The US-Mexico-Canada Agreement replaced the 25-year-old North American Free Trade Agreement (NAFTA) in July

The US-Mexico-Canada Agreement replaced the 25-year-old North American Free Trade Agreement (NAFTA) in July

Mexico has made significant progress in the implementation of its labour law reforms required under the US-Mexico-Canada Agreement (USMCA), but serious challenges remain, according to a new report.

Issued by the Independent Mexico Labor Expert Board, the report was produced to assist Congress and the Interagency Labor Committee (ILC) in their assessment of the efforts of Mexico to implement labour reforms.

The USMCA replaced the 25-year-old North American Free Trade Agreement (NAFTA) in July, offering qualifying textiles and apparel, travel goods and footwear originating from the USMCA region duty-free access to the US and Canadian markets. The agreement called for overhauls to Mexico's laws and institutions to make its unions more democratic, and set up independent bodies to enforce the changes.

The report praises Mexico for making "significant progress" in the implementation of its May 2019 labour law reform, especially taking into account the impact of the Covid-19 pandemic. The efforts of the López Obrador administration, and especially the leadership of the Secretariat of Labor and Social Welfare and the Federal Center for Conciliation and Contract Registration, were also praised.

However, the report claims that many of the changes promised to improve the lives of workers, in terms of union democracy, freedom of association and collective bargaining, remain to be implemented.

"Most unionised workers are not yet able to democratically elect their leaders or ratify their collective bargaining agreements. The system of protection contracts, sustained by employer payments to union leaders, remains intact at this time. Covid-19 has caused thousands of deaths and millions of job losses. Workers who attempt to challenge these conditions by demanding union democracy, higher wages, or even protective equipment have been fired, jailed and – in too many cases – murdered."

Mexico's economically active population in the third quarter of 2020 was 53.8m. Of this population, 35m are wage workers, but only about 23m are defined as being in formal employment, according to the report. Only about 4.4m workers are unionised, with about half of these in the private sector.

A large percentage of unionised private sector workers are covered by 'protection contracts' – 'collective agreements' signed between employers and employer-dominated 'protection' unions without the involvement or even knowledge of the workers the union purports to represent, the report states.

In some cases, protection contracts have been signed by employer-dominated unions even before the employer began operation or hired its first worker, thereby locking in low wages and poor conditions, and 'protecting' the employer from having to negotiate with an independent and democratic union, which would insist on better wages and working conditions.

While there has been "substantial progress" in transforming the complex set of reforms in the 2019 Labor Reform into concrete institutions, the report says efforts have been c by missed deadlines in the states, conservative forecasts resulting in inadequate resources, and a backloaded roll-out of federal and local conciliation centres and labour courts.

States' failure to implement local reforms has, in part, already disrupted the first stage of the labour reform implementation. "Continued failure by states to implement the needed reforms will further backload or create a disjointed implementation, leading to confusion among workers and prolonging the time Mexican workers are subjected to the old, failed labour justice system," the report notes.

Recognising the scale of the challenges Mexico faces, the US Congress appropriated US$180m in supplemental funds to the Department of Labor (DOL) to support reforms of the labour justice system and labour rights in Mexico through bilateral technical assistance, grants and other arrangements. These funds are available for 2020 and the following three years.

The report offers a number of recommendations, including:

  • End violence against workers
  • Promote transparency
  • Focus implementation on USMCA priority sectors
  • Reform the legitimation process
  • Strengthen labor inspection
  • Hold employers accountable