OECD pushes Mexico's Pena Nieto to back labor bill

MEXICO CITY Tue Sep 11, 2012 6:50pm EDT

Mexico's President-elect Enrique Pena Nieto speaks to the media next to Mexican President Felipe Calderon (not pitured), after attending a private meeting at Los Pinos Presidential Palace in Mexico City September 5, 2012. REUTERS/Henry Romero

Mexico's President-elect Enrique Pena Nieto speaks to the media next to Mexican President Felipe Calderon (not pitured), after attending a private meeting at Los Pinos Presidential Palace in Mexico City September 5, 2012.

Credit: Reuters/Henry Romero

MEXICO CITY (Reuters) - The head of the Organization for Economic Co-operation and Development on Tuesday urged Mexico's President-elect Enrique Pena Nieto to support a proposed labor reform put before Congress by outgoing President Felipe Calderon.

Calderon's draft bill to soften antiquated labor regulations and make trade unions more transparent faces opposition from Pena Nieto's centrist Institutional Revolutionary Party (PRI), which ruled Mexico continuously between 1929 and 2000.

The bill, which intends to make the labor market more competitive, foresees making work contracts in Mexico more flexible, enshrining trial periods in law and forcing unions to disclose details of their assets and submit to external audits.

Unions have staunchly defended their rights and have helped sink efforts at labor reform in the past. By the same token, Calderon's National Action Party (PAN) has set great store by opening the unions up to more scrutiny.

Support from organized labor was a keystone of the PRI's base and despite corruption scandals, unions have powerful representatives inside Congress, among them the leader of the oil workers' union, who has just entered the Senate for the PRI.

However, OECD Secretary General Jose Angela Gurria said Mexico needed to get behind Calderon's proposal, which the lower house must either back or reject by the start of October.

"The initiative on labor reform recently presented by the president is good news, we'd like to think it will have the support of the president-elect and lawmakers from all parties," Gurria said at an event with Pena Nieto in Mexico City.

Gurria was the last finance minister under the PRI before the party's defeat to the conservative National Action Party (PAN) in the presidential elections of 2000.

In the July 1 election, the PRI fell short of a majority in Congress and is likely to need support from the PAN to further its economic agenda under Pena Nieto, making the labor bill an important test of how the two parties work together.

Labor reform was one of Pena Nieto's pledges in the election campaign along with promises to open up state-owned oil giant Pemex to more foreign investment and widen the tax base to improve public finances. Pena Nieto takes office in December.

The PRI and the PAN were close to agreeing a labor bill last year until the PRI blocked it to shore up support on the left. PRI officials acknowledge it would send a negative signal if the party thwarts Calderon's initiative this time around.

If the lower house supports the draft bill, it would pass to the Senate, which would have a month to review it.

(Reporting by Lizbeth Diaz; Writing by Dave Graham)