(Download our newsletter in PDF: Trading Room -20190412)
This Tuesday a letter directed to the USTR was issued by US Congress representative Richard Neal Chairman of the House Ways and Means Committee, mentioning that members are concerned with USMCA, calling for strong labor and environment standards that can be enforceable.
Kenneth Smith former Mexican USMCA chief negotiator responded that USMCA now includes labor and environment chapters that are subject to a dispute settlement, hence, they have “teeth”; plus there is an annex that sets specific obligations to Mexico regarding collective bargaining rights and freedom of association.
And this week Mexico took an important step to overcome these “political” obstacles regarding USMCA ratification, since the Mexican Chamber of deputies “approved” the amendments to the Mexican Labor Law this Thursday that will overhaul the labor justice system and aim to be compatible with recently ratified ILO’s 98 Convention (on freedom of association and collective bargaining) and Mexico’s commitments under USMCA. Now it is the turn for Senate to discuss the labor reform.
The Ministry of Economy held a press conference to address the issue concerning the termination of the suspension agreement next May 7th, 2019. Graciela Marquéz, the Minister of Economy, informed that Mexico is not a party to the suspension agreement, but that the government will “assist” Mexican tomato producers in this situation, noting the importance of the Mexican tomato; for instance, exports to the USA represent about 3 billion USD. The suspension agreement avoided the imposition of an antidumping duty of about 17.5% back in 1996, duties that may be imposed as of May 7th; in order to avoid again this situation, the Mexican industry submitted last week a suspension agreement that apparently is not being considered by Department according to statements made in the press conference.