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.

https://www.cmtradelaw.com/category/u-s-mexico-canada-agreement-usmca/

https://www.cmtradelaw.com/category/forced-labor-uk-modern-slavery-act/

https://www.cmtradelaw.com/category/xinjiang/

 

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Photo of John Brew John Brew

John Brew is the co-chair of Crowell & Moring’s International Trade Group and a partner in the firm’s Washington, D.C. office. He has extensive experience in import and export trade regulation, and he regularly advises corporations, trade associations, foreign governments, and non-governmental organizations…

John Brew is the co-chair of Crowell & Moring’s International Trade Group and a partner in the firm’s Washington, D.C. office. He has extensive experience in import and export trade regulation, and he regularly advises corporations, trade associations, foreign governments, and non-governmental organizations on matters involving customs administration, enforcement, compliance, litigation, legislation and policy.

John represents clients in proceedings at the administrative and judicial levels, as well as before Congress and the international bureaucracies that handle customs and trade matters. He advises clients on all substantive import regulatory issues handled by U.S. Customs and Border Protection and Immigration and Customs Enforcement, such as classification, valuation, origin, marking, tariff preference programs, other agency regulations, admissibility, import restrictions, quotas, drawback, audits, prior disclosures, penalties, investigations, Importer Self Assessment and Customs-Trade Partnership Against Terrorism programs, importations under bond, the Jones Act, vessel repairs, and foreign trade zone matters.

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Photo of Frances P. Hadfield Frances P. Hadfield

Frances P. Hadfield is a counsel in Crowell & Moring’s International Trade Group in the firm’s New York office. Her practice focuses on forced labor and withhold release orders (WRO), import regulatory compliance, and customs litigation. She regularly advises corporations on matters involving…

Frances P. Hadfield is a counsel in Crowell & Moring’s International Trade Group in the firm’s New York office. Her practice focuses on forced labor and withhold release orders (WRO), import regulatory compliance, and customs litigation. She regularly advises corporations on matters involving customs compliance, audits, customs enforcement, as well as import penalties.

Frances represents clients before the U.S. Court of International Trade and the U.S. Court of Appeals for the Federal Circuit, as well as in proceedings at the administrative level. She advises corporations on both substantive federal and state regulatory issues that involve U.S. Customs and Border Protection, the Federal Trade Commission, Food and Drug Administration, and U.S. Fish & Wildlife in matters pertaining to product admissibility, audits, classification, import restrictions, investigations, marking, licenses, origin, penalties, and tariff preference programs.

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