On Monday April 29th, 2019, Mexico’s Senate approved a bill that gives its workers the right to use secret-ballots to vote on union matters and contracts. It also requires proof of workers’ consent for collective bargaining agreements and creates an independent agency and court to replace the current labor board in order to resolve disputes and register unions. This bill is a major step towards voting on the United States-Mexico-Canada (USMCA) trade pact. Hopefully, this will create a more efficient arbitration system for labor disputes. Mexican unions have long been closely aligned with business interests and seen as corrupt by U.S. union leaders. The piece of legislation now heads to Mexican president Andrés Manuel López Obrador’s desk for ratification.

U.S. Democratic lawmakers have been pushing the Mexican government to strengthen its workers’ rights to unionize, which ultimately requires new labor laws. This is in accordance to a labor annex to the USMCA that explicitly requires that workers vote to decide on unions and labor contracts in Mexico. Although House Democrats have raised concerns over the enforceability of the deal’s labor and environment standards, Mexico has said it plans to move forward on the labor changes. Additionally, House Speaker Nancy Pelosi has indicated that she wants to see how Mexico implements the policy before putting the USMCA up for vote.

The U.S. International Trade Commission (ITC) estimates that Mexico’s labor changes would result in a 17.2% increase in wages of unionized Mexican workers.” The agreement, if enforced, would strengthen labor standards and rights, including those related to collective bargaining in Mexico, which would promote higher wages and better labor conditions in that country,” the ITC found in an analysis of USMCA.

This was written by Frances P. Hadfield and Rebecca Toro Condori of Crowell & Moring LLP.