Mexico's Congress is already engaged in discussions and consultations on the labor law. Confrontations among union leaders, union members, industry associations and the government have surfaced. The spectrum of the discussion will be broad and full of land mines. But regardless of stakeholders' interests, any new laws and regulations will need to comply with international obligations not only in the USMCA but in the International Labor Organization Convention 98 on rights to organize and bargain collectively.
Moreover, if Mexico wants to increase the chances of USMCA passage in the U.S. Congress, the new law should also address enforcement concerns that have been voiced by labor groups and Democrats in the U.S. House.
The legislative discussion in Mexico's Congress is taking place during complicated times. Mexican labor unions and workers have become emboldened by the winds of change and have grown confident to fight for improved working conditions. Since January, more than 65 companies in the border town of Matamoros, near Brownsville, Texas, have been hit by workers' strikes. They began in January with maquiladora factories, jumped to a bottling company and continued on to mining companies.
Workers are demanding an increase in salary and a bonus. The results for workers thus far have been mixed. Some companies have capitulated, others have fired some of their employees and one company abruptly left Mexico. Legislators are faced with the herculean task of balancing the overdue necessity of granting Mexican workers better working conditions with discouraging corrupt union leaders from extorting businesses under the threat of a strike.
Companies on both sides of the border have begun to suffer disruptions in their supply chains. For instance, some maquiladora companies have been unable to meet their contractual obligations to their U.S. clients. Estimates by a Mexican local congresswoman point to a $1.5 million loss per week.