WASHINGTON — Mexico has made progress in putting in place the sweeping overhauls to its labor system required by the new trade agreement between the United States, Mexico and Canada, but serious challenges still remain, according to a new report by an independent board set up to evaluate those changes.

The report, the first to be issued by the Independent Mexico Labor Expert Board, highlights one of the foremost trade challenges for the incoming Biden administration: ensuring that the goals of the United States-Mexico-Canada Agreement, which went into effect this year, are realized.

The trade pact, which replaced the quarter-century-old North American Free Trade Agreement, sought to improve labor conditions and pay for Mexican workers, as way to prevent companies from undercutting American and Canadian workers by moving their factories to Mexico. Among other changes, the agreement called for sweeping overhauls to Mexico’s laws and institutions to make its unions more democratic, and set up independent bodies like labor courts to enforce those changes.

Ben Davis, the director of international affairs at the United Steelworkers and the chairman of the independent board, said it “remains to be seen if Mexico’s labor reforms will allow its workers to escape the poverty wages that have done so much damage to them, and — through unfair competition — to workers in the U.S.”

Michael Wessel, a labor adviser to the United States trade representative who helped to create the board, said the Biden administration’s efforts would be crucial in determining whether U.S.M.C.A. was ultimately deemed a success.

“The incoming Biden administration must devote considerable time and energy to making U.S.M.C.A. work,” he said. “Support for new trade agreements will depend, in part, on how successful the changes in the U.S.C.M.A. are in advancing the rights of workers and achieving identifiable and significant change.”

The changes are an attempt to address what politicians on both the right and left see as one of NAFTA’s main failings: its role in encouraging factory owners to move their operations to Mexico.

When NAFTA was introduced in the 1990s, economists and politicians argued that it would be a powerful force for raising wages for workers in Mexico, putting the Mexican economy on a more even and secure footing with the rest of North America. But since the agreement went into effect in 1994, Mexico’s less-skilled workers have experienced limited wage gains.

Progressive Democrats in the United States contend that this lackluster performance stemmed in part from a deep corruption of the Mexican labor system. In particular, they have blamed “protection contracts,” or fake collective bargaining agreements made by unions that are company controlled, without the input of workers. These agreements lock in low wages and poor working conditions, and could make up as many as three-quarters of collective bargaining agreements in Mexico, according to the report.

Workers and activists who challenge this system can face harassment, arrest and violence, the report says. American labor advocates have recently pointed to the case of Susana Prieto Terrazas, a Mexican labor activist who was arrested on charges of trying to organize workers in the state of Tamaulipas in June, shortly before the new trade pact took effect.

As part of a labor law passed last year, Mexico is setting up independent labor courts and monitors, and trying to recertify hundreds of thousands of collective bargaining agreements between companies and their employees by secret votes before May 1, 2023, among other provisions.

In its first report, the board commended the Mexican government for continuing its efforts to expand labor rights despite the scale of the undertaking and the complications of the coronavirus pandemic. However, it identified “a number of serious concerns” with the enforcement of Mexico’s new labor law that it said must be promptly addressed.

It said that most unionized workers were not yet able to democratically elect their leaders; that the old system of protection contracts remains intact; and that workers who have tried to challenge these conditions have been fired, jailed or killed.

The report adds that the pace of approval of new collective bargaining agreements is far behind where it should be, and that the process of setting up independent courts and monitors has been hampered by missed deadlines and a lack of resources. It also calls for more funding to help Mexicans set up independent unions and to build the capacity of Mexican labor inspectors to enforce the new labor rules.

“Many of the changes promised to improve the lives of workers, in terms of union democracy, freedom of association and collective bargaining, remain to be implemented,” the report concludes.