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López Obrador to Meet Biden, Trudeau over USMCA

By Antonio Gozain | Mon, 07/04/2022 - 14:00

Two years after the entry into force of the USMCA, President Andrés Manuel López Obrador announced that US and Canada leaders Joe Biden and Justin Trudeau will visit the country in November 2022 to discuss the international treaty.

Labor complaints have become one of the main points of discussion within USMCA. Recently, the US presented several complaints against companies operating in Mexico under USMCA’s Rapid Response Mechanism (RRM). Most of these complaints concern the automotive industry.

Under USMCA, Mexico committed to pass a comprehensive reform of its union law to strengthen workers’ rights of freedom of association and collective bargaining. Through the RRM, USMCA enables the US and Canada to take action and investigate complaints of labor violations and impose trade sanctions to companies that violate the reform.

This Monday, El Universal published an interview with Minister of Economy Tatiana Clouthier, who said that US’s labor complaints against Mexico “distort the scope” of the agreement that both countries share with Canada. The Mexican labor reform is still in its implementation phase and needs time to reach maturity, she added.

However, also this Monday during his daily press conference, López Obrador assured that the labor complaints do not represent a major issue for Mexico. “There is no problem, we are doing very well,” he said and added that these issues will be discussed during Biden and Trudeau’s visit to Mexico in November.

López Obrador will hold a summit with Biden on July 12 to address only bilateral matters, taking into account the relations of both countries with the rest of the continent. "There will be two or three meetings about issues of greater economic integration with respect to sovereignties, the migration issue, investment for development, work visas and other issues,” said López Obrador.

The latest labor complaint presented under USMCA’s RRM was in June 2022, when the US government argued that the automotive company VU Manufacturing seeks to impose a friendly union to support its interests in its plant in Piedras Negras, Coahuila, as reported by MBN. This became the fifth complaint pertaining to labor rights presented to the RRM in slightly over a year. The previous complaints involved plants of General Motors, Tridonex, Panasonic and Teksid.

Two Positive Years under USMCA: Experts

July 1, 2022, marked the second anniversary of the enforcement of USMCA, and several experts and private sector players classified the treaty as successful, reported El Financiero.

“There is a lot of interest from companies to come to Mexico because of the closeness we have with the US, especially many investments from companies from Asia. And although the figures are favorable, they could improve in the coming years,” said Claus von Wobeser, President, International Chamber of Commerce.

Since 2021, Mexico and the US have traded close to US$620 billion. By April 2022, both countries had traded US$250 billion, according to the US Census Bureau.

“It is possible that we are heading for a historic year in trade between Mexico and the US, and there is no doubt that USMCA is a factor for that,” said Juan Carlos Baker, former USMCA negotiator, CEO and Founding Partner, Ansley Consultants.

The data used in this article was sourced from:  
MBN, El Economista, El Financiero, US Census Bureau
Photo by:   Twitter
Antonio Gozain Antonio Gozain Journalist and Industry Analyst