La Silla Rota: Sheinbaum Proposes Formalizing Agricultural Labor to Avoid USMCA Conflicts

An initiative sent to the Senate by President Sheinbaum seeks to formalize agricultural employment and expand social security for its workers, aiming to strengthen labor rights and reduce potential controversies within the USMCAframework, stated Pedro Canabal, partner at Baker Tilly.

Mexico seeks to shield itself from any labor controversies with the United States and Canada regarding the future of the United States-Mexico-Canada Agreement (USMCA).

A legislative initiative signed by the President of Mexico, Claudia Sheinbaum Pardo, has reached the Senate to formalize employment, strengthen labor rights, and provide social security for agricultural workers.

"Regarding the foreign trade aspect of the initiative, there are three implicit elements. First, reducing labor controversy risks within the USMCA, depending on the future developments of the agreement," explains Pedro Canabal, Legal and Foreign Trade Partner at Baker Tilly.

Furthermore, he points out that it aims to align Mexican labor legislation with international standards, fulfilling commitments made under the labor chapter of the USMCA.

A third aspect is the strengthening of supply chains, security, and Blockchain within the North American bloc, he asserts.

Context: In 2020, the labor chapter was included for the first time in the USMCA, featuring the Rapid Response Labor Mechanism (RRLM), which has been invoked by Mexican workers reporting violations of their labor rights.

Contributing to Labor Competitiveness

"Essentially, it is a reform that contributes to commercial competitiveness," explains the former Central Administrator for Foreign Trade Planning of the Tax Administration Service (SAT).

He added that although it is another reform to the Federal Labor Law, the underlying logic is that international treaties include labor chapters that are binding.

"Obviously, international global value chains demand social and regulatory compliance, and nearshoring. Mexico must be conditioned by verifiable labor standards; otherwise, we will not comply," he emphasized.

Up to 83% of Agricultural Workers in Informality

According to official figures, up to 83% of agricultural workers are in informal employment, without social security, which affects their economic situation.

As of the end of July 2025, the Mexican Social Security Institute (IMSS) reported 23,591,691 affiliated formal jobs.

However, in the agricultural sector during the same period, the Occupied Population in said activity amounted to 2.78 million people, of whom more than 83% were in informal conditions, lacking access to social security and basic benefits, according to the initiative.

"In compliance with the international commitments assumed by Mexico in the United States-Mexico-Canada Agreement (USMCA), particularly in Chapters 23 (Labor) and 24 (Environment), as well as the International Labour Organization conventions ratified by Mexico, the State is responsible for guaranteeing the labor rights of agricultural workers, their effective access to social security, and environmental protection as pillars of sustainable development," the Senate initiative states.

A Sector Contributing 9.1% of GDP

According to data from the General Directorate of the Agrifood and Fisheries Information Service, the agro-industry in Mexico reached 3.27 trillion current pesos in the second quarter of 2025, representing 9.1% of the national Gross Domestic Product.

As of January 2025, the Ministry of Agriculture and Rural Development reported that the Agricultural and Fisheries Trade Balance recorded a positive surplus of 658 million dollars, the highest level in the last five years.

"While the agro-industry consolidates as a driver of foreign exchange and employment, dignified conditions must be guaranteed for agricultural workers, as the benefits of international trade are not generated solely at the point of export, but throughout the entire value chain: from small producers to packaging and marketing companies," the presidential initiative projects.