Skip to main content

Moises Kalach, head of the international negotiating arm of Mexico's CCE business lobby talks to reporters in Mexico City on Nov. 20, 2017.

Ginnette Riquelme/Reuters

After the initial euphoria had subsided, Mexican business leaders emerged bruised and resigned to a new stricter trade deal with the United States and Canada that could usher in more intrusive enforcement of labour rules in Mexico.

Moises Kalach, a leader of the CCE business lobby, which represented Mexico’s private sector in the negotiation of the U.S.-Mexico-Canada Agreement (USMCA) that will replace the 1994 North American Free Trade Agreement (NAFTA), said that businesses felt sidelined.

“We would have liked to have been (in the negotiations) more … to give our opinion more. This is the reality, we participated but not as much as we would have liked,” said Kalach.

Story continues below advertisement

USMCA was signed more than a year ago to replace NAFTA, but Democrats controlling the U.S. House of Representatives insisted on major changes to labour and environmental enforcement before bringing it to a vote.

In an unusual display of bipartisan and cross-border co-operation in the Trump era of global trade conflicts, top officials from Canada, Mexico and the United States on Tuesday signed a fresh overhaul of the quarter-century-old trade pact.

Some Mexican business groups bemoaned a lack of clarity and conflicting information on how the rules would actually be enforced under the deal, the text of which has not been made public.

Gustavo Hoyos, president of employers federation Coparmex and a vocal critic of President Andres Manuel Lopez Obrador, said “up to now virtually no one but government officials have seen the deal’s fine print.” He called the government “a bad negotiator.”

Others were more positive.

“There were many things we would have liked to have seen but in general we can say this deal is very beneficial for Mexico, it will bring investment to the country and I have no doubt will make the North American region more competitive,” said Antonio del Valle, head of the Mexican Business Council.

ENFORCEMENT MECHANISM

The deal included a new mechanism under which the United States and Canada can create panels of labour experts to investigate union complaints at Mexican factories.

Story continues below advertisement

The experts will be able to penalize goods and services exported from that plant if violations of the freedom to organize or collectively bargain are detected, Canada and the U.S. House Ways and Means Committee said.

Mexico’s chief negotiator Jesus Seade sought to play down the impact of such “rapid panels,” saying he had fended off U.S. union demands to place foreign labour inspectors in Mexican factories.

The rapid panels would be formed after three months and only in response to repeated complaints and they would be selected from a roster of experts, including one from each country involved in the dispute and one chosen by a third party, Seade said.

The Mexican official denied there would be anything like foreign labour inspectors in Mexico.

Canada said that, under the new deal, the burden of proof has been reversed, in that failure to comply with an obligation in the chapter is now presumed to be “in a manner affecting trade or investment between the parties,” unless the defending party can demonstrate otherwise.

“If I’m reading this correctly now the country defending itself is guilty until proven otherwise,” said a former senior Mexican USMCA negotiator.

Story continues below advertisement

“This can become an incentive to block trade … you just gave the U.S. an instrument to impose tariffs and close markets, because it is going to be accusing you of not complying with your labour standards.”

Duncan Wood, director of the Wilson Center’s Mexico Institute in Washington, said “that while the word ‘inspections’ has been avoided, ‘facility-based enforcement’ and in-country ’labour attaches’ will raise the spectre of foreign interference for some in Mexico.”

Related topics

Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies