USMCA labor case building: Former official

  • Market: Crude oil, Electricity, Metals, Natural gas, Oil products
  • 12/02/21

A likely legal action against a facility in Mexico for alleged labor violations of the US-Mexico-Canada Agreement (USMCA) would test the strength of the free trade deal that the US energy industry hopes to use to advance complaints against Mexico City.

Private parties such as US labor unions are likely to bring a case to the US trade representative that would allege violations in Mexico of the agreement's workers' rights provisions, said Jamieson Greer, who was chief of staff to former President Donald Trump's US trade representative, Robert Lighthizer.

"There is a great desire to have one of these cases," Greer, who is now a partner at King & Spalding's international trade practice in Washington, told Argus. "My guess is we will see one within the next few months."

Although the particular Mexican company was not identified, the case could have implications for energy investment that has underpinned US-Mexican commercial ties for years.

The USMCA, which replaced the North American Free Trade Agreement (Nafta) last year, requires Mexico to make its unions more democratic by giving workers greater ability to organize and bargain. The country also must set up independent bodies such as labor courts to resolve disputes.

Yet an independent board evaluating USMCA labor provisions said in December it found "serious concerns" with the implementation of labor laws in Mexico.

Many unionized workers are still unable to democratically elect their leaders, the board said, adding that many collective bargaining agreements in Mexico fall under an old system of "protection contracts" that keep bad working conditions and low wages in place.

Greer said a case would likely not be brought until after the US Senate confirms Katherine Tai, President Joe Biden's nominee for trade representative.

Greer did not say what company or industry might be targeted, but said both Mexican and foreign companies with operations in the country could be named.

US Senate finance committee chair Ron Wyden (D-Oregon) "is consulting closely with the new administration and stakeholders to make sure Mexico lives up to its obligations under USMCA," said Wyden's spokesman Keith Chu. "He is confident the Biden-Harris administration will act quickly to protect the rights of workers if Mexico does not keep up its side of the bargain."

The USMCA has more robust labor provisions and more powerful enforcement mechanisms than most trade agreements and the previous Nafta, including allowing private parties such as labor unions or companies to petition the US government to take action.


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28/03/24

Long-term contracts needed to stabilise gas prices: MET

Long-term contracts needed to stabilise gas prices: MET

London, 28 March (Argus) — Germany and Europe need more LNG and business-to-business long-term contracts to even out supply shocks and stabilise gas prices, even as demand is unlikely to reach historical heights again, chief executive of Swiss trading firm MET's German subsidiary Joerg Selbach-Roentgen told Argus . Long-term LNG contracts have a "stabilising effect" on prices when "all market participants know there is enough coming", Selbach-Roentgen said. He is not satisfied with the amount of long-term LNG supply contracted into Germany, arguing that stabilisation remains important even now that the market has "cooled down" after the price shocks of 2022. Long-term contracts are important for the standing of German industry, Selbach-Roentgen said — not to be reliant on spot cargoes is a matter of global competitiveness for the industrial gas market, he said. The chief executive called for more long-term contracts in other areas as well, such as for industrial offtakers, either fixed price or index-driven. Since long-term LNG contracts are concluded between wholesalers and producers, the latter need long-term planning security for their projects, which usually leads to terms of about 20 years. But long-term LNG contracts in general do not represent a major risk for MET nor for industrial offtakers in Europe, Selbach-Roentgen said. LNG is a more flexibly-structured "solution" to expected demand drops in regard to the energy transition as the tail end can be shipped to companies on other continents such as Asia if European demand wanes, he said. Gas demand is not likely to recover to "historical heights" again, mostly driven by industrials "jumping ship", Selbach-Roentgen said. When talking to large industrial companies, the discussion is often about the option that they might divert investments away from the German market as the price environment is "not attractive enough" for them any longer in terms of planning security, the chief executive said. This trend started out of necessity in reaction to the price spikes but may now be connected to longer-term "strategic" considerations, he said. In addition, industrial decarbonisation — as well as industrial offtakers' risk aversion because of the volatile gas market following Russian gas supply curtailments — leads companies to invest less into longer-term gas dependencies in Germany, Selbach-Roentgen said. In addition, MET advocates for a green gas blending obligation of 1-2pc green gas or hydrogen, in line with legislative drafts under discussion by the German government. This has already met with interest by offtakers, despite uncertainties around availability and prices, and would provide a regulatory framework that allows firms to prepare for the energy transition, Selbach-Roentgen said. By Till Stehr and Rhys Talbot Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Europe plate: Imports weigh on EU prices


28/03/24
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28/03/24

Europe plate: Imports weigh on EU prices

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Turkey rebar: Market muted ahead of elections


28/03/24
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28/03/24

Turkey rebar: Market muted ahead of elections

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28/03/24
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28/03/24

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Taiwan scrap imports fall 13pc on year in February


28/03/24
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28/03/24

Taiwan scrap imports fall 13pc on year in February

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