“(The tariff sanction, should it be imposed) will not only be limited to exports from the mine, specifically the Mina del Sombrerete in Zacatecas, but will cover exports from Grupo México as an export entity. It is a very relevant matter, it will set a very important precedent, as it will create precedents for future arbitration panels.”
Oscar de la Vega, De la Vega & Martínez Rojas.
The Mexican government is put to the test with the first labor panel, particularly because it will be the one in charge of demonstrating, in facts, that there is no violation of the labor rights relating to freedom of association and collective bargaining at one of the mines belonging to Grupo México and will have to address fundamental aspects such as the right to strike, all in less than four months, labor specialists estimated.
In the event that violations are confirmed, it is possible for tariff sanctions to be imposed on the company that incurred in this offense, “in this case Grupo Mexico, because it will not be limited only to the exports from the mine, specifically the Mina del Sombrerete in Zacatecas, but it will cover exports from Grupo México as an export entity. This is a very relevant matter, it will set a very important precedent, as it will create precedents for future arbitration panels”, said Óscar de la Vega, partner at the De la Vega & Martínez Rojas Firm.
For his part, Manuel Fuentes, an expert in labor policy and professor at the UAM, said that “the panel should be convened very soon; in it, a representative of Mexico and another of the United States will be accompanied by a neutral representative, this with the objective of having unanimity or a majority in the decision that is made, and it will have to be conducted as established in the trade agreement itself, in less than four months”, he explained.
After qualifying as “very good and appropriate that a labor panel be convened”, he said that in this manner the Mexican government will build the criteria on the interpretation of Annex 23 of the USMCA.
“A new path is being opened in international matters relating to labor disputes and, in my opinion, Mexico should have received the labor complaint and not have refused to conduct an investigation”, as there is a strike that has been in place for more than 16 years at the San Martín mine, brought by the National Mining Union led by Morena Senator Napoleón Gómez Urrutia.
In this sense, he emphasized “this is not about of previous or following events (as argued by the Mexican authority), but about the repercussion of the exercise of the right to strike”, Fuentes said.
It is worth recalling that the United States filed a labor complaint with the Mexican government raising the complaint that the rights of workers were violated at the San Martín mine (also known as del Sombrerete) located in Zacatecas and belonging to Grupo México, because a strike was terminated by establishing a collective bargaining agreement with a different union, which is a violation to workers’ rights.
Mexico maintained that this took place prior to the entry into force of the trade agreement with the United States and Canada and refused to conduct an investigation to determine a possible Remediation Plan for the company.
In this regard, Pablo Franco, representative of ILAW Network in Mexico, said that the panel is a mechanism agreed upon by the countries to solve this type of differences “The novelty now is that it is applied in labor matters for the first time; it is an unprecedented instrument and, in fact, it is integrated and the participants are chosen by a raffle; there is, therefore, a guarantee that they will be impartial and professional.”
What are the limits of the MLRR
For his part, De la Vega, pointed out that an important topic is that of the “interference that we are allowing the United States, through the USMCA, in matters that are evidently internal, such as labor matters. The American government, faced with a decision that had already been made by the Mexican government maintaining that there was no violation, challenges this decision, as it is its right, and requests that the panel is convened, which detonates and denotes an interference that is detrimental to the sovereignty of the Mexican government on internal matters; but it was accepted in the USMCA.”
He added that there is an abuse in the activation of the Rapid Response Labor Mechanisms [MLRR], “they are often individual matters that are being used as a reason to start a Mechanism which, in turn, is not regulated in the country, the United States has a Law on the Implementation of the USMCA, and this does not exist in Mexico.”