In light of increasing scrutiny over supply chain ethics, Canada and Mexico are taking steps to safeguard their economies from the risks associated with slave and child labour. The 2024 annual report from the U.S.-China Economic and Security Review Commission, submitted on November 19, 2023, highlights significant regulatory challenges faced by both countries, particularly concerning unsafe imports from China [83fd3630].
Canada has made strides by passing the Supply Chains Act in May 2023, which mandates corporations to report on slave labour within their supply chains by May 31, 2024. Notably, 38.2% of the reporting entities have already identified risks related to slave labour [83fd3630]. This proactive approach aims to enhance transparency and accountability among Canadian businesses.
In Mexico, the situation is more precarious, as Ontario Premier Doug Ford has warned that Mexico could face isolation from the United States-Mexico-Canada Agreement (USMCA) if it fails to impose tariffs on Chinese goods. This warning comes amid rising tensions, as former President Donald Trump has threatened to impose a 25% tariff on imports from Canada and Mexico starting December 1, 2024 [83fd3630].
The report also recommends eliminating the de minimis exemption, which allows low-value imports to bypass certain tariffs and regulations, thereby increasing transparency in online marketplaces [83fd3630]. This recommendation is crucial as it addresses the potential for exploitative labour practices to infiltrate supply chains through unregulated imports.
Moreover, the Vancouver International Security Summit has underscored the importance of combating hybrid warfare tactics and the need for stricter regulations to protect supply chains from organized crime. This is particularly relevant given that Canada’s TD Bank recently paid a $3 billion fine for laundering proceeds linked to organized crime [83fd3630].
As Canada and Mexico navigate these complex challenges, their responses to slave and child labour issues will be critical in shaping their economic futures and maintaining strong trade relationships within the USMCA framework [83fd3630].