CATEM's Role: Taking Advantage of Nearshoring in Mexico

Nearshoring presents both opportunities and challenges for Mexico's labor force. Recognizing the importance of proactive engagement, Mexico’s Autonomous Confederation of Workers and Employers (CATEM) is playing a pivotal role in advocating for the rights and interests of workers amid the influx of investment and job opportunities associated with nearshoring.

At the core of CATEM's mission is the empowerment of workers and the promotion of fair labor practices. Focused on harnessing the potential of nearshoring to benefit workers and communities, José Carlos Saavedra, Secretary of Foreign Relations, CATEM, underscored the confederation’s commitment to ensuring that labor rights are upheld and that workers are empowered in this shifting economic landscape.

Saavedra emphasized the need for collaboration between labor organizations, government agencies, and businesses to ensure that nearshoring initiatives translate into tangible benefits for workers. This includes advocating for fair wages, safe working conditions, and opportunities for skills development and career advancement.

CATEM is actively involved in fostering dialogue and cooperation between labor unions and companies to address the evolving needs of the labor market. By facilitating constructive engagement and negotiations, CATEM aims to strike a balance between the interests of workers and the imperatives of economic development.

Saavedra identifies three key conditions enabling the success of nearshoring in Mexico regarding talent:

• Mexico's ratification of International Labor Organization (ILO) Convention 98 on freedom of association in 2018.

• The 2019 Labor Reform in Mexico, which established conditions for operationalizing and implementing freedom of association, fundamentally altering the labor landscape

• The enforcement of USMCA and its dispute resolution mechanism, which significantly impacted nearshoring decisions. This mechanism allows labor violations to be addressed, potentially resulting in trade sanctions against non-compliant labor centers, thus emphasizing the importance of considering evolving labor conditions for companies investing in Mexico.

“Mexico's labor laws are among the world's most modern, promoting extensive worker freedoms. However, these laws also impose greater responsibilities on unions, forcing them to uphold the standards outlined in the Labor Reform and USMCA. Failure to do so jeopardizes both jobs and investments,” states Saavedra.

Saavedra emphasizes the importance of Chapter 23, focusing on labor rights, and Chapter 31, addressing dispute resolution, in USMCA. He underscored the need for ongoing scrutiny of these chapters during the USMCA revision.

In addition to advocating for labor rights, CATEM is also focused on promoting inclusive growth and social development in communities affected by nearshoring activities. This entails supporting initiatives aimed at enhancing education, healthcare, and infrastructure to uplift the standard of living for workers and their families.

Despite the opportunities presented by nearshoring, CATEM remains vigilant against potential threats to workers' rights and well-being. This includes concerns related to job insecurity, precarious employment arrangements, and the erosion of labor standards. By monitoring developments in the labor market and advocating for robust legal protections, CATEM seeks to safeguard the interests of workers in an ever-changing economic landscape.