Report on Supply Chain Compliance 3, no. 1 (January 9, 2020)
The United States Congress ratified the United States-Mexico-Canada Agreement — also known as NAFTA 2.0 — but included language that may cause problems with Mexican officials. The agreement ratified by the U.S. includes language that requires labor inspectors from the U.S. to monitor Mexico’s labor reform efforts. The language is likely a concession to stakeholders in the U.S., who fear Mexico will not live up to the strict labor requirements, thereby potentially removing any incentive for companies to hire more protected, higher-cost American workers.
A possible wrench in the works could further delay the implementation of the new trade agreement, adding uncertainty to an already disrupted international trade system. Jesús Seade, undersecretary for North America in Mexico’s Ministry of Foreign Affairs, is set to travel to the U.S. to meet with trade representative Robert Lighthizer to clarify the new language.