WEEKLY REPORT 3.5.24

April 26th - May 3rd 2024

HOT TOPICS

USMCALABORPANEL:SANMARTÍN

The USMCA labor panel ruled in favor of Mexico regarding the San Martín mine case, stating the panel lacked jurisdiction over union rights denial In line with Mexico's position, the trinational panel concluded that the denial of union rights can only be attributed to events occurring after the entry into force of the USMCA and subject to the Labor Reform of 2019 The facts presented by the United States did not meet these criteria

This ruling establishes a precedent against retroactivity in trade agreements, crucial for Mexico's sovereignty It also advocates for the reasonable use of the Rapid Response Labor Mechanism (RRLM) and emphasizes its effectiveness in protecting labor rights. The San Martín Mine case highlights the need for refinement in the RRLM's application, ensuring it strengthens national institutions and is used exclusively for facilities trading with North American partners. Mexico reiterated in a statement its commitment to continue collaborating with the U S and Canada on labor conditions and suggested refining the mechanism to equally protect migrant workers' rights.

Source: Ministry of Economy

SUBSIDY ON JOBS THAT EARN LESS THAN MXN 9,000

President López Obrador announced a decree increasing employment subsidies for workers earning up to MXN 9,081 monthly to alleviate Income Tax burdens This measure was taken so workers could fully receive the 20% increase in minimum wage, as they were only getting 14% because 6% went to ISR (income tax). The decree, benefiting 9 million formal workers, was published in the Official Gazette of the Federation and entered into force on May 1st .

Source: El Universal and the Official Gazette of the Federation

END OF THE LEGISLATIVE PERIOD

The legislative period ended on April 30th Although it appeared to be a very hectic period, many initiatives were left hanging in the legislative process These include the 20 reforms presented by AMLO, the “Ley Silla”, the reduction of the workweek, and the paternity leave permit These initiatives are left open for discussion for the next legislative period, which starts on September 1st A possible scenario is that the new legislators, as both the Senate and the Chamber of Deputies will hold elections on June 2nd , make an agreement to discard many initiatives However, it will depend on the new composition of the Congress.

Source: Prodensa Intelligence

ECONOMIC GROWTH

In the 1Q of 2024, the GDP in Mexico experienced a growth of 0.2% compared with 4Q of 2023 Nevertheless, all economic activities experienced a decline, expect tertiary activities that had a 0.7% growth. Compared with the same quarter in 2024, the economy grew 2% and all activities experienced an increase

Source: INEGI

CONFLICT AT THE U.S.-MEXICO BORDER

Mexican transporters reported new random inspection points by Texas authorities for Ciudad Juárez trailers, stemming from increased migrant flows This caused a bottleneck with hundreds of loads stranded on the Mexican side There are fears that last year's crisis, when cargo worth millions piled up during similar inspections, occurs again Consequently, Thor Salayandía, coordinator of the Border Business Bloc and National Counselor of the National Chamber of the Manufacturing Industry, warned of imminent fines for the maquiladora industry, facing contractual obligations and potential economic sanctions

Source: Forbes

CALL BETWEEN BIDEN AND AMLO

President Biden and President López Obrador reaffirmed their commitment to enhancing bilateral and regional cooperation during a phone call on April 28th. They discussed managing hemispheric migration, enhancing border operational efficiency, and promoting security Immediate measures to reduce irregular border crossings while safeguarding human rights were ordered by both leaders.

Source: The White House

MEXICAN ELECTIONS 2024

SECONDPRESIDENTIALDEBATE

The second presidential debate took place on April 28th and many bold proposals were made, specially in the business-labor sphere The PRI-PAN-PRD candidate, Xóchitl Gálvez, proposed that anyone earning less than MXN 15,000 would be exempt from paying income taxes The Morena-PT-PVEM candidate, Claudia Sheinbaum, proposed she would increase of the minimum wage to cover 2.5 basic baskets, while the Movimiento Ciudadano candidate, Jorge Álvarez Máynez, said he would promote the reduction the workweek to 40 hours, and that he would set a minimum wage of MXN 10,000 per month.

Regarding the outcome of the debate, many newspapers and agencies indicate that Sheinbaum was the winner In a survey from Reporte Indigo, 66 9% of people identified Sheinbaum as the winner of the debate, and only 26 4% saw Xóchitl as such. Also, according to Mendoza Blanco y Asociados, 54.4% of people say Sheinabum won Xóchitl has recently said that she will have to duplicate efforts as the last month before the election is the most complicated one

Source: Prodensa Intelligence, El Universal, and Forbes

OPPOSITION PRESSURES MÁYNEZ TO DROP THE RACE

After the second presidential debate, leaders of the PRI and PAN urged Jorge Álvarez Máynez, candidate from Movimiento Ciudadano, to withdraw in favor of Xóchitl Gálvez. However, Máynez, rejected this, claiming a perception of desperation from the PRI-PAN alliance He acknowledges the need to work harder, contrasting his campaign's intensity with the PRI and PAN's apparent slowdown

Source: Expansión

CANDIDATES FOR NUEVO LAREDO

The INE updated on cases with inconsistencies regarding the list of residents abroad that will vote in the next elections Councilor Arturo Castillo stated that out of 39,724 applications with issues, 20,000 could be corrected, and 18,760 are being clarified by citizens Of these, 10,473 clarifications were received, while over 8,000 records lack clarification, raising concerns about potential voter fraud. Castillo mentioned the possibility of filing a complaint and conducting a thorough investigation to prevent unauthorized registrations on the Nominal List Abroad.

Source: El Economista

CANDIDATES FOR NUEVO LAREDO

Nuevo Laredo, Tamaulipas, a strategic city in the frontier that has three international bridges to connect Mexico with the U S , will hold elections on June 2nd . The current municipal president, Carmen Lilia Canturosas from Morena, is looking to be reelected She has proposed the expansion of infrastructure with more than 750 essential public works, the continuation of paving programs, and the modernization of urban services.

Canturosas is leading the race with a 64.1% vote intention, according to RUBRUM.

The PRI-PAN-PRD candidate, Yahleel Adbala, is in second place with 24 6% and the Movimiento Ciudadano candidate, Macaria Lizeth González, is in third place with 5% This election is very important, as the municipality of Nuevo Laredo has the opportunity to be an international reference in the development of border cities Trade in North America could greatly benefit with a good administration.

Source: México Cómo Vamos, El Sol de Tampico, and Milenio

CANDIDATES FOR THE SENATE MEXICO CITY

The Senate candidates of Morena and the Movimiento Ciudadano (MC) in Mexico City declined to participate in a scheduled debate on May 5th Cynthia López Castro, representing a coalition of PAN, PRI, and PRD, criticized their absence as cowardly and challenged them to debate García Harfuch and Ernestina Godoy (Morena) cited precautionary measures by the electoral authority and scheduling conflicts for their refusal Alejandra Barrales and Sandra Cuevas (MC) cited a last-minute issue López Castro requested to use the debate space despite their absence. However, the INE confirmed the debate's cancellation According to Polls mx, the Morena team is leading the race with a 45% vote intention, while the PRI-PAN-PRD team has a 34% vote intention

Source: Expansión

CHERTORIVSKY IN MEXICO CITY

Recently, the Movimiento Ciudadano candidate for the Head of Government of Mexico City proposed he would increase the minimum wage to MXN 10,000 He also met with actors from the private sector, like the National Association of Supermarkets and Department Stores and COPARMEX, and committed to promote and encourage the promotion of the city and to detonate the economic flow in the capital Nevertheless, he still far behind the second place, with only a 4 8% of the vote intention, according to Demoscopia Digital.

Source: El Universal and El Universal

Legislative Issues and Industry News:

LABOR

INITIATIVE WITH A DRAFT DECREE AMENDING ARTICLES 84 AND 85 AND ADDING ARTICLE 995-BIS TO THE FEDERAL LABOR LAW

Presented by: Deputy Emmanuel Reyes Carmona (Gto - MORENA)

Purpose: The proposed initiative aims to ensure that workers' salaries in companies benefiting markets outside the national territory are comparable to those paid in the company's country of origin This international comparative wage shall not be less than 80% of the average wage paid for equivalent work in the country of origin To determine this international comparative salary, reliable labor studies and statistics from national and international sources will be considered The Ministry of Labor, in coordination with other authorities, will establish mechanisms for verifying and adjusting these salaries Noncompliance with salary payments will result in penalties, including suspension of fiscal benefits and fines Recurring or serious violations may lead to permanent exclusion from certain industry programs

The Ministry of Labor will oversee the evaluation of non-compliance through audits and reviews, with the authority to cancel employer registrations if necessary

Status: 2024-04-29 - Published in the Parliamentary Gazette of the Chamber of Deputies

INITIATIVE WITH DRAFT DECREE TO ADD SUBSECTION XXVII TER TO ARTICLE 132 OF THE FEDERAL LABOR LAW AND TO AMEND AND ADD SUBSECTIONS X AND XI OF ARTICLE 72 OF THE GENERAL EDUCATION LAW

Presented by: Deputy Janeth Yareli Sánchez Cruz (Plur - MORENA)

Purpose: It establishes as an obligation of the employer to grant menstrual leave for up to two working days per month with full pay to women or menstruating individuals diagnosed with severe endometriosis or primary or secondary incapacitating dysmenorrhea, for which a medical certificate issued by a public health institution endorsing such conditions must be presented It adds, as part of the educational process of students, the right to recognize absences due to menstruation, justifying the absences and providing facilities so as not to affect the academic development of female students or menstruating individuals who cannot attend classes

Status: 2024-04-29 - Published in the Parliamentary Gazette of the Chamber of Deputies