The trade regulation to implement Mexico’s obligations regarding forced labor under the USMCA became effective on May 18, 2023.

On February 17, 2023, the Ministry of Economy published in the Federal Register (“DOF”) the Order establishing the goods whose importation is subject to regulation by the Ministry of Labor and Social Welfare (“STPS”). The Order came into effect on May 18, 2023, with the purpose of implementing the trade obligations related to forced labor assumed by Mexico under the United States, Mexico and Canada Agreement (“USMCA”).

As background, on July 1, 2020, the USMCA entered into force in Mexico establishing certain obligations agreed by the Parties which main objective is to guarantee the trading of goods produced in compliance with the principles of the Labor Chapter of such trade agreement. To this extent, Article 23.6 (Forced or Compulsory Labor) of the USMCA recognizes the objective of eliminating all forms of forced or compulsory labor and establishes the obligation for each Party to prohibit, through the measures that it deems appropriate, the importation into its territory of goods originated in other countries that are wholly or partially produced by forced or compulsory labor, including child labor.

To that effect, the Sole Annex of the Order bans the importation of goods under any tariff code provided for in Article 1 of the General Import and Export Duties Law that are totally or partially produced through the use of forced or compulsory labor, including child labor.

For its enforcement, the Ministry of Economy established a procedure, to be implemented by the STPS, to facilitate the receipt, analysis, and response to situations involving the presumed use of forced or compulsory labor, including child labor,  by companies located outside the territory of the USMCA that intend to import goods resulting from such forced labor into Mexico.

This procedure may be initiated ex officio by the STPS or at the request of a party. If the STPS determines the existence of the use of forced or compulsory labor in the production of the goods, it will publish such determination in a list of resolutions on its website.

Any person, national or foreign, may request that a resolution be revoked, or the list be updated, when it is proven that the relevant use of forced or compulsory labor in the production of the goods has ceased or the authorities of other countries have revoked said determination.

The STPS has the authority to request the collaboration and information it deems necessary from competent national and foreign authorities to ensure compliance with the Order. This is expected to strengthen international cooperation and ensure proper adherence to the provisions established in the Order.

In this context, the term “Forced or Compulsory Labor” refers to “all work or service exacted from an individual, including minors, under the menace of any penalty and for which said individual has not offered himself or herself voluntarily” in accordance with Article 2(1) of the Forced Labour Convention, 1930 (Convention 29) of the International Labour Organization, published in the DOF on August 13, 1935.

Following the publication of the Order, the United States Trade Representative, Katherine Tai, released the following statement: “With this resolution, Mexico has taken an important step toward joining the United States and Canada in prohibiting the importation of goods produced with forced labor.  In light of this progress, the United States, Canada, and Mexico will work more closely together to eliminate forced labor from global supply chains and tackle transshipment, leveling the playing field for North American workers while protecting the most vulnerable workers around the world.”

The Order may be consulted in Spanish here.