rights or not.
He specifies that: “Once the panel is formed, it will have 30 days to reach a decision, from the time of its incorporation or from the time in which it verified conditions in the work center.”
The expert from the De la Vega & Martínez Rojas Firm pointed out that the sanctions that could be imposed by the arbitration panel are:
- The suspension of tariff preferences derived from the USMCA.
- The imposition of sanctions on products or services.
- Blocking of imports of goods produced in the work center.