Labour chapter summary
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Trade and labour protections are mutually supportive and Canada strives to demonstrate internationally that a competitive economy includes safe, healthy and cooperative workplaces. The Canada-United States-Mexico Agreement (CUSMA) includes a comprehensive labour chapter, fully subject to the dispute settlement provisions of the Agreement, which aims to raise and improve labour standards and working conditions in all three countries by building on international labour principles and rights.
The labour chapter includes new provisions to prohibit the importation of goods produced by forced labour; enforce obligations related to discrimination, including discrimination based on sex, sexual orientation and gender identity; address violence against workers exercising their labour rights; and ensure that migrant workers are protected under labour laws. To address the main labour rights violations in Mexico (specifically, the use of “protection contracts” or employer-dominated union agreements), the chapter also includes an Annex on Worker Representation in Collective Bargaining in Mexico, under which Mexico commits to specific legislative actions to provide for the effective recognition of the right to collective bargaining.
To address labour violations related to collective bargaining and freedom of association in a timely manner, the Agreement also includes an innovative Rapid-Response Mechanism between Canada and Mexico, and between the United States and Mexico. This enforcement mechanism would allow for the rapid deployment of a three-member panel of labour experts to a facility to ensure that the national labour law is being respected. A positive finding by the panel could result in imposing penalties, including suspending benefits or blocking shipments of goods.
Technical summary of negotiated outcomes: Labour chapter
- Contains commitments to protect and promote internationally recognized labour principles and rights that are fully subject to the dispute settlement provisions of the Agreement. This includes the 1998 International Labour Organization Declaration on Fundamental Principles and Rights at Work.
- Includes commitments to ensure that national laws and policies provide protection of the fundamental principles and rights at work, including:
- the right to freedom of association and collective bargaining
- the elimination of child labour, forced or compulsory labour, and discrimination in respect of employment occupation.
- Includes new provisions that:
- prohibit the importation of goods produced by forced labour;
- address violence against workers exercising their labour rights, including single instances of violence, or threats thereof;
- ensure that migrant workers are protected under labour laws; and
- for the first time in a trade agreement, clarify that the enforceable obligation related to non-discrimination covers employment discrimination on the basis of sex (including with regard to sexual harassment), pregnancy, sexual orientation, gender identity or gender-based wage discrimination.
- Ensures that laws provide acceptable conditions of work with respect to minimum wages, hours of work, and occupational health and safety.
- Encourages cooperation on labour matters and establishes a mechanism for engaging in cooperative labour dialogue.
- Includes a non-derogation clause that prevents CUSMA parties from derogating from their domestic labour laws in order to encourage trade or investment.
- Includes mechanisms to implement and monitor compliance with the commitments in the chapter that:
- allow for consultations among parties to discuss matters arising under the chapter and to jointly decide on any course of action to address the matter; and
- establish a mechanism in each CUSMA party for the public to raise concerns about labour issues addressed in the chapter.
- Includes an Annex on Worker Representation in Collective Bargaining in Mexico, under which Mexico commits to specific legislative actions to provide for the effective recognition of the right to collective bargaining.
- Confirms that a failure to comply with obligations in the chapter that affect trade or investment is presumed to be “in a manner affecting trade or investment between the parties,” for the purposes of a dispute, unless the defending party can demonstrate otherwise.
- Permits parties to seek recourse to dispute settlement under the dispute settlement chapter in cases of non-compliance to ensure that all labour obligations are respected.
Other outcomes related to labour: Rapid-response labour mechanism
- Innovative bilateral mechanism between Canada and Mexico, as well as the United States and Mexico, under the dispute settlement chapter, to ensure the effective implementation of specific labour obligations in covered facilities.
- If a party has concerns as it relates to freedom of association and collective bargaining, it can request an investigation by an independent panel of labour experts.
- A positive finding by the panel could result in imposing penalties, including suspending benefits or blocking shipments of goods.
Other outcomes related to labour: Rules of origin
- The CUSMA rules of origin chapter includes elements that address automotive manufacturing wages in North America.
- Under the CUSMA, the rules of origin for automotive goods include a labour value content requirement whereby a percentage of a vehicle’s value must be produced by workers earning at least US$16/hour in order for the vehicle to be deemed as originating from a CUSMA country.
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