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USMCA Labor Disputes | The Trading Room

19 Jun , 2020  

USMCA Labor Disputes, WTO, Webinar, VTZ, Trade Lawyers, Mexico

In our Trading Room economic newsletter, we address Robert Lighthizer’s appearance before the U.S. Senate to share the 2020 Trade Policy Agenda, where he commented on possible USMCA Labor Disputes and the use of the rapid response labor mechanism as well as WTO actions; we also address the selection process for the WTO Director-General.

 

Future Labor Disputes in the US Trade Policy Agenda in 2020

On Thursday, June 17, the US Trade Representative, Robert Lighthizer, appeared before the Senate to share the Trade Policy Agenda 2020. We highlight the following two points of his participation:

USMCA Labor Disputes

Lighthizer noted that as of July 1, the U.S. will meet with the corresponding committees to discuss the possible use of TMEC’s ​​enforcement mechanisms in environmental and labor matters.

In labor matters, the dispute settlement mechanisms are essentially the State-State dispute settlement panels (chapter 31 of the TMEC) and the rapid response labor mechanism

Mexican news outlets have reported that the possible first labor disputes could relate to child labor and forced labor issues, particularly in the agricultural sector; however, the freedom of association (i.e. unions) and collective bargaining should not be excluded.

The US-Mexico Bar Association (USMBA) earlier this month organized the webinar “Labor & Trade: Is Mexico Ready for USMCA’s Labor Chapter?”, where our Jr. Partner Emilio Arteaga participated. The panelists discussed the rapid response labor mechanism as well as the current labor environment in Mexico, the video of the webinar is available in the USMBA’s website:

USMBA, Labor and Trade, USMCA Labor Chapter, Video, Lawyers, Bar Association, Mexico, Labor Disputes

In addition, VTZ will organize a series of Labor & Trade webinar (in Spanish) on the specific challenges for the Mexican manufacturing industry. If you are interested in attending, please click the following link:

TMEC, Capítulo Laboral, Industria Maquiladora, Contratos Colectivos, Sindicatos

Regarding environmental disputes, it is reported that it could be about agricultural biotech products because Mexico has not granted the necessary permits to import said goods since 2018.

 

U.S. Bound Tariffs in the WTO

 

Robert Lighthizer also noted that the U.S. bound tariffs in the WTO are outdated; U.S. bound tariffs are notoriously low with an overall 4.6%.

 

In this sense, Mr. Lighthizer pointed out that the U.S.’ bound tariffs no longer reflect the economic and political conditions of WTO members, some who continue to maintain very high tariffs compared to the U.S.

 

In short, the U.S. may seek to increase its bound tariffs in the WTO. If such event occurs, such change would impact products originating from WTO members that do not have a Free Trade Agreement with the U.S., such as China However, all WTO members must agree with any change regarding in the Schedule of Concessions (i.e. the bound tariffs) of another WTO Member. In other words, the process is not unilateral and requires negotiations.

 

It should be noted that since last year, President Trump has questioned the developing status of certain WTO members (e.g. China) and the benefits that it entails.

 WTO Director-General Selection Process

On June 8, 2020, the Mexican government formally submitted Jesús Seade, USMCA chief negotiator and current Under Minister for North America, as a candidate for the Director-General of the World Trade Organization.

 

Seade’s candidacy sparked diverse opinions among renowned Mexican professionals in the international trade arena that were reported on a news outlet. For example, an opinion is that the Director-General must have a certain status, that is being an ex-minister or former head of state, and he must have sufficient leadership to overcome the paralysis situation in the WTO.

 

It is expected that the selection process will last 3 months, so the WTO may have a new Director-General by the 1st of September. So far, three other candidates appear along with the Seade: the Nigerian Ngozi Okonjo-Iweala, the Egyptian Abdel-Hamid Mamdouh, and the Moldovan Mr. Tudor Ulianovschi.

In the end, how much will the Mexican reactions affect Seade’s aspirations to Director-General?

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Futuras Controversias Laborales TMEC | The Trading Room

19 Jun , 2020  

Trading Room, OMC, Controversias Laborales, TMEC

En nuestro boletín de noticias económicas Trading Room, abordamos la comparecencia de Robert Lighthizer ante el Senado para exponer la Agenda Política Comercial 2020, en donde comenta sobre el uso del mecanismo laboral de respuesta rápida y acciones OMC; también abordamos el proceso de selección del Director General de la OMC.

Futuras Controversias Laborales en Agenda Política Comercial 2020 de EE.UU. ?

El jueves 17 de junio, el Representante Comercial de EE.UU., Robert Lighthizer, compareció ante el Senado para exponer la Agenda Política Comercial 2020. Destacamos los siguientes dos puntos de su participación:

Controversias Laborales TMEC.

 

Lighthizer señaló que a partir del 1° de julio EE.UU. se reunirá con los comités correspondientes para discutir el posible uso de los mecanismos de “enforcement” del TMEC en materia ambiental y laboral.

 

En materia laboral, los mecanismos de solución de controversia son esencialmente los paneles de solución de controversias Estado-Estado (capítulo 31 del TMEC) y el mecanismo laboral de respuesta rápida

 

Diversos portales de noticias han reportado que los primeros casos que eventualmente podrían iniciarse en materia laboral podrían versar sobre trabajo infantil, trabajo forzoso, así como temas relativos a la libertad de asociación (i.e. sindicatos) y negociación colectiva.

 

La Barra de Abogados de México-EE.UU a principios de este mes organizó el webinar sobre el Capítulo Laboral del TMEC y el Comercio Internacional, en donde participó nuestro Socio Jr. Emilio Arteaga y se discutió, precisamente, el mecanismo laboral de respuesta rápida y el entorno laboral actual en México.

 

Accede a la grabación del webinar, aquí:

Además, VTZ organizará un nuevo webinar sobre los retos del Capítulo Laboral del TMEC para la industria maquiladora, el cual se llevará a cabo el próximo 26 de junio de 2020 dirigido especialmente a la industria maquiladora.

TMEC, Capítulo Laboral, Industria Maquiladora, Contratos Colectivos, Sindicatos

En cuanto a las controversias en materia ambiental, la controversia podría versar sobre los productos biotecnológicos agrícolas porque México no ha otorgado los permisos necesarios para importarlos desde 2018 y  a la fecha.

Aranceles consolidados ante la OMC

El representante comercial Robert Lighthizer  también señaló que los aranceles consolidados en la lista de concesiones de EEUU en la OMC están desactualizados y bloqueados; los aranceles consolidados de EEUU son notoriamente bajos, en promedio de 2% a 4%.

En este sentido, el representante comercial señaló que los aranceles consolidados ya no reflejan las condiciones económicas y políticas de algunos miembros que continúan manteniendo aranceles muy altos, en comparación con los EEUU.

En pocas palabras, EEUU buscaría aumentar sus aranceles consolidados, lo cual impactaría los productos originarios de países que no cuentan con un Tratado de Libre Comercio con los EEUU. Sin embargo, el proceso para cambiar los aranceles consolidados (o la lista de concesiones) no es unilateral y requiere de una negociación de todas las partes de la OMC.

Cabe destacar que desde el año pasado,  el presidente Trump cuestiona el estatus de ciertos miembros de la OMC (como China) por su categoría de países en desarrollo y los beneficios que conlleva calidad.

El Proceso de Selección del Director de la OMC

El 8 de junio de 2020, el gobierno mexicano presentó formalmente a Jesús Seade, jefe negociador del TMEC y actual Subsecretario para América del Norte, como candidato a la Dirección General de la Organización Mundial de Comercio.

La candidatura de Seade motivó diversas opiniones entre reconocidos profesionales mexicanos en el ámbito comercial internacional, las cuales fueron reportadas en un portal de noticias. Por ejemplo, parte de las reacciones se centra en que el Director tiene que ser de un cierto nivel, es decir ser un ex-ministro o jefe de estado, con amplio liderazgo para generar consensos debido a la situación de parálisis que está enfrentando la organización.

El proceso de selección de candidato durará 3 meses, por lo que se espera contar con un nuevo director el 1 de septiembre de este año.

Hasta el momento, figuran otros tres candidatos junto con el mexicano Seade: la nigeriana Ngozi Okonjo-Iweala, el egipcio Abdel-Hamid Mamdouh y el moldavo Sr. Tudor Ulianovschi. Al final, ¿qué tanto las reacciones afectarán las aspiraciones de Seade?

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USMCA developments and Mexico-China Business Forum – The Trading Room

20 Dec , 2019  

USMCA, Labor Attachés, Labor Law enforcement, Rapid Response Mechanism,

USMCA in a Week

A few days after the protocol amending USMCA was signed, a new controversy arose between Mexico and the USA at the weekend due to USMCA’s implementing act in the USA. 

In essence, Mexican negotiator, Jesus Seade, wrote a letter stating that Mexico considered that the legislation went “beyond” the protocol since the USA was considering to include “labor inspectors” in Mexico. 

In response, USTR mentioned that the USMCA’s authorized “domestic measures” such as having “Attachés”. In fact, US attachés currently operate in Mexico in different sectors or matters, such as agricultural, commerce, among others.  

How will the US Attachés function?

The existence of a maximum of 5 labor Attachés is planned, according to the USTR response and US legislation. The Attachés “will work with their Mexican counterparts, workers, and civil society groups on implementation of the Mexican labor reform, including by providing technical assistance and disbursing capacity building funds, and provide assistance to the new U.S. government interagency labor committee.” 

Undersecretary Seade thanked the “clarity” of USTR’s response, considered that the Attachées will be 90% harmless and pointed out that the Attachées would abide by Mexican law.

Rapid Response Mechanism

The Modification Protocol to USMCA provides for Facility-Specific Rapid Response Labor Mechanism, which will operate independently.

Our labor expert, Rafael Alday, prepared an alert (only available in Spanish), addressing this mechanism briefly.

Under this context, it is clear that Mexico will have comprehensive monitoring of compliance with labor laws, particularly on unions and collective bargaining rights. In the same vein, Ricardo Ramírez, a former member of the WTO Appellate Body, said that never before a system so intrusive and with strict surveillance of labor legislation in another country had been established.

A Strong First Step

On Tuesday, the USMCA implementation act was approved by the Committee on Ways and Means of the House of Representatives, meanwhile, the House approved the act yesterday. Now, the Senate needs to vote on the act, but this will occur after the impeachment process that US President Donald Trump is facing according to media outlets.

The Mexican Minister of Economy mentioned in Twitter that the US Senate will vote on January 2020.  

Sources:

https://ustr.gov/about-us/policy-offices/press-office/press-releases/2019/december/ustr-responds-mexico-usmca

https://www.eluniversal.com.mx/opinion/ricardo-ramirez-hernandez/t-mec-me-acabo-de-enterar

https://elfinanciero.com.mx/economia/camara-de-representantes-de-eu-ratifica-el-t-mec

 

Mexico-China Business Forum

This Monday, VTZ and Adrián Vázquez participated in the Mexico-China Economic and Commercial Cooperation Forum organized by the Mexican Business Council for Foreign Trade, Investment and Technology (acronym COMCE) and the Chinese Council for the Promotion of International Trade (CCPIT). Detailed information about the plenary is available here.

 

Sources:

https://www.jornada.com.mx/ultimas/economia/2019/12/16/abriran-oficina-de-enlace-entre-empresarios-chinos-y-mexicanos-4595.html

 

Download in PDF:The Trading Room

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Mexico and China & Habemus Tomato Agreement – The Trading Room

23 Aug , 2019  

China and Mexico, Investment and Trade, Tomato Suspension Agreement

The Trading Room

(Download our newsletter in PDF: Trading Room -20190823)

Mexico and China: Trade & Investment

In an interview, the Underminister of North American Affairs of the Ministry of Foreign Affairs, Jesus Seade, commented on China and its “trade war” with the USA.

According to the news outlet, Mr. Seade commented that Mexico has to become more attractive for Chinese investment and that Mexico must address its trade deficit with China.

Also, we note that Chinese investment in Mexico is insignificant in comparison to foreign direct investment from other countries, e.g. the US, Japan, Korea, etc.  However, Mr. Seade stressed that such situation must change and Mexico has “… to be [China’s] privileged partner in the western hemisphere, America, and Mexico has to do everything so that this can occur.”

Source:

https://elfinanciero.com.mx/economia/tenemos-que-ser-el-socio-privilegiado-de-china-seade

Habemus Tomato Agreement

 

This Wednesday, the US Department of Commerce announced a new draft agreement with Mexican tomato producers/exporters. The agreement will suspend the anti-dumping investigation and, therefore, it would avoid final antidumping duties on Mexican tomato.

 

Interested parties may comment on the draft suspension agreement during the next 30 days. In essence,  Mexican tomato producers/exporters agreed to respect reference prices and, according to the Washington Post, 66% of tomato imports will be subject to an inspection to verify the quality of the product.

 

Once the suspension agreement enters into force, the US will eliminate the provisional anti-dumping duty, imposed on May 7th, 2019, and the duties paid would be returned or refunded to the Mexican tomato producers/exporters.

Sources:

https://www.commerce.gov/news/press-releases/2019/08/us-department-commerce-announces-new-draft-suspension-agreement-fresh

https://elfinanciero.com.mx/economia/acuerdo-entre-tomateros-mexicanos-y-estados-unidos-un-paso-positivo-hacia-la-aprobacion-del-t-mec-economia

https://elfinanciero.com.mx/economia/guerra-del-jitomate-llega-a-su-fin-eu-y-tomateros-mexicanos-alcanzan-acuerdo-para-evitar-aranceles

https://www.bloomberg.com/news/articles/2019-08-21/u-s-mexico-reach-deal-to-suspend-tomato-dumping-probe-tariffs

https://expansion.mx/empresas/2019/08/22/los-productores-de-tomate-es-lo-mejor-que-pudimos-hacer-para-nuestro-pais

https://www.washingtonpost.com/business/2019/08/21/us-mexico-settle-tomato-squabble-stave-off-tariffs-shortage/

https://www.reuters.com/article/us-usa-trade-tomato-mexico/mexico-and-u-s-reach-deal-to-end-tomato-tariff-dispute-idUSKCN1VB0T5.

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