CCN MEXICO REPORT

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Issue #
134
 – 
April 2016

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Trans-Pacific Partnership (TPP): The Most Important Multilateral Trade Agreement to Mexico, By Edmundo Elías-Fernández

April 18, 2016

On February 4, 2016, the Secretary of Economy of Mexico, Ildefonso Guajardo Villarreal, signed the Trans-Pacific Partnership, also known as the TPP, in Auckland, New Zealand, along with the Ministers of Commerce of the other 11 countries that make up the TPP: Australia, Brunei Darussalam, Canada, Chile, the United States of America, Japan, Malaysia, New Zealand, Peru, Singapore and Vietnam.

As established in the preamble of the TPP, this is a multilateral agreement that has been negotiated to promote economic integration, liberalize trade and investment, strengthen the competitiveness of businesses in global markets, support the growth and development of micro, small and medium-sized enterprises, facilitate regional trade by promoting efficient customs procedures, promote high levels of environmental protection, and protect and enforce labor rights, among others.

The TPP is more than a Free Trade Agreement because it contains highly important provisions to trade and procedures, such as rules related to the importation of textiles and apparel, rules of origin, customs administration and trade facilitation, sanitary and phytosanitary measures, technical barriers to trade, trade remedies, and investment rules, among others, and it also regulates various aspects of trade as such relate to competition policies, elimination of employment discrimination, intellectual property, competitiveness and business facilitation, just to name a few. For Mexico, the TPP currently represents the most important multilateral trade negotiation it has conducted.

The Mexican Senate is currently analyzing and discussing the TPP in order to determine whether it will ratify it, as prescribed by the Mexican Constitution. The TPP is undergoing respective approval procedures in each signatory country. It is important to note that the text of the TPP states that the parties have a two-year term to provide notice that they have concluded their legal procedures to approve the TPP. If after this term all 12 parties have not made this notification as to approval, the TPP will become effective if at least six countries representing 85% of the GDP of the parties provide notice of approval in each of their countries.

The entry into force of the TPP represents a big step for Mexico to advance in the integration of a stronger economic and trade policy. Considering the benefits and significance of the TTP, one should stay informed as tothe TPP’s entry into force and the repercussions the TPP could have in each industry.

The Importance of Having Proper Documentation during Work Place Inspections, by Pablo Sáenz

April 18, 2016

The Department of Labor and Social Welfare (“STPS” for its Spanish acronym) schedules annual inspections for all companies in Mexico. The purposes of inspections may vary; however, they are mainly performed to review general labor conditions, safety, health and environmental work conditions as applicable to each company. During the performance of such inspections, the STPS inspectors request various documents from the company to confirm compliance with legal requirements established by the Federal Labor Law, the Federal Regulations on Safety, Health and Environmental Work Conditions and the various Official Mexican Standards (“NOMs” for their Spanish acronym) issued by the STPS. The following is a list of some of the main items that are subject to inspection: I. General Work Conditions: a) Individual Employment Agreements; b) Pay stubs of salaries and benefits; c) Attendance Records (including overtime); d) Employee Seniority Chart; e) Internal Work Rules; f) Collective Bargaining Agreement, if applicable; g) All documents related to the creation and acts of the Joint Commission on Profit Sharing; and h) All documents related to the creation and undertakings of the Joint Commission on Training, including plans, training programs, and evidence of compliance with such. II. Safety, Health and Environmental Conditions in the Workplace: a) All documents related to the Joint Commission on Safety and Health Conditions; b) All that is relative to prevention and protection against fires, including creation of the corresponding brigade; c) Permits and authorizations for operation of machinery and equipment; d) Warning signs and colors; e) Full use of adequate protection and safety equipment; f) Different manuals, programs, studies, and evaluations relative to machinery and equipment, noise and vibrations, lighting, ventilation, receptacles subject to pressure, vapor generators, chemical substances, abnormal atmospheric pressure, thermal conditions in the work environment, etc. and g) Notices and statistics on work accidents. Given the Federal Labor Law amendment, fines for violations by companies on this subject matter have increased considerably. Following the amendment, a fine is imposed for each violation and for each employee who is affected by such violation, resulting in an increase of inspection visits by STPS. Consequently, it is essential for companies to be prepared at all times. Companies will greatly benefit from conducting internal expert reviews to verify that the company is in compliance with all applicable legal and health and safety provisions. In the author’s experience preventive measures are always less expensive for companies than corrective measures.