I. Background on Mexico

With a Gross Domestic Product (GDP) of over US$637 billion, Mexico is the world's tenth largest economy and the eighth largest exporter of goods and services. Mexico maintains one of the most open trade policies, exemplified by its Free Trade Agreements with Canada, the United States, and the European Union. The country's proximity to the US has also meant a close economic relationship between the two countries. Approximately 88% of Mexico's exports are bought by the US, accounting for almost a quarter of the country's GDP. Furthermore, Mexico relies heavily on the US for Foreign Direct Investment (FDI). According to official figures from the Mexican Secretariat of Economy, 57.4% of the FDI in the textile and apparel sector came from the US as at September 2003.¹

Despite the size of its economy, Mexico is currently ranked 55th of 177 countries in the United Nations Development Program's (UNDP) Human Development Indicators ranking.² With a population of over 100 million, 8% earn less than US$1 a day, and over 24% earn below US$2.

	In Focus: The Mexican Textile and Apparel Sector Mexico is no longer achieving the growth in the garment export industry that it enjoyed during the 1990s. In 1996, Mexico became the US's leading textile and apparel supplier in terms of volume. In 2002, it lost that status as China regained its position as the number one supplier to the US in terms of both value and volume. In 2002, the textile and garment sector accounted for 7.3% of the all manufactured exports, representing a slight decrease from 2001. Nevertheless, the textile and garment sector remained the third largest export sector in the country that year3 and maquiladoras continued to be a significant source of employment. In December 2003, there were close to 3,000 enterprises in Mexico's maquila sector, 22% of which were textile and apparel facilities. Textile and apparel maquilas employed close to 200,000 workers, over 60% of whom were female. Between 1994 and 2000, employment in the maquila sector grew by 120%, however, since then, there have been serious job losses in the sector, particularly among textile and apparel manufacturers.4 Labor and trade specialists warn that jobs losses may continue with the end of the Multi-Fibre Arrangements (MFA) in January 2005, since some predict that Mexico will lose production to other textile and apparel producing countries at that point. Others maintain that Mexico's proximity to market and close trade relations with the US may cushion the impact of the MFA's expiry.

II. Freedom of Association in Mexico

A. Corporatist and Independent Unions in Mexico

Mexico's Constitution and its Federal Labor Law, the main labor law in Mexico, recognize workers' right to form and join the trade unions of their choice. Traditionally this has taken two forms: corporatist trade unions and independent trade unions.

Corporatist unions, which are often referred to as "white unions" or charro unions, by definition have strong ties to the government or a political party. Their objectives are primarily political; they work to increase the number of union members, and the number of collective bargaining agreements (CBAs) signed, in order to command greater political and economic power. It is common for white unions to have virtually no relationship with their members and to collude with management to improve enterprise profits. In such cases, workers rarely know their representatives and sometimes do not even know that a union exists in the factory.⁵ These unions are common in Mexico's legal environment, where "closed shops" and "exclusionary clauses" of CBAs (see sidebar) make it possible for white unions to maintain power in many enterprises.

By contrast, independent trade unions in Mexico are not affiliated with the government, and generally are seen as being more representative of their members' interests. Independent unions tend to have fewer members, but they are often much more active than white unions. Because independent unions are known to push for considerable changes in the workplace, establishing a truly independent union has been difficult. In many cases, suspected leaders have been fired and blacklisted for trying to form a new union.

In Mexico, no prior authorization is required to form a trade union. However, in order to obtain the legal status that is required for collective bargaining or strikes, unions must be registered by Juntas de Conciliación y Arbitraje (Mexican conciliation and arbitration boards), which are tripartite committees comprised of representatives of the government, employers, and workers, and who often represent white unions. Independent unions have historically encountered difficulties in trying to register with local Juntas, which have been known to delay or even withhold recognition of independent trade unions if they are seen to threaten the status quo.

	In Focus: "Closed Shops" and "Exclusionary Clauses" Although Mexican labor law does not prohibit the existence of more than one union in the workplace, Article 395 of Mexico's Federal Labor Law allows "closed shops" to be created through collective bargaining agreements. The "exclusionary clauses" of these agreements stipulate that an employer can only recruit workers who are members of a specific trade union, and that employees must remain members of that union to keep their jobs. In practice, this means that as a worker signs a contract to work in the factory, the worker simultaneously becomes a member of the union. This enables union leaders to veto new hires or to force the dismissal of any worker by expelling him/her from the union. These clauses are included in most of the collective bargaining agreements that are signed in Mexico, and help to explain why such a large percentage of workers in Mexican maquilas are unionized.

B. Mexico's Ratification of International Labor Standards

Mexico has ratified six of the eight fundamental International Labor Conventions. It has not ratified the Right to Organize and Collective Bargaining Convention (No. 98), one of the two fundamental ILO Conventions concerning freedom of association. Nevertheless, membership in the International Labor Organization obliges Mexico to respect, promote, and realize in good faith the principles concerning workers' fundamental rights. Among these are freedom of association and the effective recognition of the right to collective bargaining.

Although the right to form trade unions and the right to strike are preserved in the Mexican Constitution and in the corresponding regulatory laws, Mexico ratified the International Covenant on Economic, Social, and Cultural Rights (ICESCR) with a reservation on Article 8.⁶ Article 8 guarantees everyone the right to form trade unions and join the trade union of his or her choice for the promotion and protection of his or her economic and social interests. In 1999, the UN Committee on Economic Social and Cultural Rights called on the Mexican Government to withdraw this reservation, since it did not correspond with the spirit of the ICESCR or Mexico's international obligations.

III. Right to Bargain Collectively

According to Mexican law, if a registered union exists in a facility, employers are obliged to negotiate and sign a collective bargaining agreement with that union. Article 387 of the Federal Labor Law provides that workers may exercise their right to strike if the employer refuses to negotiate.

White unions frequently sign a "protection contract" with employers, which ensures that neither the union nor management will stand in opposition to the other. As part of the agreement, the employer pays the union a monthly sum, and in turn employers are able to set employment conditions and wages in the facility unilaterally. According to Acticle 923 of the Federal Labor Law, as long as the negotiated agreement is in force, workers may not hold a strike to demand any conditions that are already regulated in the collective bargaining agreement.

A protection contract also serves to exclude other unions from a factory. The agreement guarantees that if workers try to form another union in the facility, the employer will refuse to have any dealings with that union. In the event that the new union actually manages to form and register with the Junta, it must demonstrate that it is more representative of the worker population at the enterprise before being able to obtain bargaining power. In these cases, elections are held. Elections are traditionally held in the open, and workers individually declare their vote orally in front of the official of the Junta, the unions, and the employer. As a result, it is not uncommon for management or white unions to use intimidation tactics to influence workers' votes. To prevent against intimidation, secret ballots may be used in accordance with law, but only when all parties agree to take this approach.

IV. Right to Strike

Mexico's Constitution and Federal Labor Law recognize the right to strike. However, striking workers must give five to six days' advance notice, and the Juntas have discretionary powers to declare a strike illegal. If deemed illegal, workers must return to work within 24 hours or face dismissal. If the strike is considered legal, the facility must shut down completely. Management officials may not enter the premises until the strike is over, and the company may not hire replacements for striking workers. The Government of Mexico reported that 8,282 strikes were called in 2000. They involved 60,015 workers, but only resulted in 26 legally recognized strikes. The other strikes either took place but were ruled illegal under Mexican law, or were called off due in large part to Junta decisions or negotiated settlements.

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