Mexico will have its first “acid test” in labor matters within the USMCA

The topic of union freedom in Mexico is about to be discussed in specialized courts and the resolution reached will lay the foundations for future conflicts on these matters at a global level.

According to experts, ever since the successor of NAFTA was being negotiated, the US team expressed its concern about the possible lack of compliance by Mexico in labor matters.

“When we signed the USMCA, we opened the door for the United States to monitor Mexico’s compliance with the labor reform. There is a very large infrastructure in place: on the one hand you have an interdepartmental committee with American officials. They also have another committee of legal experts, predominantly union representatives”, said Óscar de la Vega, directing partner of the de la Vega y Martínez Rojas Law Firm, which specializes in labor matters.

Why is it important?

“This is a completely new mechanism, there are no precedents for anything similar, no treaty. The first time that something like this has happened is in the USMCA, if the complaint is ruled to be admissible, we will see how it works”, pointed out Juan Carlos Baker, who is part of the negotiating team of the commercial treaty on behalf of Mexico and former undersecretary of Commerce.

The USMCA is considered to be a watershed for new treaties as, in addition to labor matters, it includes chapters on environmental, patents, electronic commerce and dispute resolution matters, among others that are not included in other international agreements in trade matters.

“Specifically, what is being requested, is that this be considered under the rapid action mechanism. Which, as its name suggests, if a panel finds that there is a violation, there can be consequences for our country and for the company in a very short period of time, we are talking about less than six months”, explained Baker Pineda, who is now an academic at the Universidad Panamericana (UP).

“The Free Trade Commission of the USMCA will be conducted on May 17 and 18. I would expect that this is a topic that ambassador (Katherine) Tai will discuss with the Mexican authorities. If the panel starts, a defense would have to be prepared, a presentation of the arguments, and the panel would decide whether there is a case or not”, Baker explained.

It should be noted that the USMCA cannot intervene in the Mexican legal framework; nonetheless, the latest reforms in labor matters that modified topics such as union democracy and outsourcing were implemented with the objective that the country complies with the commitments acquired in the trade agreement.

What is next?

Once the AFL-CIO filed the complaint, the ball is on the court of the United States government, which will have 30 calendar days to investigate the case and determine whether the complaint is valid or not.

After this period of time, if the complaint is valid, the government of the United States will present the formal request for a review and “an investigation process in Mexico will ensue, taking 45 days, and findings will be sent to the Department of Economy”, explained Óscar de la Vega.

The Department of Economy said that it will define its position once it receives an official notification. Expansión tried to contact Tridonex, the AFL-CIO and lawyer Susana Prieto, the representative of a group of workers of the company located in Matamoros, without obtaining an immediate response.

If the rapid action mechanism is activated, “if the panel determines that Mexico is not complying with its obligations, what is sought is for the matter to be solved. It is not intended that the country will maintain violations in a sustained manner”, assured Juan Carlos Baker.

In the event that there is a sanction against Tridonex, Baker pointed out, they would go from less to more. “The first thing that can be done is to suspend the preferential treatment of the products made by the company and you have to pay tariffs and so on until, in a case of recurrence, they could prohibit the products from entering the United States.”

Will there be a cascade of labor complaints?

Katherine Tai, recently ratified as head of the United States Trade Representation (USTR) was involved in the negotiation of the USMCA and will be in charge of leading negotiations on behalf of her country.

Óscar de la Vega said that, in addition to the complaint in Matamoros, there is another one against the General Motors plant in Silao made by the United Auto Workers (UAW).

The Department of Labor and Social Welfare (STPS) decided on Tuesday night to conduct the legitimation process of the collective bargaining agreement (CCT) for the General Motors Plant in Silao once again.

The new procedure must guarantee safety and accessibility to workers, the certainty that voting will be conducted in a safe, free, secret and direct manner, without any coercion or intimidation, for which purpose, the authority will guarantee compliance with: A reliable registry, dissemination of the call, accessible and safe facilities, a reinforcement of the electoral observation and surveillance mechanisms and, lastly, no interference from the company, the union or people outside of the consultation, explained the department in a statement.

For Óscar de la Vega, directing partner of the de la Vega y Martínez Rojas Law Firm, which specializes in labor matters, one of the challenges for unionism is to become attractive to the new generations.

“What I see is that there will be a creation of independent, autonomous unions. The issue is when and how unions will connect with the working base”, he said.

Both the transitory articles of the Federal Labor Law (LFT) and the USMCA establish a term of four years (May 1, 2023) for ratifying collective bargaining agreements, at least once, through free, secret and direct voting (50% plus 1). “if it does not pass that filter, the agreement is terminated”, he pointed out.