As U.S.M.C.A. Takes Effect, Much Remains Undone

If the Mexican Supreme Court rules that the labor law is unconstitutional, Mexico could be in violation of a major portion of the trade pact, and could face tariffs or other punitive actions from the United States and Canada.Union leaders are preparing a list of labor cases they could bring under the new agreement’s dispute settlement provisions, including that of a Mexican labor lawyer, Susana Prieto Terrazas, who was arrested while trying to establish an independent union. But it remains to be seen what kind of punishment the independent panels that review these cases could hand down, if any.“Implementation is only as good as they’re willing to enforce it,” said Representative Jimmy Gomez, Democrat of California. “We’re going to be paying attention, very closely, to how the agreement is implemented.”“The promise of the U.S.M.C.A. is that it was righting the wrongs of NAFTA,” he added. “But if they’re not willing to use it, or if they’re taking steps to undermine it, then it’s for naught.”For companies that are scrambling to comply with the trade pact’s voluminous rules for how they source their products and share information with the government, much remains uncertain as well.Many businesses that were working to enact the changes required by the U.S.M.C.A. had to put everything on hold for the pandemic, said Richard Mojica, a lawyer with Miller & Chevalier’s International practice. Companies have also been trying to digest hundreds of pages of new detailed industry guidance, which the administration only released in June.“It’s absolutely a scramble,” Mr. Mojica said.Ann Wilson, the senior vice president for government affairs at the Motor & Equipment Manufacturers Association, which represents auto parts suppliers, said companies were facing significant costs to meet the new rules at a particularly trying time, in the midst of a pandemic and economic recession.


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