Monday, September 24, 2012

Mexico's labor reform... screeches to a halt

Some quite interesting dynamics regarding president Calderón's proposed Labor Reform / Reforma laboral recently.

A few weeks ago, Calderón sent the reform to the Chamber of Deputies using the "preferred initiative" clause, which given changes to the Constitution a few months ago meant Congress had to act on it before the end of this month, or else it would pass automatically - essentially a "fast-track" provision.

It did. El Universal reports today that the labor reform has come to a screeching halt, where already key provisions have been changed or taken out by the the receiving commission.
Here's a nice graphic on the exact changes, so far:

The PAN has strongly backed the reform, the PRD and other left forces strongly opposed it, with the PRI quite split. PRD and PRI have also found positive aspects of the reform, though they certainly do not agree on what those are.

The PRD agreed to items such as democracy, accountability, and transparency within unions - a rarity in Mexico - but charged it a smokescreen to cover up the reform's real pro-business agenda. Indeed, it is a key component of the reform to loosen labor regulations, making it easier to hire and fire, but it is far from clear what this entails. Reuters noted the reform seeks to "often Mexico's antiquated labor laws and force its trade unions to become more transparent," though this reads a bit more like a government press release than an analysis of the reform. I have yet to find the full proposal online to look at it more closely.

The business council, the CCE, said it approved of the reform "without reservations" but also said it supported looking at proposals from the PRD.

AMLO claimed the reform was part of a deal between Calderón and Peña Nieto, but as usual whenever AMLO makes a declaration, he has little factual evidence for anything. It sure may be, though - and the interesting part is not so much that Peña Nieto did indeed back the reform, but that big sectors of the PRI, including the group around Manlio Fabio Beltrones, opposed sections of it on union transparency, exactly as they know well that these initiatives could greatly undermine PRI strength in the far from democratic unions still attached to the party. PRI unions have, for sure, greatly opposed the reform.

Why did Did Peña Nieto back it openly if he knew PRI would likely oppose it? Is he more of a reformist than imagined, or was it merely a ploy to buy some cover? It will in any case be very interesting to see how the relations will develop between the incoming president and his party, which is a far more heterogeneous coalition than they were last time the PRI held power, 1994-2000.

As for his initiatives, Peña Nieto may find that he will also have a formidable opponent in Congress in his very own party.

Sindicatos rechazan someterse a auditoría. El Universal, Sept. 3, 2012
PRD alista cambios a reforma laboral. El Universal, Sept. 19, 2012
Empresarios impulsan aval a iniciativa de FCH. El Universal, Sept. 18, 2012
PRD no se levantará de mesa de negociación. El Universal, Sept. 21, 2012
Oposición rechaza la reforma laboral. El Universal, Sept. 18, 2012
Iniciativa traerá frustración y resentimiento: AMLO. El Universal, Sept. 20, 2012
Mexico's Pena Nieto optimistic on labor reform bill. Reuters, Sept. 19, 2012

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