The Speaker of the House of Representatives of the United States, Nancy Pelosi, warned that the United States would not sign the United States–Mexico–Canada Agreement (USMCA) without Mexico approving a labor reform before.

Pelosi, a Democratic representative from California, expressed concern about how employers treat workers in Mexico. To approve a new treaty, Mexico must equate its labor laws with those of the United States and Canada. Therefore so the Mexican Congress is discussing a fast-track reform right now.

USA and Canada, concerned about job migration

In the new trade agreement, which would replace the North American Free Trade Agreement (NAFTA), the United States and Canada conditioned their signature with a labor reform in Mexico that respects the rights of workers.

Before the signing of the new treaty, the United States and Canada expressed their concern about the transfer of work to Mexico. The Economic Policy Institute estimated that, until 2010, the US It had lost some 683,000 jobs due to the trade imbalance with Mexico. However, the same analysts point out that these jobs would have been lost without NAFTA. This migration of employment has been because Mexico went from being a country with low-skilled labor to one with skilled and profitable work.

Voices against outsourcing in Mexico

According to data from the National Institute of Statistics and Geography (INEGI), outsourcing in Mexico grew 48% from 2004 to 2014. Although it has been a modality of work that has allowed the creation of jobs in Mexico, its critics point out that it has been used not to comply with the payment of taxes and not to grant labor rights such as the payment of fees to the Health Insurance.

In Mexico, many politicians have asked to eliminate or regulate outsourcing. An example is the case of the senator and mining leader, Napoleón Gómez Urrutia, who had already requested a labor reform to review the procedures in which outsourcing is carried out in Mexico. Deputies of the opposition asked that this modality will be discussed to eliminate or regulate it.

However, in the reform brought to congress, outsourcing does not appear. Jaime Flores Sandoval, director of the Administrative Center for Mexican Business Development, pointed out that Mexican laws don’t specify the term. He also comments that outsourcing is often confused with “subcontracting”.

Labor reform’s central points in Mexico are: to incorporate labor conflicts to the judicial power, to regain union principles such as collective bargaining, and to eliminate sanctions for belonging or not belonging to a union.

Everything indicates that, despite the voices against, the outsourcing boom will continue in Mexico.