On June 29, 2021, U.S. Trade Representative for Labor, Joshua Kagan, and U.S. Department of Labor’s Deputy Undersecretary for International Affairs, Thea Lee, met with their counterparts from Mexico and Canada for the first USMCA Labor Council meeting.

Key areas of discussion as outlined by USTR included:

  • USMCA’s requirement that each party prohibit the importation of goods into its territory from other sources produced in whole, or in part by forced or compulsory labor.
  • Ongoing implementation of Mexico’s recent historic labor law reform.
  • Labor policies for migrant workers.
  • Areas for ongoing and future cooperation and technical capacity building.

Notably, the USMCA is the first U.S. trade agreement that has entered into force that prohibits the import of goods produced using forced labor. Following the inaugural meeting, USTR Katherine Tai stated that “A good next step in this increased cooperation can be on the issue of forced labor.” “Working together to address this critical economic and moral issue would send a powerful message to the world.”

Key labor changes in the USMCA as outlined by CRS include:

  • Prevention of panel blocking in dispute settlement. Ensures the formation of a panel in dispute cases where a party refuses to participate in the selection of panelists.
  • “In a Manner Affecting Trade and Investment.” Shifts the burden of proof by stating that an alleged violation affects trade and investment, unless otherwise demonstrated.
  • Rapid Response Mechanism. Adds a new rapid response mechanism to provide for an independent panel investigation of denial of certain labor rights at “covered facilities,” as opposed to a government inspection.
  • Mexico’s Labor Reform Monitoring. USMCA implementing legislation creates a new interagency committee, labor attachés, and reporting requirements to Congress on Mexico’s implementation of labor reforms.
  • New or amended provisions on Rules of Procedure for DS, forced labor, and violence against workers

Next Steps and Additional Information

The Office of the U.S. Trade Representative and the Labor Department are expected to publish final guidelines for USMCA labor provisions soon.

The Interim Final Rule is available here.

The Labor Councils’ full joint statement is available here.

For more information on the USMCA and actions addressing human rights and forced labor abuses, contact our team and see previous posts below.