U.S. Department of Labor Announces $20 Million in New Grants to Support USMCA Implementation, Bringing the 2020 Total to Nearly $50 Million

WASHINGTON, DC – The U.S. Department of Labor today announced two new grants, totaling $20 million, that will assist Mexico in meeting its labor obligations under the United States-Mexico-Canada Agreement (USMCA). The grants announced today bring the total committed for this purpose by the Bureau of International Labor Affairs (ILAB) to nearly $50 million in 2020. The goal of this assistance is to ensure the effective enforcement of Mexican labor laws and legitimate collective bargaining rights, increase measures to prevent and mitigate coronavirus among workers, and address child labor and forced labor in Mexico’s supply chains.

“The Department is committed to working with the Government of Mexico so that its United States-Mexico-Canada Agreement labor obligations are fully implemented,” said U.S. Secretary of Labor Eugene Scalia. “These grants are one important part of the Department’s efforts under the USMCA to ensure a fair playing field for U.S. workers and businesses by safeguarding the dignity of work here and in Mexico.”

To assist Mexico in fulfilling its USMCA labor commitments, new grant activities will focus on improving the knowledge of workers and employers about Mexico’s 2017 constitutional reform on labor justice and 2019 labor law reform.

This week, the Department awards two substantial grants. First, a $10 million grant to the Solidarity Center, allied with the American Federation of Labor and Congress of Industrialized Organizations (AFL-CIO), focuses on improving the free exercise of labor rights by increasing workers’ access to education about labor rights, strengthening workers’ and relevant organizations’ effective use of new labor rights provisions, providing assistance in resolving labor disputes, and generating sustained, data-driven dialogue amongst stakeholders to improve the implementation of labor law reforms.

A second $10 million grant to Partners of the Americas, a non-profit organization based in Washington, D.C., working on challenging issues in Latin America, seeks to strengthen awareness of the Mexican labor justice reform among workers, employers, and union leaders, with an emphasis on how to utilize Mexico’s new labor systems to protect labor rights and effectively address labor disputes. The grant aims to build the capacity of federal and state-level Secretariats of Labor and Social Affairs staff and constituents from key institutions to conduct outreach regarding labor rights and implementation of the labor reforms among target audiences.

Previous grants awarded by the Department to support Mexico in implementing its USMCA labor obligations include:

• A $3 million grant in November to the Pan American Development Foundation to implement a project to improve working conditions in the Mexican automotive supply chain, with a focus on small and medium-sized manufacturers – this grant will focus on engaging employers to proactively adopt labor practices consistent with Mexico’s 2017 constitutional reform on labor justice and 2019 labor law reform and help create a culture of constructive labor-management dialogue and industrial relations in the Mexican automotive supply chain;
• A $20,750,000 increase in funding in October to IMPAQ International to continue their work supporting labor enforcement and implementation of labor law reform by developing a comprehensive, transparent system for registering contracts and unions in line with the provisions of the labor law reform; and
• A $664,660 contract in August with the Federal Mediation and Conciliation Service to provide mediation training to staff of the new Federal Conciliation and Labor Registration Center as well as state-level conciliators.

The Department of Labor’s financial support of Mexico’s implementation of its labor justice reform is complemented by robust monitoring of Mexico’s efforts to meet its labor obligations under the USMCA. To support that effort, ILAB recently established a new USMCA Monitoring and Enforcement Division and is in the process of completing strategic hiring for that division. ILAB has also hired four labor attachés, two of whom have already been posted at the U.S. Embassy in Mexico City.

The Department is closely tracking the ability of Mexican workers to freely exercise their new labor rights, including through the establishment of an USMCA web-based, multi-lingual hotline that allows the public to submit information on labor issues. Working closely with the Office of the U.S. Trade Representative, the Department is determining when information submitted will support action under the USMCA labor enforcement mechanisms.

The USMCA includes strong provisions related to child labor and forced labor and the Department has continued to collaborate with the Mexican government on various initiatives to address these problems in 2020. For example, ILAB provided funding for the ILO to produce technical guidance in support of implementation of the Government of Mexico’s 2019 National Child Labor Survey. The Mexican government has released the survey data and will use its results to inform policies and programs designed to combat child labor. Mexico was also included for the first time in the Department’s 2019 “Findings on the Worst Forms of Child Labor” (TDA Report), which includes profiles of countries that identify where child labor occurs; highlights governments’ efforts to combat the worst forms of child labor; presents suggested actions to advance the elimination of the worst forms of child labor; and includes assessments that identify where significant, moderate, minimal, or no advancement has been made. As this is the first year that Mexico is included in the TDA Report, the country did not receive an assessment. However, Mexico would have received an assessment of significant advancement, indicating meaningful efforts in the areas evaluated by the report.

Supported in part by Department of Labor funding, the Government of Mexico has progressed in implementing the historic constitutional reforms of 2017 and the labor law reform of 2019, consistent with Mexico’s commitments under the USMCA Labor Chapter Annex. The reforms are the most significant labor reforms in Mexico in over a century, calling for the establishment of new, independent labor courts at the federal and state levels, a Federal Conciliation and Labor Registration Center to register unions and collective bargaining agreements and attempt to conciliate labor disputes, and local conciliation centers. Implementation of the first phase of the reform began on Nov. 18, 2020, with the establishment of the new institutions in eight Mexican states. Mexico’s approved 2021 budget for phase two of labor law reform implementation is $165 million and will support implementation in an additional 14 states.

The grants will be made available through the Bureau of International Labor Affairs (ILAB), whose mission is to promote a fair global playing field for workers in the United States and around the world by enforcing trade commitments, strengthening labor standards and combating international child labor, forced labor and human trafficking. 

For more information about the Department’s work on these issues, visit http://www.dol.gov/agencies/ilab.

The mission of the Department of Labor is to foster, promote and develop the welfare of the wage earners, job seekers and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.