Mexico: The US and Canada announced having reached a trade agreement together with Mexico

Mexico (October. 2018): The US Trade Representative, Robert Lighthizer, and Canada’s Foreign Affairs Minister Chrystia Freeland, announced having reached a trade agreement together with Mexico, as part of the renegotiation of what was previously known as the North American Free Trade Agreement (NAFTA).

As expected, the trade agreement will include a labour chapter, in terms of which violations to its provisions could have more severe consequences.

Although the definitive and official text of the labour chapter is not yet known, Mexico’s Ministry of Economy, through a statement, informed that its purpose is to “Reaffirm the commitments assumed by the Parties within the framework of the 1998 Declaration of the International Labour Organization regarding Fundamental Principles and Rights at Work, guaranteeing the effective implementation of fundamental labour rights in the legislation of each Party, and promote transparency in the application of labour legislation”. A statement of shared commitments is also made in relation to the International Labour Organization Declaration on Rights at Work and on Social Justice.

The purpose for Mexico with the inclusion of the labour chapter is:
 

• Promote the implementation of fundamental labour rights in labour legislation.
• Guarantee the protection for migrant workers.
• Promote a cooperation agenda that allows the implementation of fundamental labour rights.
• Encourage communications to address differences related to the implementation of the Chapter commitments.

 
Its content is very similar to chapter 19 of the Trans-Pacific Agreement (“TPP” for its acronym in English) since:
 

• Commitments are included regarding the effective application of fundamental labour rights in national legislation:
  • Freedom of association.
  • Elimination of any form of forced labour.
  • Abolition of child labour and other protections in favour of children and minors.
  • Elimination of any form of discrimination.
  • Provide acceptable working conditions on minimum wages, working hours, safety and hygiene.

• For Mexico, specific provisions on collective bargaining are included, such as the following:
  • Guarantee the right of workers to participate in collective bargaining. There is a specific annex for this topic.
  • Guarantee the freedom of association of workers.
  • Establish independent and impartial organizations to register unions elections and resolve disputes related to collective bargaining agreements.
  • Establish requirements for the collective bargaining agreements registration.
  • Guarantee transparency in the negotiation of the collective bargaining agreements.

• Likewise, commitments that complement the application of fundamental labour rights, focused on:
  • The attention of violence cases directly related to the exercise of such rights.
  • Protection of migrant workers.
  • The fight against forced labour.
  • Protection against gender discrimination in the workplace.

• A mechanism of transparency and public participation regarding the application of this Chapter.

• The obligation to establish a Labour Council at a ministerial level, with reunions once a year, to review the compliance and effectiveness of the labour chapter.

In the USMCA, acronym in English of the new commercial agreement, the content included in the TPP is reproduced, which is in accordance with the constitutional changes that Mexico has carried out. However, the modification of the secondary legislation is pending, which does not have a specific date for its discussion; however, on September 20th, 2018, the Mexican Senate ratified Convention 98 of the International Labour Organization regarding freedom of association and collective bargaining, which is in accordance with the contents of the Chapter included in both the TPP and the USMCA.

Under the new labour obligations accepted in the TPP and in the USMCA, it is necessary for Mexican companies to carry out an analysis of their union strategy, especially those companies that have a “non-active” or protective collective bargaining agreement, due that the new legal framework, once ratified by the Mexican Senate, will imply the immediate fulfilment (“compliance”) of diverse obligations that will have the rank of constitutional disposition.