{ "id": "IN11123", "type": "CRS Insight", "typeId": "INSIGHTS", "number": "IN11123", "active": true, "source": "EveryCRSReport.com", "versions": [ { "source": "EveryCRSReport.com", "id": 598613, "date": "2019-05-22", "retrieved": "2019-05-22T22:00:32.201269", "title": "USMCA and Mexico\u2019s New Labor Law", "summary": "The 116th Congress faces policy issues related to labor under the proposed U.S.-Mexico-Canada Agreement (USMCA) (see CRS Report R44981, NAFTA Renegotiation and the Proposed United States-Mexico-Canada Agreement (USMCA)). On May 1, 2019, Mexican President Andr\u00e9s Manual L\u00f3pez Obrador signed into law a labor reform bill aimed at enhancing Mexican worker rights by ensuring that workers can vote for their union representatives by secret ballot, establishing the right of workers to join the union of their choice and establishing independent labor courts to resolve disputes and register contracts, among other measures. Critics of Mexico\u2019s current labor system argue that the pre-reform laws enable corruption in that they allow employers to influence union elections and prevent workers from voting freely to elect union leaders. The reform bill passed the Mexican House of Representatives and Senate in April 2019. The labor legislation is a commitment under the proposed USMCA. \nLabor Provisions in Proposed USMCA\nThe proposed USMCA would revise and strengthen labor provisions of the North American Free Trade Agreement (NAFTA) (see CRS In Focus IF10047, North American Free Trade Agreement (NAFTA)). NAFTA\u2019s labor provisions are in a side agreement containing 11 \u201cguiding principles\u201d pertaining to worker rights in matters affecting trade, technical assistance, capacity building provisions, and a separate dispute settlement arrangement, along with a labor cooperation mechanism. Dispute procedures within the side agreement apply to failure to enforce a country\u2019s laws regarding child labor, minimum wage, and occupational safety and health. Issues regarding freedom of association and the right to organize are limited to ministerial consultations. \nUSMCA includes components of more recent U.S. free trade agreements that strengthen labor provisions and provide the same dispute resolution mechanism as other parts of the agreement (see CRS In Focus IF10046, Worker Rights Provisions in Free Trade Agreements (FTAs)). It would require parties not only to enforce their own laws, but also to adopt and maintain specific laws related to the ILO Declaration on Fundamental Principles and Rights at Work, including to:\nnot waive or otherwise derogate from their statues or regulations; \nnot fail to effectively enforce labor laws through a sustained or recurring course of action or inaction (ongoing and consistent) in a manner affecting trade or investment between parties; \npromote compliance with labor laws through appropriate government action such as appointing and training inspectors or monitoring compliance and investigating suspected violations.\nUSMCA would add new commitments related to violence against workers, migrant worker protections, and sex-based discrimination. It includes language stating that each party would retain the right to exercise reasonable enforcement discretion and to make bona fide decisions with regard to the allocation of enforcement resources provided that the exercise of that discretion is not inconsistent with the labor obligations. It states that nothing in the labor chapter shall be construed to empower a party\u2019s authorities to undertake labor law enforcement activities in the territory of another party.\nLabor advocates have called for additional obligations in USMCA to address concerns over certain labor practices and enforcement of the agreement. Some lawmakers have stated that Mexican labor reform and enforceable labor provisions in USMCA would be key factors in deciding whether to support the agreement. They call for further strengthening enforcement mechanisms, in particular, by reopening USMCA negotiations. U.S. labor advocates contend that Mexico will be unable to meet USMCA obligations. \nProponents of trade agreements such as NAFTA contend that free trade agreements help poorer countries build their capacity to support labor protections, improve labor standards in developing countries, enhance economic development and growth, and support higher-paying U.S. jobs, particularly in the high-tech and other services sectors. Policymakers supporting NAFTA and the proposed USMCA state that it would benefit the U.S. economy and add thousands of jobs to the U.S. labor market. \nUSMCA Requirement Regarding Mexican Labor Laws\nMexico agreed under USMCA to strengthen its labor laws to protect collective bargaining and its system for administering labor justice. Annex 23-A in USMCA\u2019s Labor Chapter (Chapter 23) commits Mexico to enacting specific legislative action in regard to its labor laws in order to avoid a delay in the agreement\u2019s possible entry into force. The agreement states that it is the \u201cexpectation\u201d of the parties that Mexico would adopt such legislation before January 1, 2019. USMCA states that Mexico\u2019s law would have to establish effective recognition of the right to collective bargaining, establish independent and impartial bodies to register union activities and collective bargaining agreements, and establish independent Labor Courts for adjudication of labor disputes, in addition to other worker rights.\nMexico\u2019s Labor Legislation\nMexico\u2019s new labor law is expected to \u201ceffectively transform the labor system in Mexico,\u201d according to Mexico\u2019s Ambassador to the United States, Martha B\u00e1rcena. The Mexican government contends that the reforms would ensure enforcement of Mexican laws on worker rights protection and fulfill its USMCA commitments. These include: \t\nEstablishing independent labor courts in Mexico to resolve disputes and register contracts to ensure worker representation in unions. \nProtecting workers\u2019 rights to vote for independent unions through a secret ballot process, allowing workers to form their own unions and pick their own representatives. \nImposing legal obligations by firms to recognize workers\u2019 right to strike.\nProhibiting any form of retaliation or harassment by the government, union leadership or companies of workers exercising their rights. \nProtecting workers from any form of violence or forced labor. \nMexican government officials contend that the new law will radically improve worker rights in Mexico, mainly because workers will have the right to freely vote for their own representatives and resolve disputes through independent labor courts. USTR Lighthizer described Mexico\u2019s labor reforms as a win for labor advocates in that the new laws \u201cwill greatly improve Mexico\u2019s system of labor justice and are exactly what labor leaders in the United States and Mexico have sought for decades.\u201d Labor advocates contend that these changes are a step in the right direction, but remain concerned about enforcement and whether the Mexican government has sufficient resources to enforce the new law. Some U.S. policymakers have proposed a possible labor enforcement plan that could be included as a USMCA side agreement and would include measures to provide more effective tools to detect labor violations.", "type": "CRS Insight", "typeId": "INSIGHTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "https://www.crs.gov/Reports/IN11123", "sha1": "9a042307d58679784223959aa693c021035edadd", "filename": "files/20190522_IN11123_9a042307d58679784223959aa693c021035edadd.html", "images": {} }, { "format": "PDF", "encoding": null, "url": "https://www.crs.gov/Reports/pdf/IN11123", "sha1": "3ba9b4f77c71b171a85bb0082f62955eadcd813d", "filename": "files/20190522_IN11123_3ba9b4f77c71b171a85bb0082f62955eadcd813d.pdf", "images": {} } ], "topics": [] } ], "topics": [ "CRS Insights" ] }