Last week, the United States, Canada and Mexico signed an “initial trade deal” finalizing the USMCA trade agreement, Mexican President Andres Manuel Lopez Obrador said.
Initially signed in November 2018, the United States-Mexico-Canada Agreement (USMCA) is meant to replace the 25-year-old North American Free Trade Agreement (NAFTA), which President Donald Trump complains has been “a disaster” for the US.
However, things were going on behind the scenes as opposition Democrats, acutely aware of the need to win back blue-collar voters they lost to Trump in 2016, worked on having greater oversight of Mexican labor reforms promised under the new deal, including wage hikes and increased power for unions.
An added requirement to the trade bill
On Friday, an annexation for completion of the trade deal was presented in the U.S. House of Representatives. The additional wording proposes that up to five U.S. experts who would monitor compliance with local labor reform in Mexico be part of the agreement, according to Reuters.
On Sunday, Jesús Seade, the Mexican Foreign Relations Department’s undersecretary and chief trade negotiator for North America, said that while most of the bill is in line with what is expected to complete the ratification, it also “adds the designation of up to five U.S. labor attaches in Mexico tasked with monitoring the implementation of the labor reform that is underway in our country.”
“This provision, the result of political decisions by Congress and the Administration in the United States, was not, for obvious reasons, consulted with Mexico,” said Seade. “And, of course, we disagree.”
Seade’s office confirmed to POLITICO that he is scheduled to meet Lighthizer on Monday. He will also meet with Democratic lawmakers to discuss the issue.
Mexico says that it resisted having foreign observers on its soil over matters of sovereignty, and this is understandable. Instead, the trade deal has provisions that provide panels to resolve disputes on labor and other areas. Each panel is composed of three arbitrators, a person chosen by the United States, one by Mexico and a third-country person agreed upon by both countries, reports the Associated Press.
Seade called the designation of labor attaches “unnecessary and redundant” and said the presence of foreign officials must be authorized by the host country.
“U.S. officials accredited at their embassy and consulates in Mexico, as a labor attache could be, may not in any case have inspection powers under Mexican law,” he added.
In a letter written to U.S. Trade Representative Robert Lighthizer on Friday, expressing Mexico’s “surprise and concern” over the added wording in the bill, Seade wrote, “We reserve the right to review the scope and effects of these provisions, which our government and people will no doubt clearly see as unnecessary.”
“Additionally, I advise you that Mexico will evaluate not only the measures proposed in the (bill) … but the establishment of reciprocal mechanisms in defense of our country’s interests.”
